Table of Contents

Filed Pursuant to Rule 424(b)(3)
Registration Nos. 333-262573 and 333-262573-01

PROXY STATEMENT FOR

AN EXTRAORDINARY GENERAL MEETING OF

THE SHAREHOLDERS OF

AEA-BRIDGES IMPACT CORP.

PROSPECTUS FOR

80,500,000 SHARES OF COMMON STOCK AND 30,500,000 WARRANTS OF

AEA-BRIDGES IMPACT CORP. (AFTER ITS DOMESTICATION AS A

CORPORATION INCORPORATED IN THE STATE OF DELAWARE)

PROSPECTUS FOR

254,000,000 SHARES OF COMMON STOCK AND 30,500,000 WARRANTS OF

LIVEWIRE GROUP, INC.

(FORMERLY KNOWN AS LW EV HOLDINGS, INC.)

To the Shareholders of AEA-Bridges Impact Corp.:

You are cordially invited to attend the extraordinary general meeting in lieu of the annual general meeting (the “General Meeting”) of AEA-Bridges Impact Corp., a Cayman Islands exempted company (“ABIC”), on September 16, 2022 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date, and at such other place to which the meeting may be adjourned.

As all shareholders will no doubt be aware, due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the possibility that the meeting may be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association. If we take this step, we will announce the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material.

The units, Class A ordinary shares and public warrants of ABIC are currently listed on the NYSE under the symbols “IMPX.U,” “IMPX” and “IMPX WS,” respectively. The closing price of the units of ABIC on July 20, 2022 was $10.05 and the closing price of the Class A ordinary shares and public warrants of ABIC on July 25, 2022 was $9.95 and $0.29, respectively. HoldCo (as defined below) intends to apply to list its common stock and warrants on the NYSE under the symbols “LVWR” and “LVWR WS,” respectively, upon the closing of the Business Combination (as defined below).

On December 12, 2021, ABIC, LiveWire Group, Inc. (formerly known as LW EV Holdings, Inc.), a Delaware corporation and a direct, wholly owned subsidiary of ABIC (“HoldCo”), LW EV Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of HoldCo (“Merger Sub”), Harley-Davidson, Inc., a Wisconsin corporation (“H-D”), and LiveWire EV, LLC, a Delaware limited liability company (“LiveWire”), entered into a Business Combination Agreement and Plan of Merger (as it may be amended from time to time, the “Business Combination Agreement”), pursuant to which, among other things, (a) prior to the Closing, on the Closing Date, H-D and LiveWire will consummate the separation of the LiveWire business and the other transactions contemplated by the Separation Agreement, and (b) HoldCo shall acquire from ElectricSoul, LLC (the “Company Equityholder”), and the Company Equityholder shall transfer, convey and deliver to HoldCo, all of the membership interests of LiveWire (the “Company Equity”) and the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161,000,000 shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future. Approval of the Business Combination Agreement and the transactions contemplated thereby by ABIC’s shareholders is required by the Business Combination Agreement and ABIC’s amended and restated memorandum and articles of association. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A and ABIC encourages its shareholders to read it in its entirety. See the section entitled “Shareholder Proposal 1: The Business Combination Proposal.” On March 14, 2022, HoldCo changed its name to “LiveWire Group, Inc.”

At the General Meeting, ABIC shareholders will be asked to consider and approve the Business Combination Agreement and the consummation of the transactions contemplated thereby (the “Business Combination”), and approve the other proposals described in the accompanying proxy statement/prospectus. The

board of directors of ABIC (the “ABIC Board”) has unanimously approved the Business Combination Agreement.


Table of Contents

Concurrently with the execution of the Business Combination Agreement, ABIC and HoldCo entered into investment agreements with (i) Kwang Yang Motor Co., Ltd., (ii) KYMCO Capital Fund I Co., Ltd., (iii) SunBright Investment Co., Ltd., (iv) CycleLoop Co., Ltd. and (v) Kwang Yang Holdings Limited (collectively, the “KYMCO Group”) and the Company Equityholder, for the KYMCO PIPE Investment and the Company Equityholder PIPE Investment, respectively (as defined below).

As described in the accompanying proxy statement/prospectus, AEA-Bridges Impact Sponsor, LLC (the “Sponsor”), ABIC, HoldCo, John Garcia, John Replogle and George Serafeim entered into the Investor Support Agreement with the Sponsor pursuant to which the Sponsor has agreed to vote in favor of the Business Combination Proposal and any other proposal relating to the transaction. In addition, the Sponsor agreed to waive its redemption rights with respect to all of the Founder Shares (as defined below) in connection with the Closing of the Business Combination.

Following consummation of the Business Combination, the Company Equityholder will beneficially own approximately 74% of the combined voting power of HoldCo Common Stock, assuming no redemptions by ABIC’s Public Shareholders. As a result, HoldCo will be a “controlled company” as defined in the corporate governance rules of the NYSE.

See “Risk Factors” beginning on page 48 of the accompanying proxy statement/prospectus for a discussion of information that should be considered in connection with an investment in HoldCo’s securities.

Information about the General Meeting, the Business Combination, the Merger and other related business to be considered by the ABIC shareholders at the General Meeting is included in the accompanying proxy statement/prospectus. Whether or not you plan to attend the General Meeting, all ABIC shareholders are urged to carefully read the accompanying proxy statement/prospectus, including the Annexes and the accompanying financial statements of ABIC and LiveWire carefully and in their entirety. In particular, you are urged to read carefully the section entitled Risk Factors beginning on page 48 of the accompanying proxy statement/prospectus.

After careful consideration, the ABIC Board has approved the Business Combination Agreement and the Business Combination, and recommends that ABIC shareholders vote “FOR” the Business Combination Proposal and “FOR” all other proposals presented to ABIC shareholders in the accompanying proxy statement/prospectus. When you consider the ABIC Board’s recommendation of these proposals, you should keep in mind that certain ABIC directors and officers have interests in the Business Combination that may conflict with your interests as a shareholder. Please see the section entitledShareholder Proposal 1: The Business Combination Proposal—Interests of Certain Persons in the Business Combinationin the accompanying proxy statement/prospectus for additional information.

The approval of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting.The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the outstanding Class A Ordinary Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. The Governing Documents Proposals are voted upon on a non-binding advisory basis only. Abstentions and broker non-votes will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Shareholder Proposals.

Your vote is very important. Whether or not you plan to attend the General Meeting, please vote as soon as possible following the instructions in the accompanying proxy statement/prospectus to make sure that your shares are represented at the General Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Required Shareholder Proposals are approved at the General Meeting. Each of the Required Shareholder Proposals is cross-conditioned on the approval of each other. None of the Governing


Table of Contents

Documents Proposals, which will be voted upon on a non-binding advisory basis, or the Adjournment Proposal is conditioned on the approval of any other proposal set forth in the accompanying proxy statement/prospectus.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the General Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the General Meeting in person, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the General Meeting. If you are a shareholder of record and you attend the General Meeting and wish to vote in person, you may withdraw your proxy and vote in person (including by voting online if the meeting is conducted virtually).


Table of Contents

TO EXERCISE YOUR REDEMPTION RIGHT, YOU MUST DEMAND IN WRITING THAT YOUR PUBLIC SHARES ARE REDEEMED FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST ACCOUNT AND TENDER YOUR SHARES TO ABIC’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE VOTE AT THE GENERAL MEETING. IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT, YOU NEED TO IDENTIFY YOURSELF AS A BENEFICIAL HOLDER AND PROVIDE YOUR LEGAL NAME, PHONE NUMBER AND ADDRESS IN YOUR WRITTEN DEMAND. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATES (IF ANY) AND OTHER REDEMPTION FORMS TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL BE RETURNED TO YOU OR YOUR ACCOUNT. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHT.

On behalf of the ABIC Board, I would like to thank you for your support of ABIC and look forward to the successful completion of the Business Combination.

 

Sincerely,

/s/ John Garcia

John Garcia
Co-Chief Executive Officer and Director

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement/prospectus is dated July 27, 2022, and is expected to be first mailed or otherwise delivered to ABIC shareholders on or about July 27, 2022.


Table of Contents

ADDITIONAL INFORMATION

No person is authorized to give any information or to make any representation with respect to the matters that this proxy statement/prospectus describes other than those contained in this proxy statement/prospectus, and, if given or made, the information or representation must not be relied upon as having been authorized by ABIC or LiveWire. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy securities or a solicitation of a proxy in any jurisdiction where, or to any person to whom, it is unlawful to make such an offer or a solicitation. Neither the delivery of this proxy statement/prospectus nor any distribution of securities made under this proxy statement/prospectus will, under any circumstances, create an implication that there has been no change in the affairs of ABIC or LiveWire since the date of this proxy statement/prospectus or that any information contained herein is correct as of any time subsequent to such date.

This proxy statement/prospectus incorporates important business and financial information about ABIC from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available for you to review at the public reference room of the U.S. Securities and Exchange Commission, or SEC, located at 100 F Street, N.E., Washington, D.C. 20549, and through the SEC’s website at www.sec.gov. You can also obtain the documents this proxy statement/prospectus free of charge by requesting it in writing or by telephone from the appropriate company at the following address and telephone number:

AEA-Bridges Impact Corp.

PO Box 1093, Boundary Hall,

Cricket Square,

Grand Cayman

Cayman Islands

KY1-1102

(345) 814-5825

or

Morrow Sodali LLC

333 Ludlow Street, 5th Floor

Stamford, Connecticut 06902

Individuals, please call toll-free: (800) 662-5200

Banks and brokerage firms, please call: (203) 658-9400

Email: IMPX@info.morrowsodali.com

To obtain timely delivery, our shareholders must request the materials no later than September 9, 2022 (five business days prior to the General Meeting).

You also may obtain additional proxy cards and other information related to the proxy solicitation by contacting the appropriate contact listed above. You will not be charged for any of these documents that you request.


Table of Contents

NOTICE OF EXTRAORDINARY GENERAL MEETING

OF AEA-BRIDGES IMPACT CORP.

TO BE HELD SEPTEMBER 16, 2022

AEA-BRIDGES IMPACT CORP.

A Cayman Islands Exempted Company

PO Box 1093, Boundary Hall,

Cricket Square,

Grand Cayman

Cayman Islands

KY1-1102

TO THE SHAREHOLDERS OF AEA-BRIDGES IMPACT CORP.:

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “General Meeting”) of AEA-Bridges Impact Corp., a Cayman Islands exempted company (“ABIC”), will be held at 10:00 a.m., Eastern Time, on September 16, 2022, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, or via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

As all shareholders will no doubt be aware, due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the possibility that the meeting may be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of our amended and restated memorandum and articles of association. If we take this step, we will announce the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material.

You are cordially invited to attend the General Meeting to conduct the following items of business and/or consider, and if thought fit, approve the following resolutions:

 

1.

The Business Combination Proposal: To consider and vote upon a proposal by ordinary resolution to approve the Business Combination Agreement, dated as of December 12, 2021 (as it may be amended from time to time), a copy of which is attached to the accompanying proxy statement/prospectus as Annex A, by and among ABIC, LiveWire Group, Inc. (formerly known as LW EV Holdings, Inc.), a Delaware corporation and a direct, wholly owned subsidiary of ABIC (“HoldCo”), LW EV Merger Sub, Inc., a Delaware corporation and a direct, wholly owned subsidiary of HoldCo, Harley-Davidson, Inc., a Wisconsin corporation, and LiveWire EV, LLC, a Delaware limited liability company, and the consummation of the transactions contemplated thereby be authorized, approved and confirmed in all respects (the “Business Combination” and such proposal, the “Business Combination Proposal”).

 

2.

The Domestication Proposal: To consider and vote upon a proposal by special resolution to approve that ABIC be transferred by way of continuation to Delaware pursuant to Part XII of the Companies Act (Revised) of the Cayman Islands and Section 388 of the General Corporation Law of the State of Delaware and, immediately upon being deregistered in the Cayman Islands, ABIC be continued and domesticated as a corporation under the laws of the State of Delaware (the “Domestication Proposal”).

 

3.

The Charter Proposal: To consider and vote upon a proposal by special resolution to approve ABIC’s Amended and Restated Memorandum and Articles of Association adopted by special resolution, dated October 1, 2020, be amended and restated by the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws (Domesticated ABIC being a corporation incorporated in the State of Delaware, assuming the Domestication Proposal and the filing with and acceptance by the Secretary of State of Delaware of the Certificate of Corporate Domestication and Domesticated ABIC Certificate of Incorporation in accordance with Section 388 of the DGCL) (the “Charter Proposal”).

 

i


Table of Contents
4.

The Governing Documents Proposals: To consider and vote upon, on a nonbinding advisory basis, four separate proposals (collectively, the “Governing Documents Proposals”) in connection with the replacement of the Existing Organizational Documents with the Domesticated ABIC Organizational Documents (the “Governing Documents Proposals”).

a. Governing Documents Proposal A: To consider and vote upon, on a nonbinding advisory basis, the amendment to approve the change in the authorized share capital of ABIC from (i) 500,000,000 Class A Ordinary Shares, (ii) 50,000,000 Class B Ordinary Shares and (iii) 5,000,000 preference shares, par value $0.0001 per share, to (a) 800,000,000 shares of Domesticated ABIC Common Stock and (b) 20,000,000 shares of preferred stock, par value $0.0001 per share, of Domesticated ABIC.

b. Governing Documents Proposal B: To consider and vote upon, on a nonbinding advisory basis, the amendment to authorize the Domesticated ABIC Board to issue any or all shares of Domesticated ABIC preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Domesticated ABIC Board and as may be permitted by the DGCL.

c. Governing Documents Proposal C: To consider and vote upon, on a nonbinding advisory basis, the amendment to authorize the removal of the ability of Domesticated ABIC stockholders to take action by written consent in lieu of a meeting.

d. Governing Documents Proposal D: To consider and vote upon, on a nonbinding advisory basis, the amendment to authorize the amendment and restatement of the Existing Organizational Documents and to authorize all other changes in connection with the replacement of Existing Organizational Documents with the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws as part of the Domestication (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act, which the ABIC Board believes is necessary to adequately address the needs of Domesticated ABIC after the Business Combination.

 

5.

The Incentive Award Plan Proposal: To consider and vote upon a proposal by ordinary resolution to approve the LiveWire Group, Inc. 2022 Incentive Award Plan (the “Incentive Plan,” a copy of which is attached to this proxy statement/prospectus as Annex G), to be effective upon approval by ABIC’s shareholders (the “Incentive Plan Proposal”).

 

6.

The Adjournment Proposal: To consider and vote upon a proposal by ordinary resolution to approve the adjournment of the General Meeting to a later date or dates, if necessary, (i) to permit further solicitation and vote of proxies for the purpose of obtaining approval of the Required Shareholder Proposals, (ii) for the absence of a quorum, (iii) to allow reasonable additional time for filing or mailing of any legally required supplement or amendment to the proxy statement/prospectus or (iv) if the holders of Public Shares have elected to redeem such shares such that either (a) the shares of HoldCo Common Stock and HoldCo Warrants would not be approved for listing on the NYSE or (b) the Minimum Cash Condition would not be satisfied at Closing (the “Adjournment Proposal”).

Each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned on the approval and adoption of each of the other Required Shareholder Proposals. None of the Governing Documents Proposals, which will be voted upon on a nonbinding advisory basis, or the Adjournment Proposal is conditioned upon the approval of any other proposal.

These items of business are described in this proxy statement/prospectus, which we encourage you to read carefully in its entirety before voting.

Only holders of record of ABIC ordinary shares (“ABIC Shares”) at the close of business on May 6, 2022 are entitled to notice of the General Meeting and to vote and have their votes counted at the General Meeting and any adjournments or postponements of the General Meeting. This proxy statement/prospectus and accompanying

 

ii


Table of Contents

proxy card is being provided to ABIC’s shareholders in connection with the solicitation of proxies to be voted at the General Meeting and at any adjournment of the General Meeting. Whether or not you plan to attend the General Meeting, all of ABIC’s shareholders are urged to read this proxy statement/prospectus, including the Annexes and the documents referred to herein carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 48.

After careful consideration, the ABIC Board has determined that each of the proposals is fair to and in the best interests of ABIC and its shareholders and unanimously recommends that you vote or give instruction to vote “FOR” each of these proposals if presented. When you consider the recommendation of the ABIC Board, you should keep in mind that ABIC’s directors and officers may have interests in the Business Combination that conflict with your interests as a shareholder. See the section entitled “Shareholder Proposal 1: The Business Combination ProposalInterests of Certain Persons in the Business Combination.”

Pursuant to the Existing Organizational Documents, a Public Shareholder may request that ABIC redeem all or a portion of its Public Shares for cash if the Business Combination is consummated. As a holder of public shares, you will be entitled to receive cash for any public shares to be redeemed only if you:

(i) (a) hold Public Shares, or (b) hold Public Shares through units, you elect to separate your units into the underlying Public Shares and warrants prior to exercising your redemption rights with respect to the Public Shares; and

(ii) prior to 5:00 p.m., Eastern Time on September 14, 2022, (a) submit a written request to Continental Stock Transfer & Trust Company, ABIC’s transfer agent, in which you (i) request that ABIC redeem all or a portion of your Public Shares for cash, and (ii) identify yourself as the beneficial holder of the Public Shares and provide your legal name, phone number and address; and (b) deliver your Public Shares to Continental Stock Transfer & Trust Company, ABIC’s transfer agent, physically or electronically through the Depository Trust Company (“DTC”).

Public Shareholders may seek to have their Public Shares redeemed by ABIC, regardless of whether they vote for or against the Business Combination Proposal or any other Shareholder Proposal and whether they held ABIC Shares as of the Record Date or acquired them after the Record Date. Any Public Shareholder who holds ABIC Shares on or before September 14, 2022 (two (2) business days before the General Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. For illustrative purposes, based on funds in the Trust Account of approximately $400,313,600 on March 31, 2022 and including anticipated additional interest through the closing of the Business Combination (assuming interest accrues at recent rates and no additional tax payments are made out of the Trust Account), the estimated per share redemption price is expected to be approximately $10.01. A Public Shareholder who has properly tendered his, her or its Public Shares for redemption will be entitled to receive his, her or its pro rata portion of the aggregate amount then on deposit in the Trust Account in cash for such shares only if the Business Combination is completed. If the Business Combination is not completed, the redemptions will be canceled and the tendered shares will be returned to the relevant Public Shareholders as appropriate.

Public Shareholders who seek to redeem their Public Shares must demand redemption no later than 5:00 p.m., Eastern Time, on September 14, 2022 (two (2) business days before the General Meeting) by (a) submitting a written request to the Transfer Agent that ABIC redeem such holder’s Public Shares for cash, (b) affirmatively certifying in such request to the Transfer Agent for redemption if such holder is acting in concert or as a “group” (as defined in Section 13 d-3 of the Exchange Act) with any other shareholder with respect to ABIC Shares and (c) delivering their ABIC Shares, either physically or electronically using DTC’s deposit/withdrawal at custodian system (“DWAC”), at the holder’s option, to the Transfer Agent prior to the General Meeting. If you hold the shares in street name, you will have to coordinate with your broker to have your shares certificated or delivered electronically. Certificates that have not been tendered to the Transfer Agent (either physically or electronically)

 

iii


Table of Contents

in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the Business Combination is not completed, this may result in an additional cost to shareholders for the return of their shares.

Notwithstanding the foregoing, a Public Shareholder, together with any affiliate of his, her, its or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking redemption rights with respect to 15% or more of ABIC’s Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 15% cap will not be redeemed by ABIC.

Pursuant to the Investor Support Agreement, the Sponsor, officers and directors of ABIC have waived all of their redemption rights and will not have redemption rights with respect to any ABIC Shares owned by them, directly or indirectly. Holders of the warrants will not have redemption rights with respect to the warrants.

To ensure your representation at the General Meeting, however, you are urged to complete, sign, date and return the proxy card accompanying the proxy statement/prospectus as soon as possible. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the General Meeting and vote electronically, obtain a proxy from your broker or bank.

Your vote is important regardless of the number of shares you own. Whether you plan to attend the General Meeting or not, please complete, sign, date and return the enclosed proxy card as soon as possible in the envelope provided. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

Thank you for your participation. We look forward to your continued support.

 

By Order of the Board of Directors

/s/ John Garcia

John Garcia
Co-Chief Executive Officer and Director

July 27, 2022

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

ALL ABIC PUBLIC SHAREHOLDERS HAVE THE RIGHT TO HAVE THEIR SHARES REDEEMED FOR CASH IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION. PUBLIC SHAREHOLDERS ARE NOT REQUIRED TO AFFIRMATIVELY VOTE FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL OR BE HOLDERS OF RECORD ON THE RECORD DATE IN ORDER TO HAVE THEIR SHARES REDEEMED FOR CASH. THIS MEANS THAT ANY PUBLIC SHAREHOLDER HOLDING ABIC ORDINARY SHARES MAY EXERCISE REDEMPTION RIGHTS REGARDLESS OF WHETHER THEY ARE EVEN ENTITLED TO VOTE ON THE BUSINESS COMBINATION PROPOSAL.

TO EXERCISE REDEMPTION RIGHTS, HOLDERS MUST TENDER THEIR SHARES TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, ABIC’S TRANSFER AGENT, NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE GENERAL MEETING. YOU MAY

 

iv


Table of Contents

TENDER YOUR SHARES EITHER BY DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DTC’S DWAC SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE THE SECTION ENTITLED “GENERAL MEETING OF ABIC SHAREHOLDERS—REDEMPTION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

 

 

v


Table of Contents

TABLE OF CONTENTS

 

     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     iii  

FREQUENTLY USED TERMS

     iv  

PRESENTATION OF FINANCIAL INFORMATION

     xii  

TRADEMARKS, TRADE NAMES, AND SERVICE MARKS

     xiv  

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

     xiv  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR SHAREHOLDERS

     1  

SUMMARY

     25  

MARKET PRICE AND DIVIDEND INFORMATION

     45  

SELECTED HISTORICAL FINANCIAL INFORMATION OF LIVEWIRE

     46  

SELECTED HISTORICAL FINANCIAL INFORMATION OF ABIC

     47  

RISK FACTORS

     48  

GENERAL MEETING OF ABIC SHAREHOLDERS

     121  

SHAREHOLDER PROPOSAL 1: THE BUSINESS COMBINATION PROPOSAL

     127  

SHAREHOLDER PROPOSAL 2: THE DOMESTICATION PROPOSAL

     152  

SHAREHOLDER PROPOSAL 3: THE CHARTER PROPOSAL

     155  

SHAREHOLDER PROPOSAL 4: GOVERNING DOCUMENTS PROPOSALS

     157  

SHAREHOLDER PROPOSAL 5: THE INCENTIVE PLAN PROPOSAL

     168  

SHAREHOLDER PROPOSAL 6: THE ADJOURNMENT PROPOSAL

     174  

MATERIAL TAX CONSIDERATIONS

     176  

THE BUSINESS COMBINATION AGREEMENT

     192  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     216  

BUSINESS OF LIVEWIRE AND CERTAIN INFORMATION ABOUT LIVEWIRE

     227  

EXECUTIVE COMPENSATION OF LIVEWIRE

     243  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF LIVEWIRE

     252  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     270  

BUSINESS OF ABIC AND CERTAIN INFORMATION ABOUT ABIC

     281  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF ABIC

     294  

MANAGEMENT OF HOLDCO FOLLOWING THE BUSINESS COMBINATION

     300  

DESCRIPTION OF HOLDCO’S SECURITIES

     308  

BENEFICIAL OWNERSHIP OF SECURITIES

     316  

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

     320  

SECURITIES ACT RESTRICTIONS ON RESALE OF HOLDCO COMMON STOCK

     325  

REGULATORY APPROVALS REQUIRED

     326  

ANTICIPATED ACCOUNTING TREATMENT

     327  

LEGAL MATTERS

     328  

EXPERTS

     328  

HOUSEHOLDING INFORMATION

     328  

TRANSFER AGENT AND REGISTRAR

     328  

STOCKHOLDER PROPOSALS AND NOMINATIONS

     329  

SHAREHOLDER COMMUNICATIONS

     330  

WHERE YOU CAN FIND MORE INFORMATION

     330  

INDEX TO FINANCIAL STATEMENTS

     F-1  

ANNEX A BUSINESS COMBINATION AGREEMENT

     A-1  

ANNEX B FORM OF DOMESTICATED ABIC CERTIFICATE OF INCORPORATION

     B-1  

ANNEX C FORM OF DOMESTICATED ABIC BYLAWS

     C-1  

ANNEX D FORM OF PROPOSED HOLDCO CERTIFICATE OF INCORPORATION

     D-1  

ANNEX E FORM OF PROPOSED HOLDCO BYLAWS

     E-1  

 

i


Table of Contents
     Page  

ANNEX F FORM OF HOLDCO REGISTRATION RIGHTS AGREEMENT

     F-1  

ANNEX G FORM OF 2022 INCENTIVE AWARD PLAN

     G-1  

ANNEX H FORM OF SEPARATION AGREEMENT

     H-1  

ANNEX I LONG TERM COLLABORATION AGREEMENT

     I-1  

ANNEX J FORM OF HOLDCO TAX MATTERS AGREEMENT

     J-1  

ANNEX K FORM OF CONTRACT MANUFACTURING AGREEMENT

     K-1  

ANNEX L FORM OF TRANSITION SERVICES AGREEMENT

     L-1  

ANNEX M FORM OF MASTER SERVICES AGREEMENT

     M-1  

ANNEX N FORM OF INVESTMENT AGREEMENTS

     N-1  

ANNEX O INSIDER LETTER AGREEMENT

     O-1  

ANNEX P FORM OF INTELLECTUAL PROPERTY LICENSE AGREEMENT

     P-1  

ANNEX Q FORM OF TRADEMARK LICENSE AGREEMENT

     Q-1  

ANNEX R FORM OF JOINT DEVELOPMENT AGREEMENT

     R-1  

ANNEX S FORM OF EMPLOYEE MATTERS AGREEMENT

     S-1  

ANNEX T INVESTOR SUPPORT AGREEMENT

     T-1  

 

ii


Table of Contents

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission, or SEC, by HoldCo (File No. 333-262573), constitutes a prospectus of HoldCo under Section 5 of the U.S. Securities Act of 1933, as amended, with respect to the HoldCo Securities to be issued to ABIC shareholders, if the business combination described below is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to the general meeting of ABIC shareholders at which ABIC shareholders will be asked to consider and vote upon a proposal to adopt the Business Combination Agreement and approve the Business Combination by the approval and adoption of the Business Combination Proposal, among other matters.

 

iii


Table of Contents

FREQUENTLY USED TERMS

In this proxy statement/prospectus:

Definitions

ABIC” means AEA-Bridges Impact Corp., an exempted company incorporated under the laws of the Cayman Islands, prior to the Domestication.

ABIC Board” means the board of directors of ABIC.

ABIC Initial Shareholders” means the Sponsor, John Garcia, John Replogle and George Serafeim.

ABIC Registration and Shareholder Rights Agreement” means the agreement, dated as of October 1, 2020, made and entered into by and among ABIC, Sponsor, and John Replogle and George Serafeim.

ABIC Securities” means ABIC Shares, ABIC Warrants and/or ABIC Units.

ABIC Shares” means, collectively, the Class A Ordinary Shares and the Class B Ordinary Shares.

ABIC Units” means the units issued at the time of the IPO, with each unit consisting of one Class A Ordinary Share and one-half of one Public Warrant, at an offering price per ABIC Unit of $10.00.

ABIC Warrant Agreement” means the agreement, dated October 1, 2020, between ABIC and the Transfer Agent, which sets forth the expiration and exercise price of and procedure for exercising the ABIC Warrants; certain adjustment features of the terms of exercise; provisions relating to redemption and cashless exercise of the ABIC Warrants; certain registration rights of the holders of ABIC Warrants; a provision for amendments to the ABIC Warrant Agreement; and indemnification of the warrant agent by ABIC under the ABIC Warrant Agreement.

ABIC Warrants” means the Public Warrants and the Private Placement Warrants.

Affected Periods” means (i) audited balance sheet as of October 5, 2020, (ii) audited financial statements as of December 31, 2020 and for the period from July 29, 2020 (“Inception”) through December 31, 2020 included in the 2020 Form 10-K/A No. 1; (iii) unaudited interim financial statements as of and for the quarterly period ended March 31, 2021 included in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on June 25, 2021; and (iv) unaudited interim financial statements as of and for the three and six months ended June 30, 2021.

ASC” means the Accounting Standards Codification.

Available Cash” means the sum of (without duplication) (a) the amount of cash available to be released from the Trust Account as of immediately prior to the Closing (net of the SPAC Share Redemption Amount), plus (b) the net amount of proceeds actually received or confirmed to be received by HoldCo pursuant to the KYMCO PIPE Investment as of immediately prior to or concurrently with the Closing, plus (c) the amount of proceeds required to be funded to HoldCo pursuant to the Company Equityholder PIPE Investment, plus (d) the portion of the Backstop investment actually required to be funded to HoldCo, in each case, by Company Equityholder, minus (e) the aggregate amount of all Transaction Expenses and SPAC Transaction Expenses.

Backstop” means the financing committed by the Company Equityholder, up to an aggregate amount of $100,000,000, pursuant to the Business Combination Agreement, whereby, to the extent that any Class A Ordinary Shares are properly redeemed at the General Meeting, H-D shall cause the Company Equityholder to

 

iv


Table of Contents

pay and deliver to HoldCo an amount in cash equal to the dollar value of such redemptions in exchange for a number of shares of HoldCo Common Stock with a dollar value equal to such amount (not to exceed $100,000,000) for a purchase price of $10.00 per share of HoldCo Common Stock.

Business Combination” means the transactions contemplated by the Business Combination Agreement.

Business Combination Agreement” means the Business Combination Agreement and Plan of Merger, attached to this proxy statement/prospectus as Annex A, entered into as of December 12, 2021 by and among ABIC, LiveWire, H-D, HoldCo and Merger Sub, as it may be amended and supplemented from time to time.

Cayman Islands Companies Act” refers to the Companies Act (As Revised) of the Cayman Islands.

Class A Ordinary Shares” means the Class A ordinary shares of ABIC, par value $0.0001 per share.

Class B Ordinary Shares” means the Class B ordinary shares of ABIC, par value $0.0001 per share.

Closing” means the closing of the Business Combination.

Closing Date” means the date on which the closing of the Business Combination occurs.

Code” means the Internal Revenue Code of 1986, as amended.

Combination Period” means the 24 months from the closing of the IPO, within which ABIC is required to complete an initial business combination under the Existing Organizational Documents.

Company Equity” means the membership interests of LiveWire.

Company Equityholder” means ElectricSoul, LLC, a Delaware limited liability company.

Company Equityholder PIPE Investment” means the purchase by Company Equityholder of 10,000,000 shares of HoldCo Common Stock for a purchase price of $10.00 per share for an aggregate gross purchase price equal to $100,000,000.

Contract Manufacturing Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex K, into which H-D and LiveWire will enter in connection with the Separation, pursuant to which H-D will provide contract manufacturing and procurement services to LiveWire.

DGCL” means the Delaware General Corporation Law, as amended.

Domesticated ABIC” means AEA-Bridges Impact Corp., a corporation incorporated under the laws of the State of Delaware, after the Domestication.

Domesticated ABIC Bylaws” means the bylaws of Domesticated ABIC, as of and following the Domestication, substantially in the form attached hereto as Annex C.

Domesticated ABIC Certificate of Incorporation” means the certificate of incorporation of Domesticated ABIC, as of and following the Domestication, substantially in the form attached hereto as Annex B.

 

v


Table of Contents

Domesticated ABIC Common Stock” means the Class A common stock of Domesticated ABIC, par value $0.0001 per share.

Domesticated ABIC Organizational Documents” means the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws.

Domesticated ABIC Warrant” means a warrant to acquire one share of Domesticated ABIC Common Stock at an exercise price of $11.50 per share of Domesticated ABIC Common Stock on the terms and conditions set forth in the ABIC Warrant Agreement.

Domestication” means the continuation of ABIC by way of domestication of ABIC into a Delaware corporation, with the ABIC Shares becoming shares of common stock of the Delaware corporation under the applicable provisions of the Cayman Islands Companies Act and the DGCL; the term includes all matters and necessary or ancillary changes in order to effect such Domestication, including the adoption of the Domesticated ABIC Organizational Documents consistent with the DGCL.

DTC” means the Depository Trust Company.

DWAC” means The Depository Trust Company’s deposit/withdrawal at custodian system.

Employee Matters Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex S, into which H-D and LiveWire will enter prior to the consummation of the Business Combination.

Exchange” means on the Closing Date, H-D will contribute to HoldCo all of the Company Equity in exchange for the issuance of shares of HoldCo Common Stock to the Company Equityholder.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Existing HoldCo Bylaws” means HoldCo’s bylaws in effect as of the date of this proxy statement/prospectus.

Existing HoldCo Certificate of Incorporation” means HoldCo’s certificate of incorporation in effect as of the date of this proxy statement/prospectus.

Existing HoldCo Organizational Documents” means the Existing HoldCo Certificate of Incorporation and Existing HoldCo Bylaws.

Existing Letter Agreement” means the agreement among ABIC, Sponsor and certain officers and directors of ABIC, dated as of October 1, 2020.

Existing Organizational Documents” means ABIC’s Amended and Restated Memorandum and Articles of Association adopted by special resolution, dated October 1, 2020, as may hereafter be amended.

FATCA” means the Foreign Account Tax Compliance Act.

Founder Shares” means the 10,000,000 Class B Ordinary Shares issued and outstanding.

GAAP” means U.S. generally accepted accounting principles.

General Meeting” means the extraordinary general meeting of ABIC’s shareholders, to be held on September 16, 2022 at 10:00 a.m., Eastern Time, at the offices of Kirkland & Ellis LLP, located at 601 Lexington Avenue, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date, and at such

 

vi


Table of Contents

other place to which the meeting may be adjourned. Due to the current novel coronavirus (“COVID-19”) global pandemic, there are restrictions in place in many jurisdictions relating to the ability to conduct in-person meetings. As part of our precautions regarding COVID-19, we are planning for the meeting to be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of the Existing Organizational Documents.

H-D” means Harley-Davidson, Inc., a Wisconsin corporation.

HoldCo” means LiveWire Group, Inc. (formerly known as LW EV Holdings, Inc.), a Delaware corporation.

HoldCo Board” means the board of directors of HoldCo subsequent to the completion of the Business Combination.

HoldCo Common Stock” means the common stock of HoldCo, par value $0.0001 per share.

HoldCo Registration Rights Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex F, to be entered into upon the consummation of the Business Combination, among HoldCo, LiveWire, the Sponsor, Company Equityholder, John Garcia, John Replogle and George Serafeim (collectively, the “Holders”), pursuant to which the Holders will be entitled to certain piggyback registration rights and customary demand registration rights.

HoldCo Securities” means shares of HoldCo Common Stock and HoldCo Warrants.

HoldCo Warrant” means a warrant that represents the right to acquire shares of HoldCo Common Stock on substantially similar terms as those set forth in the ABIC Warrant Agreement.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Incentive Plan” means the LiveWire Group, Inc. 2022 Incentive Award Plan, substantially in the form attached to this proxy statement/prospectus as Annex G.

Insider Letter Agreement” means the letter agreement, attached to this proxy statement/prospectus as Annex O, dated October 1, 2020, by and between ABIC, the Sponsor and each of ABIC’s officers, and directors.

Intellectual Property License Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex P, into which H-D and LiveWire will enter in connection with the Separation.

Intended Tax Treatment” means that (a) the Domestication qualifies as a reorganization within the meaning of Section 368(a)(1)(F) of the Code, (b) the Exchange, the PIPE Financing and the Merger, taken together, qualify as a transaction described in Section 351 of the Code, (c) the Merger qualifies as a “reorganization” within the meaning of Section 368(a)(2)(E) or Section 368(a)(1)(B) of the Code and (d) the Business Combination Agreement being adopted as a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code and Treasury Regulations Sections 1.368-2(g) and 1.368-3(a) with respect to each of the Domestication and the Merger.

Investment Company Act” means the Investment Company Act of 1940, as amended.

Investment Agreements” means the investment agreements, substantially in the form attached to this proxy statement/prospectus as Annex N, between HoldCo and the KYMCO Group, pursuant to the KYMCO PIPE Investment.

 

vii


Table of Contents

Investor Support Agreement” means the agreement, attached to this proxy statement/prospectus as Annex T dated as of December 12, 2021, by and among the Sponsor, HoldCo, ABIC, John Garcia, John Replogle and George Serafeim.

IPO” means ABIC’s initial public offering of ABIC Units, Public Shares and Public Warrants pursuant to the IPO registration statement and completed on October 5, 2020.

IPO registration statement” means the registration statements filed for ABIC’s IPO on Form S-1 declared effective by the SEC on October 1, 2020 (SEC File No. 333-248785).

Joint Development Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex R, into which H-D and LiveWire will enter in connection with the Separation.

JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

KYMCO Group” means collectively, (i) Kwang Yang Motor Co., Ltd., (ii) KYMCO Capital Fund I Co., Ltd., (iii) SunBright Investment Co., Ltd., (iv) CycleLoop Co., Ltd. and (v) Kwang Yang Holdings Limited.

KYMCO PIPE Investment” means the purchase by the KYMCO Group of 10,000,000 shares of HoldCo Common Stock for a purchase price of $10.00 per share for an aggregate gross purchase price equal to $100,000,000.

“Long Term Collaboration Agreement” means the agreement, dated December 12, 2021, attached to this proxy statement/prospectus as Annex I, in which KYMCO Group and LiveWire entered into in connection with the Business Combination, pursuant to which KYMCO Group and LiveWire will work together on the design, development, manufacturing and distribution of electric vehicles, and KYMCO Group will provide LiveWire with contract manufacturing for certain products. The Long Term Collaboration Agreement will become effective upon the Business Combination.

LiveWire” means (i) LiveWire EV, LLC, a Delaware limited liability company and (ii) LiveWire EV, which, for purposes of the preparation of the financial information of LiveWire and related disclosure contained in this proxy statement/prospectus, is comprised of certain net assets and operating activities related to the historical electric vehicle operations of certain wholly owned indirect subsidiaries of H-D that did not operate as a separate, stand-alone entity and historically was included as part of the motorcycles and related products segment of H-D (for additional information, see LiveWire’s combined financial statements and notes thereto included elsewhere in this proxy statement/prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire”).

Lock-up Shares” means shares of HoldCo Common Stock and any other equity securities convertible into or exercisable or exchangeable for shares of HoldCo Common Stock (including any Private Placement Warrants) held by the Sponsor, Company Equityholder, Mr. Garcia, Mr. Replogle and Mr. Serafeim immediately following the Closing (other than shares of HoldCo Common Stock and any other equity securities convertible into or exercisable or exchangeable for shares of HoldCo Common Stock acquired pursuant to open market purchases subsequent to the Closing).

