Filed Pursuant to Rule 424(b)(3)

Registration No. 333-272466

 

PROPOSED MERGERS

YOUR VOTE IS VERY IMPORTANT

 

 

To the Stockholders of Amprius Technologies, Inc. and Amprius, Inc.:

Amprius Technologies, Inc., which we refer to as “Amprius,” and Amprius, Inc., which we refer to as “Holdco,” have entered into an Agreement and Plan of Merger and Reorganization, which we refer to as the “merger agreement,” a copy of which is attached as Annex A to the accompanying proxy statement/prospectus, pursuant to which a wholly owned subsidiary of Amprius will merge with and into Holdco (with Holdco surviving the merger as a wholly owned subsidiary of Amprius), which we refer to as the “first merger,” and Holdco (as the surviving entity of the first merger) will merge with and into Combine Merger Sub, LLC, a second wholly owned subsidiary of Amprius (“Merger Sub II”), which we refer to as the “second merger” and, together with the first merger and the other transactions contemplated by the merger agreement, the “mergers.” The mergers will result in the Holdco stockholders owning their shares in Amprius directly rather than through a holding company. Merger Sub II shall survive the second merger and be referred to as the “surviving entity.” Holdco and Amprius believe that the mergers will create more opportunities for Amprius and maximize long-term stockholder value, including by improving corporate governance and enhancing Amprius’ public float and liquidity.

Prior to the effective time of the first merger, which we refer to as the “first effective time,” in accordance with the applicable provisions of Holdco’s amended and restated certificate of incorporation, (i) each share of Holdco’s voting preferred stock (comprised of Holdco’s Series A preferred stock, Series B preferred stock, Series C preferred stock and Series E-2 preferred stock) will be automatically converted into one share of Holdco’s Class A common stock, and (ii) each share of Holdco’s non-voting preferred stock (comprised of Holdco’s Series B-NV preferred stock, Series C-NV preferred stock, Series D-1 preferred stock, Series E preferred stock and Series E-1 preferred stock) will be automatically converted into one share of Holdco’s Class B common stock (the conversions in the foregoing clauses (i) and (ii), collectively, the “pre-closing conversion”).

At the first effective time, by virtue of the first merger, each share of Holdco’s Class A common stock and Holdco’s Class B common stock issued and outstanding immediately prior to the first effective time will be automatically converted into the right to receive the applicable portion of the Per Share Merger Consideration (as defined below) to be calculated in accordance with a discounted exchange ratio as described in more detail in the accompanying proxy statement/prospectus. Based on an assumed discounted exchange ratio of 0.7056 (the “Discounted Exchange Ratio”) and certain other assumptions described in the accompanying proxy statement/prospectus, it is expected that the “Per Share Merger Consideration” will be comprised of 29,363,779 shares of Amprius’ common stock and 28,606,816 shares of Amprius’ non-voting common stock. Pursuant to the merger agreement, at the first effective time, each option to purchase Holdco stock that is outstanding immediately prior to the first effective time, whether vested or unvested, will be converted into an option to purchase a number of shares of Amprius’ common stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Holdco’s Class A common stock subject to such Holdco option immediately prior to the first effective time and (y) the Discounted Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Holdco option immediately prior to the first effective time divided by (B) the Discounted Exchange Ratio. In addition, each Holdco warrant to purchase Holdco stock outstanding immediately prior to the first effective time will be canceled and automatically replaced, without any further action required on the part of the holder, with warrants representing the right to receive, on a net exercise basis, a number of shares of Amprius’ common stock equal to (x) the Discounted Exchange Ratio multiplied by the number of shares of Holdco’s Class A common stock underlying such Holdco warrant, minus (y) the aggregate exercise price of such Holdco warrant divided by $8.71, rounded to the nearest whole share.

At the effective time of the second merger, which we refer to as the “second effective time,” by virtue of the second merger, (i) each share of Holdco (as the surviving entity of the first merger) common stock issued and outstanding immediately prior to the second effective time will be cancelled and cease to exist and (ii) the

membership interests of Merger Sub II outstanding immediately prior to the second effective time will be converted into and become the membership interests of the surviving entity, which will constitute 100% of the outstanding interests of the surviving entity.

Following the mergers, Amprius’ stockholders (other than Holdco) will continue to own and hold their existing shares of Amprius common stock, and all outstanding and unexercised warrants and options to purchase shares of Amprius’ common stock will remain in effect pursuant to their terms. It is expected that, based on the assumptions described in the accompanying proxy statement/prospectus, immediately after the mergers, (i) Holdco’s stockholders as of immediately prior to the first effective time will own approximately 74% of the outstanding capital stock of Amprius, comprised of 59% of Amprius’ common stock and 100% of Amprius’ non-voting common stock, as compared to the 77% of Amprius’ common stock currently held by Holdco, (ii) the percentage of Amprius’ outstanding capital stock held by current stockholders (other than Holdco) will increase from approximately 23% before the mergers to 26% immediately after the mergers (or, on a fully-diluted basis, from 55.6% to 55.8%) and (iii) the directors and officers of Amprius, all of whom are expected to continue to be the directors and executive officers of the combined organization following the closing of the mergers, will collectively beneficially own 14% of the outstanding capital stock of Amprius, which is expected to represent 22% of the voting power of Amprius, as none of the shares owned by the directors and executive officers of Amprius will be non-voting common stock. For more information, see the section titled “Principal Stockholders of the Combined Organization” in the accompanying proxy statement/prospectus.

Shares of Amprius’ common stock and Amprius’ public warrants to purchase common stock, which we refer to as the “public warrants,” are currently listed on the New York Stock Exchange, which we refer to as the “NYSE,” under the symbols “AMPX” and “AMPX.W,” respectively. On June 23, 2023, the last trading day before the date of this proxy statement/prospectus, the closing sale price of Amprius’ common stock and public warrants on the NYSE was $8.11 per share and $0.56 per warrant, respectively.