Master Services Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex M, into which H-D and LiveWire will enter in connection with the Business Combination.

Maximum Redemptions” means the maximum number of Class A Ordinary Shares of ABIC that may be redeemed in connection with the proposed Business Combination, while still satisfying the Minimum Cash Condition.

 

viii


Table of Contents

Merger” means the merger of Merger Sub with and into ABIC, with ABIC surviving the merger as a wholly owned direct subsidiary of HoldCo.

Merger Effective Time” means the effective time of the Merger.

Merger Sub” means LW EV Merger Sub, Inc., a Delaware corporation.

Minimum Cash Condition” means the closing condition in the Business Combination Agreement that the amount of Available Cash shall be no less than $270,000,000.

Morrow” means Morrow Sodali LLC, as proxy solicitor.

No Redemptions” means no Class A Ordinary Shares of ABIC are redeemed in connection with the proposed Business Combination.

NYSE” means The New York Stock Exchange.

PIPE Financing” means the Company Equityholder PIPE Investment and the KYMCO PIPE Investment.

PIPE Investors” means the KYMCO Group and Company Equityholder.

PFIC” means passive foreign investment company under the Code.

Private Placement” means the private placement by ABIC of 10,500,000 Private Placement Warrants to the Sponsor simultaneously with the closing of the IPO.

Private Placement Warrants” means the warrants exercisable for one Class A Ordinary Share at a price of $11.50 per share sold to the Sponsor simultaneously with the closing of the IPO in a private placement at a price of $1.00 per warrant.

Proposed HoldCo Bylaws” means the bylaws of HoldCo, as of and following the Merger and to remain in effect following the Closing, substantially in the form attached hereto as Annex E.

Proposed HoldCo Certificate of Incorporation” means the certificate of incorporation of HoldCo, as of and following the Merger and to remain in effect following the Closing, substantially in the form attached hereto as Annex D.

Proposed HoldCo Organizational Documents” means the Proposed HoldCo Bylaws and Proposed HoldCo Certificate of Incorporation.

proxy statement/prospectus” means the proxy statement/prospectus forming a part of this registration statement.

Public Shareholders” means the holders of the Public Shares or Public Warrants that were sold in the IPO (whether they were purchased in the IPO or thereafter in the open market).

Public Shares” means ABIC’s Class A Ordinary Shares sold in the IPO (whether they were purchased in the form of ABIC Units in the IPO or thereafter in the open market).

Public Warrants” means the warrants included in the ABIC Units sold in the IPO, each warrant exercisable for one Class A Ordinary Share at a price of $11.50 per share (whether they were purchased in the form of ABIC Units in the IPO or thereafter in the open market).

 

ix


Table of Contents

Record Date” means May 6, 2022.

redemption” means the redemption of Public Shares for the redemption price.

redemption right” means the right of each Public Shareholder (as determined in accordance with the Existing Organizational Documents and the Trust Agreement) to redeem all or a portion of such holder’s Class A Ordinary Shares at the redemption price in connection with the General Meeting.

Required Shareholder Proposals” means the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal.

Rule 144” means Rule 144 under the Securities Act.

Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

SEC” means the U.S. Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933, as amended.

Separation” means the separation of the LiveWire business from H-D into an independent company.

Separation Agreement” means the separation agreement, substantially in the form attached to this proxy statement/prospectus as Annex H, into which LiveWire and H-D we will enter into on the Closing Date, prior to the Closing, that will set forth LiveWire’s agreements with H-D regarding the Separation.

Shareholder Proposals” means, collectively, the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, the Governing Documents Proposals, the Incentive Plan Proposal and the Adjournment Proposal.

SPAC Share Redemption Amount” means the aggregate amount payable with respect to all redemptions.

SPAC Transaction Expenses” means all transaction expenses of ABIC (which shall include any outstanding amounts under any Working Capital Loans) that are accrued and unpaid, as set forth on a written statement to be delivered by ABIC to LiveWire not less than two (2) business days prior to the Closing Date, which shall include the respective amounts and wire transfer instructions for the payment thereof, together with corresponding invoices for the foregoing and (i) all Transaction Expenses that are accrued and unpaid as of Closing and set forth on a written statement to be delivered by H-D to LiveWire not less than two (2) business days prior to the Closing Date, which shall include the respective amounts and wire transfer instructions for payment thereof, together with corresponding invoices for the foregoing and (ii) H-D shall pay or cause to be paid, by wire transfer of immediately available funds, any Transactions Expenses in excess of $27,000,000.

Sponsor” means AEA-Bridges Impact Sponsor, LLC, a Cayman Islands limited liability company.

Sponsor Group” means the Sponsor and its affiliates.

Subscription Agreement” means the Investment Agreements, and any other subscription agreements entered into by HoldCo with the prior written approval of ABIC and LiveWire prior to Closing.

Tax Matters Agreement” means the tax matters agreement, substantially in the form attached to this proxy statement/prospectus as Annex J, into which H-D and HoldCo will enter in connection with the Business Combination, which sets forth the principles and responsibilities of the parties regarding the allocation of taxes and other related liabilities and adjustments with respect to taxes, preparation of tax returns, tax audits and certain other tax matters.

 

x


Table of Contents

Termination Date” means September 30, 2022.

Trademark License Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex Q, into which LiveWire and H-D will enter in connection with the Separation, pursuant to which H-D will grant to LiveWire a royalty-free license to use certain H-D trademarks with respect to LiveWire products.

Transition Services Agreement” means the agreement, substantially in the form attached to this proxy statement/prospectus as Annex L, into which LiveWire and H-D will enter in connection with the separation of the LiveWire business from H-D pursuant to the terms of the Separation Agreement.

Transaction Expenses” means (i) all fees, costs and expenses incurred by or on behalf of or subject to payment or reimbursement by H-D and its subsidiaries, including the LiveWire and its subsidiaries before and through the Closing (and not paid prior to the Closing), including the employer’s portion of any payroll or employment taxes related thereto (whether deferred or not, but after taking into account any tax credits under the CARES Act), in connection with or incidental to the preparation for, negotiating or consummation of the transactions contemplated by the Business Combination Agreement and related agreements or otherwise in connection with H-D’s exploration of strategic alternatives, engagement in the process of selling the LiveWire Business (as defined below), including all fees, costs, expenses, brokerage fees, commissions, finder’s fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers and (ii) any amounts that H-D is obligated to pay pursuant to Section 6.15 of the Separation Agreement; provided, that any Transaction Expenses in excess of $27,000,000 shall be the liability and obligation of H-D.

Transfer Agent” means Continental Stock Transfer & Trust Company.

Treasury Regulations” means the Code, its legislative history, and final, temporary and proposed treasury regulations promulgated thereunder as then amended.

Trust Account” means the trust account of ABIC, which holds the net proceeds from the IPO and certain of the proceeds from the sale of the Private Placement Warrants, together with interest earned thereon, less amounts released to pay taxes.

Trust Agreement” means the Investment Management Trust Agreement, dated as of October 1, 2020, between ABIC and Continental Stock Transfer & Trust Company, LLC, as trustee.

Working Capital Loans” means certain loans that may be made by the Sponsor or an affiliate of the Sponsor, or certain of ABIC’s officers and directors in connection with the financing of a business combination.

 

xi


Table of Contents

PRESENTATION OF FINANCIAL INFORMATION

Presentation of Financial Information

This proxy statement/prospectus contains:

 

   

the audited combined financial statements of LiveWire as of and for the years ended December 31, 2021, 2020, and 2019, prepared in accordance with GAAP;

 

   

the unaudited interim combined financial statements of LiveWire as of March 27, 2022 and for the three months ended March 27, 2022 and March 28, 2021 (such unaudited interim combined financial statements prepared in accordance with GAAP);

 

   

the audited financial statements of ABIC as of December 31, 2021 and 2020 and for the period from July 29, 2020 (inception) through December 31, 2020, each prepared in accordance with GAAP;

   

the unaudited condensed financial statements of ABIC as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 (such unaudited condensed financial statements prepared in accordance with GAAP); and

 

   

the unaudited pro forma condensed combined financial information of LiveWire and ABIC as of and for the three months ended March 27, 2022 and for the year ended December 31, 2021, prepared in accordance with Article 11 of SEC Regulation S-X.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should carefully read the following selected financial information in conjunction with the section entitled “Managements Discussion and Analysis of Financial Condition and Results of Operations of ABIC” and ABIC’s financial statements and the related notes appearing elsewhere in this proxy statement/prospectus.

This information should be read in conjunction with “Risk Factors,” Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire” and LiveWire’s combined financial statements and notes thereto included elsewhere in this proxy statement/prospectus. The selected historical combined financial information in this section is not intended to replace LiveWire’s historical combined financial statements and the related notes thereto included elsewhere in this proxy statement/prospectus. LiveWire’s historical results are not necessarily indicative of future results. Such unaudited interim financial information has been prepared on a basis consistent with LiveWire’s audited combined financial statements.

The non-GAAP information of LiveWire above and elsewhere in this proxy statement/prospectus should be read in conjunction with LiveWire’s audited combined financial statements and unaudited interim combined financial statements and the related notes included elsewhere in this proxy statement/prospectus. Please see the section entitled “Shareholder Proposal 1: The Business Combination ProposalCertain Unaudited LiveWire Prospective Financial Information” beginning on page 142 of this proxy statement/prospectus.

Share Calculations and Ownership Percentages

Unless otherwise specified (including in the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information and ”Beneficial Ownership of Securities”), the share calculations and ownership percentages set forth in this proxy statement/prospectus with respect to HoldCo’s stockholders following the Business Combination are for illustrative purposes only and assume the following:

 

1.

no Public Shareholders exercise their redemption rights in connection with the Closing, and the balance of the Trust Account as of the Closing is the same as its balance on March 31, 2022 of $400,313,600. Please see the section entitled “General Meeting of ABIC Shareholders—Redemption Rights”;

 

xii


Table of Contents
2.

all separated ABIC Units, together with the cancellation of all Class B Ordinary Shares, are exchanged for shares of Domesticated ABIC Common Stock which are exchanged for shares of HoldCo Common Stock at such time;

 

3.

for purposes of the number of Class A Ordinary Shares redeemable, assuming Maximum Redemptions, the per share redemption price is $10.01; the actual per-share redemption price will be equal to the pro rata portion of the Trust Account calculated as of two business days prior to the consummation of the Business Combination;

 

4.

the PIPE Investment is consummated in accordance with the terms of the Subscription Agreements, with HoldCo issuing a total of 20.0 million shares of HoldCo Common Stock to the PIPE Investors at $10.00 per share;

 

5.

none of the Earn Out Shares have vested pursuant to the applicable terms of the Business Combination Agreement and are excluded from the outstanding share calculations unless expressly stated to the contrary;

 

6.

none of the HoldCo Common Stock reserved for issuance under the Incentive Plan has been issued; and

 

7.

none of the warrants to purchase HoldCo Common Stock have been exercised for shares of HoldCo Common Stock.

 

xiii


Table of Contents

TRADEMARKS, TRADE NAMES, AND SERVICE MARKS

The LiveWire, H-D and STACYC logos, and other trademarks or service marks of LiveWire and/or H-D appearing in this proxy statement/prospectus are the property of HoldCo, LiveWire and/or H-D. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this prospectus are presented without the ® and symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of other entities. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements. Forward-looking statements provide the respective current expectations or forecasts of future events of HoldCo, LiveWire and ABIC. Forward-looking statements include statements about HoldCo’s, LiveWire’s and ABIC’s respective expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will” and “would,” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this proxy statement/prospectus include, but are not limited to, statements regarding LiveWire’s operations, cash flows, financial position and dividend policy.

Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Managements Discussion and Analysis of Financial Condition and Results of Operations of LiveWire,” “Managements Discussion and Analysis of Financial Condition and Results of Operations of ABIC,” “Business of ABIC and Certain Information About ABIC” and “Business of LiveWire and Certain Information About LiveWire.” The risks and uncertainties include, but are not limited to:

 

   

LiveWire’s history of losses and expectation to incur significant expenses and continuing losses for the foreseeable future;

 

   

LiveWire’s ability to execute its business model, including market acceptance of its planned electric vehicles;

 

   

risks related to LiveWire’s limited operating history, the rollout of its business and the timing of expected business milestones, including LiveWire’s ability to develop and manufacture electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale;

 

   

LiveWire’s financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder;

 

   

changes in LiveWire’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;

 

   

LiveWire’s ability to attract and retain a large number of customers;

 

   

LiveWire’s future capital requirements and sources and uses of cash;

 

   

LiveWire’s ability to obtain funding for its operations and manage costs;

 

   

risks related to challenges LiveWire faces as pioneer into the highly-competitive and rapidly-evolving electric vehicle industry;

 

xiv


Table of Contents
   

LiveWire’s operational and financial risks if it fails to effectively and appropriately separate the LiveWire business from the H-D business;

 

   

risks related to H-D making decisions for its overall benefit that could negatively impact LiveWire’s overall business;

 

   

risks related to LiveWire’s relationship with H-D and its impact on LiveWire’s other business relationships;

 

   

LiveWire’s ability to leverage contract manufacturers, including H-D and KYMCO Group, to contract manufacture its electric vehicles;

 

   

risks related to retail partners being unwilling to participate in LiveWire’s go-to-market business model or their inability to establish or maintain relationships with customers for LiveWire’s electric vehicles;

 

   

risks related to potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of LiveWire’s electric vehicles;

 

   

risks related to building out LiveWire’s supply chain, including LiveWire’s dependency on its existing suppliers and LiveWire’s ability to source suppliers, in each case many of which are single-sourced or limited-source suppliers, for its critical components such as batteries and semiconductor chips;

 

   

LiveWire’s ability to rely on third-party and public charging networks;

 

   

LiveWire’s ability to attract and retain key personnel;

 

   

LiveWire’s business, expansion plans and opportunities, including its ability to scale its operations and manage its future growth effectively;

 

   

the effects on LiveWire’s future business of competition, the pace and depth of electric vehicle adoption generally and its ability to achieve planned competitive advantages with respect to its electric vehicles and products, including with respect to reliability, safety and efficiency;

 

   

risks related to LiveWire’s business and H-D’s business overlapping and being perceived as competitors;

 

   

LiveWire’s inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between LiveWire and H-D;

 

   

LiveWire’s dependency on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it may require significant investment for LiveWire to build its own safety and testing facilities, or LiveWire may be required to obtain such services from another third-party at increased costs;

 

   

risks related to any decision by LiveWire to electrify H-D products, or the products of any other company;

 

   

LiveWire’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

 

   

potential harm caused by misappropriation of LiveWire’s data and compromises in cybersecurity;

 

   

changes in laws, regulatory requirements, governmental incentives and fuel and energy prices;

 

   

the impact of health epidemics, including the COVID-19 pandemic, on LiveWire’s business, the other risks it face and the actions it may take in response thereto;

 

   

litigation, regulatory proceedings, complaints, product liability claims and/or adverse publicity;

 

xv


Table of Contents
   

the possibility that LiveWire may be adversely affected by other economic, business and/or competitive factors; and

 

   

other factors discussed in “Risk Factors.”

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 described in “Risk Factors” in this proxy statement/prospectus. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus. HoldCo, LiveWire and ABIC undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks HoldCo describes in the reports it will file from time to time with the SEC after the date of this proxy statement/prospectus.

In addition, statements that “HoldCo believes,” “LiveWire believes” or “ABIC believes” and similar statements reflect HoldCo’s, LiveWire’s and ABIC’s respective beliefs and opinions on the relevant subject. These statements are based on information available to them as of the date of this proxy statement/prospectus, and while HoldCo, LiveWire and ABIC respectively believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. HoldCo’s, LiveWire’s and ABIC’s statements should not be read to indicate that they have respectively conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.

Although HoldCo, LiveWire and ABIC respectively believe the expectations reflected in the forward-looking statements were reasonable at the time made, they cannot guarantee future results, level of activity, performance or achievements. Moreover, neither HoldCo, LiveWire nor ABIC nor any other person assumes 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 proxy statement/prospectus and any subsequent written or oral forward-looking statements that may be issued by HoldCo, LiveWire ABIC or persons acting on their behalf.

 

 

xvi


Table of Contents

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR SHAREHOLDERS

The questions and answers below highlight only selected information from this document and only briefly address certain commonly asked questions about the proposals to be presented at the General Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our shareholders. We urge shareholders to read carefully this entire proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the General Meeting, which will be held at 10:00 a.m., Eastern Time, on September 16, 2022 at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned.

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

You are receiving this proxy statement/prospectus in connection with the General Meeting of ABIC’s shareholders. ABIC is holding the General Meeting to consider and vote upon the Shareholder Proposals described below. Your vote is important. You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

ABIC’s shareholders are being asked to consider and vote upon the Business Combination Proposal to approve the Business Combination Agreement and the Business Combination contemplated thereby. The Business Combination Agreement provides that, among other things, (a) prior to the Closing, on the Closing Date, H-D and LiveWire will consummate the separation of the LiveWire business and the other transactions contemplated by the Separation Agreement, and (b) the Company Equityholder shall consummate the Exchange, pursuant to which HoldCo shall acquire from the Company Equityholder, and the Company Equityholder shall transfer, convey and deliver to HoldCo, all of the Company Equity and the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161,000,000 shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future. Approval of the Business Combination Agreement and the transactions contemplated thereby by ABIC’s shareholders is required by the Business Combination Agreement and the Existing Organizational Documents. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A and ABIC encourages its shareholders to read it in its entirety. See the section titled “Shareholder Proposal 1: The Business Combination Proposal.”

ABIC’s shareholders are also being asked to consider and vote upon the Domestication Proposal to change the corporate structure and domicile of ABIC by way of continuation from an exempted company incorporated under the laws of the Cayman Islands to a corporation incorporated under the laws of the State of Delaware in accordance with Section 388 of the Delaware General Corporation Law, as amended (the “DGCL”) and the Cayman Islands Companies Act (As Revised). At least one day prior to the Merger Effective Time, the Domestication will be effected, and prior to the Closing, on the Closing Date, the Merger will occur in accordance with Section 251(g) of the DGCL, in which Merger Sub will be merged with and into ABIC, with ABIC surviving the merger as a wholly owned direct subsidiary of HoldCo, and HoldCo will continue as the public company. The form of the proposed Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws are attached to this proxy statement/prospectus as Annex B and Annex C, respectively. See the section titled “Shareholder Proposal 2: The Domestication Proposal.” All outstanding securities of ABIC will convert in the Merger to identical outstanding securities of HoldCo, as described in more detail in this proxy statement/prospectus.

ABIC’s shareholders are also being asked to consider and vote upon the Charter Proposal to adopt the proposed Domesticated ABIC Certificate of Incorporation in the form attached hereto as Annex B, and

 

1


Table of Contents

the proposed Domesticated ABIC Bylaws, which is included in the form attached here to as Annex C, which, in the judgment of the ABIC Board, is necessary to adequately address the needs of ABIC following the Domestication and the consummation of the Business Combination. See the section titled “Shareholder Proposal 3: The Charter Proposal.”

ABIC’s shareholders are also being asked to consider and vote upon the Governing Documents Proposals to approve, on a nonbinding advisory basis, each of the Governing Documents Proposals and thereby (i) authorize changes to authorized shares of capital stock, (ii) authorize the Domesticated ABIC Board to make issuances of preferred stock, (iii) adopt Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act, and (iv) approve other changes to be made in connection with the adoption of the Domesticated ABIC Organizational Documents. A copy of the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws is attached to this proxy statement/prospectus as Annex B and Annex C, respectively. See the section titled “Shareholder Proposal 4: The Governing Documents Proposals.”

ABIC’s shareholders are also being asked to consider and vote upon the Incentive Plan Proposal to approve the Incentive Plan, a copy of which is attached to this proxy statement/prospectus as Annex G, to be effective upon approval by ABIC’s shareholders. See the section titled “Shareholder Proposal 5: The Incentive Plan Proposal.

ABIC’s shareholders are also being asked to consider and vote upon the Adjournment Proposal to adjourn the General Meeting to a later date or dates, including, if necessary, (i) to permit further solicitation and vote of proxies if it is determined by ABIC that more time is necessary or appropriate to approve one or more Shareholder Proposals at the General Meeting, (ii) to allow reasonable additional time for filing or mailing of any supplemental or amended disclosure required under applicable law and (iii) if the holders of Class A Ordinary Shares have elected to redeem such shares such that either (a) the shares of HoldCo Common Stock and HoldCo Warrants would not be approved for listing on the NYSE or (b) the Minimum Cash Condition would not be met at Closing. See the section titled “Shareholder Proposal 6: The Adjournment Proposal.

The presence, in person or by proxy, of ABIC shareholders representing a majority of the issued and outstanding ABIC Shares on the Record Date and entitled to vote on the Shareholder Proposals to be considered at the General Meeting will constitute a quorum for the General Meeting.

YOUR VOTE IS IMPORTANT. YOU ARE ENCOURAGED TO VOTE AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS.

 

Q.

When and where will the General Meeting be held?

 

A.

The General Meeting will be held at 10:00 a.m., Eastern Time, on September 16, 2022, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned. As part of our precautions regarding COVID-19, we are planning for the possibility that the meeting may be held virtually over the Internet. If we take this step, we will announce the decision to do so via a press release and posting details on our website that will also be filed with the SEC as proxy material. Only shareholders who hold ABIC Shares at the close of business on the Record Date will be entitled to vote at the General Meeting.

 

Q.

What is being voted on at the General Meeting?

 

A.

At the General Meeting, the shareholders of ABIC are being asked to vote on the following Shareholder Proposals:

(1) The Business Combination Proposal;

 

2


Table of Contents

(2) The Domestication Proposal;

(3) The Charter Proposal;

(4) The Governing Documents Proposals;

(5) The Incentive Plan Proposal; and

(6) The Adjournment Proposal.

 

Q.

Are the Shareholder Proposals conditioned on one another?

 

A.

Each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal (together, the “Required Shareholder Proposals”) is interdependent upon the other and each must be approved in order for ABIC to complete the Business Combination contemplated by the Business Combination Agreement. The Business Combination Proposal, the Incentive Plan Proposal, and the Adjournment Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. None of the Governing Documents Proposals, which will be voted upon on a nonbinding advisory basis, or the Adjournment Proposal is conditioned upon the approval of any of the other proposals. The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the outstanding ABIC Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. The Governing Documents Proposals are voted upon on a nonbinding advisory basis only.

 

Q.

Why is ABIC proposing the Business Combination?

 

A.

ABIC was incorporated to effect a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. Since ABIC’s organization, the ABIC Board has sought to identify suitable candidates in order to effect such a transaction. In its review of LiveWire, the ABIC Board considered a variety of factors weighing positively and negatively in connection with the Business Combination. After careful consideration, the ABIC Board has determined that the Business Combination presents a highly attractive business combination opportunity and is in the best interests of ABIC’s shareholders. The ABIC Board believes that, based on its review and consideration, the Business Combination with LiveWire presents an opportunity to increase shareholder value. However, there can be no assurance that the anticipated benefits of the Business Combination will be achieved. Approval of the Business Combination by ABIC’s shareholders is required by the Business Combination Agreement and the Existing Organizational Documents.

 

Q.

What will happen in the Business Combination?

 

A.

The Business Combination consists of a series of transactions pursuant to which (i) at least one day prior to the Merger Effective Time, ABIC will complete the Domestication, in connection with which all outstanding ABIC Shares will convert into shares of Domesticated ABIC Common Stock, par value $0.0001 per share, and each outstanding ABIC Warrant will convert into a Domesticated ABIC Warrant; (ii) prior to the Closing, on the Closing Date, H-D and LiveWire will consummate the separation of the LiveWire business and the other transactions contemplated by the Separation Agreement; (iii) prior to the Closing, on the Closing Date, the Merger will occur, in which Merger Sub will be merged with and into ABIC, with ABIC surviving the merger as a wholly owned direct subsidiary of HoldCo, and HoldCo will continue as the public company, with each share of Domesticated ABIC Common Stock being converted into the right of the holder thereof to receive one share of HoldCo Common Stock; and (iv) the Company Equityholder shall consummate the Exchange, pursuant to which HoldCo shall acquire from the Company Equityholder, and the Company Equityholder shall transfer, convey and deliver to HoldCo, all of the Company Equity and the

 

3


Table of Contents
  Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161,000,000 shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future.

 

Q.

What consideration will be received in connection with the Business Combination?

 

A.

The aggregate consideration to be paid in the Business Combination is derived from an aggregate transaction enterprise value of $1.765 billion, apportioned between cash and shares of HoldCo Common Stock, as more specifically set forth in the Business Combination Agreement. In addition to the consideration to be paid at Closing, the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161,000,000 shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future. For further details, see “The Business Combination AgreementConsideration.”

 

Q.

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

A.

We expect that a U.S. Holder that exercises its redemption rights to receive cash from the Trust Account in exchange for its Public Shares will generally be treated as selling such shares (for this purpose, including the Domesticated ABIC Common Stock received in exchange therefor) in a taxable transaction resulting in the recognition of capital gain or loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of Public Shares that such U.S. Holder owns or is deemed to own (including through the ownership of Public Warrants and the Domesticated ABIC Common Stock and Domesticated ABIC Warrants received in exchange therefor) prior to and following the redemption. For a more complete discussion of the U.S. federal income tax considerations of a U.S. Holder’s exercise of redemption rights, see “Material Tax ConsiderationsU.S. Federal Income Tax Considerations to U.S. HoldersTax Consequences of U.S. Holders Exercising Redemption Rights.

For a description of the tax consequences for Non-U.S. Holders exercising redemption rights in connection with the Business Combination, see the section entitled “Material Tax ConsiderationsU.S. Federal Income Tax Considerations to U.S. HoldersTax Consequences of Non-U.S. Holders Exercising Redemption Rights.”

Additionally, because the Domestication will occur immediately prior to the redemption by any Public Shareholder, U.S. Holders exercising redemption rights will be subject to the potential tax consequences of Section 367(b) of the Code and the tax rules relating to PFICs. The tax consequences of the exercise of redemption rights, including pursuant to Section 367(b) of the Code and the PFIC rules, are discussed more fully under “Material Tax Considerations.” All holders of our Public Shares considering exercising their redemption rights are urged to consult their tax advisors on the tax consequences to them of an exercise of redemption rights, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.

 

Q.

What are the U.S. federal income tax consequences as a result of the Business Combination?

 

A.

Subject to the assumptions, limitations and qualifications described in “Material Tax Considerations—U.S. Federal Income Tax Considerations to U.S. Holders,” it is the opinion of Kirkland & Ellis LLP that the exchange of Domesticated ABIC Common Stock for shares of HoldCo Common Stock pursuant to the Merger (together with the Exchange and PIPE Financing) will qualify as a tax-deferred exchange for U.S. federal income tax purposes under Section 351 of the Code. In addition, subject to the assumptions, limitations and qualifications described in “Material Tax Considerations—U.S. Federal Income Tax Considerations to U.S. Holders,” including that as of immediately following the Closing the Trust Account retains at least 50 percent (50%) of its cash balance as of the date hereof taking into account any exercise of redemption rights and payment of transaction expenses by ABIC, it is the opinion of Kirkland & Ellis LLP that the Merger is more likely than not to qualify as a tax-deferred reorganization under Section 368(a)(2)(E) or Section 368(a)(1)(B) of the Code. If the

 

4


Table of Contents
  Merger only qualifies as a tax-deferred exchange under Section 351 of the Code and does not qualify as a tax-deferred reorganization under Section 368(a) then the exchange of Domesticated ABIC Warrants for HoldCo Warrants in the Merger would not qualify for tax-deferred treatment and would be taxable as further described in “Material Tax Considerations—U.S. Federal Income Tax Considerations to U.S. Holders.” The parties intend to report the Merger as a tax-deferred exchange described in Section 351 of the Code and as a tax-deferred reorganization under Section 368(a) of the Code. However, there are significant factual and legal uncertainties as to whether the Merger will qualify as a tax-deferred reorganization under Section 368(a)(2)(E) or Section 368(a)(1)(B) of the Code. For example, under Section 368(a) of the Code, the acquiring corporation must continue, either directly or indirectly through certain controlled corporations, either a significant line of the acquired corporation’s historic business or use a significant portion of the acquired corporation’s historic business assets in a business. However, there is an absence of guidance directly on point as to how the provisions of Section 368(a) of the Code apply in the case of an acquisition of a corporation with only investment-type assets, such as ABIC, and there are significant factual and legal uncertainties concerning the determination of this requirement. Moreover, qualification of the Merger as a tax-deferred reorganization under Section 368(a) of the Code is based on facts (including the cash balance of the Trust Account immediately following the Closing) which will not be known until or following the closing of the Business Combination. The closing of the Business Combination is not conditioned upon the receipt of an opinion of counsel that the Business Combination will so qualify for the Intended Tax Treatment, and neither ABIC nor HoldCo intends to request a ruling from the IRS regarding the U.S. federal income tax treatment of the Business Combination. Further, any change that is made after the date hereof in any of the foregoing bases for the Intended Tax Treatment, including any inaccuracy of the facts or assumptions upon which such expectations were based, could adversely affect the Intended Tax Treatment. Accordingly, no assurance can be given that the Merger will qualify as a tax-free reorganization under Section 368(a) of the Code or that the IRS will not challenge the Intended Tax Treatment or that a court will not sustain a challenge by the IRS.

You are strongly urged to consult with a tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences of the Business Combination to you. For a description of material U.S. federal income tax consequences of the Business Combination, see the section entitled “Material Tax Considerations” beginning on page 172.

 

Q:

What positive and negative factors did the ABIC Board consider when determining whether to approve the Business Combination Agreement and the related transactions?

 

A:

In evaluating the transaction with H-D for sale of the LiveWire business, the ABIC Board consulted with its management, advisors and legal counsel as well as financial and other consultants, and considered and evaluated several factors. In particular, the ABIC Board considered the following positive factors, although not weighted or in any order of significance, in deciding to approve the Business Combination Agreement and transactions contemplated thereby:

 

   

LiveWire is an industry-leading all-electric motorcycle brand that operates in a large global market in the early stage of a secular shift to electric motorcycles, which the ABIC Board believes presents an attractive investment opportunity in electric vehicles with strong growth prospects. Following a review of industry trends including customer preferences and recognition of the benefits of electric vehicles, financial metrics for charging network and electric vehicle technologies, LiveWire’s evolution and other factors, the ABIC Board believes LiveWire is well positioned to further capitalize on these trends.

 

   

ABIC believes that LiveWire has a compelling financial profile that appeals to and aligns with its ESG priorities.

 

5


Table of Contents
   

In connection with the Business Combination, LiveWire will be the first public electric motorcycle company in the U.S. ABIC believes that LiveWire has developed strong global production capabilities to startup and scale compared to traditional original equipment manufacturers.

 

   

LiveWire is a modern retailer, combining the best of digital and physical purchase paths for its customers and retail partners to provide tech-forward sales and service. LiveWire’s retail network is rapidly expanding in priority markets by leveraging H-D’s traditional motorcycle dealer network and working with retail partners who possess a strong sales track record, presence in a priority market, commitment to LiveWire’s mission and expertise in the electric vehicle retail and service industry.

 

   

LiveWire has an established brand presence in North America and Europe, with planned expansion in additional markets, including Asia-Pacific.

 

   

LiveWire will benefit from the operational and manufacturing support of industry-leading financial and strategic partners H-D and the KYMCO Group, each of which has provided significant investment in the Business Combination. Through these partnerships, LiveWire is well-positioned to leverage the engineering expertise, manufacturing footprint, established distribution channels, supply chain infrastructure and global logistics capabilities of H-D and the KYMCO Group, which may create an opportunity for global at-scale manufacturing and purchasing efficiencies in priority markets. Further, the KYMCO Group’s investment provided further validation for ABIC’s valuation.

 

   

With a robust new product pipeline, LiveWire is well positioned to, and has a clearly defined strategy to, capture increasing global market share and consumer adoption in the growing electric vehicle industry, following significant research and development investments to date. LiveWire has a demonstrated track record of research and development investments, providing breakthrough technologies and features for its premium electric motorcycle and is poised to extend its portfolio of products to include a range of middleweight applications. LiveWire is leveraging the latest technologies to address heavyweight motorcycles and anticipates future improvements in motorcycle range and charging capabilities.

 

   

LiveWire’s electric motorcycles utilize breakthrough technology and features, including built-in cellular connectivity and GPS, customizable ride modes, advanced control technology and the LiveWire app, providing the rider with a unique customer experience.

 

   

The ABIC Board believes that LiveWire has a strong, experienced public company management team with a proven track record of operational excellence.

 

   

Depending on the extent of redemptions by ABIC’s Public Shareholders and on the final amount of the expenses incurred in connection with the Business Combination, the Business Combination is expected to provide up to approximately $545 million of gross cash proceeds to LiveWire’s balance sheet. This additional cash injection is expected to, among other things, fund LiveWire’s strategic plan to accelerate its go-to-market model, invest in new production development and enhance its global manufacturing and distribution capabilities.

 

   

The ABIC Board reviewed and discussed in detail the results of the due diligence examination of LiveWire conducted by ABIC’s management team and ABIC’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of H-D regarding LiveWire and its business plan, operations, prospects and forecasts, research on the electric vehicle industry, including historical growth trends and market share information as well as end-market size and growth projection, evaluation analyses with respect to the Business Combination, review of material contracts (including LiveWire’s exclusive retailer, dealer, and supplier contracts), LiveWire’s audited and unaudited financial statements and other

 

6


Table of Contents
 

material matters as well as general financial, technical, legal, intellectual property, regulatory, tax and accounting due diligence.

 

   

The ABIC Board reviewed factors such as LiveWire’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the ABIC Board believed that LiveWire was well positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors.

 

   

Following a review of the financial data provided to ABIC and the due diligence of LiveWire’s business conducted by ABIC’s management and ABIC’s advisors and the support for the implied valuation of LiveWire indicated by the commitments obtained in the PIPE Financing, the management of LiveWire determined that the aggregate consideration to be paid in the Business Combination was reasonable.

 

   

If the Business Combination is consummated, ABIC shareholders (other than ABIC shareholders that sought redemption of their Class A Ordinary Shares) would have a meaningful economic interest in HoldCo and, as a result, would have a continuing opportunity to benefit from the success of LiveWire following the consummation of the Business Combination.

 

   

H-D and/or its subsidiaries and certain Sponsor parties have agreed to be subject to a lock-up in respect of their shares of HoldCo Common Stock (ranging from 12 or 18 months for Sponsor parties to seven years for H-D and/or its subsidiaries and subject to certain customary exceptions).

 

   

The agreement of the KYMCO Group investors to invest $100 million in HoldCo at Closing of the Business Combination at $10.00 per share, for an aggregate of 10,000,000 shares of HoldCo Common Stock. H-D’s commitment to subscribe for shares of HoldCo Common Stock, in an aggregate amount of up to $100 million to fund any redemptions by ABIC shareholders. H-D’s commitment to purchase an aggregate of 10,000,000 shares of HoldCo Common Stock, for an aggregate amount of $100 million subject to the satisfaction (or waiver) of certain of H-D’s Closing conditions.

 

   

The HoldCo Board will include, among other committees, an Audit and Finance Committee and Conflicts Committee (to oversee conflicts arising in connection with the H-D relationship) comprised of all independent directors as further described in “Management of HoldCo Following the Business Combination—Nominating and Corporate Governance Committee Information.

 

   

The financial and other terms of the Business Combination Agreement and the fact that such terms and conditions were the product of arm’s length negotiations between ABIC and H-D.

The ABIC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

The risk that the future financial performance of LiveWire may not meet the ABIC Board’s expectations due to factors in LiveWire’s control or out of its control.

 

   

The potential that a significant number of ABIC’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of ABIC shareholders elect to redeem their shares, this redemption will not prevent the consumation of the Business Combination.

 

   

The fact that the Business Combination Agreement includes an exclusivity provision that prohibits ABIC and H-D from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement—Covenants of the Parties—Other Covenants of ABIC.

 

7


Table of Contents
   

The separation of the LiveWire business from H-D may involve certain risks, including (i) the fact that the business of LiveWire overlaps with H-D in certain markets may affect LiveWire’s ability to build and maintain relationships with partners, dealers, suppliers and customers, (ii) LiveWire’s inability to maintain a strong relationship with H-D or to favorably resolve any disputes could result in a significant reduction of LiveWire’s revenue, (iii) following termination of the Contract Manufacturing Agreement to be entered into at Closing (pursuant to which H-D will continue to provide LiveWire with contracting manufacturing services for a proscribed period of time), LiveWire will need to engage a third-party contractor or build its own in-house manufacturing capability to make its products, which could result in significant cost and expense, (iv) the fact that LiveWire is dependent, and following completion of the Business Combination, will remain dependent on H-D for a number of services, including certain financial and accounting, IT back-of-house operations, IP, quality safety and testing-related services, (v) the fact that H-D will retain certain assets utilized in the LiveWire business and (vi) the fact that H-D holds the direct contractual relationship with many key suppliers required for LiveWire to produce its electric vehicles and disputes between H-D and such key suppliers may negatively impact LiveWire’s electric vehicle production.

 

   

The risk that ABIC’s shareholders may fail to provide the votes necessary to approve and effect the Business Combination.

 

   

The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain Closing conditions that are not within ABIC’s control.

 

   

The challenges associated with preparing HoldCo, a privately held entity, for the applicable disclosure, controls and listing requirements to which HoldCo will be subject as a publicly traded company on the NYSE.

 

   

The expected fees and expenses associated with the Business Combination and related transactions, some of which would be payable regardless of whether the Business Combination is ultimately consummated and the substantial time and effort of management required to complete the Business Combination.

 

   

The fact that ABIC’s shareholders will experience dilution as a result of the issuance of shares of HoldCo Common Stock to H-D as consideration in the Business Combination (and may experience dilution as a result of future issuances or resales of shares of HoldCo Common Stock). The fact that ABIC’s shareholders will hold a minority interest in HoldCo, which will limit or preclude the ability of ABIC’s shareholders to influence corporate matters, including any future potential change in control or other material transaction. The ABIC Board determined that such facts were outweighed by the long-term benefits that the potential Business Combination would provide to ABIC’s shareholders and future shareholders of ABIC after Closing.

 

   

The risk that HoldCo does not obtain the commitments related to the PIPE Financing or otherwise retain sufficient cash in the Trust Account or find replacement cash to meet the requirements of the Business Combination.

 

   

The possibility of shareholder litigation challenging the Business Combination.

 

   

The risk that ABIC did not obtain a third-party valuation or financial opinion from any independent investment banking or accounting firm in determining whether to proceed with the Business Combination (and may not obtain such valuation or opinion).

 

   

The impact of the COVID-19 pandemic on the LiveWire business.

 

8


Table of Contents

The ABIC Board concluded, in its business judgment, that the potential benefits related to the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the ABIC Board determined that the Business Combination Agreement and the Business Combination (including the Merger), were advisable, fair to, and in the best interests of, ABIC and its shareholders. For additional information, (see “ABIC Board’s Reasons for Approval of the Business Combination”).

 

Q.

Why is ABIC proposing the Domestication?

 

A.

The ABIC Board believes that it would be in the best interests of ABIC to effect the Domestication to enable HoldCo to avoid certain taxes that would be imposed on HoldCo if HoldCo were to conduct an operating business in the United States as a foreign corporation following the Business Combination. In addition, the ABIC Board believes Delaware provides a recognized body of corporate law that will facilitate corporate governance by HoldCo’s officers and directors following the Closing. Delaware maintains a favorable legal and regulatory environment in which to operate. For many years, Delaware has followed a policy of encouraging companies to incorporate there and in furtherance of that policy, has adopted comprehensive, modern and flexible corporate laws that are regularly updated and revised to meet changing business needs. As a result, many major corporations have initially chosen Delaware as their domicile or have subsequently reincorporated in Delaware in a manner similar to the procedures ABIC is proposing. Due to Delaware’s longstanding policy of encouraging incorporation in that state and consequently its prevalence as the state of incorporation, the Delaware courts have developed a considerable expertise in dealing with corporate issues and a substantial body of case law has developed construing the DGCL and establishing public policies with respect to Delaware corporations. It is anticipated that the DGCL will continue to be interpreted and explained in a number of significant court decisions that may provide greater predictability with respect to HoldCo’s corporate legal affairs.

The Domestication will not occur unless the ABIC shareholders have approved the Domestication Proposal, the Business Combination Proposal, the Charter Proposal and the Incentive Plan Proposal, and the Business Combination Agreement is in full force and effect prior to the Domestication. The Domestication will occur at least one day prior to the consummation of the Merger.

 

Q.

What is involved with the Domestication?

 

A.

The Domestication will require ABIC to file certain documents in both the Cayman Islands and the State of Delaware. At the effective time of the Domestication, which will be at least one day prior to the consummation of the Merger, ABIC will cease to be a company incorporated under the laws of the Cayman Islands and in connection with the Business Combination, HoldCo (of which Merger Sub will be a wholly owned direct subsidiary) will continue as a Delaware corporation. The Existing HoldCo Certificate of Incorporation and the Existing HoldCo Bylaws will be replaced by the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws. As a result, your rights as a shareholder will cease to be governed by the laws of the Cayman Islands and will be governed by Delaware law.

 

Q.

When do you expect that the Domestication will be effective?

 

A.

The Domestication is expected to become effective at least one day prior to the consummation of the Merger and Exchange.

 

Q.

How will the Domestication affect my securities of ABIC?

 

A.

In connection with the Domestication, at least one day prior to the Merger Effective Time, (i) all outstanding ABIC Shares will convert into shares of Domesticated ABIC Common Stock, par value $0.0001 per share, (ii) each outstanding ABIC Warrant will convert into a Domesticated ABIC Warrant

 

9


Table of Contents
  and (iii) each issued and outstanding ABIC Unit that has not been previously separated into the underlying Class A Ordinary Share and underlying ABIC Warrant upon the request of the holder thereof will be canceled and will entitle the holder thereof to one share of Domesticated ABIC Common Stock and one-half of one Domesticated ABIC Warrant. In the Merger, by operation of law and without further action on the part of ABIC’s shareholders, each share of Domesticated ABIC Common Stock will be converted on a one-for-one basis into shares of HoldCo Common Stock. Each Domesticated ABIC Warrant will convert into a HoldCo Warrant without further action on the part of ABIC’s shareholders. Although it will not be necessary for you to exchange your certificates representing ABIC Shares after the Domestication, HoldCo will, upon request, exchange your ABIC Share certificates for the applicable number of shares of HoldCo Common Stock, and all certificates for securities issued after the Merger will be certificates representing securities of HoldCo.

 

Q.

What are the U.S. federal income tax consequences of the Domestication?

 

A.

As discussed more fully under “Material Tax Considerations,” the Domestication generally should constitute a tax-deferred reorganization within the meaning of Section 368(a)(l)(F) of the Code. Subject to the application of Section 367 and the “passive foreign investment company” (“PFIC”) rules discussed below, U.S. Holders (as defined in “Material Tax ConsiderationsU.S. Federal Income Tax Considerations to U.S. Holders”) and Non-U.S. Holders (as defined in “Material Tax ConsiderationsU.S. Federal Income Tax Considerations to Non-U.S. Holders”) should not recognize taxable gain or loss on the Domestication. However, due to the absence of direct guidance on the application of Section 368(a)(1)(F) of the Code to the facts and circumstances relating to ABIC, this result is not entirely clear. In the case of a transaction, such as the Domestication, that should qualify as a tax-deferred reorganization within the meaning of Section 368(a)(1)(F) of the Code, subject to the PFIC rules discussed below, U.S. Holders will be subject to Section 367(b) of the Code and, as a result of the Domestication:

 

   

a U.S. Holder that holds Public Shares that have a fair market value of less than $50,000 on the date of the Domestication and that, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares, generally will not recognize any gain or loss and will not be required to include any part of ABIC’s earnings in income;

 

   

a U.S. Holder that holds Public Shares that have a fair market value of $50,000 on the date of the Domestication or more and that, on the date of the Domestication, owns (actually and constructively) less than 10% of the total combined voting power of all classes of ABIC Shares entitled to vote and less than 10% of the total value of all classes of ABIC Shares generally will recognize gain (but not loss) on the exchange of Public Shares for shares of Domesticated ABIC Common Stock pursuant to the Domestication. As an alternative to recognizing gain, such U.S. Holder may file an election to include in income as a deemed dividend deemed paid by ABIC the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367(b) of the Code) attributable to its Public Shares, provided certain other requirements are satisfied; and

 

   

a U.S. Holder that, on the date of the Domestication, owns (actually or constructively) 10% or more of the total combined voting power of all classes of ABIC Shares entitled to vote or 10% or more of the total value of all classes of ABIC Shares generally will be required to include in income as a deemed dividend deemed paid by ABIC the “all earnings and profits amount” attributable to its Public Shares. Any such U.S. Holder that is treated as a corporation for U.S. federal income tax purposes may, under certain circumstances, effectively be exempt from U.S. federal income taxation on a portion or all of the deemed dividend pursuant to Section 245A of the Code (commonly referred to as the participation exemption).

 

10


Table of Contents

ABIC does not expect to have significant cumulative earnings and profits through the date of the Domestication. Complex attribution rules apply in determining whether a U.S. Holder owns 10% or more of the total combined voting power of all classes of ABIC Shares entitled to vote or owns 10% or more of the total value of all classes of ABIC Shares. All U.S. Holders are urged to consult their tax advisors with respect to those attribution rules.

ABIC believes that it is likely classified as a PFIC. If ABIC is a PFIC, then notwithstanding the U.S. federal income tax consequences of the Domestication discussed in the foregoing, a U.S. Holder may, in certain circumstances, still recognize gain (but not loss) upon the exchange of its Public Shares or Public Warrants for Domesticated ABIC Common Stock or Domesticated ABIC Warrants pursuant to the Domestication under the PFIC rules of the Code equal to the excess, if any, of the fair market value of the shares of Domesticated ABIC Common Stock or Domesticated ABIC Warrants received in the Domestication over the U.S. Holder’s adjusted tax basis in the corresponding Public Shares or Public Warrants surrendered in exchange therefor. The tax on any such gain so recognized would be imposed at the rate applicable to ordinary income and an interest charge would apply. For a more complete discussion of the potential application of the PFIC rules to U.S. Holders as a result of the Domestication, see the discussion in the section entitled “Material Tax ConsiderationsU.S. Federal Income Tax Considerations to U.S. Holders—PFIC Considerations.

Additionally, the Domestication may cause Non-U.S. Holders to become subject to U.S. federal income withholding taxes on any dividends paid in respect of such Non-U.S. Holder’s shares of Domesticated ABIC Common Stock.

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are urged to consult their tax advisors on the tax consequences to them of the Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a more complete discussion of the U.S. federal income tax considerations of the Domestication, see “Material Tax Considerations.”

 

Q.

What are the material differences, if any, in the terms and price of securities issued at the time of the IPO as compared to the securities that will be issued as part of the PIPE Financing at the Closing? Will the Sponsor or any of its directors, officers or affiliates participate in the PIPE Financing?

 

A.

ABIC Units were the units issued at the time of the IPO consisting of Class A Ordinary Shares and Public Warrants, at an offering price per ABIC Unit of $10.00. At the Closing, the Class A Ordinary Shares will convert into shares of HoldCo Common Stock and the Public Warrants will convert into HoldCo Warrants. The PIPE Investors will receive shares of HoldCo Common Stock at a price per share of $10.00 as part of the PIPE Financing at the Closing, and will therefore hold the same security as the holders of Class A Ordinary Shares immediately following the Business Combination, although the PIPE Investors as such will not receive any Public Warrants. The PIPE Financing will raise an aggregate of $200,000,000, of which $100,000,000 will be funded by the KYMCO Group and $100,000,000 will be funded by the Company Equityholder.

 

Q.

What equity stake will current ABIC shareholders, the Company Equityholder and the KYMCO Group hold in HoldCo immediately after the Closing?

 

A.

It is anticipated that, following the Closing, in a no redemption scenario: (i) the Company Equityholder will own approximately 74.0% of the outstanding shares of HoldCo Common Stock; (ii) the Public Shareholders will own approximately 17.4% of the outstanding shares of HoldCo Common Stock; (iii) the Sponsor Group will own approximately 4.3% of the outstanding shares of HoldCo Common Stock; and (iv) the KYMCO Group stockholders will own approximately 4.3% of the outstanding shares of HoldCo Common Stock. These levels of ownership assume (A) that prior to the Closing no ABIC Warrants will be exercised and (B) that at or after the Closing no HoldCo Warrants will be

 

11


Table of Contents
  exercised. If all of the Private Placement Warrants and HoldCo Warrants were exercisable and immediately exercised upon completion of the Business Combination on a 1:1 basis for cash, ABIC’s Public Shareholders would receive in aggregate approximately 22.9% of the shares of HoldCo Common Stock on a fully diluted basis, and the Sponsor Group would receive in aggregate approximately 7.84% of the shares of HoldCo Common Stock on a fully diluted basis assuming that the Sponsor Group does not transfer any of the Private Placement Warrants prior to the Closing or Private Placement Warrants at or after the Closing; however, the Private Placement Warrants and the shares of HoldCo Common Stock are subject to restrictions on the timing of their exercise and may also be exercisable on a cashless basis by reference to the fair market value of the shares of HoldCo Common Stock, and these percentages are therefore indicative only. Therefore, the voting rights of such shareholders will slightly differ from the indicated ownership percentages.

For more information, please see the sections titled “Beneficial Ownership of Securities” and “Unaudited Pro Forma Condensed Combined Financial Information.

 

Q:

What vote is required to approve the Shareholder Proposals presented at the General Meeting of ABIC’s shareholders?

 

A:

Approval of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the approval of an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting. The Governing Documents Proposals are voted upon on a nonbinding advisory basis only. Abstentions and broker non-votes will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal.

As of the Record Date, the ABIC Initial Shareholders owned of record an aggregate of 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25% of the issued and outstanding ABIC Shares. Assuming that all shareholders who are entitled to do so attend the General Meeting and vote, the affirmative vote of 12,500,000 of the Public Shares, in addition to the affirmative vote of the ABIC Initial Shareholders, would be required to approve each of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal.

Approval of the Domestication Proposal and the Charter Proposal requires the approval of a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of at least a two-thirds majority of the issued ABIC Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting. Abstentions and broker non-votes will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Domestication Proposal and the Charter Proposal.

As of the Record Date, the ABIC Initial Shareholders owned of record an aggregate of 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25% of the issued and outstanding ABIC Shares. Assuming that all shareholders who are entitled to do so attend the General Meeting and vote, the affirmative vote of 20,833,334 of the Public Shares, in addition to the affirmative vote of the ABIC Initial Shareholders, would be required to approve each of the Domestication Proposal and the Charter Proposal.

The Governing Documents Proposals are voted upon on a nonbinding advisory basis only.

 

12


Table of Contents
Q:

What interests do the current ABIC Shareholders and ABICs other current officers and directors have in the Business Combination?

 

A:

When you consider the recommendation of the ABIC Board in favor of approval of the Required Shareholder Proposals, you should keep in mind that the Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests include that the Sponsor as well as our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired or may acquire in the future), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.

Additionally, among other things, these interests include the following:

 

   

the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by October 5, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $99,500,000, based upon the closing price of $9.95 per Class A Ordinary Share on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $3,045,000, based upon the closing price of $0.29 per Public Warrant on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and

 

   

the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $102,047,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on July 25, 2022.

 

13


Table of Contents

Sponsor Group Ownership of ABIC Prior to Closing 

 

     Securities
held by
Sponsor
Group
     Sponsor Cost
at ABIC’s
IPO ($)
 

Founder Shares

     9,950,000      $ 25,000 (1) 

Private Placement Warrants

     10,500,000      $ 10,500,000  
     

 

 

 

Total

      $ 10,525,000  

 

  (1) 

Includes cost for 50,000 Founder Shares held by the independent directors.

Sponsor Group Ownership of HoldCo Following the Closing

 

     Securities
held by
Sponsor
Group Prior
to Closing
     Value per
Security
($)
     Total Value ($)  

Shares of HoldCo Common Stock Issued to Holders of Founder Shares

     9,950,000      $ 9.95      $ 99,002,500  

HoldCo Private Placement Warrants

     10,500,000      $ 0.29      $ 3,045,000  
     

 

 

    

 

 

 

Total

         $ 102,047,500  

 

   

the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any out-of-pocket expenses incurred on ABIC’s behalf related to identifying, investigating, negotiating, and completing an initial business combination, including the formation and setting up of the Sponsor and related entities. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by ABIC’s officers and directors and there are no outstanding out-of-pocket expenses for which ABIC’s officers or directors are awaiting reimbursement;

 

   

the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by October 5, 2022;

 

   

the fact that the HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;

 

   

the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in the Proposed HoldCo Organizational Documents;

 

   

the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the lock-up restrictions;

 

   

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

 

   

the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;

 

   

the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any out-of-pocket expenses incurred by them on ABIC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by October 5, 2022;

 

14


Table of Contents
   

the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that John Garcia, who is currently the Executive Chairman, Co-Chief Executive Officer and Director of ABIC, paid an aggregate of $25,000,000 for 2,500,000 ABIC Units. Such securities are valued at approximately $25,125,000, based upon the closing price of the ABIC Units ($10.05) on the NYSE on July 20, 2022; and

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and required LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.

In addition, certain persons who are expected to become HoldCo directors after the completion of the Business Combination may have interests in the Business Combination that are different from, or in addition to, the interests of the ABIC shareholders. See “Shareholder Proposal 1: The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for more information.

The personal and financial interests of the Sponsor as well as ABIC’s executive officers and directors may have influenced their motivation in identifying and selecting LiveWire as a business combination target, completing the Business Combination with LiveWire and influencing the operation of the business following the Business Combination. In considering the recommendations of the ABIC Board to vote for the proposals, its shareholders should consider these interests. Additionally, following the Closing, the Sponsor will have the right to designate one member of the HoldCo Board, who is initially expected to be John Garcia. Any vote made by such individual appointed by the Sponsor as part of such individual’s service on the HoldCo Board does not express the vote of ABIC in any capacity, but solely such individual’s vote as a director of HoldCo.

 

Q:

Did the ABIC Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

A:

No. The ABIC Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. However, ABIC’s management, the members of the ABIC Board and the other representatives of ABIC have substantial experience in evaluating the operating and financial merits of companies similar to LiveWire and reviewed certain financial information of LiveWire and compared it to certain publicly traded companies, selected based on the experience and the professional judgment of ABIC’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the ABIC Board in valuing LiveWire’s business and assuming the risk that the ABIC Board may not have properly valued such business.

 

Q.

Who will have the right to nominate or appoint directors to the HoldCo Board after the consummation of the Business Combination?

 

A.

Subject to the Business Combination Agreement, each holder of shares of HoldCo Common Stock has the exclusive right to vote for the election of directors following the consummation of the Business

 

15


Table of Contents
  Combination. In the case of election of directors, all matters to be voted on by stockholders must be approved by a plurality of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class.

The HoldCo Board will be initially comprised of seven board members nominated by the Company Equityholder, three of such board members being independent under the NYSE listing standards and one of such independent board members being initially selected by the Sponsor (with such board member selection by the Sponsor acceptable to the Company Equityholder).

ABIC shareholders are not being asked to vote on the election of directors at the General Meeting to which this proxy statement/prospectus relates.

 

Q.

What happens to the funds deposited in the Trust Account after consummation of the Business Combination?

 

A.

Following the closing of the IPO on October 5, 2020, an amount equal to $400,000,000 ($10.00 per unit) from the net proceeds from the IPO and the sale of the Private Placement Warrants was placed in the Trust Account. At March 31, 2022, we had cash and investments held in the Trust Account of approximately $400.3 million. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of taxes payable and excluding deferred underwriting commissions, for the purposes of consummating an initial business combination (which will be the Business Combination should it occur). We may withdraw interest from the Trust Account to pay taxes, if any. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

If our initial business combination (which will be the Business Combination should it occur) is paid for using equity or debt securities or not all of the funds released from the Trust Account are used for payment of the consideration in connection with our initial business combination (which will be the Business Combination should it occur) or used for redemptions or purchases of the Public Shares, HoldCo may apply the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations of HoldCo, the payment of principal or interest due on indebtedness incurred in completing our Business Combination, to fund the purchase of other companies or for working capital. See “SummarySources and Uses of Funds for the Business Combination.”

 

Q.

What happens if a substantial number of the Public Shareholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

A.

Our Public Shareholders are not required to vote “FOR” the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Shareholders are reduced as a result of redemptions by Public Shareholders.

If a Public Shareholder exercises its redemption rights, such exercise will not result in the loss of any warrants that it may hold. Assuming that 37,500,000 Class A Ordinary Shares held by ABIC’s Public Shareholders (or approximately 93.8% of the Class A Ordinary Shares outstanding) were redeemed, each of the retained outstanding Public Warrants (which will be HoldCo Warrants following the Closing) would each have a value of approximately $0.29 per warrant based on the closing price of the Public Warrants on the NYSE on July 25, 2022. If a substantial number of, but not all, Public Shareholders exercise their redemption rights, but choose to exercise their retained warrants, any non-redeeming shareholders would experience dilution to the extent such warrants are exercised and additional shares of HoldCo Common Stock are issued.

 

16


Table of Contents

The Business Combination Agreement provides that LiveWire’s obligation to consummate the Business Combination is conditioned on, among other things, the Minimum Cash Condition. The Minimum Cash Condition requires that the Company shall have Available Cash of at least $270,000,000 equal to the sum of (without duplication) (a) the amount of cash available to be released from the Trust Account as of immediately prior to the Closing (net of the SPAC Share Redemption Amount), plus (b) the net amount of proceeds actually received or confirmed to be received by HoldCo pursuant to the KYMCO PIPE Investment as of immediately prior to or concurrently with the Closing, plus (c) the amount of proceeds required to be funded to HoldCo pursuant to the Company Equityholder PIPE Investment, plus the portion of the Backstop actually required to be funded to HoldCo, in each case, by the Company Equityholder, minus the aggregate amount of all Transaction Expenses and SPAC Transaction Expenses. If the Minimum Cash Condition is not met, and such condition is not waived by LiveWire, then the Business Combination Agreement may be terminated and the proposed Business Combination may not be consummated. In addition, in no event will ABIC redeem Class A Ordinary Shares in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001.

Additionally, as a result of redemptions, the trading market for shares of HoldCo Common Stock may be less liquid than the market for the Class A Ordinary Shares was prior to consummation of the Business Combination and we may not be able to meet the listing standards for NYSE or another national securities exchange.

The below sensitivity table shows the potential impact of redemptions on the pro forma book value per share of the shares owned by non-redeeming shareholders in a no redemption scenario, an illustrative redemption scenario, and a maximum redemption scenario. The sensitivity table below also sets forth (x) the potential additional dilutive impact of each of the below additional dilution sources in each redemption scenario, and (y) the effective underwriting fee incurred in connection with the IPO in each redemption scenario.

 

    Assuming No
Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Contractual
Maximum Redemption(3)
    Assuming Charter
Redemption Limitation(4)
 

Shareholders

  Ownership in
Shares
    Equity %     Ownership in
Shares
    Equity %     Ownership in
Shares
    Equity %     Ownership in
Shares
    Equity %  

Company Equityholder(5)

    171,000,000       74.0     181,000,000       81.9     181,000,000       89.0     181,000,000       89.8

Public Shareholders

    40,000,000       17.4     20,000,000       9.1     2,500,000       1.2     499,609       0.2

Sponsor stockholders(6)

    10,000,000       4.3     10,000,000       4.5     10,000,000       4.9     10,000,000       5.0

KYMCO Group stockholders

    10,000,000       4.3     10,000,000       4.5     10,000,000       4.9     10,000,000       5.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Shares Outstanding Excluding HoldCo Warrants

    231,000,000       100.0     221,000,000       100     203,500,000       100     201,499,609       100

 

    Assuming No
Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Contractual
Maximum Redemption(3)
    Assuming Charter
Redemption Limitation(4)
 

Additional Dilution Sources

  Amount ($)     Equity %(7)     Amount ($)     Equity %(7)     Amount ($)     Equity %(7)     Amount ($)     Equity %(7)  

HoldCo Warrants

    30,500,000       9.2%       30,500,000       9.6%       30,500,000       10.2%       30,500,000       10.3%  

Earn Out Shares

    12,500,000       3.8%       12,500,000       3.9%       12,500,000       4.2%       12,500,000       4.2%  

Incentive Plan

    57,540,000       17.4%       53,340,000       16.8%       51,765,000       17.4%       51,344,918       17.4%  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Additional Dilution Sources

    100,450,000       30.3%       96,340,000       30.4%       94,765,000       31.8%       94,344,918       31.9%  

 

    Assuming No
Redemption(1)
    Assuming Illustrative
Redemption(2)
    Assuming Contractual
Maximum Redemption(3)
    Assuming Charter
Redemption Limitation(4)
 

Deferred Discount

  Amount ($)     % of Trust
Account
    Amount ($)     % of Trust
Account
    Amount ($)     % of Trust
Account
    Amount ($)     % of Trust
Account
 

Effective Deferred Discount(8)

  $ 14,000,000       3.5   $ 14,000,000       7.0   $ 14,000,000       56.0   $ 14,000,000       280.0

 

17


Table of Contents

 

(1) 

This scenario assumes that no Public Shares are redeemed by Public Shareholders.

(2) 

This scenario assumes that 20,000,000 Public Shares are redeemed by Public Shareholders and that the Backstop is fully subscribed for.

(3)

This scenario assumes that 37,500,000 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,313,600 in the Trust Account as of March 31, 2022, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the Minimum Cash Condition and that the full Backstop is subscribed for.

(4)

This scenario assumes that 39,500,316 Public Shares are redeemed by Public Shareholders, which, based on the amount of $400,313,600 in the Trust Account as of March 31, 2022, represents the maximum amount of redemptions that would still enable us to have sufficient cash to satisfy the provision in the Existing Organizational Documents that prohibits us from redeeming our Class A Ordinary Shares in an amount that would result in our failure to have net tangible assets equaling or exceeding $5,000,001, and that the full Backstop is subscribed for.

(5)

Excludes 12,500,000 shares of HoldCo Common Stock in estimated potential Earn Out Shares as the price threshold for each tranche has not yet been triggered.

(6)

Assumes that the Sponsor shall not forfeit and/or transfer any Founder Shares under the Investor Support Agreement.

(7)

The Equity % with respect to each Additional Dilution Source set forth below, including the Total Additional Dilution Sources, includes the full amount of shares issued with respect to the applicable Additional Dilution Source in the numerator and the full amount of shares issued with respect to the Total Additional Dilution Sources in the denominator. For example, in the Illustrative Redemption Scenario, the Equity % with respect to the HoldCo Warrants would be calculated as follows: (a) 30,500,000 shares issued pursuant to the HoldCo Warrants (representing approximately 13.8% of the previously outstanding 221,000,000 shares); divided by (b) (i) 221,000,000 shares (the number of shares outstanding prior to any issuance pursuant to the HoldCo Warrants) plus (ii) 30,500,000 shares issued pursuant to the HoldCo Warrants, 12,500,000 Earn Out Shares and 53,340,000 shares issued pursuant to the Incentive Plan.

(8)

The level of redemption also impacts the effective underwriting fee incurred in connection with the IPO. In a no redemption scenario, based on the approximately $400.3 million in the Trust Account, ABIC’s $14.0 million in deferred underwriting fees represents an effective deferred underwriting fee of approximately 3.5% as a percentage of cash in the Trust Account. In an illustrative redemption scenario, based on the approximately $200.1 million in the Trust Account, the effective underwriting fee would be approximately 7.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a contractual maximum redemption scenario, based on the approximately $25.0 million in the Trust Account, the effective underwriting fee would be approximately 56.0% as a percentage of the amount remaining in the Trust Account following redemptions. In a charter redemption limitation scenario, based on the approximately $5,000,001 in the Trust Account, the effective underwriting fee would be approximately 280.0% as a percentage of the amount remaining in the Trust Account following redemptions.

 

Q.

What conditions must be satisfied to complete the Business Combination?

 

A.

The consummation of the Business Combination is subject to the satisfaction or waiver of certain customary closing conditions of the respective parties, including, the following without limitation: (a) the approval and adoption of each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, and the Incentive Plan Proposal by ABIC shareholders and the transactions contemplated thereby; (b) the waiting period (or any extension thereof) applicable to the consummation of the transactions contemplated by the Business Combination Agreement shall have expired or been terminated; (c) there shall not be any applicable law in effect that makes the consummation of the transactions contemplated by the Business Combination Agreement illegal or any order in effect preventing the consummation of the transactions contemplated thereby; (d) the shares of HoldCo Common Stock to be issued in connection with the Business Combination having been approved for listing on the NYSE; (e) since September 26, 2021, there shall not have occurred a Company Material Adverse Effect (as defined in the Business Combination Agreement), the material adverse effects of which are continuing; (f) ABIC having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining after the Closing; (g) the Minimum Cash Condition; and (h) this registration statement on Form S-4 shall have become effective under the Securities Act, no stop order shall have been issued by the SEC suspending the effectiveness of such registration statement and no proceeding seeking such stop order has been threatened or initiated by the SEC that remains pending.

See the sections titled “The Business Combination Agreement and Shareholder Proposal 1: The Business Combination Proposal for a summary of the terms of the Business Combination Agreement and additional information regarding the terms of the Business Combination Proposal.

 

18


Table of Contents
Q.

When do you expect the Business Combination to be completed?

 

A.

It is currently expected that the Business Combination will be completed in the second half of 2022.

This timing depends, among other things, on the approval of the Required Shareholder Proposals to be presented at the General Meeting. However, the General Meeting could be adjourned if the Adjournment Proposal is adopted at the General Meeting and ABIC elects to adjourn the General Meeting to a later date or dates to permit further solicitation and vote of proxies as permitted by the Business Combination Agreement.

 

Q.

What happens if the Business Combination is not completed?

 

A.

If a shareholder has tendered shares to be redeemed but the Business Combination is not completed, the redemptions will be canceled and the tendered shares will be returned to the relevant shareholders as appropriate. The current deadline set forth in the Existing Organizational Documents for ABIC to complete its initial business combination (which will be the Business Combination should it occur) is October 5, 2022 (24 months after the closing of the IPO).

 

Q.

What differences will there be between the current constitutional documents of ABIC and the Proposed HoldCo Certificate of Incorporation and the Proposed HoldCo Bylaws following the Closing?

 

A.

The consummation of the Business Combination is conditioned, among other things, on the Domestication. Accordingly, in addition to voting on the Business Combination, ABIC’s shareholders also are being asked to consider and vote upon a proposal to approve the Domestication, and replace our Existing Organizational Documents, in each case, under Cayman Islands law, with the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws. Following the Merger, the Proposed HoldCo Certificate of Incorporation and Proposed HoldCo Bylaws, which are substantially identical to the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws, will be in effect. The Proposed HoldCo Organizational Documents differ materially from the Existing Organizational Documents, which will govern following the Domestication and the Merger. For additional information, see “Comparison of Corporate Governance and Shareholder Rights.”

 

Q.

Why is ABIC proposing the Adjournment Proposal?

 

A.

ABIC’s shareholders are also being asked to consider and vote upon the Adjournment Proposal to approve the adjournment of the General Meeting to a later date or dates, including, if necessary, (i) to permit further solicitation and vote of proxies, (ii) for the absence of a quorum, (iii) to allow reasonable additional time for the filing or mailing of any legally required supplement or amendment to the proxy statement/prospectus or (iv) if the holders of Public Shares have elected to redeem such shares such that the shares of HoldCo Common Stock would not be approved for listing on the NYSE or the Minimum Cash Condition would not be satisfied. See the section titled “Shareholder Proposal 6: The Adjournment Proposal” for additional information.

 

Q.

Who is entitled to vote at the General Meeting?

 

A.

ABIC has fixed May 6, 2022 as the Record Date. If you are a shareholder of ABIC at the close of business on the Record Date, you are entitled to vote on matters that come before the General Meeting.

 

Q.

How do I vote?

 

A.

If you are a record owner of your shares, there are two ways to vote your Class A Ordinary Shares at the General Meeting:

You Can Vote by Signing and Returning the Enclosed Proxy Card. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your

 

19


Table of Contents

shares will be voted as recommended by the ABIC Board “FOR” the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, the Governing Documents Proposals, the Incentive Plan Proposal and the Adjournment Proposal (if presented). Votes received after a matter has been voted upon at the General Meeting will not be counted.

You Can Attend the General Meeting and Vote Virtually. You will receive a ballot that you may use to cast your vote.

If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. If you wish to attend the General Meeting and vote in person and your shares are held in “street name,” you must obtain a legal proxy from your broker, bank or nominee. That is the only way ABIC can be sure that the broker, bank or nominee has not already voted your shares.

 

Q.

What if I do not vote my Class A Ordinary Shares or if I abstain from voting?

 

A.

The approval of the Business Combination Proposal, the Adjournment Proposal and the Incentive Plan Proposal will require an ordinary resolution as a matter of Cayman Islands law, being the affirmative vote of a majority of the holders of ABIC Shares, who being present and entitled to vote at the General Meeting, vote at the General Meeting. The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of a majority of at least two-thirds of the outstanding Class A Ordinary Shares, who, being present and entitled to vote at the General Meeting, vote at the General Meeting. The Governing Documents Proposals are voted upon on a nonbinding advisory basis only. Abstentions and broker non-votes will be considered present for the purposes of establishing a quorum but, as a matter of Cayman Islands law, will not constitute a vote cast at the General Meeting and therefore will have no effect on the approval of each of the Shareholder Proposals.

 

Q.

What Shareholder Proposals must be passed in order for the Business Combination to be completed?

 

A.

The Business Combination will not be completed unless the Business Combination Proposal, the Domestication Proposal, the Charter Proposal, and the Incentive Plan Proposal are approved. If ABIC does not complete an initial business combination (which will be the Business Combination should it occur) by October 5, 2022, ABIC will be required to dissolve and liquidate itself and return the monies held within its Trust Account to its Public Shareholders unless ABIC submits and its shareholders approve an extension.

 

Q.

How does the ABIC Board recommend that I vote on the Shareholder Proposals?

 

A.

The ABIC Board unanimously recommends that the holders of ABIC Shares entitled to vote on the Shareholder Proposals, vote as follows:

FOR approval of the Business Combination Proposal;

“FOR” approval of the Domestication Proposal;

“FOR” approval of the Charter Proposal;

“FOR” approval of the Governing Documents Proposals;

“FOR” approval of the Incentive Plan Proposal; and

FOR approval of the Adjournment Proposal, if presented.

 

20


Table of Contents
Q.

How many votes do I have?

 

A.

ABIC shareholders have one vote per each ABIC Share held by them on the Record Date for each of the Shareholder Proposals to be voted upon.

 

Q.

How will the Sponsor and ABIC officers and directors vote in connection with the Required Shareholder Proposals?

 

A.

As of the Record Date, the ABIC Initial Shareholders owned of record an aggregate of 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25% of the issued and outstanding ABIC Shares. The Sponsor and ABIC’s officers and directors have agreed to vote the ABIC Shares owned by them in favor of the Required Shareholder Proposals. However, any subsequent purchases of Class A Ordinary Shares prior to the Record Date by the Sponsor or ABIC’s officers and directors in the aftermarket will make it more likely that the Required Shareholder Proposals will be approved as such shares would be voted in favor of the Required Shareholder Proposals. As of the Record Date, there were 50,000,000 ABIC Shares outstanding.

 

Q.

How do the Public Warrants differ from the Private Placement Warrants and what are the related risks for any holders of HoldCo Warrants following the Business Combination?

 

A.

The Private Placement Warrants will be identical to the Public Warrants in all material respects, except that the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of the initial business combination and they will not be redeemable by HoldCo so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, will have the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by HoldCo in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

As a result, following the Business Combination, HoldCo may redeem your Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby significantly impairing the value of such warrants. HoldCo will have the ability to redeem outstanding HoldCo Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the shares of HoldCo Common Stock equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which a notice of redemption is sent to the warrantholders. HoldCo will not redeem the warrants as described above unless a registration statement under the Securities Act covering the shares of HoldCo Common Stock issuable upon exercise of such warrants is effective and a current prospectus relating to those shares of HoldCo Common Stock is available throughout the 30-day redemption period. If and when the HoldCo Warrants become redeemable by HoldCo, it may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding HoldCo Warrants could force you (i) to exercise your HoldCo Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your HoldCo Warrants at the then-current market price when you might otherwise wish to hold your HoldCo Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding HoldCo Warrants are called for redemption, is likely to be substantially less than the market value of your HoldCo Warrants.

In addition, HoldCo will have the ability to redeem the outstanding HoldCo Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10 per warrant if, among other things, the closing price of the shares of HoldCo Common Stock equals or exceeds $10.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and

 

21


Table of Contents

the like) on the trading day prior to the date on which a notice of redemption is sent to the warrant holders. In such a case, the holders will be able to exercise their HoldCo Warrants prior to redemption for a number of shares of HoldCo Common Stock determined based on a table in which the number of shares of HoldCo Common Stock is based on the redemption date and the fair market value of the shares of HoldCo Common Stock. Recent trading prices for the Class A Ordinary Shares have not exceeded the $10.00 per share threshold at which the HoldCo Warrants would become redeemable. Please see the notes to ABIC’s financial statements included elsewhere in this proxy statement/prospectus. The value received upon exercise of the HoldCo Warrants (1) may be less than the value the holders would have received if they had exercised their HoldCo Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the HoldCo Warrants.

In each case, HoldCo may only call the HoldCo Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each holder, provided that holders will be able to exercise their HoldCo Warrants prior to the time of redemption and, at HoldCo’s election, any such exercise may be required to be on a cashless basis.

 

Q.

Do I have redemption rights with respect to my Class A Ordinary Shares?

 

A.

Under Section 49.5 of the Existing Organizational Documents, prior to the completion of the Business Combination, ABIC will provide all of the Public Shareholders with the opportunity to have their shares redeemed upon the completion of the Business Combination, subject to certain limitations, for cash equal to the applicable redemption price (as defined in the Existing Organizational Documents); provided, however, that ABIC may not redeem such shares to the extent that such redemption would result in ABIC having net tangible assets (as determined under the Exchange Act) of less than $5,000,001 upon the completion of the Business Combination.

Public Shareholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination, whether or not they were holders of Class A Ordinary Shares as of the Record Date or acquired their shares after the Record Date. The redemptions will be effectuated in accordance with the Existing Organizational Documents and Cayman Islands law. Any Public Shareholder who holds Class A Ordinary Shares on or before September 14, 2022 (two (2) business days before the General Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the completion of the Business Combination; provided that such Public Shareholders follow the procedures provided for exercising such redemption as set forth in the Existing Organizational Documents, as described below, by such date. However, the proceeds held in the Trust Account could be subject to claims that could take priority over those of Public Shareholders exercising such redemption right, regardless of whether such holders vote for or against the Business Combination Proposal and whether such holders are holders of Class A Ordinary Shares as of the Record Date. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. A Public Shareholder will be entitled to receive cash for these shares only if the Business Combination is completed. For more information, see “General Meeting of ABIC Shareholders  Redemption Rights.”

 

Q.

Can the Sponsor and the independent directors redeem their Founder Shares in connection with the consummation of the Business Combination?

 

A.

The Sponsor and the independent directors have agreed, for no additional consideration, to waive their redemption rights with respect to their Founder Shares and any Public Shares they may hold in connection with the consummation of the Business Combination.

 

Q.

May the Sponsor, ABIC directors, officers, advisors or their affiliates purchase shares in connection with the Business Combination?

 

A.

The Sponsor and ABIC’s directors, officers, advisors or their affiliates may purchase Class A Ordinary Shares in privately negotiated transactions or in the open market either prior to or after the Closing,

 

22


Table of Contents
  including from ABIC shareholders who would have otherwise exercised their redemption rights. However, the Sponsor, directors, officers and their affiliates have no current commitments or plans to engage in such transactions and have not formulated any terms or conditions for any such transactions at the date of this proxy statement/prospectus. If ABIC engages in such transactions, any such purchases will be subject to limitations regarding possession of any material nonpublic information not disclosed to the seller of such shares and they will not make any such purchases if such purchases are prohibited by Regulation M under the Exchange Act. Any such purchase after the Record Date would include a contractual acknowledgement that the selling shareholder, although still the record holder of Class A Ordinary Shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event the Sponsor or ABIC’s directors, officers or advisors or their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per-share pro rata portion of the aggregate amount then on deposit in the Trust Account.

 

Q.

Is there a limit on the number of shares I may redeem?

 

A.

Each Public Shareholder, together with any affiliate or any other person with whom such Public Shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking a redemption right with respect to 15% or more of the Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 15% cap will not be redeemed by ABIC. Any Public Shareholder who holds less than 15% of the Public Shares may have all of the Public Shares held by him, her or it redeemed for cash.

 

Q.

How do I exercise my redemption right?

 

A.

If you are a Public Shareholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern Time, on September 14, 2022 (two (2) business days before the General Meeting), that ABIC redeem your shares for cash, (ii) affirmatively certify in your request to ABIC’s Transfer Agent for redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) and (iii) submit your request in writing to ABIC’s Transfer Agent, at the address listed at the end of this section and deliver your shares to ABIC’s Transfer Agent physically or electronically using DTC’s DWAC system at least two business days prior to the vote at the General Meeting.

Any request for redemption, once made by a Public Shareholder, may not be withdrawn once submitted to ABIC unless the ABIC Board determines (in its sole discretion) to permit in the withdrawal of such redemption requests (which it may do in whole or in part). In addition, if you deliver your shares for redemption to ABIC’s Transfer Agent and later decide prior to the General Meeting not to elect redemption, you may request that ABIC’s Transfer Agent return the shares (physically or electronically). You may make such request by contacting ABIC’s Transfer Agent at the phone number or address listed at the end of this section.

Any corrected or changed written demand of redemption rights must be received by ABIC’s Secretary two business days prior to the vote taken on the Business Combination Proposal at the General Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the Transfer Agent at least two business days prior to the vote at the General Meeting.

Public Shareholders seeking to exercise their redemption right and opting to deliver physical certificates (if any) and other redemption forms should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is ABIC’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the Transfer

 

23


Table of Contents

Agent. However, ABIC does not have any control over this process and it may take longer than two weeks. Shareholders who hold their shares in street name will have to coordinate with their banks, brokers or other nominees to have the shares certificated or delivered electronically. There is a cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a nominal fee to the tendering broker and it would be up to the broker whether or not to pass this cost on to the redeeming shareholder. In the event the Business Combination is not completed, this may result in an additional cost to shareholders for the return of their shares.

If a Public Shareholder properly demands redemption as described above, then, if the Business Combination is completed, ABIC will redeem the shares subject to the redemptions for cash. Such amount will be paid promptly after completion of the Business Combination. If you exercise your redemption right, then you will be exchanging your Class A Ordinary Shares for cash and will no longer own these shares following the Business Combination.

If you are a Public Shareholder and you exercise your redemption right, it will not result in either the exercise or loss of any ABIC Warrants that you may hold. Your ABIC Warrants will continue to be outstanding following a redemption of your Class A Ordinary Shares and will become exercisable in connection with the completion of the Business Combination.

If you intend to seek redemption of your Public Shares, you will need to deliver your shares (either physically or electronically) to ABIC’s Transfer Agent prior to the meeting, as described in this proxy statement/prospectus. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

One State Street, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

Q.

If I am a holder of ABIC Units, can I exercise redemption rights with respect to my ABIC Units?

 

A.

No. Holders of issued and outstanding ABIC Units must elect to separate the ABIC Units into the underlying Public Shares and Public Warrants prior to exercising redemption right with respect to the Public Shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying Public Shares and Public Warrants, or if you hold units registered in your own name, you must contact the Transfer Agent directly and instruct them to do so. The redemption right includes the requirement that a holder must identify itself in writing as a beneficial holder and provide its legal name, phone number and address to the Transfer Agent in order to validly redeem its shares. You are requested to cause your Public Shares to be separated and delivered to the Transfer Agent by 5:00 p.m., Eastern Time, on September 14, 2022 (two (2) business days before the General Meeting) in order to exercise your redemption right with respect to your Public Shares.

 

24


Table of Contents

SUMMARY

This summary highlights selected information contained in this proxy statement/prospectus and does not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus, including the Annexes and accompanying financial statements of ABIC and LiveWire, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the General Meeting (as described below). Please see the section entitled “Where You Can Find More Information.”

Parties to the Business Combination

LiveWire

LiveWire is redefining motorcycling as an industry-leading, all-electric vehicle company. LiveWire has incurred net losses since its inception. LiveWire’s net loss was approximately $68.3 million, $77.6 million, and $56.5 million for the fiscal years ended December 31, 2021, 2020, and 2019, respectively, and approximately $15.5 million and $14.7 million for the three months ended March 27, 2022 and March 28, 2021, respectively. LiveWire’s net losses reflect the start-up nature of LiveWire’s business including low shipment volumes associated with the introduction of a new electric motorcycle combined with investments in product development as LiveWire continues to focus on technological innovation that will support future products and growth. For more information, see “Risk Factors—Risks Related to LiveWire—We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for several years. We have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain.”

Headquartered in the USA and born out of the lineage of H-D, the world’s most iconic motorcycle company, LiveWire is developing the technology of the future and investing in the capabilities to lead the industry transformation. Well past the concept stage and into production, LiveWire combines over a decade of practical experience and a commitment to advancing sustainable propulsion systems. LiveWire represents the future of motorcycling, introducing existing riders to electric products while bringing new riders to the community.

Founded in 2010 as “Project Hacker” within H-D, LiveWire started an innovative program designed to pioneer the future of motorcycling by means of design, technology and experience. In 2014, H-D took its first fleet of electric vehicles into the field to test the concept with riders around the world. The feedback was exceptional and led to increased investment and focus on LiveWire. To accelerate the development and commercialization of the vehicles, LiveWire Labs, a Silicon Valley-based state-of-the-art R&D facility, was opened in 2018. By bringing together the best electric vehicle and tech talent, LiveWire’s engineering team has developed an extensive portfolio of proprietary know-how and intellectual property.

Leveraging core technology advancements, the motorcycles that began as prototypes reached commercial viability. With production beginning in September of 2019, H-D introduced the world to an electric motorcycle that transformed the riding experience, paving the way for the future of two-wheeled electric motorcycles. With the launch came critical acclaim and immediate recognition for the LiveWire name, which saw the Harley-Davidson LiveWire become the top-selling premium electric motorcycle in the U.S. and Europe in both 2020 and 2021. In 2021, building on early success and the continued growth in the global market demand for electric vehicles, H-D launched LiveWire as a standalone electric vehicle division, with the first LiveWire-branded product, the LiveWire ONE debuting in July 2021.

Today, with the LiveWire ONE in the market and on the road, LiveWire is on a path to becoming the leading brand in the premium electric motorcycle segment. Looking forward, LiveWire will draw on the lineage of H-D, its DNA as an agile disruptor and decades of learnings in the electric vehicle sector to position the company as the most desirable motorcycle brand in the world.

H-D

Harley-Davidson Motor Company was founded in 1903. Harley-Davidson, Inc. (“H-D”) was incorporated in 1981, at which time it purchased the Harley-Davidson motorcycle business from AMF Incorporated in a

 

25


Table of Contents

management buyout. In 1986, H-D became publicly held. H-D is the parent company of the group of companies referred to as Harley-Davidson Motor Company and Harley-Davidson Financial Services (“HDFS”). H-D operates in two segments: Motorcycles and Related Products and Financial Services. Since 1903, H-D has defined motorcycle culture by delivering a motorcycle lifestyle with distinctive and customizable motorcycles, experiences, motorcycle accessories, riding gear and apparel. HDFS provides financing, insurance and other programs to help get riders on the road. For more information, visit harley-davidson.com.

ABIC

ABIC is a blank check company incorporated as a Cayman Islands exempted company on July 29, 2020. ABIC was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

 

The registration statement for ABIC’s IPO was declared effective on October 1, 2020. On October 5, 2020, ABIC consummated the IPO of 40,000,000 ABIC Units. The ABIC Units sold in the IPO were sold at a price of $10.00 per ABIC Unit, generating gross proceeds of $400,000,000 before underwriting discounts and expenses. Each unit consists of one Public Share and one-half of one warrant to purchase one Public Share for $11.50 per share. Prior to the closing of the IPO, ABIC completed the private sale of an aggregate of 10,5000,000 Private Placement Warrants to Sponsor, each exercisable to purchase one Public Share at $11.50 per share at a price of $1.00 per Private Placement Warrant generating gross proceeds of $10,500,000.

Following the closing of the IPO on October 5, 2020, an amount of $400,000,000 ($10.00 per ABIC Unit) from the net proceeds of the sale of the ABIC Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by ABIC, until the earlier of (i) the completion of a business combination and (ii) the distribution of the funds in the Trust Account to ABIC’s shareholders, as described below.

ABIC Units, Class A Ordinary Shares, and Public Warrants are currently listed on the NYSE under the symbols “IMPX.U,” “IMPX” and “IMPX WS,” respectively.

HoldCo

HoldCo is a Delaware corporation that was formed on December 7, 2021.

The registered address of HoldCo is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808.

Merger Sub

Merger Sub is a Delaware corporation that was formed on December 7, 2021.

The registered address of Merger Sub is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808.

The Proposals to be Submitted at the General Meeting

The following is a summary of the Shareholder Proposals to be submitted to the ABIC shareholders at the General Meeting. The transactions contemplated by the Business Combination Agreement will be consummated only if the Required Shareholder Proposals are approved at the General Meeting.

 

26


Table of Contents

Shareholder Proposal 1: The Business Combination Proposal

As discussed in this proxy statement/prospectus, ABIC is asking its shareholders to adopt the Business Combination Agreement and approve the Business Combination. ABIC shareholders should read carefully this proxy statement/prospectus in its entirety for more detailed information concerning the Business Combination Agreement, which is attached as Annex A to this proxy statement/prospectus. Please see the section entitled “The Business Combination Agreement—The Business Combination Agreement; Structure of the Business Combination” for additional information and a summary of certain terms of the Business Combination and the Business Combination Agreement. ABIC shareholders are urged to read carefully the Business Combination Agreement in its entirety before voting on this proposal.

The aggregate consideration to be paid in the Business Combination is derived from an aggregate transaction enterprise value of $1.765 billion, apportioned between cash and shares of HoldCo Common Stock, as more specifically set forth in the Business Combination Agreement. At the Merger Effective Time, following the Domestication, (a) with respect to ABIC’s shareholders, (i) each share of ABIC common stock (excluding any such shares held in treasury by ABIC) (the “Domesticated ABIC Common Stock”) that is issued and outstanding immediately prior to Merger Effective Time will be exchanged for one share of HoldCo Common Stock, in accordance with the DGCL and the Certificate of Merger and (ii) each ABIC Warrant (the “Domesticated ABIC Warrants”) that is issued and outstanding immediately prior to the Merger Effective Time will be converted into a right to receive the same number of shares of HoldCo Common Stock pursuant to the ABIC Warrant Agreement and (b) with respect to HoldCo, each share of common stock of Merger Sub that is issued and outstanding immediately prior to the Merger Effective Time will be exchanged for the same number of shares of ABIC common stock. At the effective time of the Exchange, HoldCo will issue 161,000,000 shares of HoldCo Common Stock to the Company Equityholder, valued at a price per share of $10.00, in exchange for 100% of the membership interests of LiveWire. In addition to the consideration to be paid at Closing, the Company Equityholder shall receive, in consideration for the transfer, conveyance and delivery of the Company Equity, 161,000,000 shares of HoldCo Common Stock and the right to receive up to an additional 12.5 million shares of HoldCo Common Stock in the future. Please read the sections titled “Shareholder Proposal 1: The Business Combination Proposal” and “The Business Combination Agreement” for further details.

Shareholder Proposal 2: The Domestication Proposal

As discussed in this proxy statement/prospectus, ABIC is asking its shareholders to approve the Domestication Proposal. Under the Business Combination Agreement, the approval of the Domestication Proposal is also a condition to the consummation of the Business Combination. As a condition to closing the Business Combination, the ABIC Board has unanimously approved, and ABIC shareholders are being asked to consider and vote upon, a proposal to approve the Domestication Proposal. The Domestication Proposal, if approved, will approve a change of ABIC’s jurisdiction of incorporation from the Cayman Islands to the State of Delaware. Accordingly, while ABIC is currently incorporated as an exempted company under the Cayman Islands Companies Act, upon the effectiveness of the Domestication it will be governed by the DGCL. HoldCo is currently governed by the DGCL and, following the consummation of the Business Combination, will continue to be governed by the DGCL. We encourage shareholders to carefully consult the information set out below under “Comparison of Corporate Governance and Shareholder Rights.” The Domesticated ABIC Organizational Documents, attached hereto as Annex B and Annex C, differ in certain material respects from the Existing Organizational Documents and we encourage shareholders to carefully consult the information set out below under the Existing Organizational Documents and the Proposed HoldCo Organizational Documents, attached hereto as Annex D and Annex E. Please read the section titled “Shareholder Proposal 2: The Domestication Proposal” for further details.

 

27


Table of Contents

Shareholder Proposal 3: The Charter Proposal

As discussed in this proxy statement/prospectus, ABIC is asking its shareholders to approve the Charter Proposal. Under the Business Combination Agreement, the approval of the Charter Proposal is also a condition to the consummation of the Business Combination. ABIC shareholders are being asked to adopt the proposed Domesticated ABIC Certificate of Incorporation in the form attached hereto as Annex B, and the proposed Domesticated ABIC Bylaws, which is included in the form attached hereto as Annex C, which, in the judgment of the ABIC Board, is necessary to adequately address the needs of ABIC following the Domestication and the consummation of the Business Combination. Please read the section titled “Shareholder Proposal 3: The Charter Proposal” for further details.

Shareholder Proposal 4: The Governing Documents Proposals

As discussed in this proxy statement/prospectus, ABIC is asking its shareholders to approve, on a nonbinding advisory basis, four separate proposals in connection with the replacement of the Existing Organizational Documents with the Domesticated ABIC Organizational Documents (collectively, the “Governing Documents Proposals”).

 

   

Governing Documents Proposal A: an amendment to approve the change in the authorized share capital of ABIC from (i) 500,000,000 Class A Ordinary Shares, (ii) 50,000,000 Class B Ordinary Shares and (iii) 5,000,000 preference shares, par value $0.0001 per share, to (a) 800,000,000 shares of Domesticated ABIC Common Stock and (b) 20,000,000 shares of preferred stock, par value $0.0001 per share, of Domesticated ABIC.

 

   

Governing Documents Proposal B: an amendment to authorize the Domesticated ABIC Board to issue any or all shares of Domesticated ABIC preferred stock in one or more classes or series, with such terms and conditions as may be expressly determined by the Domesticated ABIC Board and as may be permitted by the DGCL.

 

   

Governing Documents Proposal C: an amendment to authorize the removal of the ability of Domesticated ABIC stockholders to take action by written consent in lieu of a meeting.

 

   

Governing Documents Proposal D: an amendment to authorize the amendment and restatement of the Existing Organizational Documents and to authorize all other changes in connection with the replacement of Existing Organizational Documents with the Domesticated ABIC Certificate of Incorporation and Domesticated ABIC Bylaws as part of the Domestication (copies of which are attached to this proxy statement/prospectus as Annex B and Annex C, respectively), including adopting Delaware as the exclusive forum for certain stockholder litigation and the federal district courts of the United States as the exclusive forum for litigation arising out of the Securities Act, which the ABIC Board believes is necessary to adequately address the needs of Domesticated ABIC after the Business Combination.

Please see the section titled “Shareholder Proposal 4: The Governing Documents Proposals” for further details.

Shareholder Proposal 5: The Incentive Plan Proposal

As discussed in this proxy statement/prospectus, ABIC is asking its shareholders to approve the Incentive Plan Proposal. The ABIC Board intends to adopt, and ABIC shareholders are being asked to consider and vote upon, a proposal to approve the Incentive Plan and the material terms thereunder. The purpose of the Incentive Plan is to enhance HoldCo’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. If approved by ABIC shareholders, the Incentive Plan will become effective as of the date of such approval. Please read the section titled “Shareholder Proposal 5: The Incentive Plan Proposal” for further details.

 

28


Table of Contents

Shareholder Proposal 6: The Adjournment Proposal

ABIC is proposing the Adjournment Proposal to allow the ABIC Board to adjourn the General Meeting to a later date or dates, if necessary, (i) to permit further solicitation and vote of proxies for the purpose of obtaining approval of the Required Shareholder Proposals; (ii) for the absence of a quorum; (iii) to allow reasonable additional time for filing or mailing of any legally required supplement or amendment to the proxy statement/prospectus; or (iv) if the holders of Public Shares have elected to redeem such shares such that either (a) the shares of HoldCo Common Stock and HoldCo Warrants would not be approved for listing on the NYSE or (b) the Minimum Cash Condition would not be satisfied at Closing. Please see the section titled “Shareholder Proposal 6: The Adjournment Proposal” for further details.

Each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal is conditioned on the approval and adoption of each of the other Required Shareholder Proposals. None of the Governing Documents Proposals, which will be voted upon on a nonbinding advisory basis, or the Adjournment Proposal is conditioned upon the approval of any other proposal.

ABIC Board’s Reasons for the Approval of the Business Combination

In evaluating the transaction with LiveWire, the ABIC Board consulted with its management and legal counsel as well as financial and other advisors, and the ABIC Board considered and evaluated several factors. In particular, the ABIC Board considered the following positive factors, although not weighted or in any order of significance, in deciding to approve the Business Combination Proposal:

 

   

Growing Electric Vehicle Market. LiveWire is an industry-leading all-electric motorcycle brand with a focus on the urban market and a mission to pioneer the rapidly growing two-wheel electric motorcycle space and beyond. LiveWire operates in a large global market in the early stage of a secular shift to electric motorcycles, which the ABIC Board believes presents an attractive, risk-adjusted investment opportunity in electric vehicles, with strong growth prospects. Following a review of industry trends including customer preferences and recognition of the benefits of electric vehicles, financial metrics for charging network and electric vehicle technologies, LiveWire’s evolution and other factors, the ABIC Board believes LiveWire is well-positioned to further capitalize on these trends.

 

   

ESG / Impact-Focused. ABIC believes that LiveWire has a compelling financial profile that appeals to and aligns with its ESG priorities. LiveWire’s ESG priorities include (i) lowering carbon emissions, improving air quality and minimizing noise pollution in urban environments and beyond, (ii) determining a path to achieve net zero carbon emissions by 2035 by designing for sustainability, decarbonizing its supply chain and operations and becoming a market leader in influencing green electricity for consumers, (iii) promoting workplace flexibility and increasing diversity among employees, (iv) driving positive change in its communities and (v) aligning interests of its stakeholders with ESG reporting transparency.

 

   

Leading the Transformation of Motorcycling. In connection with the Business Combination, LiveWire will be the first public electric motorcycle company in the U.S. (with its products designed and developed in the U.S.). ABIC believes that LiveWire has developed strong global production capabilities to startup and scale compared to traditional original equipment manufacturers. LiveWire is uniquely positioned to lead the transformation of electric motorcycling. Since the LiveWire brand initially launched in 2014 with a prototype electric motorcycle, LiveWire’s electric motorcycles have been embraced by early adopters and high-profile riders.

 

   

Transformative Go-to-Market Model. LiveWire is a modern retailer, combining the best of digital and physical purchase paths for its customers and retail partners to provide tech-forward sales and service. In addition to offering a central digital platform for purchase to enhance the customer

 

29


Table of Contents
 

experience, LiveWire provides four strategic retail paths for purchase, including store-in-store sales through electric vehicle-ready retail partner locations, gallery concept spaces, pop-up retail stores in key markets and LiveWire “on the road,” which brings test rides directly to LiveWire customers. Furthermore, LiveWire’s retail network is rapidly expanding in priority markets by leveraging H-D’s traditional motorcycle dealer network and working with retail partners who possess a strong sales track record, presence in a priority market, commitment to LiveWire’s mission and expertise in the electric vehicle retail and service industry.

 

   

Growing International Presence. As a pure-play electric vehicle brand with first mover advantage, LiveWire has an established brand presence in North America and Europe, with planned expansion in additional markets, including Asia-Pacific. In particular, LiveWire has laid solid foundations for growth in Australia, Japan, South Korea and China.

 

   

Backed by World-Class Financial and Strategic Partners. LiveWire will benefit from the operational and manufacturing support of industry-leading financial and strategic partners H-D and the KYMCO Group, each of which has provided significant investment in the Business Combination. With H-D’s 119-year heritage, technical expertise and global network of ~1,400 dealers, LiveWire is strategically linked to the H-D brand, enhancing LiveWire’s distribution, retail, design, engineering and manufacturing capabilities. The KYMCO Group is a Taiwanese motorcycle and sport vehicle manufacturer with a presence in over 100 countries. Through these partnerships, LiveWire is well-positioned to leverage the engineering expertise, manufacturing footprint, established distribution channels, supply chain infrastructure and global logistics capabilities of H-D and the KYMCO Group, which may create an opportunity for global at-scale manufacturing and purchasing efficiencies in priority markets. Further, the KYMCO Group’s investment provided further validation for ABIC’s valuation.

 

   

Portfolio of Products to Drive Growth. With a robust new product pipeline, LiveWire is well-positioned to, and has a clearly defined strategy to, capture increasing global market share and consumer adoption in the growing electric vehicle industry, following significant research and development investments to date. LiveWire has a demonstrated track record of research and development investments, providing breakthrough technologies and features for its premium electric motorcycle and is poised to extend its portfolio of products to include a range of middleweight applications. LiveWire is leveraging the latest technologies to address heavyweight motorcycles and anticipates future improvements in motorcycle range and charging capabilities. Additionally, LiveWire is actively attracting new riders and building brand allegiance by offering premier electric bikes for kids and older kids (including STACYC, the all-electric balance bike for kids). Beyond its electric motorcycle sales, LiveWire has created multiple growth vectors, including through its software and subscription services consumer financing and protection services, general merchandising of apparel and equipment and parts and accessories related-services.

 

   

Differentiated Expertise in Key Technologies. LiveWire’s electric motorcycles utilize breakthrough technology and features, including built-in cellular connectivity and GPS, customizable ride modes, advanced control technology and the LiveWire app, providing the rider with a unique customer experience. Arrow, LiveWire’s highly differentiated proprietary modular electric vehicle system, is scalable for future vehicle configurations, can be brought quickly to market, is a more efficient investment for new electric motorcycle models, includes lower incremental parts development and provides greater flexibility to evolving regulations. Through its partnership with the KYMCO Group, LiveWire’s strategic plans include scaling down the Arrow architecture to a platform of lightweight two-wheelers.

 

   

Mission-Driven Leadership Team with a Strong Track Record. The ABIC Board believes that LiveWire has a strong, experienced public company management team with a proven track record

 

30


Table of Contents
 

of operational excellence. We are confident in the management team’s deep industry knowledge and strategic vision and believe that the ABIC and LiveWire teams will form a collaborative and effective long-term partnership that is positioned to create and enhance stockholder value going forward. We believe that existing H-D officers Jochen Zeitz, who will serve as Executive Chairman of the HoldCo Board and Acting Chief Executive Officer of HoldCo for up to two years following the Closing, and Ryan Morrissey, who will serve as President of HoldCo following the Closing, will provide important continuity in advancing LiveWire’s strategic and growth objectives. Additionally, Jochen Zeitz will continue in his capacity as Chief Executive Officer of H-D and following the appointment of a permanent Chief Executive Officer of HoldCo, will retain his role as Executive Chairman of HoldCo.

 

   

Transaction Proceeds. Depending on the extent of redemptions by ABIC’s Public Shareholders and on the final amount of the expenses incurred in connection with the Business Combination, the Business Combination is expected to provide up to approximately $545 million of gross cash proceeds to LiveWire’s balance sheet. This additional cash injection is expected to, among other things, fund LiveWire’s strategic plan to accelerate its go-to-market model, invest in new production development and enhance its global manufacturing and distribution capabilities.

 

   

Due Diligence. The ABIC Board reviewed and discussed in detail the results of the due diligence examination of LiveWire conducted by ABIC’s management team and ABIC’s financial, legal and regulatory advisors, including extensive telephonic and in-person meetings with the management team and advisors of H-D regarding LiveWire and its business plan, operations, prospects and forecasts, research on the electric vehicle industry, including historical growth trends and market share information as well as end-market size and growth projection, evaluation analyses with respect to the Business Combination, review of material contracts (including LiveWire’s exclusive retailer, dealer, and supplier contracts), LiveWire’s audited and unaudited financial statements, and other material matters, as well as general financial, technical, legal, intellectual property, regulatory, tax and accounting due diligence.

 

   

Financial Condition. The ABIC Board reviewed factors such as LiveWire’s historical financial results, and outlook and business and financial plans. In reviewing these factors, the ABIC Board believed that LiveWire was well-positioned in its industry for potential strong future growth and therefore was likely to be positively viewed by public investors.

 

   

Reasonableness of Consideration. Following a review of the financial data provided to ABIC and the due diligence of LiveWire’s business conducted by ABIC’s management and ABIC’s advisors and the support for the implied valuation of LiveWire indicated by the commitments obtained from KYMCO and H-D, the management of LiveWire determined that the aggregate consideration to be paid in the Business Combination was reasonable.

 

   

Post-Closing Economic Interest in HoldCo. If the Business Combination is consummated, ABIC shareholders (other than ABIC shareholders that sought redemption of their Class A Ordinary Shares) would have a meaningful economic interest in HoldCo and, as a result, would have a continuing opportunity to benefit from the success of LiveWire following the consummation of the Business Combination.

 

   

Lock-Up. H-D and/or its subsidiaries and certain Sponsor parties have agreed to be subject to a lock-up in respect of their shares of HoldCo Common Stock (ranging from 12 or 18 months for Sponsor parties to seven years for H-D and/or its subsidiaries and subject to certain customary exceptions).

 

   

Financing. The agreement of the KYMCO Group investors to invest $100 million in HoldCo at the Closing of the Business Combination at $10.00 per share, for an aggregate of 10,000,000

 

31


Table of Contents
 

shares of HoldCo Common Stock. H-D’s commitment to subscribe for shares of HoldCo Common Stock, in an aggregate amount of up to $100 million to fund any redemptions by ABIC shareholders. H-D’s commitment to purchase an aggregate of 10,000,000 shares of HoldCo Common Stock, for an aggregate amount of $100 million subject to the satisfaction (or waiver) of certain of H-D’s Closing conditions.

 

   

Post-Business Combination Corporate Governance. The HoldCo Board will include, among other committees, an Audit and Finance Committee and Conflicts Committee (to oversee conflicts arising in connection with the H-D relationship) comprised of all independent directors as further described in “Management of HoldCo Following the Business Combination—Nominating and Corporate Governance Committee Information.

 

   

Negotiated Transaction. The financial and other terms of the Business Combination Agreement and the fact that such terms and conditions were the product of arm’s length negotiations between ABIC and H-D.

The ABIC Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

 

   

Macroeconomic Risks. The risk that the future financial performance of LiveWire may not meet the ABIC Board’s expectations due to factors in LiveWire’s control or out of its control.

 

   

Redemption Risk. The potential that a significant number of ABIC’s shareholders elect to redeem their shares prior to the consummation of the Business Combination and pursuant to the Existing Organizational Documents. However, even in the event that a significant number of ABIC shareholders elect to redeem their shares, this redemption would not prevent the consummation of the Business Combination.

 

   

Exclusivity. The fact that the Business Combination Agreement includes an exclusivity provision that prohibits ABIC and H-D from soliciting other business combination proposals, as further discussed in “The Business Combination Agreement—Covenants of the Parties—Other Covenants of ABIC.

 

   

Separation from the H-D Business. The separation of the LiveWire business from H-D may involve certain risks, including (i) the fact that the business of LiveWire overlaps and competes with H-D in certain markets may affect LiveWire’s ability to build and maintain relationships with partners, dealers, suppliers and customers, (ii) LiveWire’s inability to maintain a strong relationship with H-D or to favorably resolve any disputes could result in a significant reduction of LiveWire’s revenue, (iii) following termination of the Contract Manufacturing Agreement to be entered into at Closing (pursuant to which H-D will continue to provide LiveWire with contracting manufacturing services for a proscribed period of time), LiveWire will need to engage a third-party contractor or build its own in-house manufacturing capability to make its products, which could result in significant cost and expense, (iv) the fact that LiveWire is dependent, and following completion of the Business Combination, will remain dependent on H-D for a number of services, including certain financial and accounting, IT-back of house operations, IP, quality safety and testing-related services, (v) the fact that H-D will retain certain assets utilized in the LiveWire business and (vi) the fact that H-D holds the direct contractual relationship with many key suppliers required for LiveWire to produce its electric vehicles and disputes between H-D and such key suppliers may negatively impact LiveWire’s electric vehicle production.

 

   

Stockholder Vote. The risk that ABIC’s shareholders may fail to provide the votes necessary to approve and effect the Business Combination.

 

32


Table of Contents
   

Closing Conditions. The potential risks and costs associated with the Business Combination failing to be consummated in a timely manner or that Closing might not occur despite the reasonable best efforts of the parties. The completion of the Business Combination is conditioned on the satisfaction of certain Closing conditions that are not within ABIC’s control.

 

   

Listing Risks. The challenges associated with preparing HoldCo, a privately held entity, for the applicable disclosure, controls and listing requirements to which HoldCo will be subject as a publicly traded company on the NYSE.

 

   

Fees and Expenses. The expected fees and expenses associated with the Business Combination and related transactions, some of which would be payable regardless of whether the Business Combination is ultimately consummated and the substantial time and effort of management required to complete the Business Combination.

 

   

Dilution; ABIC Shareholders Receiving a Minority Position in HoldCo. The fact that ABIC’s shareholders will experience dilution as a result of the issuance of shares of HoldCo Common Stock to H-D as consideration in the Business Combination (and may experience dilution as a result of future issuances or resales of shares of HoldCo Common Stock). The fact that ABIC’s shareholders will hold a minority interest in HoldCo, which will limit or preclude the ability of ABIC’s shareholders to influence corporate matters, including any future potential change in control or other material transaction, The ABIC Board determined that such facts were outweighed by the long-term benefits that the potential Business Combination would provide to ABIC’s shareholders and future shareholders of ABIC after Closing.

 

   

PIPE Financing. The risk that HoldCo does not obtain the commitments related to the PIPE Financing or otherwise retain sufficient cash in the Trust Account or find replacement cash to meet the requirements of the Business Combination.

 

   

Litigation. The possibility of shareholder litigation challenging the Business Combination.

 

   

Financial Opinion. The risk that ABIC did not obtain a third-party valuation or financial opinion from any independent investment banking or accounting firm in determining whether to proceed with the Business Combination (and may not obtain such valuation or opinion).

 

   

COVID-19. The impact of the COVID-19 pandemic on the LiveWire business.

 

   

Other Risks. Various other risks associated with the Business Combination, the business of ABIC and the business of ABIC described under the section entitled “Risk Factors.

In addition to considering the factors described above, the ABIC Board also considered that certain of the officers and directors of ABIC may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of ABIC’s shareholders (see “—Interests of Certain Persons, the Sponsor, and ABIC Directors and Executive Officers in the Business Combination” below). ABIC’s independent directors reviewed and considered these interests during the negotiation of the Business Combination and in valuating and approving, as members of the ABIC Board, the Business Combination Agreement and the transactions contemplated therein, including the Business Combination.

The ABIC Board concluded that the potential benefits that it expected ABIC and its shareholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the ABIC Board determined that the Business Combination Agreement and the Business Combination were advisable, fair to and in the best interests of ABIC and its shareholders.

For more information about the ABIC Board’s decision-making process concerning the Business Combination, please see the section entitled “Shareholder Proposal 1: The Business Combination Proposal—ABIC Board’s Reasons for Approval of the Business Combination.”

 

33


Table of Contents

Certain Agreements Related to the Business Combination

In connection with the Business Combination, certain related agreements have been, or will be entered into, on or prior to the closing of the Business Combination, including the Investment Agreements, the Investor Support and the Inside Letter Agreement. See the section titled “The Business Combination Agreement—Certain Agreements Related to the Business Combination” of this proxy statement/prospectus for additional information.

The General Meeting

Date, Time and Place of the General Meeting

ABIC’s General Meeting is to be held at 10:00 a.m., Eastern Time, on September 16, 2022, at the offices of Kirkland & Ellis LLP located at 601 Lexington Avenue, 50th Floor, New York, New York 10022, and via a virtual meeting, or at such other time, on such other date and at such other place to which the meeting may be adjourned. As part of our precautions regarding COVID-19, we are planning for the meeting to be held virtually over the Internet, but the physical location of the meeting will remain at the location specified above for the purposes of the Existing Organizational Documents. Only shareholders who hold ABIC Shares at the close of business on the record date will be entitled to vote at the General Meeting.

Record Date; Outstanding Shares; Shareholders Entitled to Vote

ABIC shareholders will be entitled to vote or direct votes to be cast at the General Meeting if they owned ABIC Shares at the close of business on May 6, 2022, which is the Record Date for the General Meeting. Shareholders will have one vote for each ABIC Share owned at the close of business on the Record Date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted. ABIC Warrants do not have voting rights. As of the close of business on the record date, there were 50,000,000 ABIC Shares issued and outstanding, of which 40,000,000 were issued and outstanding Public Shares.

The Sponsor, the members of the ABIC Board and the executive officers of ABIC have agreed to, among other things, vote in favor of the Business Combination Agreement and the transactions contemplated thereby, in the case of the Sponsor, subject also to the terms and conditions contemplated by the Investor Support Agreement, and waive their redemption rights in connection with the closing of the Business Combination with respect to any ABIC Shares held by them. As of the date of this proxy statement/prospectus, the ABIC Initial Shareholders owned of record an aggregate of 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25% of the issued and outstanding ABIC Shares. The ABIC Shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price.

Quorum and Required Vote

A quorum of ABIC shareholders is necessary to hold the General Meeting. A quorum will be present at the General Meeting if the holders of a majority of the issued and outstanding ABIC Shares, who, being present and entitled to vote at a meeting of ABIC’s shareholders, vote at such meeting.

Each of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal and the Incentive Plan Proposal is interdependent upon the others and must be approved in order for ABIC to complete the Business Combination as contemplated by the Business Combination Agreement. None of the Governing Documents Proposals, which will be voted upon on a nonbinding advisory basis, or the Adjournment Proposal is conditioned upon the approval of any of the other proposals. The Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal will require an ordinary resolution as a matter of Cayman Islands

 

34


Table of Contents

law, being the affirmative vote of the holders of a majority of the outstanding ABIC Shares, who, being present and entitled to vote at a meeting of ABIC’s shareholders, vote at such meeting. The Domestication Proposal and the Charter Proposal will require a special resolution as a matter of Cayman Islands law, being the affirmative vote of the holders of at least two-thirds of the outstanding ABIC Shares, who, being present and entitled to vote at a meeting of ABIC’s shareholders, vote at such meeting. The Governing Documents Proposals are voted upon on a nonbinding advisory basis only. If any of the Business Combination Proposal, the Domestication Proposal, the Charter Proposal or the Incentive Plan Proposal fails to receive the required approval, none will be approved and the Business Combination will not be completed.

Recommendation to Shareholders of ABIC

The ABIC Board has unanimously approved each of the Shareholder Proposals. The ABIC Board unanimously recommends that shareholders:

 

   

Vote “FOR” the Business Combination Proposal;

 

   

Vote “FOR” the Domestication Proposal;

 

   

Vote “FOR” the Charter Proposal;

 

   

Vote “FOR” the Governing Documents Proposals;

 

   

Vote “FOR” the Incentive Plan Proposal; and

 

   

Vote “FOR” the Adjournment Proposal.

When you consider the recommendation of the ABIC Board in favor of approval of the Required Shareholder Proposals, you should keep in mind that the Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests include that the Sponsor as well as our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired or may acquire in the future), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC. See the section entitled “Shareholder Proposal 1: The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for a further discussion of these considerations.

Redemption Right

Pursuant to the Existing Organizational Documents, a Public Shareholder may request that ABIC redeem all or a portion of its Public Shares for cash if the Business Combination is consummated. As a holder of Public Shares, you will be entitled to receive cash for any Public Shares to be redeemed only if you:

 

  1.

(i) (a) hold Public Shares, or (b) hold Public Shares through units, you elect to separate your units into the underlying Public Shares and warrants prior to exercising your redemption rights with respect to the Public Shares; and

 

  2.

prior to 5:00 pm, Eastern Time on September 14, 2022, (a) submit a written request to the Transfer Agent, in which you (i) request that the Company redeem all or a portion of your Public Shares for cash, and (ii) identify yourself as the beneficial holder of the Public Shares and provide your legal name, phone number and address; and (b) deliver your Public Shares to the Transfer Agent, physically or electronically through DTC.

Public Shareholders may seek to have their Public Shares redeemed by ABIC, regardless of whether they vote for or against the Business Combination Proposal or any other Shareholder Proposal and whether they

 

35


Table of Contents

held Public Shares as of the record date or acquired them after the record date. Any Public Shareholder who holds ABIC Shares on or before September 14, 2022 (two (2) business days before the General Meeting) will have the right to demand that his or her shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. For illustrative purposes, based on funds in the Trust Account of approximately $400,313,600 on March 31, 2022 and including anticipated additional interest through the closing of the Business Combination (assuming interest accrues at recent rates and no additional tax payments are made out of the Trust Account), the estimated per share redemption price is expected to be approximately $10.01. A Public Shareholder who has properly tendered his or her Public Shares for redemption will be entitled to receive his or her pro rata portion of the aggregate amount then on deposit in the Trust Account in cash for such shares only if the Business Combination is completed. If the Business Combination is not completed, the redemptions will be canceled and the tendered Public Shares will be returned to the relevant Public Shareholders as appropriate.

ABIC Public Shareholders who seek to redeem their Public Shares must demand redemption no later than 5:00 p.m., Eastern Time, on September 14, 2022 (two (2) business days before the General Meeting) by (a) submitting a written request to the Transfer Agent that ABIC redeem such holder’s Public Shares for cash, (b) affirmatively certifying in such request to the Transfer Agent for redemption if such holder is acting in concert or as a “group” (as described in Section 13(d)(3) of the Exchange Act) with any other shareholder with respect to ABIC Shares and (c) delivering their ABIC Shares, either physically or electronically using DTC’s DWAC System, at the holder’s option, to the Transfer Agent prior to the General Meeting. If a Public Shareholder holds the Public Shares in street name, such Public Shareholder will have to coordinate with his or her broker to have such Public Shares certificated or delivered electronically. Certificates that have not been tendered to the Transfer Agent (either physically or electronically) in accordance with these procedures will not be redeemed for cash. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge the tendering broker a nominal fee and it would be up to the broker whether or not to pass this cost on to the redeeming Public Shareholder. In the event the Business Combination is not completed, this may result in an additional cost to Public Shareholders for the return of their shares.

Notwithstanding the foregoing, a Public Shareholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to 15% or more of ABIC’s Public Shares. Accordingly, any shares held by a Public Shareholder or “group” in excess of such 15% cap will not be redeemed by ABIC. We have no specified maximum redemption threshold under the Existing Organizational Documents, other than the aforementioned 15% threshold, except that in no event will we redeem ordinary shares in an amount that would cause our net tangible assets to be less than $5,000,001. Each redemption of Public Shares by our Public Shareholders will reduce the amount in our Trust Account.

Additionally, pursuant to the Investor Support Agreement, the Sponsor and ABIC’s current officers and directors have, for no additional consideration, agreed to waive their all of their redemption rights with respect to any ABIC Shares owned by them, directly or indirectly. The ABIC Shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. The closing price of ABIC Class A Ordinary Shares on the date immediately prior to the date of this proxy statement/prospectus was $9.95. The cash held in the Trust Account as of March 31, 2022, was approximately $10.01 per Public Share. Prior to exercising their redemption rights, shareholders should verify the market price of ABIC Shares as they may receive higher proceeds from the sale of their shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price, ABIC cannot assure its shareholders that they will be able to sell their ABIC Shares in the open market, even if the market price per share is higher than the Redemption price stated above, as there may not be sufficient liquidity in its securities when its shareholders wish to sell their shares. A Public Shareholder who properly exercises its redemption rights pursuant to the

 

36


Table of Contents

procedures set forth herein will be entitled to receive a full pro rata portion of the aggregate amount then on deposit in the Trust Account, less any amounts necessary to pay ABIC’s taxes.

For more information, see “General Meeting of ABIC Shareholders—Redemption Rights.

Emerging Growth Company

ABIC 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, as amended (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 our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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 a 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 an election to opt out is irrevocable. ABIC 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, ABIC, 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 ABIC’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.

We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of ABIC’s IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period. References herein to “emerging growth company” have the meaning associated with it in the JOBS Act.

Material Tax Consequences

For a detailed discussion of material U.S. federal income tax consequences of the Business Combination, see the section titled “Material Tax Considerations” in this proxy statement/prospectus.

Anticipated Accounting Treatment of the Business Combination

The Business Combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, ABIC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of LiveWire issuing stock for the net assets of ABIC, accompanied by a recapitalization. The net assets of ABIC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of LiveWire.

 

37


Table of Contents

Regulatory Approvals Required

The parties’ obligation to consummate the Business Combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required Notification and Report Forms with the Antitrust Division and the FTC. ABIC and H-D filed the required forms under the HSR Act with the Antitrust Division and the FTC on January 24, 2022. The waiting period under the HSR Act expired at 11:59 pm (Eastern Time) on February 23, 2022. At any time before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws or foreign direct investment laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination, conditionally approving the Business Combination upon divestiture of LiveWire’s assets, subjecting the completion of the Business Combination to regulatory conditions or seeking other remedies. Private parties may also seek to take legal action under such antitrust laws under certain circumstances. There is no assurance that the Antitrust Division, the FTC, any state attorney general or any other government authority will not attempt to challenge the Business Combination on antitrust or foreign direct investment grounds, and, if such a challenge is made, we cannot assure you as to its result.

Neither ABIC nor HoldCo is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Appraisal Rights

ABIC’s shareholders have no appraisal rights in connection with the Business Combination, the Domestication, or the Merger under the Cayman Islands Companies Act or under the DGCL.

Proxy Solicitation

Proxies may be solicited by mail, via telephone or via e-mail or other electronic correspondence. ABIC has engaged Morrow to assist in the solicitation of proxies.

If an ABIC shareholder grants a proxy, such shareholder may still vote its shares in person if it revokes its proxy before the General Meeting. An ABIC shareholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “General Meeting of ABIC Shareholders — Revoking Your Proxy; Changing Your Vote.”

Interests of Certain Persons in the Business Combination

When you consider the recommendation of the ABIC Board in favor of approval of the Required Shareholder Proposals, you should keep in mind that the Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests include that the Sponsor as well as our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired or may acquire in the future), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.

Additionally, among other things, these interests include the following:

 

   

the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

38


Table of Contents
   

the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by October 5, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $99,500,000, based upon the closing price of $9.95 per Class A Ordinary Share on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $3,045,000, based upon the closing price of $0.29 per Public Warrant on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and

 

   

the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $102,047,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on July 25, 2022.

Sponsor Group Ownership of ABIC Prior to Closing

 

     Securities
Held by
Sponsor
Group
     Sponsor Cost
at ABIC’s IPO ($)
 

Founder Shares

     9,950,000      $ 25,000 (1) 

Private Placement Warrants

     10,500,000      $ 10,500,000  
     

 

 

 

Total

      $ 10,525,000  

 

(1) 

Includes cost for 50,000 Founder Shares held by the independent directors.

 

39


Table of Contents

Sponsor Group Ownership of HoldCo Following the Closing

 

     Securities
Held by
Sponsor
Group
Prior
to Closing
     Value per
Security
($)
     Total Value ($)  

Shares of HoldCo Common Stock Issued to Holders of Founder Shares

     9,950,000      $ 9.95      $ 99,002,500  

HoldCo Private Placement Warrants

     10,500,000      $ 0.29      $ 3,045,000  
     

 

 

    

 

 

 

Total

         $ 102,047,500  

 

   

the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any out-of-pocket expenses incurred on ABIC’s behalf related to identifying, investigating, negotiating and completing an initial business combination, including the formation and setting up of the Sponsor and related entities. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by ABIC’s officers and directors and there are no outstanding out-of-pocket expenses for which ABIC’s officers or directors are awaiting reimbursement;

 

   

the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by October 5, 2022;

 

   

the fact that the HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;

 

   

the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents;

 

   

the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the lock-up restrictions;

 

   

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

 

   

the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;

 

   

the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any out-of-pocket expenses incurred by them on ABIC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by October 5, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

40


Table of Contents
   

the fact that John Garcia, who is currently the Executive Chairman, Co-Chief Executive Officer and Director of ABIC, paid an aggregate of $25,000,000 for 2,500,000 ABIC Units. Such securities are valued at approximately $25,125,000, based upon the closing price of the ABIC Units ($10.05) on the NYSE on July 20, 2022; and

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and required LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.

In addition, certain persons who are expected to become HoldCo directors after the completion of the Business Combination may have interests in the Business Combination that are different from, or in addition to, the interests of the ABIC shareholders. See “Shareholder Proposal 1: The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for more information.

The personal and financial interests of the Sponsor as well as ABIC’s executive officers and directors may have influenced their motivation in identifying and selecting LiveWire as a business combination target, completing the Business Combination with LiveWire and influencing the operation of the business following the Business Combination. In considering the recommendations of the ABIC Board to vote for the proposals, its shareholders should consider these interests. Additionally, following the Closing, the Sponsor will have the right to designate one member of the HoldCo Board, who is initially expected to be John Garcia. Any vote made by such individual appointed by the Sponsor as part of such individual’s service on the HoldCo Board does not express the vote of ABIC in any capacity, but solely such individual’s vote as a director of HoldCo.

Interests of HoldCo Directors and Executive Officers in the Business Combination

When you consider the recommendation of the ABIC Board in favor of approval of the Shareholder Proposals, you should keep in mind that HoldCo and LiveWire’s directors and executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests, among other things, are discussed in “Executive Compensation of LiveWire.

Sources and Uses of Funds for the Business Combination

The following tables summarize the sources and uses for funding the Business Combination (i) assuming that none of the Class A Ordinary Shares are redeemed in connection with the Business Combination and (ii) assuming that the contractual maximum number of Class A Ordinary Shares with the available Backstop are redeemed in connection with the Business Combination, while still satisfying the Minimum Cash Condition. For an illustration of the number of shares and percentage interests outstanding under scenarios that assume redemptions of the Class A Ordinary Shares in an illustrative redemption scenario, in a contractual maximum redemption scenario and a charter redemption limitation scenario, see “Risk Factors — Risks Related to the Business Combination and ABIC — The Public Shareholders will experience immediate dilution as a consequence of the issuance of shares of HoldCo Common Stock as consideration in the Business Combination and in the PIPE Financing.

 

41


Table of Contents

No Redemption (1)

 

     Source of Funds  
     (in millions)  

Existing Equity Rollover

   $ 1,610.0  

Cash and Investments Held in Trust Account(2)

     400.3  

Company Equityholder PIPE Investment

     100.0  

KYMCO PIPE Investment

     100.0  
  

 

 

 

Total Sources

   $ 2,210.3  
  

 

 

 

 

     Uses  
     (in millions)  

Existing Equity Rollover

   $ 1,610.0      

Shareholder Redemptions

     —      

Cash to LiveWire Balance Sheet

     550.9      

Estimated Transaction Fees and Expenses(3)

     49.4      
  

 

 

 

Total Uses

   $ 2,210.3      
  

 

 

 

 

(1) 

Figures exclude impact of cash and cash equivalents as well as outstanding payables at ABIC.

(2) 

As of March 31, 2022.

(3) 

Represents an estimated amount, inclusive of IPO deferred underwriting fee, accounting, legal and other fees related to the Business Combination.

Contractual Maximum Redemption(1)

 

     Source of Funds  
     (in millions)  

Existing Equity Rollover

   $ 1,610.0  

Cash and Investments Held in Trust Account(2)

     400.3  

Company Equityholder PIPE Investment

     100.0  

KYMCO PIPE Investment

     100.0  

Backstop

     100.0  
  

 

 

 

Total Sources

   $ 2,310.3  
  

 

 

 

 

     Uses  
     (in millions)  

Existing Equity Rollover

   $ 1,610.0      

Shareholder Redemptions

     375.2      

Cash to LiveWire Balance Sheet

     275.7      

Estimated Transaction Fees and Expenses(3)

     49.4     
  

 

 

 

Total Uses

   $ 2,310.3      
  

 

 

 

 

(1) 

Figures exclude impact of cash and cash equivalents as well as outstanding payables at ABIC.

(2) 

As of March 31, 2022.

(3) 

Represents an estimated amount, inclusive of IPO deferred underwriting fee, accounting, legal and other fees related to the Business Combination.

Risk Factor Summary

The LiveWire business and the Business Combination are subject to numerous risks. In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus,

 

42


Table of Contents

including the Annexes, and especially consider the factors discussed in the section entitled “Risk Factors.” The occurrence of one or more of the events or the circumstances described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may adversely affect HoldCo’s, LiveWire’s and ABIC’s ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition or results of operations of HoldCo and LiveWire. References below to LiveWire shall be deemed to also refer to HoldCo and the post-Business Combination company, as the context requires or as appropriate. These risks include the following:

Risks Related to LiveWire

 

   

We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for several years. We have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain;

 

   

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment;

 

   

We may be unable to develop and produce electric vehicles of sufficient quality, and on a schedule and scale, that would appeal to a large customer base;

 

   

If we fail to achieve unit sales expectations, our business, prospects, financial condition and operating results could be adversely impacted;

 

   

We are a pioneer in a new space. As we scale and expand our business, we may not be able to adequately control the costs of our operations;

 

   

The electric vehicle sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of competitors;

 

   

Our business and prospects depend significantly on our ability to build the LiveWire brand and consumers’ recognition, acceptance and adoption of the LiveWire brand. We may not succeed in continuing to maintain and strengthen the LiveWire brand;

 

   

We have an established standard of quality and associated consumer expectations through our H-D motorcycle lineage. If we are unable to continue providing quality services and customer service, our business and reputation may be materially and adversely affected;

 

   

Our relationship to H-D and the H-D presents potential opportunities, synergies and risks. Our brand and reputation could be harmed if we fail to realize those synergies through negative publicity regarding H-D and its products and services;

 

   

We may experience operational and financial risks if we fail to effectively and appropriately separate the LiveWire brand from the H-D business;

 

   

H-D could make decisions for the benefit of its overall business that could negatively impact our overall business;

 

   

Our relationship to H-D may impact our other business relationships or potential business relationships;

 

   

Leveraging contract manufacturers, including H-D, the KYMCO Group and other partners, to contract manufacture electric vehicles is subject to risks; or

 

   

If retail partners are unwilling to participate in our go-to-market business model, it may have negative impacts on our business.

 

43


Table of Contents

Risks Related to Separation

 

   

Our business and H-D’s business overlap and we may compete, or be perceived as competitors, in certain markets;

 

   

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment;

 

   

After this offering, we will be a smaller company relative to H-D, which could result in increased costs because of a decrease in our purchasing power and difficulty maintaining existing customer relationships and obtaining new customers;

 

   

We are dependent on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it will require significant investment for us to build our own safety and testing facilities, or we may be required to obtain such services from another third party at increased costs;

 

   

Any decision by us to electrify H-D products, or the products of any other company, may not achieve the intended results or return on investment when compared with developing our own motorcycle portfolio; or

 

   

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Business Combination.

Risks Related to the Business Combination and ABIC

 

   

ABIC and LiveWire will incur significant transaction and transition costs in connection with the Business Combination.

 

   

If the conditions to the Business Combination Agreement are not met, the Business Combination may not occur.

 

   

The Sponsor and each of ABIC’s officers and directors agreed to vote in favor of our initial business combination, including the Business Combination in particular, as applicable, regardless of how the Public Shareholders vote.

 

   

Since the Sponsor and our executive officers and directors have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with HoldCo is appropriate as our initial business combination and in recommending that shareholders vote in favor of approval of the Required Shareholder Proposals. Such interests include that the Sponsor and our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired during or may acquire after the IPO), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.

 

   

The ability of the Public Shareholders to exercise their redemption rights with respect to a large number of our shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

 

   

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of shares of HoldCo Common Stock to drop significantly, even if HoldCo’s business is doing well.

 

44


Table of Contents

MARKET PRICE AND DIVIDEND INFORMATION

ABIC

ABIC Units, Class A Ordinary Shares, and Public Warrants are currently listed on the NYSE under the symbols “IMPX.U,” “IMPX” and “IMPX WS,” respectively. The ABIC Units will automatically separate into their component securities following the Domestication and, as a result, will no longer trade as an independent security. Upon the Closing, the shares of HoldCo Common Stock and HoldCo Warrants will be listed on the NYSE under the symbols “LVWR” and “LVWR WS,” respectively.

The closing price of the ABIC Units on December 8, 2021, Class A Ordinary Shares on December 10, 2021, and Public Warrants on December 10, 2021, the last trading day before announcement of the execution of the Business Combination Agreement, was $10.26, $9.85 and $0.81, respectively.

Holders of the ABIC Units, Class A Ordinary Shares and Public Warrants should obtain current market quotations for their securities. The market price of ABIC Securities could vary at any time before the Business Combination.

Holders

As of March 31, 2022, there was 1 holder of record of ABIC Units, 1 holder of record of Class A Ordinary Shares, 3 holders of record of Class B Ordinary Shares and 3 holders of record of ABIC Warrants (1 of whom was a public holder). The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose ABIC Units, Class A Ordinary Shares and Public Warrants are held of record by banks, brokers and other financial institutions.

Dividends

ABIC has not paid any cash dividends on the ABIC Units to date and does not intend to pay cash dividends prior to the completion of the Business Combination. Assuming the Business Combination is consummated, the payment of cash dividends in the future will be dependent, among other things, upon LiveWire’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination as well as compliance with the Proposed HoldCo Certificate of Incorporation and Proposed HoldCo Bylaws and Delaware law. The payment of any dividends following the Business Combination will be subject to the relevant provisions of the Proposed HoldCo Certificate of Incorporation and Proposed HoldCo Bylaws. See also “Description of HoldCos Securities—Common Stock—Dividend rights.” The ability of HoldCo to declare dividends may also be limited by the terms of financing or other agreements entered into by HoldCo from time to time.

HoldCo

Historical market price information for shares of HoldCo Common Stock is not provided because there is no public market for shares of HoldCo Common Stock. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire.”

H-D

H-D’s shares are currently listed on the NYSE under the symbol “HOG.” The closing price of the H-D shares on December 10, 2021, the last trading day before announcement of the execution of the Business Combination Agreement, was $36.81.

 

45


Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION OF LIVEWIRE

The selected historical combined statements of operations and comprehensive loss data of LiveWire for the years ended December 31, 2021, 2020 and 2019 and the historical combined balance sheet data as of December 31, 2021 and 2020 are derived from LiveWire’s audited combined financial statements included elsewhere in this proxy statement/prospectus. The selected historical combined statements of operations and comprehensive loss data of LiveWire for the three months ended March 27, 2022 and three months ended March 28, 2021 and the historical combined balance sheet data as of March 27, 2022 are derived from LiveWire’s unaudited interim combined financial statements included elsewhere in this proxy statement/prospectus.

You should read the following selected combined historical financial data together with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire” and LiveWire’s financial statements and related notes included elsewhere in this proxy statement/prospectus. LiveWire’s historical results are not necessarily indicative of the results that may be expected in the future and LiveWire’s results for the three months ended March 27, 2022 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2022 or any other period.

 

     Three Months Ended     Year Ended  

(Amounts in thousands)

   March 27,
2022
    March 28,
2021
    December 31,
2021
    December 31,
2020
    December 31,
2019
 

Revenue, net

   $ 11,414     $ 6,536     $ 35,806     $ 30,863     $ 20,188  

Costs and expenses:

          

Cost of goods sold

     10,488       6,702       38,380       55,819       21,298  

Selling, administrative and engineering expense

     16,112       14,459       65,608       52,099       56,997  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expense

     26,600       21,161       103,988       107,918       78,295  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating loss

     (15,186     (14,625     (68,182     (77,055     (58,107

Other income (expense), net

     69       (5     302       (30     75  

Interest expense related party

     (277     (68     (293     (186     (1

Interest (expense) income

     (4     3       19       56       41  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (15,398     (14,695     (68,154     (77,215     (57,992

Income tax provision (benefit)

     68       13       138       357       (1,475
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (15,466     (14,708     (68,292     (77,572     (56,517

Other comprehensive (loss) income:

          

Foreign currency translation adjustments

     (100     (29     (85     236       (6
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (15,566   $ (14,737   $ (68,377   $ (77,336   $ (56,523
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     As of March 27,      As of December 31,
     2022      2021      2020  
     (in thousands)      (in thousands)

Balance sheet data:

        

Total assets

   $ 75,756      $ 61,952      $ 51,740  

Total liabilities

     52,845        42,027        49,717  

Total equity

     22,911        19,925        2,023  

 

46


Table of Contents

SELECTED HISTORICAL FINANCIAL INFORMATION OF ABIC

The following tables contain summary historical financial data for ABIC. Such data as of December 31, 2021 has been derived from the audited financial statements of ABIC included elsewhere in this proxy statement/prospectus. Such data as of March 31, 2022 and for the three months ended March 31, 2021 and 2022 has been derived from the unaudited financial statements of ABIC included elsewhere in this proxy statement/prospectus.

The information below is only a summary and should be read in conjunction with ABIC’s financial statements, and the notes and schedules related thereto, which are included elsewhere in this proxy statement/prospectus and the section entitled “Managements Discussion and Analysis of Financial Condition and Results of Operations of ABIC.” ABIC’s historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

    For the three
months ended
March 31,
2022
    For the three
months ended
March 31,
2021
 
   

(Unaudited)

    (Unaudited)  

Formation and operational costs

  $ 1,589,390     $ 295,008  

Loss from operations

    (1,589,390     (295,008

Other income (expense):

   

Interest earned on investments held in Trust Account

    64,109       89,062  

Change in fair value of warrant liability

    10,522,500       19,520,000  
 

 

 

   

 

 

 

Total other income (expense)

    10,586,609       19,609,062  
 

 

 

   

 

 

 

Net income (loss)

  $ 8,997,219     $ 19,314,054  
 

 

 

   

 

 

 

Weighted average shares outstanding of Class A Ordinary Shares

    40,000,000       40,000,000  

Basic and diluted net income per ordinary share, Class A Ordinary Shares

  $ 0.18     $ 0.39  
 

 

 

   

 

 

 

Weighted average shares outstanding of Class B Ordinary Shares

    10,000,000       10,000,000  
 

 

 

   

 

 

 

Basic and diluted net income per ordinary share, Class B Ordinary Shares

  $ 0.18     $ 0.39  
 

 

 

   

 

 

 

 

    March 31,
2022
    December 31,
2021
 
   

(Unaudited)

       

Condensed Balance Sheet Data (at Period End):

   

Total assets

  $ 401,037,081     $ 401,526,175  

Total liabilities

  $ 45,106,540     $ 54,592,853  

Class A Ordinary Shares subject to possible redemption, 40,000,000 shares at $10.00 per share redemption value at March 31, 2022 and December 31, 2021

    400,000,000       400,000,000  

Preference shares, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding

    —         —    

Class A Ordinary Shares, $0.0001 par value; 500,000,000 shares authorized; no shares issued and outstanding (excluding 40,000,000 shares subject to possible redemption)

    —         —    

Class B Ordinary Shares, $0.0001 par value; 50,000,000 shares authorized; 10,000,000 shares issued and outstanding

    1,000       1,000  

Total shareholders’ deficit

  $ (44,069,459   $ (53,066,678

 

47


Table of Contents

RISK FACTORS

You should carefully review and consider the following risk factors, together with all of the other information contained in this proxy statement/prospectus, including the financial statements and notes to the financial statements included herein and the matters addressed in the section entitled “Cautionary Note Regarding Forward Looking Statements,” in evaluating the Business Combination and the proposals to be voted on at the General Meeting. Certain of the following risk factors apply to the business and operations of LiveWire and will also apply to its business and operations following the completion of the Business Combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of LiveWire following the Business Combination. The risks discussed below may not prove to be exhaustive and are based on certain assumptions made by LiveWire and ABIC which later may prove to be incorrect or incomplete. You are encouraged to perform your own investigation with respect to the businesses of LiveWire and ABIC. LiveWire and ABIC may face additional risks and uncertainties that are not presently known to such entity, or that are currently deemed immaterial, which may also impair their business or financial condition.

Risks Related to LiveWire

Throughout this section, unless otherwise indicated or the context otherwise requires, references to “LiveWire,” “we,” “us,” “our” and other similar terms refer to LiveWire, prior to and/or after giving effect to the Business Combination, as the context may require.

Risks Related to Our Business

We are an early stage company with a history of losses and expect to incur significant expenses and continuing losses for several years. We have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain.

We have incurred net losses since our inception, including net losses of $68.3 million, $77.6 million, and $56.5 million for the years ended December 31, 2021, 2020, and 2019, respectively, and approximately $15.5 million and $14.7 million for the three months ended March 27, 2022 and March 28, 2021, respectively. We believe that we will continue to incur operating and net losses in the future until at least the time we begin significant deliveries of our electric vehicles which may occur later than we expect or not at all. We do not expect to be profitable for the foreseeable future as we invest in our business, build capacity and ramp-up operations, and we cannot assure you that we will ever achieve or be able to maintain profitability in the future. Even if we are able to successfully develop our electric vehicles and attract customers, there can be no assurance that we will be financially successful. For example, as we expand our electric vehicle portfolio, including the introduction of lower-priced electric motorcycles, and expand internationally, we will need to manage costs effectively to sell those products at our expected margins. Failure to become profitable could materially and adversely affect the value of your investment. If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our electric vehicles, such as the LiveWire One, and our services, which may not occur. Our business also will at times require significant amounts of working capital to support the growth of additional electric vehicle platforms and electric vehicle models. An inability to generate positive cash flow for the near term may adversely affect our ability to raise needed capital for our business on reasonable terms, diminish supplier or customer willingness to enter into transactions with us, and have other adverse effects that may decrease our long-term viability. There can be no assurance that we will achieve positive cash flow in the near future or at all.

Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment.

H-D began making initial deliveries of our predecessor electric motorcycle, the Harley-Davidson LiveWire, in September of 2019, and we launched the LiveWire One model in July of 2021. As an entirely new

 

48


Table of Contents

product, there is no historical basis for making judgments on the demand for our electric vehicles, our ability to develop, produce and deliver electric vehicles, or our profitability in the future. It is difficult to predict our future revenues and appropriately budget for our expenses, and trends that may emerge in this quickly evolving industry that may be outside our visibility and may affect our business. You should consider our business and prospects in light of the risks and challenges we face as a pioneer in a new industry, including with respect to our ability to continuously advance our electric vehicle technologies; develop safe, reliable and quality electric vehicles that appeal to customers; deliver and service a large volume of electric vehicles; turn profitable; build a globally recognized and respected brand cost-effectively; expand our electric vehicles lineup; navigate the evolving regulatory environment; improve and maintain our operational efficiency; manage supply chain effectively; adapt to changing market conditions, including technological developments and changes in competitive landscape; and manage our growth effectively.

While we currently focus on the LiveWire One, we expect our product roadmap to expand beyond the LiveWire One and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive as a pioneer in a new industry.

If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected.

We may be unable to develop and produce electric vehicles of sufficient quality, on a schedule and at scale, that would appeal to a large customer base.

Our business depends in large part on our ability to develop, market, produce and sell our electric vehicles. The continued development of and the ability to sell our electric vehicles at scale, including the LiveWire One and future electric vehicles are and will be subject to risks, including with respect to:

 

   

our ability to secure necessary funding;

 

   

our ability to develop and launch a light model electric vehicle at scale and at attractive profit margins for our business;

 

   

our ability to negotiate and execute definitive agreements, and maintain arrangements on reasonable terms, with our various suppliers for hardware, software or services necessary to engineer or manufacture parts or components of our electric vehicles;

 

   

securing necessary components, services or licenses on acceptable terms and in a timely manner;

 

   

delays by us in delivering final component designs to our suppliers;

 

   

our ability to accurately produce electric vehicles within specified design tolerances;

 

   

quality controls, including within our production operations, that prove to be ineffective or inefficient;

 

   

defects in design and/or manufacture that cause our electric vehicles not to perform as expected or that require repair, field actions, product recalls or design changes;

 

   

delays, disruptions or increased costs in our, third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies;

 

   

other delays, backlog in manufacturing and research and development of new models, and cost overruns;

 

   

obtaining required regulatory approvals and certifications;

 

   

compliance with environmental, safety and similar regulations; and

 

   

our ability to attract, recruit, hire, retain and train skilled employees.

 

49


Table of Contents

Historically, motorcycle customers have expected motorcycle manufacturers to periodically introduce new and improved vehicle models. In order to meet these expectations, we intend to introduce new electric motorcycle models and enhanced versions of existing models. The electric vehicle market is new and quickly evolving. As a pioneer in a new industry, we inherently have limited experience, as a company, designing, testing, manufacturing, marketing and selling our electric motorcycles and therefore cannot assure you that we will be able to meet customer expectations. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition and operating results.

If we fail to achieve unit sales expectations, our business, prospects, financial condition and operating results could be adversely impacted.

The electric vehicle market is becoming increasingly competitive. Increasing competition may lead to lower vehicle-unit sales and increased inventory, which may result in downward price pressure. Our ability to successfully achieve unit sales expectations will be fundamental to our future success in existing and new markets and our market share. We cannot assure you that we will be able to achieve unit sales expectations. If we are unable to achieve unit sales expectations our business, prospects, financial condition and operating results could be adversely impacted.

We are a pioneer in a new space. As we scale and expand our business, we may not be able to adequately control the costs of our operations.

We have a short operating history in the electric vehicle industry, which is continuously evolving. Through our partnership with H-D and retail partners, comprised largely of existing H-D dealers, we have partners with extensive experience selling internal combustion engine motorcycles at scale. Despite this experience, the electric motorcycle industry is new and there are no guarantees that this experience will result in sales of electric motorcycles at a comparable scale. We will require significant capital to develop and grow our business, including developing and producing our electric vehicles, establishing or expanding design, research and development, production and building our brand. We have incurred and expect to continue incurring significant expenses, including research and development expenses, raw material procurement costs, sales and distribution expenses as we build our brand and market our electric vehicles, and general and administrative expenses as we scale our operations, identify and commit resources to investigate new areas of demand and incur costs as a public company, which will impact our profitability. Our ability to become profitable in the future is dependent on the design, development and marketability of our product portfolio, while also controlling costs to achieve expected margins. If we are unable to efficiently design, develop, market, deploy, distribute and service our electric vehicles, our margins, profitability and prospects could be materially and adversely affected.

The electric vehicle sector is rapidly growing and our products and services are and will be subject to strong competition from a growing list of competitors.

Both the vehicle industry generally, and the electric vehicle segment in particular, are highly competitive, and we will be competing for sales with both leading internal combustion engine-focused companies and smaller electric vehicle-focused companies. Several major motorcycle companies have electric vehicles available today and other current and prospective motorcycle manufacturers are also developing electric vehicles. Factors affecting competition include product performance and quality, technological innovation, customer experience, brand differentiation, product design, pricing and manufacturing scale and efficiency. Increased competition may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results. We also expect competition for electric vehicles to intensify due to increased demand and a regulatory push for alternative fuel vehicles, continuing globalization and consolidation in the worldwide automotive industry. Further, as a result of new entrants in the electric vehicle market, we may experience increased competition for components and other parts of our electric vehicles, which may have limited or single-source supply.

 

50


Table of Contents

Our business and prospects depend significantly on our ability to build the LiveWire brand and consumers’ recognition, acceptance and adoption of the LiveWire brand. We may not succeed in continuing to maintain and strengthen the LiveWire brand.

Our business and prospects are heavily dependent on our ability to develop, maintain and strengthen the LiveWire brand. If we do not continue to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Promoting and positioning our brand will likely depend significantly on our ability to provide high-quality electric vehicles and engage with our customers as intended. In addition, our ability to develop, maintain and strengthen the LiveWire brand will depend heavily on the success of our customer development and branding efforts. Such efforts mainly include building a community of customers engaged with our branding initiatives, such as at automotive shows and events. To effectively build our brand with a new customer in a new industry, such efforts may be non-traditional and may not achieve the desired results. To promote our brand, we may be required to change our customer development and branding practices, which could result in substantially increased expenses, including the potential to use traditional media such as television, radio and print and engage celebrity talent or brand ambassadors. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results may be materially and adversely impacted.

In addition, if negative incidents occur or are perceived to have occurred, whether or not such incidents are our fault, we could be subject to adverse publicity. In particular, given the popularity of social media, any negative publicity, whether true or not, could quickly proliferate and harm consumer perceptions and confidence in the LiveWire brand. Furthermore, there is the risk of potential adverse publicity related to our manufacturing partners or other partners whether or not such publicity is related to their collaboration with us. Our ability to successfully position our brand could also be adversely affected by perceptions about the quality of our competitors’ vehicles.

In addition, from time to time, our electric vehicles may be evaluated and reviewed by third parties. Any negative reviews or reviews which compare us unfavorably to competitors could adversely affect consumer perception about our electric vehicles.

We have an established standard of quality and associated consumer expectations through our H-D motorcycle lineage. If we are unable to continue providing quality services and customer service, our business and reputation may be materially and adversely affected.

Our business and prospects heavily depend on our ability to develop, maintain and strengthen the LiveWire standard of quality and associated consumer expectations, including maintaining the established standard of quality and associated consumer expectations through our H-D motorcycle lineage. If we are not able to establish, maintain and strengthen the LiveWire standard of quality and associated consumer expectations with our brand, we may lose the opportunity to build a critical mass of customers. Our ability to develop, maintain and strengthen the LiveWire brand will depend heavily on our ability to provide high-quality electric vehicles and engage with our customers as intended, as well as the success of our customer development and marketing efforts. If we do not develop and maintain a strong brand associated with the LiveWire brand, our business, prospects, financial condition and operating results could be materially and adversely impacted.

Our relationship to H-D presents potential opportunities, synergies and risks. Our brand and reputation could be harmed if we fail to realize those opportunities and synergies, or through negative publicity regarding H-D and its products and services.

Our relationship to H-D presents potential opportunities, synergies and risks for us. Our business and prospects heavily depend on our ability to develop, maintain and strengthen the LiveWire standard of quality and associated consumer expectations, including maintaining the established standard of quality and associated consumer expectations through our H-D motorcycle lineage. However, the association of our business and brand

 

51


Table of Contents

to H-D and its business could subject us to reputational and regulatory risks. Any negative developments with respect to H-D may materially and adversely affect our business and brand. Additionally, the anticipated benefits of the synergies with H-D may not be realized or the value of goodwill and other intangible assets could be impacted by one or more continuing unfavorable events or trends, which could result in significant impairment charges. The occurrence of any of these events could have a material adverse effect on our business, prospectus, financial condition and operating results.

We may experience operational and financial risks if we fail to effectively and appropriately separate the LiveWire business from the H-D business.

We may experience operational and financial risks in connection with separating from H-D if we are unable to:

 

   

successfully separate the operations, as well as the accounting, financial controls, management information, technology, data, human resources and other administrative systems and functions, of H-D from our operations and systems;

 

   

overcome cultural challenges associated with separating employees from H-D and incorporating them into our organization;

 

   

successfully identify, validate, qualify and contract with replacement or second-source manufacturing, engineering, development and testing service providers (or stand up such capabilities internally) to act as second sources or replacement sources of such services in the event H-D is unable to provide such services or our agreements with H-D to provide the same expire or are terminate;

 

   

successfully identify and realize potential synergies with H-D;

 

   

fully identify potential risks and liabilities associated with H-D, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with H-D, including claims from terminated employees, former stockholders, H-D dealers, or other third parties, and other known and unknown liabilities;

 

   

retain or hire senior management and other key personnel; and

 

   

successfully manage strain on our management, operations and financial resources.

Additionally, the Separation requires significant time and resources, and we may not manage these processes successfully. We may make substantial investments of resources to support the Separation, which would result in significant ongoing operating expenses and may divert resources and management attention from other areas of our business. We cannot assure you that these investments will be successful. If we fail to successfully separate from H-D, we may not realize the benefits expected from the Separation and our business may be harmed.

H-D could make decisions for the benefit of its overall business that could negatively impact our overall business.

Following the Separation, H-D, through the Company Equityholder, will be our majority shareholder. To ensure we are making decisions that benefit our business and our shareholders, we will have a Conflicts Committee (as defined herein) to review and approve any matter involving a conflict of interest between us and H-D. Outside of our business, H-D may make certain decisions that benefit its overall business, including its relationships with its suppliers and dealers, that could negatively impact our overall business, including our supplier partnerships, pricing, approach to manufacturing or ability to expand distribution. These decisions by H-D about its business may have a material and adverse effect on our business, prospects, financial condition and operating results.

 

52


Table of Contents

Our relationship to H-D may impact our other business relationships or potential business relationships.

H-D has many longstanding business relationships that we expect to largely be able to leverage to our benefit through our relationship with H-D. Our relationship to H-D may also affect our ability to develop and maintain our own relationships with companies providing services and capabilities to, or for the benefit of, our business, including supply, distribution, marketing and operations. Depending upon the relationship between H-D and these other companies, the other companies may be less willing or unwilling to develop and maintain relationships with us. Additionally, they may favor our competitors or may view us as competitors, because of our relationship with H-D. We may also enter into certain agreements with H-D pursuant to which we and/or H-D have continuing obligations to provide services to each other. Our inability to maintain the business relationships necessary to maintain and grow our business may materially and negatively impact our results.

Leveraging contract manufacturers, including H-D, the KYMCO Group and other potential partners, to contract manufacture electric vehicles is subject to risks.

A key financial benefit to our business is our asset-light operating model in which we rely on contract manufacturers to produce our electric vehicles. We have secured the experience and expertise of H-D and are in negotiations with KYMCO Group to serve as our long-term contract manufacturing partners to provide manufacturing, procurement, logistics and distribution services for our platforms and certain other products. If these contract manufacturing agreements terminate or expire, or if H-D or KYMCO Group fail to perform or meet our expected quality standards, timelines, capacity requirements, costs, manufacturing capabilities or manufacturing footprint, we may need to engage another third-party contract manufacturer or build our own in-house manufacturing capabilities, which could cause us to incur significant cost and expense. Additionally, our recourse against H-D for their failure to perform or meet our expected quality standards is limited. We do not currently have alternate manufacturing arrangements in place so it may take time to transition to another contract manufacturer and there is no guarantee that they would be able to meet our capacity, capability or quality requirements, or otherwise be an effective and acceptable manufacturing solution. Any of the foregoing could adversely affect our business, prospects, financial condition and operating results.

If retail partners are unwilling to participate in our go-to-market business model or are unable or ineffective in establishing or maintaining relationships with customers for electric vehicles, it may adversely impact our business.

We employ a go-to-market business model whereby our revenue is generated primarily by sales through retail partners, which are largely drawn from H-D’s traditional motorcycle dealer network and the development of new retail partners. We depend on the capability of these retail partners to develop and implement effective retail sales plans to create demand among retail purchasers for our electric vehicles and related products and services that the retail partners may purchase from us. We provide our retail partners with specific training and programs to assist them in selling our products, but there can be no assurance that these steps will be effective, and that restrictions on travel and other limitations as a result of the COVID-19 pandemic undermine our efforts to provide training and build relationships. If our retail partners are not able to establish, maintain and strengthen our brand, we may lose the opportunity to build a critical mass of customers. Our retail partners ability to develop, maintain and strengthen their relationships with customers for electric vehicles will depend heavily on our ability to provide high-quality electric vehicles and engage with our customers as intended, as well as the success of our customer development and marketing efforts. The electric vehicle industry is intensely competitive, and we may not be successful in building, maintaining and strengthening our relationship with customers. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results could be materially and adversely impacted.

Some of these retail partners may also market, sell and support offerings that may be competitive with ours, may devote more resources to the marketing, sales and support of such competitive offerings or may have incentives to promote other offerings to the detriment of our own. Our retail partners could subject us to lawsuits,

 

53


Table of Contents

potential liability, and reputational harm if, for example, any of our retail partners misrepresents the functionality of our electric vehicles to customers or violates laws or our or their corporate policies. Our ability to achieve revenue growth in the future will depend, in part, on our success in maintaining successful relationships with our retail partners, identifying additional retail partners, including in new markets, and training our retail partners to independently sell our electric vehicles. If our retail partners are unsuccessful in selling electric vehicles, or if we are unable to enter into arrangements with or retain a sufficient number of high-quality retail partners in each of the regions in which we sell our electric vehicles and keep them motivated to sell our electric vehicles, our business, prospects, financial condition and operating results could be adversely affected.

Our research and development efforts may not yield the expected results, or results on expected timelines or at expected costs.

Technological innovation is critical to our success, and we have strategically developed most of the key technologies in-house, such as energy dense battery packs and battery management systems (“BMS”), high power, high efficiency inverters and motors, efficient onboard charger and DC-DC converter and best-in-class software and controls. We have been investing heavily in our research and development efforts. In 2019, 2020, and 2021, our research and development expenses amounted to $22.1 million, $23.0 million, and $35.3 million, respectively. Our research and development expenses accounted for 109%, 74%, and 99% of our total revenues for 2019, 2020, and 2021, respectively. The electric vehicle industry is experiencing rapid technological changes, and we need to invest significant resources in research and development to lead technological advances and remain competitive in the market. Therefore, we expect that our research and development expenses will continue to be significant. Furthermore, research and development activities are inherently uncertain, and there can be no assurance that we will continue to achieve technological breakthroughs and successfully commercialize such breakthroughs. As a result, our significant expenditures on research and development may not generate corresponding benefits. If our research and development efforts fail to keep up with the latest technological developments, we may suffer a decline in our competitive position.

Besides our in-house expertise, we also rely on certain technologies of our suppliers to enhance the performance of our electric vehicles. In particular, we do not manufacture battery cells, which makes us dependent upon suppliers for the relevant technologies. As technologies change, we plan to upgrade our existing models and introduce new models in order to provide our electric vehicles with the latest technologies, including battery cells, which could involve substantial costs and lower our return on investment for existing models.

Even if we are able to keep pace with changes in technologies and develop new models, our prior models could become obsolete more quickly than expected, potentially reducing our return on investment.

If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry, or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially.

Customers may be less likely to purchase our electric vehicles if they are not convinced that our business will succeed or that our service and support and other operations will continue in the long-term. Similarly, suppliers and other third parties may be less likely to invest time and resources in developing business relationships with us if they are not convinced that our business will succeed. Accordingly, in order to build and maintain our business, we must maintain confidence among customers, suppliers, analysts, ratings agencies and other parties in our electric vehicles, long-term financial viability and business prospects. Maintaining such confidence may be complicated by certain factors, including those that are largely outside of our control, such as our limited operating history; customer unfamiliarity with our electric vehicles and electric vehicles and electric motorcycles in general; any delays in scaling production, delivery and service operations to meet demand; competition and uncertainty regarding the future of our electric vehicles and electric vehicles and electric motorcycles in general; and our production and sales performance compared with market expectations.

 

54


Table of Contents

We, our outsourcing partners, and our suppliers are subject to numerous regulations. Unfavorable changes to, or failure by us, our outsourcing partners or our suppliers to comply with these regulations could substantially harm our business, prospects, financial condition and operating results.

We and our electric vehicles, and vehicles in general, as well as our third-party outsourcing partners and our suppliers are or will be subject to substantial regulation under foreign, federal, state and local laws. We continue to evaluate requirements for licenses, approvals, certificates and governmental authorizations necessary to manufacture, sell, deploy or service our electric vehicles in the jurisdictions in which we plan to operate and, to the extent we have not already, intend to take such actions necessary to comply. We may experience difficulties in obtaining or complying with various licenses, approvals, certifications and other governmental authorizations necessary to manufacture, sell, deploy or service our electric vehicles in any of these jurisdictions. If we, our third-party outsourcing partners or our suppliers are unable to obtain or comply with any of the licenses, approvals, certifications or other governmental authorizations necessary to carry out our operations in the jurisdictions in which we or they currently operate, or those jurisdictions in which we or they plan to operate in the future, our business, prospects, financial condition and operating results could be materially adversely affected. We expect to incur significant costs in complying with these regulations. Regulations related to the electric and alternative energy vehicle industry are evolving and we face risks associated with changes to these regulations, including, but not limited to,

 

   

increased support for other alternative fuel systems, which could have an impact on the acceptance of our electric vehicles; and

 

   

increased sensitivity by regulators to the needs of established automobile and motorcycle manufacturers, which could lead them to pass regulations that could reduce the compliance costs of such established manufacturers or mitigate the effects of government efforts to promote alternative fuel vehicles.

To the extent the laws change, our electric vehicles may not comply with or be positioned to take advantage of applicable foreign, federal, state or local laws, which may have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results could be adversely affected.

Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells

and key semiconductor chip components necessary for our electric vehicles, could harm our business.

We and our suppliers may experience increases in the cost of or a sustained interruption in the supply or shortage of materials. Any such cost increase, supply interruption or shortage could materially and negatively impact our business, prospects, financial condition and operating results. We and our suppliers use various materials in our businesses and products, including, for example, lithium-ion battery cells, semiconductor chips and steel, and the prices for these materials fluctuate. The available supply of these materials may be unstable, depending on market conditions and global demand. For example, COVID-19, including associated variants, and the recent conflict in the Ukraine, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including semiconductors, materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs. There have been very sizable increases in recent months in the cost of key metals, including lithium, nickel, aluminum and cobalt with volatility in pricing expected to persist for the foreseeable future. In addition, our business also depends on the continued supply of battery cells for our electric vehicles. We are exposed to multiple risks relating to lithium-ion battery cells. These risks include, but are not limited to:

 

   

an increase in the cost, or decrease in the available supply, of materials used in the cells;

 

   

disruption in the supply of cells due to quality issues or recalls by battery cell manufacturers; and

 

55


Table of Contents
   

fluctuations in the value of any foreign currencies in which battery cell and related raw material purchases are or may be denominated against the US dollar.

Our business is dependent on the continued supply of battery cells for the battery packs used in our electric vehicles. While H-D has entered into a supply agreement to acquire lithium-ion battery cells, we may have limited flexibility to immediately change suppliers in the event of any disruption in the supply of those cells, which could then disrupt production of our electric vehicles. However, we continually leverage relationships with several battery cell suppliers to monitor their developments and assess and characterize their cells. Additionally, the Arrow powertrain will utilize the industry-standard 21700 cylindrical cell form factor that enables rapid implementation of alternate cells from a wide variety of manufacturers with minimal mechanical changes and minor calibration adjustments to the BMS algorithms. The ongoing cell manufacturer relationship development and cell assessment and characterization work positions LiveWire to respond in a nimble manner to potential disruptions.

Semiconductor chips are also a vital input component to the electrical architecture of our electric vehicles, controlling wide aspects of the electric vehicles’ operations. Many of the key semiconductor chips used in our electric vehicles come from single-source or limited-source suppliers, and therefore a disruption with any one manufacturer or supplier in our supply chain would have an adverse effect on our ability to effectively produce and timely deliver our electric vehicles. Due to our reliance on these semiconductor chips, we are subject to the risk of shortages and long lead times in their supply. While H-D has entered into a supply agreement to acquire semiconductor chips, we may have limited flexibility to immediately change suppliers in the event of any disruption in the supply of those chips, which could then disrupt production of our electric vehicles. We are still in the process of identifying alternative manufacturers for semiconductor chips. H-D has in the past experienced, and we may in the future experience, semiconductor chip shortages, and the availability and cost of these components would be difficult to predict. For example, our manufacturers may experience temporary or permanent disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, component or material shortages, cost increases, acquisitions, insolvency, changes in legal or regulatory requirements, or other similar problems.

In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021 and 2022, which we expect to continue as a consequence of the continuing COVID-19 pandemic, inflation of raw material costs and the conflict in Ukraine. As a result, our ability to source semiconductor chips used in our electric vehicles could be adversely affected. This shortage may result in increased chip delivery lead times, delays in the production of our electric vehicles, and increased costs to source available semiconductor chips. For example, we faced supply constraints related to certain components including those impacted by the global semiconductor chip shortages. In the first quarter of 2022, our production was lower than what we had planned due to the lack of availability of certain components. To the extent this semiconductor chip shortage continues, and we are unable to mitigate the effects of this shortage, our ability to deliver sufficient quantities of our electric vehicles could be adversely affected. In addition, we may be required to incur additional costs and expenses in managing ongoing semiconductor chip shortages, including additional research and development expenses, engineering design and development costs in the event that new suppliers must be onboarded on an expedited basis.

Furthermore, fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and material costs. Substantial increases in the prices for our materials or prices charged to us, such as those charged by battery cell or semiconductor chip suppliers, would increase our operating costs and could reduce our margins. For example, due to the recent global semiconductor supply shortage, other supply chain issues including the COVID-19 pandemic and the conflict in Ukraine, and the current inflationary environment in the United States, the cost of input materials, components and processes required to produce our electric vehicles is expected to increase, and we may need to increase the prices of our electric vehicles in response to these cost pressures. Price increases and other measures taken by us to offset

 

56


Table of Contents

higher costs could materially and adversely affect our reputation and brand, result in negative publicity and loss of customers and sales, and adversely affect our business, prospects, financial condition and operating results. In addition, a growth in popularity of electric vehicles without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us, and would impact our projected manufacturing and delivery timelines, and adversely affect our business, prospects, financial condition and operating results.

Electric vehicles are inherently new products. We may experience significant delays in the design, production and launch of our electric vehicles, which could harm our business, prospects, financial condition and operating results.

Our future business depends in large part on our ability to execute on our plans to develop, produce, market and sell our electric vehicles. Electric vehicle companies experience delays in the design, production and commercial release of new products. To the extent we delay the launch of future models of electric vehicles, our growth prospects could be adversely affected as we may fail to establish or grow our market share. Furthermore, we rely on contract manufacturers for the manufacturing of electric vehicles. We could experience delays if our contract manufacturers do not meet agreed upon timelines or experience capacity constraints. Additionally, we rely on third-party suppliers for the provision and development of the key components and materials used in our electric vehicles. To the extent our suppliers experience any delays in providing us with or developing necessary components we could experience delays in delivering on our timelines. See “Increases in costs, disruption of supply or shortage of materials, in particular for lithium-ion battery cells, could harm our business.”

The battery’s range and life will deteriorate with usage and time, which, if material, could negatively influence potential customers’ decisions to purchase our electric vehicles.

All lithium-ion batteries are consumable components that become less effective as they chemically age. As lithium-ion batteries chemically age, the amount of charge they can hold diminishes, which may result in a perceptible decrease in range for an electric vehicle. This can be referred to as the battery’s maximum capacity, i.e., the measure of battery capacity relative to when it was new. In addition, a battery’s ability to deliver maximum instantaneous performance, or “peak power,” may decrease and impact acceleration performance in an electric vehicle. A normal battery is designed to retain up to 80% of its original capacity after 30,000 miles when operating under normal conditions. Although common to all electric vehicles, lithium-ion battery aging may negatively influence potential customers’ electric vehicle purchase decisions.

Our business may suffer if our products or features contain defects or fail to perform as expected. We may choose to or be compelled to undertake product recalls or take other similar actions, which could adversely affect our brand image, business and operating results.

If our electric vehicles contain design or manufacturing defects that cause them not to perform as expected or that require repair, our ability to develop, market and sell our products and services may be harmed, and we may experience delivery delays, product recalls, product liability, breach of warranty and consumer protection claims and significant warranty and other expenses. In particular, our electric vehicles are highly dependent on software, which is inherently complex and may contain latent defects or errors or be subject to external attacks. Although we attempt to remedy any issues we observe in our electric vehicles as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not completely satisfy our customers. While we perform extensive internal testing on our electric vehicles and features, we currently have a limited frame of reference by which to evaluate their long-term quality, reliability, durability and performance characteristics when operating in the field. There can be no assurance that we will be able to detect and fix all defects in our electric vehicles prior to their sale to or installation for customers.

 

57


Table of Contents

Any product recall in the future, whether initiated by us or a supplier, and whether the product recall involves our or a competitor’s product, may result in adverse publicity, damage our brand image, and adversely affect our business, prospects, financial condition and operating results. Such recalls, whether caused by systems or components engineered or manufactured by us or our suppliers, may involve significant expense, the possibility of lawsuits, and diversion of management’s attention and other resources, which could adversely affect our brand image and our business, prospects, financial condition and operating results.

We depend on suppliers, including critical and single sourced suppliers, to deliver components according to schedules, prices, quality and volumes that are acceptable to us. We may be unable to effectively manage these suppliers. Uncertainties in the global economy may negatively impact suppliers and other business partners, which may interrupt the supply chain and require other changes to operations. These and other factors may adversely impact revenues and operating income.

Our success will be dependent upon our ability to enter into supplier agreements and maintain our relationships with existing suppliers who are critical to the output and production of our electric vehicles. The supply agreements we may enter into with suppliers in the future may have provisions where such agreements can be terminated in various circumstances, including potentially without cause. If our suppliers become unable to provide, or experience delays in providing components or if the supply agreements we enter into are terminated, it may be difficult to find replacement components. Additionally, our products contain parts that we purchase from single-source or limited-source suppliers, for which no immediate or readily available alternative supplier exists. While we believe that we would be able to establish alternate supply relationships and can obtain or engineer replacement components for our single-source components, we may be unable to do so in the short-term (or at all) at prices or quality levels that are acceptable to us. In addition, as we evaluate opportunities and take steps to insource certain components and parts, supply arrangements with current or future suppliers (with respect to other components and parts offered by such suppliers) may be available on less favorable terms or not at all, especially in light of the increases in materials pricing. Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, natural disasters, health epidemics such as the global COVID-19 pandemic, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational. For example, a global shortage of semiconductors has been reported since early 2021 and has caused challenges in the manufacturing industry and impacted our supply chain and production as well. Additionally, if our suppliers do not accurately forecast and effectively allocate production or if they are not willing to allocate sufficient production to us, it may reduce our access to components and require us to search for new suppliers. The unavailability of any component or supplier could result in production delays, product design changes and loss of access to important technology and tools for producing and supporting our products, as well as impact our capacity expansion and our ability to fulfill our obligations under customer contracts. For example, in the first quarter of 2022, our production was lower than what we had planned due to the lack of availability of certain components. Moreover, significant increases in our production or product design changes by us may in the future require us to procure additional components in a short amount of time. Our suppliers may not be willing or able to sustainably meet our timelines or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources.

In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions, we would be required to take measures to ensure components and materials remain available. Any disruption could affect our ability to deliver electric vehicles and could increase our costs and negatively affect our liquidity and financial performance.

Also, if a supplied vehicle component becomes the subject of a product recall, we may be required to find an alternative component, which could increase our costs and cause vehicle production delays. Additionally, we may become subject to costly litigation surrounding the component.

If we do not enter into long-term supply agreements with guaranteed pricing for our parts or components, we may be exposed to fluctuations in prices of components, materials and equipment. Agreements

 

58


Table of Contents

for the purchase of battery cells contain or are likely to contain pricing provisions that are subject to adjustments based on changes in market prices of key commodities. Substantial increases in the prices for such components, materials and equipment would increase our operating costs and could reduce our margins if we cannot recoup the increased costs. Any attempts to increase the announced or expected prices of our electric vehicles in response to increased costs could be viewed negatively by our potential customers and could adversely affect our business, prospects, financial condition and operating results.

As we continue to grow, we may not be able to effectively manage our growth, which could negatively impact our brand and financial performance.

We intend to expand our operations significantly, which will require hiring, retaining and training new personnel, controlling expenses, establishing facilities, and implementing administrative infrastructure, systems, and processes. Our future operating results depend to a large extent on our ability to manage this expansion and growth successfully. Risks that we face in undertaking this expansion include, among others:

 

   

attracting and hiring skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future;

 

   

managing a larger organization with a great number of employees in different divisions and geographies;

 

   

training and integrating new employees into our operations to meet the growing demands of our business;

 

   

controlling expenses and investments in anticipation of expanded operations;

 

   

establishing or expanding design, manufacturing and sales;

 

   

managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities; and

 

   

implementing and enhancing administrative infrastructure, systems and processes.

Furthermore, we have limited experience to date in high volume production of our electric vehicles and we cannot ensure that we will be able to continue to partner with reliable contract manufacturers and reliable sources of component supply, that will enable us to meet the quality, price, engineering, design and production standards, as well as the production volumes, required to successfully market our electric vehicles as our operations expand. Any failure to effectively manage our growth could negatively impact our brand and financial performance.

If relevant government agencies in the US do not recognize us as a manufacturer or brand distinct from H-D, it could negatively impact our go-to market plan and ability to appoint independent dealers in certain states within the US.

In the US our ability to appoint independent dealers in certain states requires us to obtain certain licenses, such as manufacturer’s or distributor’s licenses, from relevant state agencies, such as Departments of Motor Vehicles, Motor Vehicle Commissions, or their equivalents. If we are not recognized by certain states as a manufacturer independent from H-D, our ability to obtain a manufacturer license in certain states—and thus our ability to appoint independent dealers in the applicable state—may be impacted.

Unexpected termination of leases, failure to renew the lease of our existing premises or to renew such leases at acceptable terms could materially and adversely affect our business.

We currently lease the premises for our research and development facility, retails stores and offices. We cannot assure you that we would be able to renew the relevant lease agreements without substantial

 

59


Table of Contents

additional cost or increase in the rental cost payable by us. If a lease agreement is renewed at a rent substantially higher than the current rate, or currently existing favorable terms granted by the lessor are not extended, our business and results of operations may be adversely affected. Additionally, if our sublease at our Company-operated dealership location is either terminated or not renewed and we do not have an existing alternate dealership location, that could jeopardize our dealer license, which would impact our ability to make direct sales to consumers and could materially and adversely affect our business.

We may be unable to complete environmental, social and governance, or ESG initiatives, in whole or in part, which could lead to less opportunity for us to have ESG investors and partners and could negatively impact ESG-focused investors when evaluating us.

There has been increased focus, including by consumers, investors, employees and other shareholders, as well as by governmental and non-governmental organizations, on environmental, social and governance matters generally and with regard to our industry specifically.

We have undertaken, and plan to continue undertaking, ESG initiatives. Any failure by us to meet our commitments or loss of confidence on the part of customers, investors, employees, brand partners and other shareholders as it relates to our ESG initiatives could negatively impact our brand, our business, prospects, financial condition and operating results. These impacts could be difficult and costly to overcome, even if such concerns were based on inaccurate or misleading information.

In addition, achieving our ESG initiatives may result in increased costs in our supply chain, fulfillment, and/or corporate business operations, and could deviate from our initial estimates and have a material adverse effect on our business and financial condition. In addition, standards and research regarding ESG initiatives could change and become more onerous both for us and our third-party suppliers and vendors to meet successfully. Evolving data and research could undermine or refute our current claims and beliefs that we have made in reliance on current research, which could also result in costs, a decrease in revenue, and negative market perception that could have a material adverse effect on our business and financial condition.

A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment in funds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of such ESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the company’s efforts and impacts on climate change and human rights, ethics and compliance with law and the role of the company’s board of directors in supervising various sustainability issues. In light of investors’ increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society’s ESG expectations or achieve our financial goals.

Finally, while we may create and publish voluntary disclosures regarding ESG matters from time to time, many of the statements in those voluntary disclosures are based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved in measuring and reporting on many ESG matters.

The success of our business depends on the availability of power and charging infrastructure for electric vehicles. Limitations on that infrastructure may negatively impact our business.

Demand for our electric vehicles will depend in part upon the availability of public charging infrastructure. We do not plan to develop or invest in our own network of charging stations, but will instead rely on the use of at-home charging, which makes up the majority of electric vehicle charging today, along with a

 

60


Table of Contents

growing publicly accessible charging infrastructure provided by third parties and the government. We have limited experience in the actual provision of charging solutions to customers and the facilitation of these services is subject to challenges, which include:

 

   

successful integration with existing third-party charging networks, including obtaining necessary licenses for charging solutions on commercially acceptable terms;

 

   

inadequate capacity or over capacity in certain areas, security risks or risk of damage to vehicles, charging equipment or real or personal property;

 

   

access to sufficient charging infrastructure;

 

   

the potential for lack of customer acceptance of our charging solutions; and

 

   

the risk that government support for electric vehicle and alternative fuel solutions and infrastructure may not continue.

While the prevalence of charging stations generally has been increasing, charging station locations are significantly less widespread than gas stations. Some potential customers may choose not to purchase our electric vehicles because of the lack of a more widespread charging infrastructure. To provide our customers with access to sufficient charging infrastructure, we will rely on the availability and successful integration of our electric vehicles with, third-party charging networks. Any failure of third-party charging networks to meet customer expectations or needs, including quality of experience, could impact the demand for electric vehicles, including ours. For example, where charging bays exist, the number of electric vehicles could oversaturate the available charging bays, leading to increased wait times and dissatisfaction for customers. To the extent we are unable to meet user expectations or experience difficulties in facilitating access to charging solutions, our reputation and business, prospects, financial condition and operating results may be materially and adversely affected.

Our electric vehicles use lithium-ion battery cells. When not properly managed, lithium-ion battery cells have been observed to catch fire or vent smoke and flame on rare occasions. If our electric vehicles exhibit those conditions, it could have a negative effect on our reputation and business.

The battery packs within our electric vehicles make use of lithium-ion cells. If not properly managed or subject to environmental stresses, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials as well as other lithium-ion cells. While the battery pack is designed to contain any single cell’s release of energy without spreading to neighboring cells, a field or testing failure of battery packs in our electric vehicles could occur, which could result in bodily injury or death and could subject us to lawsuits, product recalls or redesign efforts, all of which would be time consuming and expensive and could harm our brand image and results of operation. Also, negative public perceptions regarding the suitability of lithium-ion cells for automotive applications, the social and environmental impacts of mineral mining or procurement associated with the constituents of lithium-ion cells, or any future incident involving lithium-ion cells, such as a vehicle or other fire, could materially and adversely affect our reputation and business.

Our industry and its technology are rapidly evolving and may be subject to unforeseen changes. Developments in alternative technologies or improvements in current and future enabling and competitive technologies may adversely affect the demand for our electric vehicles.

We may be unable to keep up with changes in electric vehicle technology or alternatives to electricity as a fuel source and, as a result, our competitiveness may suffer. Developments in alternative technologies, such as advanced diesel, hydrogen, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine or the cost of gasoline, may materially and adversely affect our business and prospects in ways we do not currently anticipate. Existing and other battery cell technologies, fuels or sources of energy may emerge as customers’ preferred alternative to our electric vehicles. Any failure by us to develop new

 

61


Table of Contents

or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced alternative fuel and electric vehicles, which could result in the loss of competitiveness of our electric vehicles, decreased revenue and a loss of market share to competitors. Our research and development efforts may not be sufficient to adapt to changes in alternative fuel and electric vehicle technology. As technologies change, we plan to upgrade or adapt our electric vehicle with the latest technology. However, our electric vehicles may not compete effectively with alternative systems if we are not able to source and integrate the latest technology into our electric vehicles. Additionally, the introduction and integration of new technologies into our electric vehicles may increase our costs and capital expenditures required for the production and manufacture of our electric vehicles and, if we are unable to cost efficiently implement such technologies, our business, prospects, financial condition and operating results could be materially and adversely affected.

Our future growth and success are dependent upon consumers’ adoption of, and their demand for, two- and three-wheeled electric vehicles in a sector that is generally competitive, cyclical and volatile.

Our future growth is dependent on the demand for, and upon consumers’ willingness to adopt two- and three-wheeled electric vehicles, and even if electric vehicles become more mainstream, consumers choosing us over other electric vehicles manufacturers. Demand for electric vehicles may be affected by factors directly impacting electric vehicle prices or the cost of purchasing and operating electric vehicles such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.

In addition, the demand for our electric vehicles and services will highly depend upon the adoption by consumers of new energy vehicles in general and electric motorcycles in particular. The market for new energy vehicles is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing consumer demands and behaviors.

Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include:

 

   

perceptions about electric vehicles quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such electric vehicles are produced by us or other manufacturers;

 

   

perceptions about electric vehicles safety in general, in particular safety issues that may be attributed to the use of advanced technology, including electric vehicles systems;

 

   

range anxiety, including the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge;

 

   

the availability of new energy vehicles;

 

   

the availability of service and charging stations for electric vehicles;

 

   

the costs and challenges of installing home charging equipment, including for multi-family, rental and densely populated urban housing;

 

   

the environmental consciousness of consumers, and their adoption of electric vehicles;

 

   

the occurrence of negative incidents, or perception that negative incidents have occurred, with respect to our or our competitors’ electric vehicles resulting in adverse publicity and harm to consumer perceptions in electric vehicles generally;

 

62


Table of Contents
   

the higher initial upfront purchase price of electric vehicles, despite lower cost of ongoing operating and maintenance costs, compared to internal combustion engines vehicles;

 

   

perceptions about and the actual cost of alternative fuel;

 

   

regulatory, legislative and political changes; and

 

   

macroeconomic factors.

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for electric vehicles and domestically produced vehicles could have a material adverse effect on our business, prospects, financial condition and operating results.

Any reduction, elimination, or discriminatory application of government subsidies and economic incentives because of policy changes, or the reduced need for such subsidies and incentives due to the perceived success of the electric vehicle or other reasons, may result in the diminished competitiveness of the alternative fuel and electric vehicle industry generally or our electric vehicles in particular. Additionally, federal, state and local laws may impose additional barriers to electric vehicle adoption, including additional costs. For example, many states have enacted laws imposing additional registration fees for certain hybrid and electric vehicles to support transportation infrastructure, such as highway repairs and improvements, which have traditionally been funded through federal and state gasoline taxes. Any of the foregoing could materially and adversely affect the growth of the alternative fuel automobile markets and our business, prospects, financial condition and operating results.

While certain tax credits and other incentives for alternative energy production, alternative fuel, and electric vehicles have been available in the past, there is no guarantee these programs will be available in the future. If current tax incentives are not available in the future, our business, prospects, financial condition and operating results could be harmed.

Our electric motorcycles’ quiet performance compared to internal combustion engine motorcycles may subject riders to greater risks.

Our electric motorcycles will be quieter compared to internal combustion engine motorcycles, which may subject riders to greater risks. To the extent accidents associated with our quieter electric motors occur, we could be subject to liability, negative publicity, government scrutiny and further regulation. Any of the foregoing could materially and adversely affect our business, prospects, financial condition and operating results.

Vehicle retail sales depend heavily on affordable interest rates and availability of credit for vehicle financing and a substantial increase in interest rates could materially and adversely affect our business, prospects, financial condition, results of operations, and cash flows.

In certain regions, including North America and Europe, financing for new vehicle sales has been available at relatively low interest rates for several years due to, among other things, expansive government monetary policies. As interest rates rise, market rates for new vehicle financing will generally be expected to rise as well, which may make our electric vehicles less affordable to customers or steer customers to less expensive vehicles that would be less profitable for us, adversely affecting our financial condition and results of operations. Additionally, if consumer interest rates increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain financing to purchase our electric vehicles. As a result, a substantial increase in customer interest rates or tightening of lending standards could have a material adverse effect on our business, prospects, financial condition and operating results.

Our warranty reserves may be insufficient to cover future warranty claims which could adversely affect our business, prospects, financial condition and operating results.

As our electric vehicles enter production, we will need to maintain warranty reserves to cover warranty-related claims. If our warranty reserves are insufficient to cover future warranty claims on our electric

 

63


Table of Contents

vehicles, our business, prospects, financial condition and operating results could be materially and adversely affected. We expect to record and adjust warranty reserves based on changes in estimated costs and actual warranty costs. However, as we have only recently begun production of the LiveWire One, we have limited operating experience with our electric motorcycles, and therefore limited experience with warranty claims for these electric motorcycles and other electric vehicles or with estimating warranty reserves. In the future, we may become subject to significant and unexpected warranty expenses. There can be no assurances that then-existing warranty reserves will be sufficient to cover all claims.

We may become subject to product liability claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.

We may become subject to product liability claims, which could harm our financial condition and liquidity. The vehicle and motorcycle industries experience an abundance of product liability claims. We face the risk of significant monetary exposure to claims in the event our electric vehicles do not perform as expected or contain design, manufacturing, or warning defects, and to claims without merit, or in connection with malfunctions resulting in personal injury or death. Moreover, a product liability claim could generate substantial negative publicity about our electric vehicles and business and inhibit or prevent commercialization of other future electric motorcycle vehicles, which would have a material adverse effect on our financial condition and liquidity. Any insurance coverage might not be sufficient to cover all potential product liability claims. Any lawsuit seeking significant monetary damages either in excess of our coverage, or outside of our coverage, may have a material adverse effect on our reputation and financial condition and liquidity. We may not be able to secure additional product liability insurance coverage on commercially acceptable terms or at reasonable costs when needed, particularly if we face liability for our products and are forced to make a claim under our policies.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to losses resulting from product liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage. Our policies may include significant deductibles or self-insured retentions, policy limitations and exclusions, and we cannot be certain that our insurance coverage will be sufficient to cover all future losses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which may harm our financial condition and operating results.

We depend on revenue generated from a limited number of models and in the foreseeable future will be significantly dependent on a limited number of models.

H-D began making initial deliveries of our predecessor electric motorcycle, the Harley-Davidson LiveWire, in September of 2019, and we launched the LiveWire One model in July of 2021. For the foreseeable future, we will depend on revenue generated from a limited number of models. Historically, motorcycle customers have come to expect a variety of vehicle models offered in a company’s fleet and new and improved vehicle models to be introduced frequently. Given that for the foreseeable future our business will depend on a limited number of models, to the extent a particular model is not well received by the market, our sales volume, business, prospects, financial condition and operating results could be materially and adversely affected.

We may face challenges in expanding our business and operations internationally and our ability to conduct business in international markets may be adversely affected by legal, regulatory, political and economic risks.

Our business plan includes operations in international markets, including Germany, France, Netherlands, Switzerland, United Kingdom and Canada, as well as prioritizing the Asia Pacific markets of Japan, South Korea, China, Australia and New Zealand, and eventual expansion into other international markets. We will face risks associated with any potential international operations, including possible unfavorable legal, regulatory, political and economic risks, which could harm our business. We anticipate having international

 

64


Table of Contents

operations and subsidiaries that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Furthermore, conducting and launching operations on an international scale requires close coordination of activities across multiple jurisdictions and time zones and consumes significant management resources. We will be subject to a number of risks associated with international business activities that may increase our costs, impact our ability to sell our electric vehicles and require significant management attention. These risks include:

 

   

conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time;

 

   

expenditures related to foreign lawsuits and liability;

 

   

difficulties in staffing and managing foreign operations;

 

   

difficulties establishing relationships with, or disruption in the supply chain from, international suppliers;

 

   

difficulties attracting customers in new jurisdictions;

 

   

difficulties in attracting effective distributors, dealers or sales agents, as the case may be;

 

   

foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States;

 

   

fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake;

 

   

United States and foreign government trade restrictions, tariffs and price or exchange controls;

 

   

foreign labor laws, regulations and restrictions;

 

   

changes in diplomatic and trade relationships;

 

   

laws and business practices favoring local companies;

 

   

difficulties protecting or procuring intellectual property;

 

   

the adoption of the LiveWire brand versus competitive foreign brands;

 

   

political instability, natural disasters, war or events of terrorism and health epidemics, such as the COVID-19 pandemic or the conflict in Ukraine; and

 

   

the strength of international economies.

If we fail to successfully address these risks, our business, prospects, financial condition and operating results could be materially harmed.

LiveWire’s Chief Executive Officer will have Chief Executive Officer roles in both H-D and LiveWire for up to two years, which may present challenges that could impact our business.

We selected Mr. Zeitz as our Chief Executive Officer for up to two years due to his unique experience, abilities, and passion. His roles as Chief Executive Officer of both H-D and LiveWire during that period will create operational synergies and potential challenges as long as he is serving in both roles, including impacting his ability to devote exclusive time, attention, and effort to our business. If conflicts of interests arise due to, for example, adverse interests of H-D and us on a matter, Mr. Zeitz would be required to recuse himself, deferring our decisions on the matter to an independent Conflicts Committee and our management. On matters in which Mr. Zeitz recuses himself, we will not have the full benefit of his experience and insight to resolve the matters and make decisions under the best terms possible for us. The decisions made by the Conflicts Committee and our management on those matters may be different than decisions Mr. Zeitz would have made. The HoldCo Board

 

65


Table of Contents

may also be unable to identify and hire a CEO of equal caliber to replace Mr. Zeitz after the two-year period. All of those scenarios could materially and adversely affect our business, prospects, financial condition and operating results.

Our business, prospects, financial condition and operating results may be adversely affected by pandemics (including COVID-19) and epidemics, natural disasters, actual or threatened war (including the conflict in Ukraine), terrorist activities, political unrest, and other outbreaks.

We face various risks related to public health issues, including epidemics, pandemics and other outbreaks, including the recent pandemic of respiratory illness caused by a novel coronavirus known as COVID-19 and associated variants. We also face various risks related to natural disasters, including hurricanes, earthquakes, tsunamis or other natural disasters. Such public health issues or natural disasters could disrupt our business operations, reduce or restrict our supply of materials and services, result in us incurring significant costs to protect our employees and facilities or result in regional or global economic distress, which may materially and adversely affect our business, financial condition and operating results. Actual or threatened war, including the conflict in Ukraine, terrorist activities, political unrest, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results. Any one or more of these events may impede our production and delivery efforts and adversely affect our sales results, which could materially and adversely affect our business, financial condition and operating results.

The impact of COVID-19 and associated variants, including changes in consumer and business behavior, pandemic fears, market downturns and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 and associated variants (some of which may be more transmissible, such as the Delta and Omicron variant) has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and has led to a global decrease in vehicle sales in markets around the world.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns. These measures may adversely impact our employees and operations, the operations of our suppliers, vendors and business partners, the activities of our retail customers and may negatively impact our production plans, sales and marketing activities, business and results of operations. In addition, various aspects of our business cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect our sales and marketing activities, and our business, prospects, financial condition and operating results.

Due to operational shutdowns of certain of our direct and indirect suppliers as a result of COVID-19 and associated variants, we experienced delays and shortages of certain parts and materials necessary for the production of our electric vehicles. In some cases, suppliers were delayed in providing the required parts and/or materials, whereas in other cases, suppliers were able only to fulfill our orders on a partial basis or not at all. As a result of such delays and shortages, we are continuing to adapt our internal designs and processes in an effort to remedy or mitigate impacts on our production timeline. Nevertheless, due to these delays and shortages, our production for the first quarter of 2022 was lower than we had planned. Despite our efforts to mitigate such delays, we cannot be certain these will sufficiently alleviate or mitigate delays or interruptions we may experience in the future, and, to the extent our production timeline is delayed, our business, prospects, financial condition and operating results may be materially and adversely affected.

Additionally, the spread of COVID-19 and associated variants has caused us to modify our business practices (including employee travel, recommending that all non-essential personnel work from home and cancellation or reduction of physical participation in sales activities, meetings, events and conferences), and we may take further actions as may be required by government authorities or that we determine is in the best interests of our employees, customers, suppliers, vendors and business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government

 

66


Table of Contents

authorities. If significant portions of our workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, our operations may be adversely impacted.

The extent to which the COVID-19 pandemic impacts our business, prospects, financial condition and operating results will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and spread of the pandemic, its severity, the existence and severity of COVID-19 variants, the actions to contain the virus or treat its impact (including the availability of vaccines and the speed and extent of vaccine distribution and acceptance), how quickly and to what extent normal economic and operating activities can resume and whether and to what extent COVID-19 or variants thereof, including the Delta and Omicron variant which has become widespread in the United States, re-emerge, spread and impact us and our suppliers after normal activities resume. Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment, or a decline in consumer confidence as a result of the COVID-19 pandemic and the conflict in Ukraine could have a material adverse effect on the demand for our vehicles. Under difficult economic conditions, potential customers may seek to reduce spending by forgoing our electric vehicles for other traditional options, increase use of public and mass transportation options or choose to keep their existing vehicles.

There are no comparable recent events that may provide guidance as to the effect of the spread and duration of COVID-19 (and associated variants) and pandemics in general, and, as a result, the ultimate impact of the COVID-19 pandemic or other pandemics is highly uncertain.

 

We are also vulnerable to natural disasters and other calamities. Although we have servers that are hosted in an offsite location, our backup system does not capture data on a real-time basis and we may be unable to recover certain data in the event of a server failure. We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, technology platform failures or Internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our business, prospects, financial condition and operating results.

Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and adversely affect our business, prospects, financial condition and operating results.

The global macroeconomic environment is facing challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States. There have been concerns over the downturn in economic output caused by the COVID-19 pandemic and the conflict in Ukraine. It is unclear whether these challenges will be contained and what effects they each may have. Economic conditions in the United States are sensitive to global economic conditions. Any prolonged slowdown in the United States economic growth might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors. Credit risks of customers and suppliers and other counterparty risks may also increase.

Sales of our electric vehicles depend in part on discretionary consumer spending and are even more exposed to adverse changes in general economic conditions. In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of our electric vehicles and our results of operations may be materially and adversely affected.

 

67


Table of Contents

The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and operating results.

United States and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, Russian military forces launched a military action in Ukraine, and sustained conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage.

Russia’s recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military action against Ukraine have led to an unprecedented expansion of sanction programs imposed by the United States, the European Union, the United Kingdom, Canada, Switzerland, Japan and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic, including, among others:

 

   

blocking sanctions against some of the largest state-owned and private Russian financial institutions (and their subsequent removal from the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) payment system) and certain Russian businesses, some of which have significant financial and trade ties to the European Union;

 

   

blocking sanctions against Russian and Belarusian individuals, including the Russian President, other politicians and those with government connections or involved in Russian military activities; and

 

   

blocking of Russia’s foreign currency reserves as well as expansion of sectoral sanctions and export and trade restrictions, limitations on investments and access to capital markets and bans on various Russian imports.

While we do not currently have operations in Ukraine, Russia or Belarus, we are nevertheless actively monitoring the situation in Ukraine and assessing its impact on our business, including our business partners and customers. To date we have not experienced any material interruptions in our infrastructure, supplies, technology systems or networks needed to support our operations. We have no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market and/or supply disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the abovementioned factors could affect our business, financial condition and operating results. Any such disruptions may also magnify the impact of other risks described in this proxy statement/prospectus.

In addition, there may be an increased risk of cyberattacks by state actors due to the current conflict between Russia and Ukraine. Any increase in such attacks on us or our systems could adversely affect our network systems or other operations. Although we maintain cybersecurity policies and procedures to manage risk to our information systems and, continuously adapt our systems and processes to mitigate such threats, we may not be able to address these cybersecurity threats proactively or implement adequate preventative measures and there can be no assurance that we will promptly detect and address any such disruption or security breach, if at all. See “—We are subject to cybersecurity risks to our various systems and software and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.”

Our financial results may vary significantly from period to period due to fluctuations in our operating costs, product demand and other factors.

We expect our period-to-period financial results to vary based on our operating costs and product demand, which we anticipate will fluctuate as we continue to design, develop, produce and distribute new electric

 

68


Table of Contents

vehicles. Additionally, our revenue from period to period may fluctuate as we build out global distribution, add new product derivates based on market demand and margin opportunities and introduce new or existing electric vehicles to new markets. Additionally, our revenue from period to period may fluctuate due to seasonality. As a result of these factors, we believe that quarter-to-quarter comparisons of our financial results, especially in the short term, are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance. Moreover, our financial results may not meet the expectations of equity research analysts, ratings agencies or investors, who may be focused only on quarterly financial results and holding us to the same standard of expectation as H-D. If any of this occurs, the trading price of HoldCo Common Stock could fall substantially, either suddenly or over time.

We may seek to obtain future financing through the issuance of debt or equity, which may have an adverse effect on our shareholders or may otherwise adversely affect our business.

If we raise funds through the issuance of additional equity or debt, including convertible debt or debt secured by some or all of our assets, holders of any debt securities or preferred shares issued will have rights, preferences and privileges senior to those of holders of our ordinary shares in the event of liquidation. If additional debt is issued, there is a possibility that once all senior claims are settled, there may be no assets remaining to pay out to the holders of ordinary shares. In addition, if we raise funds through the issuance of additional equity, whether through private placements or public offerings, such an issuance would dilute ownership of our current shareholders that do not participate in the issuance. If we are unable to obtain any needed additional funding, we may be required to reduce the scope of, delay or eliminate some or all of, our planned research, development, production and marketing activities, any of which could materially harm our business.

Furthermore, the terms of any additional debt securities we may issue in the future may impose restrictions on our operations, which may include limiting our ability to incur additional indebtedness, pay dividends on or repurchase our share capital or make certain acquisitions or investments. In addition, we may be subject to covenants requiring us to satisfy certain financial tests and ratios, and our ability to satisfy such covenants may be affected by events outside of our control.

We intend to grant equity awards under the Incentive Plan, which may result in share-based compensation expenses.

We intend to adopt the Incentive Plan for the purpose of granting share-based compensation to employees, directors and consultants to incentivize their performance and align their interests with ours. We believe the granting of share-based compensation may be important to our ability to attract and retain key personnel and employees, and we will evaluate whether to grant share-based compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our operating results.

If our electric vehicle owners modify our electric vehicles regardless of whether third-party aftermarket products are used, the electric vehicle may not operate properly, which may create negative publicity and could harm our business.

Vehicle enthusiasts may seek to alter our electric vehicles to modify their performance which could compromise vehicle safety and security systems. Also, customers may customize their electric vehicles with aftermarket parts that can compromise rider safety. We may not test, nor do we endorse, such changes or products. In addition, customers may attempt to modify our electric vehicles’ charging systems or use improper external cabling or unsafe charging outlets that can compromise the vehicle systems or expose our customers to injury from high-voltage electricity. Such unauthorized modifications could reduce the safety and security of our electric vehicles and any injuries resulting from such modifications could result in adverse publicity, which would negatively affect our brand and thus harm our business, prospects, financial condition and operating results.

 

69


Table of Contents

Our inability to obtain and/or retain necessary licenses and permits to operate the business may negatively impact our financial results.

It may be necessary for us to use the patented or proprietary technology of third parties to develop or commercialize our products, in which case we would be required to obtain a license or acquire intellectual property from these third parties. The licensing or acquisition of third-party intellectual property is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property that we may consider attractive or necessary, and thereby prevent us from obtaining the right to use such intellectual property ourselves. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. If we are unable to license such technology, or if we are forced to license such technology on unfavorable terms, our business could be harmed. If we are unable to obtain a necessary license, we may be unable to develop or commercialize the affected product models, which could harm our business, and the third parties owning such intellectual property could seek either an injunction prohibiting our sales or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

Moreover, some of our patents and patent applications in the future may be jointly owned with third parties. If we are unable to obtain an exclusive license to any such third-party joint owners’ interests in such patents or patent applications, such joint owners may be able to license their rights to other third parties, including our competitors, who could market competing products and technology. In addition, we may need the cooperation of any such joint owners in order to enforce such patents against third parties, and such cooperation may not be provided to us. Any of the foregoing could harm our business, financial condition and results of operations.

Risks Related to the Separation

Our business and H-D’s business overlap and we may compete, or be perceived as competitors, in certain markets.

Both LiveWire and H-D are companies whose primary business involves producing, marketing and selling vehicles and related products. While we intend to operate in a different business segment than H-D, neither we nor H-D is prohibited from competing against each other. Additionally, under the Intellectual Property License Agreement, H-D has the right to use all of our existing our intellectual property and incremental improvements to our existing intellectual property, which could facilitate H-D’s development of products that compete with ours; however, H-D may be required in some cases to pay us royalties for the use of our existing intellectual property and their rights to our newly developed intellectual property would be limited as defined under the Joint Development Agreement. If we were in competition with H-D, it could have a material adverse effect on our results of operations or our ability to pursue opportunities which may otherwise be available to us.

Our inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between us and H-D could result in a significant reduction of our revenue.

Maintaining a strong relationship with H-D and its management team will be important to our success for at least as long as H-D remains a majority shareholder. Disputes may arise between H-D and us in a number of areas relating to our ongoing relationship, including:

 

   

our strategy, direction and objectives as a business;

 

   

labor, tax, employee benefit, indemnification and other matters arising from our separation from H-D;

 

   

employee retention and recruiting;

 

   

business combinations involving us;

 

   

our ability to engage in activities with certain customers, suppliers, and partners;

 

70


Table of Contents
   

sales or dispositions by H-D of all or any portion of its ownership interest in us;

 

   

the nature, quality and pricing of services H-D has agreed to provide us;

 

   

supply chain, including access to parts and raw material supplies, as well as allocation of manufacturing labor, parts and other supplies shared across the York manufacturing facility;

 

   

business opportunities that may be attractive to both H-D and us; and

 

   

product or technology development or marketing activities which may require the consent of H-D.

While we have the Conflicts Committee to help resolve any potential conflict between us and H-D, we may not be able to resolve all potential conflicts. Assuming we are able to resolve such a potential conflict, we intend for such resolution to be comparable to the resolution that we would reach with an unaffiliated party. However, the resolution that we actually reach may be less favorable than if we were dealing with an unaffiliated party.

The agreements we will enter into with H-D may be amended upon agreement between the parties. While we are controlled by H-D, we may not have the leverage to negotiate agreements or amendments to these agreements, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

After this offering, we will be a smaller company relative to H-D which could result in increased costs because of a decrease in our purchasing power and difficulty maintaining existing customer relationships and obtaining new customers.

Prior to this offering, we were able to take advantage of H-D’s size and purchasing power in procuring goods, technology and services, including insurance, employee benefit support and audit and other professional services. While this may continue in some ways with H-D as a majority shareholder, we are a smaller company than H-D, and we cannot assure you that once we become public we will have access to financial and other resources comparable to those available to us prior to the offering. As a standalone company, we may be unable to obtain office space, goods, technology and services at prices or on terms as favorable as those available to us prior to this offering, which could increase our costs and reduce our profitability. Likewise, we may find it more difficult to attract and retain high-quality employees as a smaller company than we were operating within as a wholly owned subsidiary of H-D, which could impact our results of operations. Our future success also depends on our ability to develop and maintain relationships with customers. Our reduced relationship with H-D and our smaller relative size after this offering may make it more difficult to develop and maintain relationships with customers, which could adversely affect our prospects.

We are dependent on H-D for a number of services, including services relating to quality and safety testing. If those service arrangements terminate, it will require significant investment for us to build our own safety and testing facilities, or we may be required to obtain such services from another third party at increased costs.

We are dependent on H-D for a number of services, including services relating to quality and safety testing. If these service arrangements terminate, we do not currently have alternate arrangements in place that will allow us to fully execute our business plan, including, without limitation, agreements for quality and safety testing and, as such, will be required to deploy significant resources to build our own safety and testing facilities, or may be required to obtain such services from another third party at increased costs. If we are unable to maintain such arrangements and agreements, or if we are unable to effectively build our own facilities or obtain such services from another third party, our business, prospects, financial condition and operating results may be materially and adversely affected.

Any decision by us to electrify H-D products, or the products of any other company, may not achieve the intended results or return on investment when compared to developing our own motorcycle portfolio.

We may decide to electrify H-D’s and other companies’ products in the future. While we expect electrifying H-D’s motorcycle portfolio to be a key piece of our future success, these efforts require resources

 

71


Table of Contents

that may otherwise be used on our electric vehicle portfolio. All project scopes, resource allocation, time commitment, and investment dollars dedicated to the electrification of H-D’s core products will be governed by separate joint development agreements that will be established and agreed upon by the LiveWire and H-D management teams. If the available resources do not support both LiveWire and H-D electrification efforts, it could negatively impact development of our electric vehicles and ultimately our ability to deliver targeted revenues and operating income.

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the Business Combination.

In the past, our operations have been a part of H-D and H-D provided us with certain financial, operational and managerial resources for conducting our business. Following the Business Combination, while a number of these resources will continue to be at H-D and used to provide services to us under the Transition Services Agreement, we will perform certain of our own financial, operational and managerial functions. There are no assurances that we will be able to successfully put in place the financial, operational and managerial resources necessary to perform these functions.

Our transition to being a public company after the Business Combination will also subject us to significant regulatory oversight and financial reporting obligations under the federal securities laws and GAAP, as well as the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and operating results. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies in the US. The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the US may require costs greater than expected. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

H-D may fail to perform under various transaction agreements that will be executed as part of the Separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.

We will enter into a number of agreements with H-D upon the closing of the Business Combination, including the Trademark License Agreement, Employee Matters Agreement, Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement, Joint Development Agreement and Intellectual Property License Agreement pursuant to which we and/or H-D have continuing obligations to each other. If we or H-D fail to perform obligations under such agreements, our business may be negatively impacted. Furthermore, upon the expiration or termination of such agreements, we may not have necessary or comparable systems and services in place to replace the services provided under such agreements, which may negatively impact our business.

Our ability to successfully effect the Business Combination and successfully operate the business thereafter will depend largely upon the efforts of certain key personnel, including the continuing services of Jochen Zeitz, our acting CEO. The loss of such key personnel (including Jochen Zeitz) could adversely affect the operations and profitability of our business.

We are highly dependent on our senior management, including our Chief Executive Officer, Jochen Zeitz, and other key personnel. Our success will depend on our ability to retain senior management and to attract, recruit, retain, manage and motivate qualified personnel in the future, particularly with respect to an expected increase in hiring in connection with becoming a public company, including sales and marketing professionals,

 

72


Table of Contents

engineers and other highly skilled personnel and to integrate current and additional personnel in all departments. The loss of members of our senior management, sales and marketing professionals and engineers could result in delays in product development and harm our business. If we are not successful in attracting and retaining highly qualified personnel, it would have a material adverse effect on our business, financial condition and operating results.

We will be required to make payments to H-D under the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement and certain other agreements, and the amounts of such payments could be significant.

We will enter into certain agreements pursuant to which we will be obligated to make payments to H-D. Such agreements include the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement and certain others. The amounts payable under these agreements could be significant and could prohibit or restrict us from using these funds in other aspects of our business. Additionally, if we fail to make payments under the contracts we have with H-D, it may be determined that we are in breach of contract and we may have to pay damages or renegotiate those contracts. We can provide no assurance that we will be able to renegotiate the contracts we have with H-D or that any renegotiated terms will be favorable to us. The occurrence of such events could materially harm our business and financial condition.

Transfer or assignment to us of certain contracts, investments in joint ventures, and other assets may require the consent of a third party. If such consent is not given, we may not be entitled to the benefit of such contracts, investments, and other assets in the future.

Our separation from H-D requires certain contracts to be assigned from H-D or its affiliates to us or our affiliates. The assignment of certain of these contracts requires us to obtain consents and assignments from third parties. It is possible that, in connection with the consent process, some parties may seek more favorable contractual terms from us. If we are unable to obtain such consents we may be unable to obtain some of the benefits, assets and contractual commitments that are intended to be allocated to us as part of the Separation. If we are unable to obtain such consents, the loss of these contracts could increase our expenses or otherwise materially adversely affect our business, financial condition and operating results.

As HoldCo, following the Closing, will be a “controlled company” within the meaning of the NYSE listing standards and intends to rely on exemptions from certain corporate governance requirements, its shareholders may not have the same protections afforded to shareholders of companies that are subject to all NYSE corporate governance requirements.

After the completion of the Separation, H-D will own more than 50% of the total voting power of our common shares and we will be a “controlled company” within the meaning of the corporate governance rules of the NYSE. Under these corporate governance standards, a “controlled company” may elect not to comply with certain corporate governance requirements. For example, controlled companies are not required to have:

 

   

a board that is composed of a majority of “independent directors,” as defined under the NYSE rules;

 

   

a compensation committee that is composed entirely of independent directors; and

 

   

director nominations be made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.

Following this offering, we intend to utilize these exemptions. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all the corporate governance requirements of the NYSE.

 

73


Table of Contents

We may not be successful as an independent, publicly traded company, and we will not enjoy the same benefits that we did as a wholly owned subsidiary of H-D.

The historical financial information we have included in this proxy statement/prospectus does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent entity during the historical periods presented. The historical costs and expenses reflected in our consolidated financial statements include an allocation for certain corporate functions historically provided by H-D, including tax, accounting, treasury, legal, human resources, compliance, insurance, sales and marketing services. The historical financial information is not necessarily indicative of what our results of operations, financial position, cash flows or costs and expenses will be in the future. We have not made pro forma adjustments to reflect many significant changes that will occur in our cost structure, funding and operations as a result of our transition to becoming a public company, including changes in our employee base, potential increased costs associated with reduced economies of scale and increased costs associated with being a publicly traded, standalone company. For additional information, see “Selected Historical Financial Information of LiveWire,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire,” and our historical combined financial statements and notes thereto.

In connection with the Separation, H-D will indemnify us for certain liabilities and we will indemnify H-D for certain liabilities. If we are required to act on these indemnities for the benefit of H-D, we may need to divert cash to meet those obligations and our financial results could be negatively impacted. Additionally, any indemnity from H-D may not be sufficient to insure us against the full amount of liabilities for which we may be allocated responsibility, and H-D may not be able to satisfy its indemnification obligations in the future.

Third parties may seek to hold us responsible for H-D’s liabilities. Likewise, our relationship with H-D, as a much larger company and our majority shareholder, may make us more of a target for litigation than we otherwise would be on our own. Under certain agreements to be entered into with H-D in connection with the Separation, we will indemnify H-D for claims and losses relating to liabilities related to our business, and H-D will indemnify us for claims and losses relating to liabilities related to H-D’s business and not related to our business. However, if those liabilities are significant and we are ultimately held liable for them, we cannot assure you that we will be able to recover the full amount of our losses from H-D.

Pursuant to the Separation Agreement and certain other agreements with H-D, H-D will agree to indemnify us for certain liabilities, as discussed further in “Certain Relationships and Related Person Transactions.” However, third parties could also seek to hold us responsible for any of the liabilities that H-D has agreed to retain, and there can be no assurance that the indemnity from H-D will be sufficient to protect us against the full amount of such liabilities, or that H-D will be able to fully satisfy its indemnification obligations. In addition, H-D’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Separation. Moreover, even if we ultimately succeed in recovering from H-D or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our businesses, financial position and operating results.

Some of our directors and executive officers own restricted stock units and/or stock options covering H-D common stock that fluctuate in value in accordance with the value of H-D’s share price and/or other performance metrics, which could cause conflicts of interest that could result in us not acting on opportunities we otherwise may have.

Some of our directors and executive officers own restricted stock units and/or stock options that fluctuate in value in accordance with the value of H-D’s share price. In addition, some of our executive officers and directors are executive officers and/or directors of H-D. Ownership of restricted stock units and options that fluctuate in value in accordance with the value of H-D’s share price by our directors and officers after the Separation and the presence of executive officers or directors of H-D on the HoldCo Board could create, or appear to create, conflicts of interest with respect to matters involving both us and H-D that could have different

 

74


Table of Contents

implications for H-D than they do for us. Provisions of our certificate of formation will address corporate opportunities that are presented to our directors or officers that are also directors or officers of H-D. We cannot assure you that the provisions in our certificate of formation will adequately address potential conflicts of interest, that potential conflicts of interest will be resolved in our favor or that we will be able to take advantage of corporate opportunities presented to individuals who are officers or directors of both us and H-D. As a result, we may be precluded from pursuing certain growth initiatives, which could adversely affect our business.

H-D holds the direct contractual relationship with many key suppliers required for us to produce our electric vehicles. Disputes between H-D and these critical suppliers may negatively impact our electric vehicle production.

Our existing and potential relationships with partners and suppliers may be affected by our relationship with H-D. We partner with and purchase from a number of suppliers with whom H-D has a direct contractual relationship. H-D’s majority ownership in us might affect our ability to develop and maintain relationships with these suppliers, including because H-D may require us to limit our relationships with them or not work with them at all. Additionally, H-D might choose not to pursue enforcement of these contracts on our behalf in order to preserve H-D’s relationship with the partner or supplier. Likewise, these suppliers may be less willing or unwilling to develop and maintain relationships with us, and may favor our competitors or may view us as competitors, because of our relationship with H-D.

H-D may compete with certain of our significant channel, technology and other marketing partners as well as certain of our suppliers. Pursuant to our certificate of formation and certain agreements that we will enter into with H-D in connection with the Separation, H-D may have the ability to impact our relationship with these suppliers, which could have a material adverse effect on our results of operations, and our ability to pursue opportunities which may otherwise be available to us or electric vehicle production.

Risks Related to Information Technology, Intellectual Property, Data Security and Privacy

We collect and process significant information about our customers and their vehicles and are subject to various privacy and consumer protection laws.

We collect, receive, store, transmit and otherwise process different types of information about or related to a range of individuals, including our customers, riders of our electric vehicles, website visitors, users of our mobile application, our employees, job applicants and employees of other companies that we do business with (such as our vendors and suppliers). In addition to the information we collect from our customers to complete a sale or transaction, we use our electric vehicles’ onboard electronic systems to capture information about each electric vehicle’s use, such as location, charge time, battery usage, mileage and driving behavior, among other things, to aid us in providing services including electric vehicle diagnostics, repair, maintenance, insurance, roadside assistance and vehicle emergency services. Further we can, via data collection and analysis, customize and optimize the driving and riding experiences of our electric vehicles. Our customers may in the future choose not to provide this data, which may harm our business and our ability to properly maintain the vehicle. Possession and use of our customers’ driving behavior, electric vehicle use and other information may subject us to legislative and regulatory burdens and risks, and we will be required to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal information in the United States, Europe and elsewhere.

A wide variety of state, federal and international laws as well as regulations, industry standards and contractual obligations apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal information and other types of information. Evolving and changing definitions of personal data and personal information within the United States, Europe, the United Kingdom (the “UK”) and elsewhere, may limit or inhibit our ability to operate or expand our business and some jurisdictions require that certain types of data be retained on servers within these jurisdictions or place restrictions on the export of data to other jurisdictions.

 

75


Table of Contents

Additionally, laws, regulations, and standards covering marketing and advertising activities conducted by telephone, email, mobile devices and the Internet may be applicable to our business, such as the Telephone Consumer Protection Act (as implemented by the Telemarketing Sales Rule) (the “TCPA”), the Controlling the Assault of Non-Solicited Pornography and Marketing Act (the “CAN-SPAM Act”) and similar state and foreign consumer protection laws. The Federal Trade Commission and many state attorneys general are also interpreting federal and state consumer protection laws (including the Federal Trade Commission Act) as imposing standards for the online collection, use, dissemination, and security of data. In addition, by providing financing to and collecting related information from customers, we are subject to financial privacy laws such as the Gramm-Leach-Bliley Act of 1999 and its implementing regulations (“GLBA”), which restricts certain collection, use, disclosure and other processing of certain information and contains compliance requirements such as providing notice to individuals of privacy practices and implementing data security standards. We are also subject to certain laws and regulations that have been enacted or proposed, such as “Right to Repair” laws, that could require us to provide third-party access to our network and/or vehicle systems. Our failure to comply with applicable laws, directives, and regulations may result in private claims or enforcement actions against us, including liabilities, fines and damage to our reputation, any of which may have a material adverse effect on our business, prospects, financial condition and operating results.

Data protection and privacy-related laws and regulations are evolving and may result in ever increasing regulatory and public scrutiny and escalating levels of enforcement and sanctions. For example, the State of California adopted the CCPA, and prior to that the EU (and the UK) adopted General Data Protection Regulation (the “GDPR”). These laws (and other laws that have since been enacted) impose additional regulatory obligations regarding the handling of personal data and further provide certain individual privacy rights to persons whose data is processed by covered organizations.

In the United States, the CCPA became operative on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020, along with related regulations which came into force on August 14, 2020. Additionally, although not effective until January 1, 2023, the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA, was passed on November 3, 2020. The CCPA requires (and the CPRA will require) covered companies to, among other things, provide new disclosures to California consumers and affords such consumers new privacy rights such as rights to access and require deletion of their personal information, opt out of certain sales of personal information (a concept that is defined broadly) and receive detailed information about how their personal information is collected, used and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for certain security breaches that may increase security breach litigation. The CPRA imposes additional data protection obligations on covered companies, including additional consumer rights processes and opt-outs for certain uses of sensitive data and sharing of personal information starting in January 2023 (with a look back to January 2022). The CCPA has encouraged “copycat” laws in other states across the country. For example, Virginia enacted the Virginia Consumer Data Protection Act (the “VCDPA”), another comprehensive state privacy law, which will also be effective January 1, 2023. Also in 2021, Colorado enacted the Colorado Privacy Act (the “CPA”), which goes into effect July 1, 2023. We cannot fully predict the impact of the CCPA, CPRA, VCDPA and CPA or subsequent guidance on our business or operations, but it may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, and the results of our operations or prospects. A number of other proposals exist for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs, modify our data processing practices and materially and adversely affect our business, prospects, financial condition and operating results.

By expanding into the EU and UK, we will also be subject to the GDPR and the UK data protection regime consisting primarily of the UK General Data Protection Regulation and the UK Data Protection Act 2018 (together referred to as the “UK GDPR”). The GDPR, the national implementing legislation in EU member states, and the UK GDPR impose stringent data protection requirements, some of which are different from requirements under existing United States data privacy laws.

 

76


Table of Contents

The GDPR/UK GDPR also generally prohibits the transfer of personal data subject to those regimes outside of the EU/UK (including to the United States) unless a lawful data transfer solution has been implemented or a data transfer derogation applies. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal information from the EU and the UK to the United States. In July 2020, the Court of Justice of the EU (the “CJEU”) invalidated the EU-U.S. Privacy Shield Framework (the “Privacy Shield”), which provided a mechanism for the transfer of personal data from the European Economic Area (“EEA”)/UK to the United States. Further, while the CJEU upheld the adequacy of the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and an alternative to the Privacy Shield), it made it clear that reliance alone on the Standard Contractual Clauses may not necessarily be sufficient to protect data transferred in all circumstances. Use of the Standard Contractual Clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country. On June 4, 2021 the European Commission published a new set of modular Standard Contractual Clauses providing for an 18-month implementation period. The new Standard Contractual Clauses apply only to the transfer of data outside of the EEA and not the UK, though the UK’s Information Commissioner’s Officer launched a public consultation on its draft revised data transfers mechanisms in August 2021 and laid its proposal before Parliament, with the United Kingdom SCCs expected to come into force in March 2022, with a two-year grace period. We are monitoring these developments, but we may, in addition to other impacts, experience additional costs associated with increased compliance burdens and be required to engage in new contract negotiations with third parties that aid in processing data on our behalf or localize certain data. In addition, as supervisory authorities in the EEA and UK continue to issue further guidance relating to the processing of personal information, including the transfer of data, we could suffer additional costs or be subject to complaints or regulatory investigations or fines if there are allegations of non-compliance, and if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results. Loss, retention or misuse of certain information and alleged violations of laws and regulations relating to privacy and data security, and any relevant claims, may expose us to potential liability and may require us to expend significant resources on data security and in responding to and defending such allegations and claims.

We may also become subject to evolving EU and UK privacy laws on cookies and e-marketing. In the EU and the United Kingdom, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive may be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance. In the EU and the United Kingdom, informed consent is required for the placement of most cookies or similar technologies that store information, or access information stored, on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. While the text of the ePrivacy Regulation is still under development, a recent European court decision, regulators’ recent guidance and recent campaigns by a not-for-profit organization are driving increased attention to cookies and tracking technologies. There is also a general increasing awareness of how Internet user data is being used by companies, in particular, focused on the use of cookies to collect or aggregate information about Internet users’ online browsing activity. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities, may require significant changes to our business and may negatively impact our efforts to understand users.

 

77


Table of Contents

Additionally, other countries outside of Europe and the United States, including countries we either operate or may in the future operate within, are considering enacting legislation implementing data protection requirements or imposing cross-border data transfer restrictions or laws requiring local data residency. For example, Brazil enacted the General Data Protection Law, New Zealand enacted the New Zealand Privacy Act, China enacted its Personal Information Protection Law, and Canada introduced the Digital Charter Implementation Act. Compliance with additional laws and regulations could be expensive and result in significant penalties (for example, fines for certain breaches of the GDPR or the UK GDPR are up to the greater of €20 million/£17.5 million or 4% of total global annual turnover), and may place restrictions on the conduct of our business and the manner in which we interact with our customers. Failure to comply with applicable laws and regulations could result in lawsuits, regulatory enforcement actions against us or other liability. For example, our misuse of or failure to secure personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility. In addition, we may also face civil claims including representative actions and other class action type litigation (where individuals have alleged to suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. These possibilities, if borne out, could have a negative impact on revenues and profits. If a third party alleges that we have violated applicable data privacy laws, we could face legal claims and damages as well as reputational harm among consumers, investors, and strategic partners.

Although we make reasonable efforts to comply with all applicable data protection laws and regulations, our interpretations and efforts may have been or may prove to be insufficient or incorrect. We also make public statements about our use and disclosure of personal information through our privacy policy, information provided on our website and other public statements. Although we endeavor to ensure that our public statements are complete, accurate and fully implemented, we may at times fail to do so or be alleged to have failed to do so. We may be subject to potential regulatory or other legal action if such policies or statements are found to be deceptive, unfair or misrepresentative of our actual practices. In addition, from time to time, concerns may be expressed about whether our products and services compromise the privacy of our customers, riders and others. Any concerns about our data privacy and security practices (even if unfounded), or any failure, real or perceived, by us to comply with our posted privacy policies or with any legal or regulatory requirements, standards, certifications or orders or other privacy or consumer protection-related laws and regulations applicable to us, could cause our customers, riders and users to reduce their use of our products and services.

In addition, the regulatory framework for data privacy issues worldwide is currently evolving and is likely to remain uncertain for the foreseeable future, and it is possible that applicable laws and regulations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules, or our practices. Any failure or perceived failure by us to comply with applicable privacy and data security laws and regulations, our privacy policies, or our privacy-related obligations to users or other third parties, or any compromise of security that results in the unauthorized access to or transfer of personal information or other customer data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our customers, riders and users to lose trust in us, which would have an adverse effect on our reputation and business. We may also incur significant expenses to comply with privacy, consumer protection and security standards and controls imposed by laws, regulations, industry standards or contractual obligations.

Any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of our users’ data, or regarding the manner in which the express or implied consent of users for the use and disclosure of such data is obtained-or in how these applicable laws, regulations or industry practices are interpreted and enforced by state, federal and international privacy regulators-could require us to modify our services and features, possibly in a material and costly manner, may subject us to legal claims, regulatory enforcement actions and fines, and may limit our ability to develop new services and features that make use of the data that our users voluntarily share with us.

 

78


Table of Contents

We are subject to cybersecurity risks to our various systems and software and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.

We are at risk for interruptions, outages and breaches of (a) operational systems, including business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors or suppliers; (b) facility security systems, owned by us or our third-party vendors or suppliers; (c) transmission control modules or other in-product technology, owned by us or our third-party vendors or suppliers; (d) the integrated software in our electric vehicles; (e) our mobile application software; or (f) customer or rider data that we process or our third-party vendors or suppliers process on our behalf. In addition, we and our third-party vendors or suppliers that host our data may encounter attempted attacks on their networks that may take a variety of forms, including denial of service attacks, infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, bugs, viruses, worms, and malicious software programs. All of these types of cyber incidents can give rise to a variety of losses and costs, including legal exposure and regulatory fines, damages to reputation, and others. These incidents could also materially disrupt operational systems; result in loss of intellectual property, trade secrets, other proprietary or competitively sensitive information and data generally (including personal information); compromise certain information of customers, employees, suppliers, riders, users or others; harm our reputation or brand; or affect the performance of transmission control modules or other in-product technology and the integrated software in our electric vehicles.

A cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security defenses, including hacking, fraud, trickery or other forms of deception. The techniques used by cyber attackers change frequently, are becoming increasingly diverse and sophisticated, and may be difficult to detect for long periods of time. Although we maintain information technology measures designed to protect us against intellectual property theft, data breaches and other cyber incidents, such measures will require updates and improvements, and we cannot guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents. The implementation, maintenance, segregation and improvement of these systems requires significant management time, support and cost. Moreover, there are inherent risks associated with developing, improving, expanding and updating current systems, including the disruption of our data management, procurement, production execution, finance, supply chain and sales and service processes. These risks may affect our ability to manage our data and inventory, procure parts or supplies or produce, sell, deliver and service our electric powertrain solutions, adequately protect our intellectual property or achieve and maintain compliance with, or realize available benefits under, applicable laws, regulations and contracts. We cannot be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned. If we do not successfully implement, maintain or expand these systems as planned, our operations may be disrupted, our ability to accurately and timely report our financial results could be impaired, and deficiencies may arise in our internal control over financial reporting, which may impact our ability to certify our financial results. Moreover, our proprietary information, intellectual property or personal information that we hold could be compromised or misappropriated and our reputation may be adversely affected. If these systems do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.

A significant cyber incident could impact production capability, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation, any of which could materially affect our business, prospects, financial condition and operating results. In addition, while we maintain insurance coverage, our insurance coverage for cyberattacks may not be sufficient to cover all the losses and costs we may experience as a result of a cyber incident, including any disruptions resulting from such an incident.

 

79


Table of Contents

We also work with partners and third-party service providers or vendors that collect, store and process such data on our behalf and in connection with our products and services. There can be no assurance that any security measures that we or our third-party service providers or vendors have implemented will be effective against current or future security threats. While we have developed systems and processes designed to protect the availability, integrity, confidentiality and security of us and our customers’, riders’, website visitors’, employees’ and others’ data, our security measures or those of our third-party service providers or vendors could fail and result in security incidents, including unauthorized access to or disclosure, acquisition, encryption, modification, misuse, loss, destruction or other compromise of such data. If a compromise of such data were to occur, we may have liability under our contracts with other parties and under applicable law for damages and incur penalties and other costs to respond to, investigate and remedy such an incident. Laws in all 50 U.S. states require us to provide notice to customers, regulators, credit reporting agencies or others when certain sensitive information has been compromised as a result of a security breach. There are significant differences between the laws of the various states, and as a result compliance in the event of a widespread data breach could be complicated, in addition to being costly. Depending on the facts and circumstances of such an incident, these damages, penalties, fines and costs could be significant. Such an event could harm our reputation and result in litigation against us. Any of these results could materially adversely affect our business, prospects, financial condition and operating results.

We may need to defend ourselves against intellectual property infringement claims, which may be time consuming and would cause us to incur substantial costs.

Companies, organizations, or individuals, including our competitors, may currently hold or obtain in the future patents, trademarks or other proprietary or intellectual property that would prevent, limit or interfere with our ability to make, use, develop, sell or market our vehicles, components or other goods and services, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents, trademarks, trade secrets or other intellectual property or proprietary rights alleging that we are infringing, misappropriating, diluting or otherwise violating such rights. Such parties may bring suits against us alleging infringement or other violation of such rights, or otherwise assert their rights and urge us to take licenses to their intellectual property. While we try to avoid infringing the rights of others, we may unknowingly do so. For example, we may not be aware of existing patents or patent applications that could be pertinent to our business as many patent applications are filed confidentially in the United States and are not published until 18 months following the applicable filing date. In the event that a claim relating to intellectual property is asserted against us, our suppliers or our third-party licensors, or if third parties not affiliated with us hold patents that relate to our products or technology, we may need to seek licenses to such intellectual property or seek to challenge those patents. Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us. In addition, we may be unable to obtain these licenses on commercially reasonable terms, if at all, and our challenge of third-party patents may be unsuccessful. Litigation or other legal proceedings relating to intellectual property claims, regardless of merit, may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. Further, if we are determined to have infringed upon a third party’s intellectual property, we may be required to do one or more of the following:

 

   

cease selling, incorporating certain components into, or using vehicles or offering goods or services that incorporate or use the intellectual property that we allegedly infringe, misappropriate, dilute or otherwise violate;

 

   

pay substantial royalty or license fees or other damages;

 

   

seek a license from the holder of the allegedly infringed intellectual property, which license may not be available on reasonable terms, or at all;

 

   

redesign or reengineer our vehicles or other technology, goods or services, which may be costly, time-consuming or impossible; or

 

   

establish and maintain alternative branding for our products and services.

 

80


Table of Contents

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property on acceptable terms, our business, prospects, financial condition and operating results could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

If we are unable to maintain, protect or enforce our rights in our proprietary technology, brands or other intellectual property, our competitive advantage, business, financial condition and results of operations could be harmed.

Our failure to obtain or maintain adequate protection of, or prevent others from unauthorized use of, our intellectual property could harm our competitive advantage, business, financial condition and results of operations. We rely on a combination of patent, trade secret, trademark and other intellectual property laws, employee and third-party nondisclosure agreements, intellectual property licenses, and other contractual rights, to establish and protect our rights in our technology and intellectual property.

We have applied for patent protection relating to certain of our existing and proposed products, processes and services. However, we cannot assure you that any of our patent applications will issue as patents, or if they do issue, that they will be of sufficient scope or strength to provide our technologies with any meaningful protection or our business with any commercial protection. Further, once issued, the patents we own could be challenged, invalidated or circumvented by others. Some patent applications in the US are maintained in secrecy for a period of time after they are filed, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we will be the first creator of inventions covered by any patent application we make or the first to file patent applications on such inventions. Further, we cannot assure you that competitors will not infringe our patents, or that we will have adequate resources to enforce our patents.

We also rely on unpatented proprietary technology. It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets and other proprietary information, our policy is to require that relevant employees, consultants, advisors and collaborators enter into confidentiality agreements. We cannot assure you that these agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. If we are unable to maintain the proprietary nature of our technologies, our competitive position, business, financial condition and results of operations could be harmed.

We rely on our trademarks, trade names, and brand names to distinguish our products from those of our competitors, and have registered or applied to register certain of these trademarks. We cannot assure you that our trademark applications will be approved. Third parties may also oppose our trademark applications, or otherwise challenge our use of our trademarks. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition, and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you that competitors will not infringe our trademarks, or that we will have adequate resources to enforce our trademarks.

Despite our efforts to protect our intellectual property, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that our intellectual property is invalid or unenforceable, or that they do not infringe upon our intellectual property. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or may take in the future in an effort to prevent infringement or misappropriation may not be successful. From time to time, we may have to resort to litigation to enforce our intellectual property, which could result in substantial costs and diversion of our resources.

 

81


Table of Contents

Patent, trademark, trade secret and other intellectual property laws vary significantly throughout the world. A number of foreign countries do not protect intellectual property to the same extent as they are protected in the United States. Therefore, our intellectual property may not be as strong or as easily enforced outside of the United States. Failure to adequately protect our intellectual property could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which would adversely affect our business, prospects, financial condition and operating results.

Risks Related to Other Legal, Regulatory and Tax Matters

We are subject to substantial regulation and unfavorable changes to, or failure by us to comply with, current or future regulations could substantially harm our business and operating results. Increased environmental, safety, emissions or other regulations may result in higher costs, cash expenditures and/or sales restrictions.

Our electric vehicles, and the sale of motorcycles in general, are subject to substantial regulation under international, federal, state and local laws. We expect to incur significant costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative energy are currently evolving and we face risks associated with changes to these regulations, such as:

 

   

the imposition of a carbon tax or the introduction of a cap-and-trade system on electric utilities, either of which could increase the cost of electricity and thereby the cost of operating an electric vehicle;

 

   

new state regulations of electric vehicles fees could discourage consumer demand for electric vehicles;

 

   

the increase of subsidies for alternative fuels such as corn and ethanol could reduce the operating cost of vehicles that use such alternative fuels and gasoline, and thereby reduce the appeal of electric vehicles;

 

   

changes to the regulations governing the assembly and transportation of battery cells could increase the cost of battery cells or make such commodities more difficult to obtain;

 

   

changes in regulation, for example relating to the noise required to be emitted by electric vehicles, may impact the design or function of electric vehicles, and thereby lead to decreased consumer appeal;

 

   

changes in regulations governing the range and miles per gallon of gasoline-equivalent calculations could lower our electric vehicles’ ratings, making electric vehicles less appealing to consumers; and

 

   

the amendment or rescission of the CAFE standards could reduce new business opportunities for our business.

To the extent the laws change, our electric vehicles may not comply with applicable international, federal, state or local laws, which could have an adverse effect on our business. Compliance with changing regulations could be burdensome, time consuming and expensive. To the extent compliance with new regulations is cost prohibitive, our business, prospects, financial condition and operating results could be materially and adversely affected.

Internationally, there may be laws in jurisdictions we have not yet entered or laws we are unaware of in jurisdictions we have entered that may restrict our sales or other business practices. Even for those jurisdictions we have analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with our ability to sell electric vehicles directly to consumers could have a negative and material impact on our business, prospects, financial condition and operating results.

 

82


Table of Contents

Our operations may impact the environment or cause exposure to hazardous substances, and our properties may have environmental contamination, which could result in material liabilities to us.

Our operations currently use hazardous materials and generate limited quantities of hazardous wastes from time to time. We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and cleanup of soil, surface water, groundwater, and other media. Such claims may arise, for example, out of conditions at sites that we currently own or operate, as well as at sites that we previously owned or operated, or at sites that we may acquire. Under certain federal and state environmental laws, our liability for such conditions may be joint and several with other owners/operators, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire share. Liability under these laws is generally strict. Accordingly, we may incur liability without regard to fault or to the legality of the conduct giving rise to the conditions. These and other similar unforeseen impacts that our operations may have on the environment, as well as exposures to hazardous substances or wastes associated with our operations, could result in costs and liabilities that could materially and adversely affect us.

Our facilities, and our suppliers’ facilities, are vulnerable to disruption due to natural disasters, which could become more frequent and severe due to climate change.

There is growing concern that a gradual increase in global average temperatures may cause an adverse change in weather patterns around the globe, resulting in an increase in the frequency and severity of such natural disasters. Increased frequency or duration of extreme weather conditions may disrupt the productivity of our facilities, the operation of our supply chain or impact demand for our products. In addition, the increasing concern over climate change may result in more regional, federal and global legal and regulatory requirements and could increase the costs we incur in our operations.

Changes in US or international trade policy, including the continuation or imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition and operating results.

The US government has adopted a new approach to trade policy and in some cases has attempted to renegotiate or terminate certain existing bilateral or multilateral trade agreements. It has also imposed tariffs on certain foreign goods, including steel and certain vehicle parts, which have begun to result in increased costs for goods imported into the United States. In response to these tariffs, a number of US trading partners have imposed retaliatory tariffs on a wide range of US products, which makes it more costly for us to export our electric vehicles to those countries. China and the United States have each imposed tariffs, indicating the potential for further trade barriers which may escalate a nascent trade war between China and the United States. In addition, additional trade restrictions or barriers could be implemented on a broader range of products or raw materials. If we are unable to pass price increases on to our customer base or otherwise mitigate the costs, or if demand for our exported electric vehicles decreases due to the higher cost, our business, prospects, financial condition and operating results could be materially adversely affected. The resulting environment of retaliatory trade or other practices could have a material adverse effect on our business, prospects, financial condition, operating results, customers, suppliers and the global economy.

The strategic partnership with the KYMCO Group could be negatively impacted by geopolitical events that might occur between mainland China and Taiwan.

Our strategic partnership with the KYMCO Group may be negatively affected by the impact of geopolitical events and related actions that may occur between mainland China and Taiwan. In recent years, there have been political and trade tensions between mainland China and Taiwan, which have resulted in the implementation of trade barriers, including the use of economic sanctions and export control restrictions. Violations of these economic sanctions and export control restrictions can result in significant civil and criminal penalties. Prolonged or increased use of trade barriers may result in a decrease in the growth of the global

 

83


Table of Contents

economy and electric vehicle industry and could cause turmoil in global markets. which could decrease demand for our products and services. Also, any increase in the use of economic sanctions or export control restrictions could impact our ability to continue supplying products and services to those customers and our customers’ demand for our products and services. Further escalation of trade tensions, the increased use of economic sanctions or export control restrictions could negatively affect our strategic partnership with the KYMCO Group.

We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.

We are subject to anti-corruption, anti-bribery, anti-money laundering and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010 (the “U.K. Bribery Act”), and other anti-corruption laws and regulations. The FCPA and the U.K. Bribery Act prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of these laws or regulations could adversely affect our business, results of operations, financial condition and reputation. Our policies and procedures designed to ensure compliance with these regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

Our business also must be conducted in compliance with applicable economic and trade sanctions laws and regulations, such as those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council and other relevant sanctions authorities. Our global operations expose us to the risk of violating, or being accused of violating, anti-corruption laws and economic and trade sanctions laws and regulations. Our failure to comply with these laws and regulations may expose us to reputational harm as well as significant penalties, including criminal fines, imprisonment, civil fines, disgorgement of profits, injunctions and debarment from government contracts, as well as other remedial measures. Investigations of alleged violations can be expensive and disruptive. Despite our compliance efforts and activities we cannot assure compliance by our employees or representatives for which we may be held responsible, and any such violation could materially adversely affect our reputation, business, prospects, financial condition and operating results.

Non-compliance with anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, prospects, financial condition and operating results. In addition, changes in economic sanctions laws in the future could adversely impact our business and investments in our common stock.

We are or may be subject to risks associated with strategic alliances or acquisitions.

We may from time to time consider entering into strategic alliances, including joint ventures, minority equity investments or other transactions, with various third parties to further our business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, with non-performance by the third party and with increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the

 

84


Table of Contents

actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with any such third party.

When appropriate opportunities arise, we may acquire additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore, acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations. Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

We are, and may in the future be, subject to legal proceedings in the ordinary course of our business. If the outcomes of these proceedings are adverse to us, it could have a material adverse effect on our business, prospects, financial condition and operating results.

We are subject to various litigation matters from time to time, the outcome of which could have a material adverse effect on our business, prospects, financial condition and operating results. Claims arising out of actual or alleged violations of law could be asserted against us by individuals, either individually or through class actions, by governmental entities in civil or criminal investigations and proceedings or by other entities. These claims could be asserted under a variety of laws, including but not limited to consumer finance laws, consumer protection laws, tort laws, environmental laws, intellectual property laws, privacy laws, labor and employment laws, securities laws and employee benefit laws. We may also become subject to allegations of discrimination or other similar misconduct, which, regardless of the ultimate outcome, may result in adverse publicity that could harm our brand, reputation and operations. Claims may also arise out of actual or alleged breaches of contract or other actual or alleged acts or omissions by or on behalf of us. These actions could expose us to adverse publicity and to substantial monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including but not limited to suspension or revocation of licenses to conduct business. Even if we are successful in defending against legal claims, litigation could result in substantial costs and demand on management resources. See “Business of ABIC and Certain Information About ABIC—Legal Proceedings.”

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition.

We may be subject to taxes by the U.S. federal, state, local and foreign tax authorities. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

 

   

allocation of expenses to and among different jurisdictions;

 

   

changes in the valuation of our deferred tax assets and liabilities;

 

   

expected timing and amount of the release of any tax valuation allowances;

 

   

tax effects of stock-based compensation;

 

   

costs related to intercompany restructurings;

 

   

changes in tax laws, tax treaties, regulations or interpretations thereof; or

 

   

lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.

 

85


Table of Contents

In addition, we may be subject to audits of our income, sales and other taxes by U.S. federal, state, and local and foreign taxing authorities. Outcomes from these audits could have an adverse effect on our operating results and financial condition.

Changes in tax laws or regulations that are applied adversely to us or our customers may materially adversely affect our business, prospects, financial condition and operating results.

New income, sales, use or other tax laws, statutes, rules, regulation or ordinances could be enacted at any time, or interpreted, changed, modified or applied adversely to us or our customers, any of which could adversely affect our business, prospects, financial performance and operating results. In particular, presidential, congressional, state and local elections in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our customers, suppliers and manufacturers. For example, the United States government has, from time to time, proposed and may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate and the imposition of minimum taxes or surtaxes on certain types of income. The likelihood of these changes being enacted or implemented is unclear. We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business. To the extent that such changes have a negative impact on us, our suppliers, manufacturers or our customers, including as a result of related uncertainty, these changes may materially and adversely affect our business, prospects, financial condition and operating results.

Risks Related to the Common Stock

The price of HoldCo Common Stock may be volatile, and you may be unable to resell your HoldCo Common Stock at or above the price at which you purchased such stock, or at all.

After the Closing of the Business Combination, the market price for our HoldCo Common Stock is likely to be volatile. In addition, the market price for our HoldCo Common Stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others:

 

   

trends and changes in consumer preferences in the industries in which we operate;

 

   

changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the consumer and advertising marketplaces;

 

   

changes in key personnel;

 

   

our entry into new markets;

 

   

changes in our operating performance;

 

   

investors’ perceptions of our prospects and the prospects of the businesses in which we participate;

 

   

fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors;

 

   

the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

   

announcements relating to litigation;

 

   

guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance;

 

   

changes in financial estimates or ratings by any securities analysts who follow our HoldCo Common Stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our HoldCo Common Stock;

 

86


Table of Contents
   

downgrades in our credit ratings or the credit ratings of our competitors;

 

   

the development and sustainability of an active trading market for our HoldCo Common Stock;

 

   

investor perceptions of the investment opportunity associated with our HoldCo Common Stock relative to other investment alternatives;

 

   

the inclusion, exclusion or deletion of our stock from any trading indices;

 

   

future sales of our common stock by our officers, directors and significant stockholders;

 

   

other events or factors, including those resulting from system failures and disruptions, hurricanes, wars, acts of terrorism, other natural disasters or responses to such events;

 

   

price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and

 

   

changes in accounting principles.

These and other factors may lower the market price of our HoldCo Common Stock, regardless of our actual operating performance. As a result, our HoldCo Common Stock may trade at prices significantly below the price at which you purchased such common stock.

In addition, the stock markets, including the NYSE, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

Our stock price may be exposed to additional risks because our business will become a public company through a “de-SPAC” transaction. There has been increased focus by government agencies on such transactions, and we expect that increased focus to continue, and we may be subject to increased scrutiny by the SEC and other government agencies on holders of our securities as a result, which could adversely affect the price of our HoldCo Common Stock.

If we fail to implement and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud.

Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) will require us to evaluate the effectiveness of our internal control over financial reporting as of the end of each fiscal year, including a management report assessing the effectiveness of our internal control over financial reporting beginning with our Annual Report on Form 10-K for the year ending December 31, 2022. Additionally, once we cease to be an emerging growth company, our independent registered accounting firm will also be required to attest to the effectiveness of our internal controls over financial reporting in each Annual Report on Form 10-K to be filed with the SEC. We may in the future identify material weaknesses or significant deficiencies that we may be unable to remedy before the requisite deadline for those reports. Our ability to comply with the annual internal control reporting requirements will depend on the effectiveness of our financial reporting and data systems and controls across our company. We expect these systems and controls to involve significant expenditures and to become increasingly complex as our business grows. To effectively manage this complexity, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. Any weaknesses or deficiencies or any failure to implement required new or improved controls, or difficulties encountered in the implementation or operation of these controls, could harm our operating results and cause us to fail to meet our financial reporting obligations or result in material misstatements in our financial statements, which could adversely affect our business and reduce our stock price.

 

87


Table of Contents

A market for our securities may not continue, which would adversely affect the liquidity and price of its securities.

The price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities may never develop or, if developed, it may not be sustained. In addition, the price of our securities can vary due to general economic conditions and forecasts, its general business condition and the release of its financial reports. Additionally, if our securities are not listed on, or become delisted from, NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of its securities may be more limited than if it were quoted or listed on NYSE or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding common stock adversely, then the price and trading volume of common stock could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of us, the trading price of our common stock would likely be negatively impacted. Furthermore, if one or more of the analysts who do cover us downgrade our common stock or our industry, or the common stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our common stock could decline. If one or more of these analysts stops covering us or fails to publish reports on us regularly, we could lose visibility in the market, which, in turn, could cause our common stock price or trading volume to decline.

Additionally, any fluctuation in the credit rating of us or our subsidiaries may impact our ability to access debt markets in the future or increase our cost of future debt, which could have a material adverse effect on our operations and financial condition, which in turn may adversely affect the trading price of shares of our common stock.

Risks Related to the Business Combination and ABIC

Throughout this section, unless otherwise indicated or the context otherwise requires, references to “ABIC,” “we,” “us,” “our” and other similar terms refer to AEA-Bridges Impact Corp. and its subsidiaries, prior to the Business Combination and to HoldCo and its consolidated subsidiaries after giving effect to the Business Combination.

The Sponsor and each of ABIC’s officers and directors agreed to vote in favor of our initial business combination, including the Business Combination in particular, as applicable, regardless of how the Public Shareholders vote.

Unlike other special purpose acquisition companies in which the initial shareholders agree to vote their founder shares and any public shares purchased by them during or after such company’s initial public offering in accordance with the majority of votes cast by the Public Shareholders in connection with an initial business combination, the Sponsor and each of ABIC’s officers and directors have agreed, and their permitted transferees will agree, pursuant to the terms of letter agreements entered into with ABIC (including the Investor Support Agreement entered into between the ABIC Initial Shareholders, ABIC, LiveWire, HoldCo and H-D with respect to the Business Combination), to vote any Founder Shares held by them, as well as any Public Shares owned by them, in favor of our initial business combination (including the Business Combination).

 

88


Table of Contents

As of the record date, the ABIC Initial Shareholders owned 10,000,000 Class B Ordinary Shares and 2,500,000 Class A Ordinary Shares, representing approximately 25.0% of the issued and outstanding ABIC Shares, and will be able to vote all of such shares at the General Meeting. As a result, we would need only an additional 12,500,000, or 31.3% (assuming all outstanding ABIC Shares are voted), or one ABIC Share (assuming only the minimum number of ABIC Shares representing a quorum are voted), in each case, of the 40,000,000 Public Shares sold in our IPO to be voted in favor of the Business Combination in order to have the Business Combination approved. Accordingly, it is more likely that the necessary shareholder approval will be received for the Business Combination than would be the case if the Sponsor and each of ABIC’s officers and directors agreed to vote any ABIC Shares owned by them in accordance with the majority of the votes cast by the Public Shareholders.

Since the Sponsor and our executive officers and directors have interests that are different, or in addition to (and which may conflict with), the interests of our shareholders, a conflict of interest may have existed in determining whether the Business Combination with HoldCo is appropriate as our initial business combination and in recommending that shareholders vote in favor of approval of the Required Shareholder Proposals. Such interests include that the Sponsor and our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired during or may acquire after the IPO), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.

When you consider the recommendation of the ABIC Board in favor of approval of the Required Shareholder Proposals, you should keep in mind that the Sponsor, our directors and our executive officers have interests in such proposal that are different from, or in addition to, those of ABIC shareholders and warrant holders generally. These interests include that the Sponsor as well as our executive officers and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect to Public Shares they may have acquired or may acquire in the future), and that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete the Business Combination, even if it is with a less favorable target company or on less favorable terms to shareholders, rather than liquidate ABIC.

Additionally, among other things, these interests include the following:

 

   

the fact that the Sponsor and ABIC’s directors have agreed not to redeem any ABIC Shares held by them in connection with the shareholder vote to approve a proposed initial business combination, including the Business Combination;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 10,000,000 Founder Shares currently owned by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and the independent directors. The Founder Shares would be worthless if the Business Combination or another business combination is not consummated by October 5, 2022 because the holders are not entitled to participate in any redemption or distribution with respect to such shares. Such securities may have a significantly higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $99,500,000, based upon the closing price of $9.95 per Class A Ordinary Share on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, the 10,500,000 Private Placement Warrants, each exercisable to purchase one Class A Ordinary Share at $11.50 per share, subject to adjustment, held by the Sponsor, in which certain of ABIC’s officers and directors hold a direct and indirect interest, and which were acquired for an aggregate purchase price of $10,500,000 in a private placement that took place simultaneously with the consummation of the IPO, would become worthless. Such securities may

 

89


Table of Contents
 

have a higher value at the time of the Business Combination and, if unrestricted and freely tradable, would be valued at approximately $3,045,000, based upon the closing price of $0.29 per Public Warrant on the NYSE on July 25, 2022;

 

   

the fact that if the Business Combination or another business combination is not consummated by October 5, 2022, ABIC will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Class A Ordinary Shares for cash and, subject to the approval of its remaining shareholders and the ABIC Board, dissolving and liquidating; and

 

   

the fact that the Sponsor Group paid an aggregate of $10,525,000 for its investment in HoldCo, as summarized in the table below, and following the consummation of the Business Combination, the aggregate value of the Sponsor’s investment will be $102,047,500, based upon the respective closing price of the Class A Ordinary Shares and the public warrants on the NYSE on July 25, 2022.

Sponsor Group Ownership of ABIC Prior to Closing

 

     Securities
held by
Sponsor
Group
     Sponsor Cost
at ABIC’s IPO ($)
 

Founder Shares

     9,950,000      $ 25,000 (1) 

Private Placement Warrants

     10,500,000      $ 10,500,000  
     

 

 

 

Total

      $ 10,525,000  

 

(1) 

Includes cost for 50,000 Founder Shares held by the independent directors.

Sponsor Group Ownership of HoldCo Following the Closing

 

     Securities
held by
Sponsor
Group

Prior
to Closing
     Value per
Security
($)
     Total Value ($)  

Shares of HoldCo Common Stock Issued to Holders of Founder Shares

     9,950,000      $ 9.95      $ 99,002,500  

HoldCo Private Placement Warrants

     10,500,000      $ 0.29      $ 3,045,000  
     

 

 

    

 

 

 

Total

         $ 102,047,500  

 

   

the fact that the Sponsor, officers or directors, or their affiliates may be reimbursed for any out-of-pocket expenses incurred on ABIC’s behalf related to identifying, investigating, negotiating, and completing an initial business combination, including the formation and setting up of the Sponsor and related entities. As of the date of this proxy statement/prospectus, no out-of-pocket expenses have been incurred by ABIC’s officers and directors and there are no outstanding out-of-pocket expenses for which ABIC’s officers or directors are awaiting reimbursement;

 

   

the fact that the Sponsor and ABIC’s current officers and directors have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if ABIC fails to complete an initial business combination by October 5, 2022;

 

   

the fact that the HoldCo Registration Rights Agreement will be entered into by, among others, the Sponsor;

 

90


Table of Contents
   

the fact that, pursuant to the Business Combination Agreement, the Sponsor will have certain governance rights in respect of HoldCo that will be set forth in HoldCo’s governing documents;

 

   

the right of the Sponsor to hold shares of HoldCo Common Stock following the Business Combination, subject to the terms and conditions of the lock-up restrictions;

 

   

the fact that the Sponsor will benefit from the completion of a business combination and may be incentivized to complete an acquisition of a less favorable target company or on terms less favorable to shareholders rather than liquidate;

 

   

the fact that the Sponsor and its affiliates can earn a positive rate of return on their investment, even if other ABIC shareholders experience a negative rate of return in HoldCo;

 

   

the fact that the Sponsor and ABIC’s officers and directors will lose their investment in ABIC and will not be reimbursed for any out-of-pocket expenses incurred by them on ABIC’s behalf incident to identifying, investigating and consummating an initial business combination if an initial business combination is not consummated by October 5, 2022;

 

   

the fact that if the Trust Account is liquidated, including in the event ABIC is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify ABIC to ensure that the proceeds in the Trust Account are not reduced below $10.00 per Public Share, or such lesser per Public Share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which ABIC has entered into an acquisition agreement or claims of any third party for services rendered or products sold to ABIC, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that John Garcia, who is currently the Executive Chairman, Co-Chief Executive Officer and Director of ABIC, paid an aggregate of $25,000,000 for 2,500,000 ABIC Units. Such securities are valued at approximately $21,125,000, based upon the closing price of the ABIC Units ($10.05) on the NYSE on July 20, 2022; and

 

   

the fact that the Business Combination Agreement provides for the continued indemnification of ABIC’s existing directors and officers and requires LiveWire to purchase, at or prior to the Closing, and maintain in effect for a period of six years after the Closing, a “tail” policy providing directors’ and officers’ liability insurance coverage for certain ABIC directors and officers after the Business Combination.

In addition, certain persons who are expected to become HoldCo directors after the completion of the Business Combination may have interests in the Business Combination that are different from, or in addition to, the interests of the ABIC shareholders. See “Shareholder Proposal 1: The Business Combination Proposal—Interests of Certain Persons in the Business Combination” for more information.

The personal and financial interests of the Sponsor as well as ABIC’s executive officers and directors may have influenced their motivation in identifying and selecting LiveWire as a business combination target, completing the Business Combination with LiveWire and influencing the operation of the business following the Business Combination. In considering the recommendations of the ABIC Board to vote for the proposals, its shareholders should consider these interests. Additionally, following the Closing, the Sponsor will have the right to designate one member of the HoldCo Board, who is initially expected to be John Garcia. Any vote made by such individual appointed by the Sponsor as part of such individual’s service on the HoldCo Board does not express the vote of ABIC in any capacity, but solely such individual’s vote as a director of HoldCo.

 

91


Table of Contents

The exercise of ABIC’s directors’ and executive officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in ABIC’s shareholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Business Combination Agreement, would require ABIC to agree to amend the Business Combination Agreement, to consent to certain actions taken by LiveWire or to waive rights that ABIC is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of LiveWire’s business, a request by LiveWire to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on HoldCo’s business and would entitle ABIC to terminate the Business Combination Agreement. In any of such circumstances, it would be at ABIC’s discretion, acting through the ABIC Board, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for ABIC and its shareholders and what he, she or they may believe is best for himself, herself or themself in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, ABIC does not believe there will be any changes or waivers that ABIC’s directors and executive officers would be likely to make after shareholder approval of the Required Shareholder Proposals has been obtained. While certain changes could be made without further shareholder approval, ABIC intends to circulate a new or amended proxy statement/prospectus and resolicit ABIC’s shareholders if changes to the terms of the transaction that would have a material impact on its shareholders are required prior to the vote on the Required Shareholder Proposals.

ABIC and LiveWire will incur significant transaction and transition costs in connection with the Business Combination.

ABIC and H-D have incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination. ABIC and H-D may also incur unanticipated costs associated with the Business Combination, including costs driven by LiveWire’s becoming a public company and the listing on the NYSE of the shares of HoldCo Common Stock, and these unanticipated costs may have an adverse impact on the results of operations of LiveWire following the effectiveness of the Business Combination. All expenses incurred in connection with the Business Combination Agreement and the transactions contemplated thereby, including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs.

ABIC and LiveWire cannot provide assurance that the benefits of the Business Combination will offset the incremental transaction costs in the near term, if at all.

The ABIC Warrant Agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with us.

The ABIC Warrant Agreement provides that, subject to applicable law; (i) any action, proceeding or claim against us arising out of or relating in any way to the ABIC Warrant Agreement, including under the Securities Act, will 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 (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the ABIC Warrant Agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act (which provides for the exclusive

 

92


Table of Contents

jurisdiction of the federal courts with respect to all suits brought to enforce a duty or liability created by the Exchange Act or the rules and regulations thereunder) or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in the ABIC Warrant Agreement. If any action, the subject matter of which is within the scope the forum provisions of the ABIC Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”); and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us, which may discourage such lawsuits. Alternatively, if a court were to find this provision of the ABIC Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operation and could result in a diversion of the time and resources of our management and the ABIC Board.

The ability of the Public Shareholders to exercise their redemption rights with respect to a large number of our shares could increase the probability that the Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.

The Business Combination Agreement requires us to meet the Minimum Cash Condition at Closing. We do not know how many shareholders will ultimately exercise their redemption rights in connection with the Business Combination. As such, the Business Combination is structured based on our expectations (and those of the other parties to the Business Combination Agreement) as to the number of shares that will be submitted for redemption. In the event that the Public Shareholders exercise their redemption rights with respect to a number of our shares such that the Minimum Cash Condition is not met, we may need to seek to arrange for additional third-party financing to be able to satisfy the Minimum Cash Condition (or such lower amount designated by LiveWire if LiveWire waives the condition). If LiveWire waives the Minimum Cash Condition, HoldCo’s ability to operate its business and execute its plans to meet its projections post-Closing of the Business Combination may be adversely affected. Furthermore, if LiveWire waives the Minimum Cash Condition in order to complete the Business Combination, HoldCo may need to raise a substantial amount of capital in order to be able to continue its operations, which capital may not be available due to the business conditions created as a result of LiveWire’s waiver of the Minimum Cash Condition. Furthermore, raising such additional financing may involve dilutive equity issuances or the incurrence of indebtedness at higher-than-desirable levels. In general, if we (or, after the Business Combination, HoldCo) are unable to obtain sufficient funding on a timely basis, we may be unable to expand our operations or otherwise capitalize on business opportunities, and defend against and prosecute litigation, which could materially affect our business, financial condition and results of operations. If we are ultimately unable to continue as a going concern, we may have to seek the protection of bankruptcy laws or liquidate our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that our securityholders will lose all or a part of their investment.

If too many of the Public Shareholders elect to redeem their shares and additional third-party financing is not available to us, there is an increased probability that the Business Combination would be unsuccessful. If the Business Combination is unsuccessful, you would not receive your pro rata portion of the funds in the Trust Account until we liquidate the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time the ABIC Shares may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment or

 

93


Table of Contents

lose the benefit of funds expected in connection with your exercise of the redemption rights of our Public Shares until we liquidate or you are able to sell your shares in the open market.

During the pendency of the Business Combination, LiveWire and ABIC are prohibited from entering into certain transactions that might otherwise be beneficial to LiveWire, ABIC or their respective shareholders because of restrictions in the Business Combination Agreement. Furthermore, certain provisions of the Business Combination Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Business Combination Agreement.

Certain covenants in the Business Combination Agreement impede our ability to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Business Combination. As a result, we may be at a disadvantage to our competitors during that period. In addition, while the Business Combination Agreement is in effect, neither we nor LiveWire may solicit, initiate, knowingly induce, knowingly encourage, knowingly facilitate, discuss or negotiate, directly or indirectly, any alternative acquisition proposal, such as a merger, material sale of assets or equity interests or other business combination, with any third party, even though any such alternative acquisition could be more favorable to our shareholders than the Business Combination. In addition, if the Business Combination is not completed, these provisions will make it more difficult to complete an alternative business combination following the termination of the Business Combination Agreement due to the passage of time during which these provisions have remained in effect.

Until the earlier of consummation of the Business Combination or termination of the Business Combination Agreement, LiveWire and ABIC are subject to certain limitations on the operations of their businesses, each as summarized under the section entitled “The Business Combination Agreement—Covenants of the Parties.” The limitations on LiveWire’s and ABIC’s conduct of their businesses during this period could have the effect of delaying or preventing other strategic transactions and may, in some cases, make it impossible to pursue business opportunities that are available only for a limited time.

Uncertainties about the Business Combination during the pre-Closing period may cause third parties to delay or defer decisions concerning LiveWire or seek to change existing arrangements.

There may be uncertainty regarding whether the Business Combination will occur. This uncertainty may cause third parties to delay or defer decisions concerning LiveWire, which could negatively affect LiveWire’s business. Third parties may seek to change existing agreements with LiveWire as a result of the Business Combination for these or other reasons.

The announcement and pendency of the Business Combination could adversely affect LiveWire’s business, prospects, financial condition or operating results.

The announcement and pendency of the Business Combination could cause disruptions to and create uncertainty surrounding LiveWire’s business, including with respect to LiveWire’s relationships with existing and future customers, suppliers and employees, which could have an adverse effect on LiveWire’s business, prospects, financial condition or operating results, irrespective of whether the Business Combination is completed. The business relationships of LiveWire may be subject to disruption as customers, suppliers and other persons with whom LiveWire has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships or consider entering into business relationships with other parties. The risk, and adverse effect, of any such disruptions could be exacerbated by a delay in the consummation of the Business Combination.

If the conditions to the Business Combination Agreement are not met, the Business Combination may not occur.

Even if the Business Combination Agreement is approved by our shareholders, specified conditions must be satisfied or waived before the parties to the Business Combination Agreement are obligated to complete

 

94


Table of Contents

the Business Combination. For a list of the material closing conditions contained in the Business Combination Agreement, see the section entitled “The Business Combination—Conditions to the Closing of the Business Combination.” ABIC, HoldCo, LiveWire and H-D may not satisfy all of the Closing conditions in the Business Combination Agreement. If the Closing conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed pending later satisfaction or waiver, and such non-occurrence or delay may cause us and LiveWire to each lose some or all of the intended benefits of the Business Combination.

If the Business Combination is not completed, potential alternative target businesses may have leverage over us in negotiating an initial business combination and our ability to conduct due diligence on a business combination as we approach our dissolution deadline may decrease, which could undermine our ability to complete an initial business combination on terms that would produce value for our shareholders.

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of the IPO. Consequently, a potential target may obtain leverage over us in negotiating a business combination, knowing that we may be unable to complete a business combination with another target business by October 5, 2022. This risk will increase as we get closer to the time frame described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

The Sponsor, as well as LiveWire, and their respective directors, executive officers and advisors, or their affiliates may elect to purchase Public Shares or Public Warrants from the Public Shareholders, which may influence a vote on the Business Combination and reduce the public “float” of our securities.

At any time at or prior to the Business Combination, during a period when they are not then aware of any material nonpublic information regarding us or our securities and subject to customary interim operating covenants set forth in the Business Combination Agreement, the Sponsor, as well as LiveWire, and their respective directors, executive officers and advisors or their affiliates may purchase Public Shares or warrants in privately negotiated transactions or in the open market. There is no limit on the number of securities the Sponsor, as well as LiveWire, and their respective directors, officers and advisors, or their affiliates may purchase in such transactions, subject to compliance with applicable law, NYSE rules and their own governance, contractual and legal restrictions. Additionally, at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material nonpublic information), the Sponsor, as well as LiveWire, their directors, officers and advisors, or their affiliates may enter into transactions with investors and others to provide them with incentives to acquire Public Shares, vote their Public Shares in favor of the Required Shareholder Proposals or not redeem their Public Shares. The purpose of any such share purchases and other transactions could be to (i) increase the likelihood of satisfaction of the requirements that (a) the Business Combination Proposal and the Incentive Plan Proposal are approved by the affirmative vote of the holders of at least a majority of the issued ABIC Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting; and (b) the Domestication Proposal and the Charter Proposal are approved by the affirmative vote of the holders of at least two-thirds of the issued ABIC Shares who are present in person or represented by proxy and entitled to vote thereon and who vote at the General Meeting; and (ii) otherwise limit the number of Public Shares electing to redeem, also in order to ensure that the Minimum Cash Condition is satisfied and that ABIC’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) are at least $5,000,001 after giving effect to the transactions contemplated by the Business Combination Agreement, the PIPE Financing and the redemptions of Class A Ordinary Shares. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held in the Trust Account will be used to purchase Public Shares or Public Warrants in such transactions. Such purchases may include a contractual acknowledgment that such shareholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.

 

95


Table of Contents

In the event that the Sponsor, as well as LiveWire, and their respective directors, executive officers and advisors, or their affiliates purchase Public Shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their redemption rights or submitted a proxy to vote against the Business Combination, such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against the Business Combination. The purpose of any such transaction could be to: (1) vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining shareholder approval of the Required Shareholder Proposals, (2) reduce the number of Public Warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with the Business Combination or (3) satisfy a closing condition in the Business Combination Agreement that requires us to have a minimum net worth or a certain amount of cash at the closing of the Business Combination, where it appears that such requirement would otherwise not be met. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of the Class A Ordinary Shares or Public Warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

If a shareholder fails to receive notice of our offer to redeem the Public Shares in connection with Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

We will comply with the proxy rules when conducting redemptions in connection with the Business Combination. Despite our compliance with these rules, if a shareholder fails to receive our proxy solicitation materials, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation materials that we will furnish to holders of the Public Shares in connection with the Business Combination will describe the various procedures that must be complied with in order to validly submit Public Shares for redemption. In the event that a shareholder fails to comply with these procedures disclosed in the proxy solicitation materials, its Public Shares may not be redeemed.

Because of our limited resources and the significant competition for initial business combination opportunities, if the Business Combination is not completed, it may be more difficult for us to complete an initial business combination. If we have not completed our initial business combination within the required time period, the Public Shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the redemption of their shares, and our warrants will expire worthless.

We have encountered and expect to continue to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other special purpose acquisition companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors may possess greater resources or more specialized industry knowledge related to a specific business combination target than we do and our financial resources will be relatively limited when contrasted with those of some of these competitors. Additionally, the number of special purpose acquisition companies looking for business combination targets has increased compared to recent years and many of these special purpose acquisition companies are sponsored by entities or persons that have significant experience with completing business combinations. While we believe there are numerous target businesses we could potentially acquire, should the Business Combination fail, with the net proceeds of the IPO, over-allotment and the sale of the Private Placement Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable may be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our Public

 

96


Table of Contents

Shares the right to redeem their shares for cash at the time of our initial business combination in conjunction with a shareholder vote. Target companies will be aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating an initial business combination. If we have not completed our initial business combination within the required time period, the Public Shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of the Trust Account and our warrants will expire worthless.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per Public Share (which was the offering price in the IPO).

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the Public Shareholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will consider whether competitive alternatives are reasonably available to ABIC and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be in the best interests of the company under the circumstances. The underwriters of the IPO will not execute an agreement with us waiving such claims to the monies held in the Trust Account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.

Upon redemption of the Public Shares, if we do not complete our initial business combination within 24 months from the closing of the IPO, or upon the exercise of the redemption rights in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by Public Shareholders could be less than the $10.00 per Public Share initially held in the Trust Account, due to claims of such creditors. Pursuant to a letter agreement the form of which is filed as an exhibit to this proxy statement/prospectus, the Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction 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, in each case net of the interest that may be withdrawn to pay our tax obligations; provided that such liability will not apply to any claims by a third party or prospective target business that 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 our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

 

97


Table of Contents

However, we have not asked the Sponsor to reserve for such indemnification obligations, nor have we independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and we believe that the Sponsor’s only assets are securities of our company. Therefore, we 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 our initial business combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any redemption of your Public Shares. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us that is not dismissed, or if we otherwise enter compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims deplete the Trust Account, we may not be able to return to the Public Shareholders $10.00 per share (which was the offering price in the IPO).

Our directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders.

In the event that the proceeds in the Trust Account are reduced 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, in each case net of the interest that may be withdrawn to pay our tax obligations, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors, in exercising their business judgment and subject to their fiduciary duties, may choose not to do so in any particular instance for a variety of reasons, for example, if the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to the Public Shareholders may be reduced below $10.00 per Public Share.

ABIC is an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if ABIC takes advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make ABIC Securities less attractive to investors and may make it more difficult to compare ABIC’s performance with other public companies.

ABIC is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and 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 ABIC’s 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. As a result, ABIC’s shareholders may not have access to certain information they may deem important. ABIC could be an emerging growth company for up to five years, although circumstances could cause ABIC to lose that status earlier, including if the market value of Class A Ordinary Shares held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case ABIC would no longer be an emerging growth company as of the following fiscal year-end. We cannot predict whether investors will find ABIC Securities less attractive because

 

98


Table of Contents

ABIC relies on these exemptions. If some investors find ABIC Securities less attractive as a result of its reliance on these exemptions, the trading prices of ABIC Securities may be lower than they otherwise would be, there may be a less active trading market for ABIC Securities and the trading prices of ABIC Securities may be more volatile.

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 a 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 an election to opt out is irrevocable. ABIC 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, ABIC, 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 ABIC’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.

Additionally, ABIC is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. ABIC will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of the ABIC Shares held by non-affiliates exceeds $250 million as of the prior June 30, or (2) ABIC’s annual revenues exceeded $100 million during such completed fiscal year and the market value of the ABIC Shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent ABIC takes advantage of such reduced disclosure obligations, it may also make comparison of ABIC’s financial statements with other public companies difficult or impossible.

The price of the shares of HoldCo Common Stock and HoldCo Warrants may be volatile.

Upon consummation of the Business Combination, the price of shares of HoldCo Common Stock and HoldCo Warrants may fluctuate due to a variety of factors, including:

 

   

changes in the industries in which LiveWire and HoldCo and their customers operate;

 

   

variations in its operating performance and the performance of its competitors in general;

 

   

the material and adverse impact of the COVID-19 pandemic and the conflict in Ukraine on the markets and the broader global economy;

 

   

actual or anticipated fluctuations in LiveWire’s and HoldCo’s annual or interim operating results;

 

   

publication of research reports by securities analysts about LiveWire, HoldCo or their competitors or their industry;

 

   

the public’s reaction to LiveWire’s and HoldCo’s press releases, other public announcements and filings with the SEC;

 

   

LiveWire’s or HoldCo’s failure or the failure of their competitors to meet analysts’ projections or guidance that LiveWire, HoldCo or their competitors may give to the market;

 

   

additions and departures of key personnel;

 

   

changes in laws and regulations affecting its business;

 

   

failure to comply with laws or regulations, including the Sarbanes-Oxley Act, or failure to comply with the requirements of the NYSE;

 

99


Table of Contents
   

actual, potential or perceived control, accounting or reporting problems;

 

   

commencement of, or involvement in, litigation involving LiveWire or HoldCo;

 

   

changes in LiveWire’s or HoldCo’s capital structures, such as future issuances of securities or the incurrence of additional debt;

 

   

the volume of shares of HoldCo Common Stock available for public sale;

 

   

general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and epidemics and pandemics (including the ongoing COVID-19 pandemic), acts of war or terrorism (including the conflict in Ukraine); and

 

   

the other factors described in this “Risk Factors” section.

These market and industry factors may materially reduce the market price of shares of HoldCo Common Stock and HoldCo Warrants regardless of the operating performance of LiveWire or HoldCo.

Beginning in January 2022, subsequent to our announcement of the Business Combination and our PIPE offering on December 12, 2021, there has been a precipitous drop in the market values of growth-oriented companies. Accordingly, securities of growth companies such as ours may be more volatile than other securities and may involve special risks.

Beginning in January 2022, subsequent to our announcement of the Business Combination and our PIPE Financing on December 12, 2021, there has been a precipitous drop in the market values of growth-oriented companies like ours. In recent months, inflationary pressures, increases in interest rates and other adverse economic and market forces have contributed to these drops in market value. As a result, our securities are subject to potential downward pressures, which may result in high redemptions of the cash available from the Trust Account. If there are substantial redemptions, there will be a lower float of our HoldCo Common Stock outstanding, which may cause further volatility in the price of our securities and adversely impact our ability to secure financing following the closing of the Business Combination.

Securities of companies formed through SPAC mergers such as ours may experience a material decline in price relative to the share price of the SPAC prior to the merger.

As with most SPAC initial public offerings in recent years, ABIC issued shares for $10.00 per share upon the closing of its initial public offering. As with other SPACs, the $10.00 per share price of ABIC reflected each share having a one-time right to redeem such share for a pro rata portion of the proceeds held in the Trust Account equal to approximately $10.00 per share prior to the closing of the Business Combination. Following Closing, the shares outstanding will no longer have any such redemption right and will be solely dependent upon the fundamental value of the combined company, which, like the securities of other companies formed through SPAC mergers in recent years, may be significantly less than $10.00 per share.

A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of shares of HoldCo Common Stock to drop significantly, even if HoldCo’s business is doing well.

Sales of a substantial number of shares of HoldCo Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of shares of HoldCo Common Stock.

We may be required to file one or more registration statements prior to or shortly after the Closing to provide for the resale of certain restricted shares from time to time. As restrictions on resale end and the registration statements are available for use, the market price of shares of HoldCo Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

 

100


Table of Contents

The Public Shareholders will experience immediate dilution as a consequence of the issuance of shares of HoldCo Common Stock as consideration in the Business Combination and in the PIPE Financing.

The issuance of additional shares of HoldCo Common Stock in the Business Combination (including the PIPE Financing) will dilute the equity interests of our existing shareholders and may adversely affect prevailing market prices for the Public Shares and/or Public Warrants. The Public Shareholders who do not redeem their Public Shares may experience dilution from several additional sources to varying degrees in connection with and after the Business Combination.

Additionally, HoldCo may determine, subject to the receipt of any stockholder or stock exchange approvals that may be required, to issue additional shares of HoldCo Common Stock or other equity securities of equal or senior rank in connection with privately negotiated transactions following the consummation of the Business Combination.

The issuance of additional shares of HoldCo Common Stock (or other equity securities of equal or senior rank) could have the following effects for holders of Public Shares who elect not to redeem their shares:

 

   

your proportionate ownership interest in HoldCo will decrease;

 

   

the relative voting strength of each previously outstanding share of HoldCo Common Stock following the Business Combination will be diminished; or

 

   

the market price of the shares of HoldCo Common Stock and the Public Warrants may decline.

The below sensitivity table shows the potential impact of redemptions on the pro forma book value per share of the shares owned by non-redeeming shareholders in a no redemption scenario, an illustrative redemption scenario, contractual maximum redemption scenario and charter redemption limitation scenario. The sensitivity table below also sets forth (x) the potential additional dilutive impact of each of the below additional dilution sources in each redemption scenario; and (y) the effective underwriting fee incurred in connection with the IPO in each redemption scenario.