Amprius is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the mergers and related matters. At the Amprius special meeting, which will be held at 10:00 a.m., local time, on July 26, 2023 via live webcast at www.virtualshareholdermeeting.com/AMPX2023SM, unless postponed or adjourned to a later date, Amprius will ask its stockholders to, among other things:

 

1.

approve and adopt the merger agreement, and the transactions contemplated thereby, including the mergers and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder pursuant to the terms of the merger agreement;

 

2.

approve and adopt the amended and restated certificate of incorporation of Amprius, which we refer to as the “proposed charter,” in the form attached as Annex B of the accompanying proxy statement/prospectus, to authorize a new class of non-voting common stock; and

 

3.

consider and, if necessary, vote upon an adjournment of the Amprius special meeting to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 and 2.

As of June 14, 2023, Holdco beneficially owns or controls an approximate 77% equity interest in Amprius through ownership or control of 65,515,552 shares of Amprius’ common stock. As a result, Amprius is currently a “controlled company” within the meaning of NYSE rules. Holdco is party to a support agreement with Amprius, pursuant to which, among other things, Holdco has committed to voting in favor of each of the proposals presented by Amprius for approval by holders of its common stock. However, the mergers will not be consummated unless (i) Proposal Nos. 1 and 2 are approved by the holders of a majority of the outstanding shares of Amprius common stock that are not owned, directly or indirectly, by (1) Holdco; (2) any holder of Holdco common stock or preferred stock; (3) any member of Amprius’ board of directors, which we refer to as the “Amprius Board;” (4) any officer of Amprius; or (5) any associate or immediate family member of the foregoing persons (the shares held by holders other than those listed in (1) through (5), the “Unaffiliated Shares” and the holders of the Unaffiliated Shares, the “Unaffiliated Stockholders”) and (ii) all other conditions to the mergers are satisfied.

On May 8, 2023, after careful consideration, the special committee of the Amprius Board, comprised of the sole independent and disinterested director of Amprius, which we refer to as the “special committee,” (i) determined that the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, are advisable and are fair to, and in the best interests of, Amprius and the Unaffiliated Stockholders and (ii) recommended that the Amprius Board approve and adopt the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, and recommend that Amprius’ stockholders approve and adopt the same.

On May 9, 2023, and based in part upon the recommendation of the special committee, the Amprius Board unanimously (i) determined that the merger agreement, the mergers and the other transactions contemplated by the merger agreement, are advisable and are fair to, and in the best interests of, Amprius and its stockholders (including the Unaffiliated Stockholders), (ii) approved and declared advisable the mergers and the other transactions contemplated by the merger agreement, including the mergers, the issuance of Amprius common stock, non-voting common stock, options and warrants in connection with the mergers, the amendment and restatement of Amprius’ certificate of incorporation and the amendment and restatement of Amprius’ bylaws, (iii) approved and authorized each of the transaction documents, including the merger agreement, and (iv) recommended that the stockholders of Amprius approve the merger agreement and the transactions contemplated thereby, including the mergers, the issuance of Amprius common stock, non-voting common stock, options and warrants in connection with the mergers and the amendment and restatement of Amprius’ certificate of incorporation. The Amprius Board accordingly recommends that Amprius’ stockholders vote “FOR” Proposal Nos. 1, 2, and 3.

After careful consideration, Holdco’s board of directors, which we refer to as the “Holdco Board,” (i) determined that the form, terms and provisions of the merger agreement, including all exhibits and schedules attached thereto, are fair, advisable and in the best interests of Holdco, (ii) approved and adopted the merger agreement, (iii) authorized and approved the mergers, and (iv) recommended that Holdco’s stockholders approve and adopt the merger agreement and the mergers. The Holdco Board recommends that Holdco’s stockholders sign and return the action by written consent of Holdco’s stockholders, which we refer to as the “Holdco written consent,” in favor of (i) adopting and approving the merger agreement and the transactions contemplated thereby, (ii) acknowledging that each such stockholder’s approval is irrevocable and each such stockholder is aware of its rights to demand appraisal for its shares pursuant to Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the “DGCL,” and that each such stockholder has received and read a copy of Section 262 of the DGCL, (iii) acknowledging that by each such stockholder’s approval of the mergers each such stockholder thereby waives any rights under Section 262 of the DGCL, and (iv) the conversion of Holdco’s preferred stock into Holdco’s common stock immediately prior to the first effective time.

In considering the recommendation of the Amprius Board with respect to the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder pursuant to the merger agreement and the other matters to be acted upon by Amprius’ stockholders at the Amprius special meeting, Amprius’ stockholders should be aware that certain members of the Amprius Board and executive officers of Amprius have interests in the mergers that may be different from, or in addition to, interests they have as Amprius’ stockholders. For more information, see the section titled “The Mergers—Interests of Amprius Directors and Executive Officers in the Mergers” in the accompanying proxy statement/prospectus.

As described in the accompanying proxy statement/prospectus, Holdco is party to a support agreement with Amprius, pursuant to which, among other things, Holdco has agreed to vote in favor of the approval and adoption of the merger agreement, the proposed charter, the mergers and the other transactions at the time specified therein. In addition, certain stockholders of Holdco have entered into a support agreement, which we refer to as the “Stockholder Support Agreement,” with Amprius and Holdco, which stockholders collectively own approximately (i) (a) 78% of Holdco’s voting preferred stock and the non-voting preferred stock (voting as a

single class and on an as-converted basis), (b) 72% of Holdco’s Series D-1 preferred stock and combined Series E preferred stock (voting as a single class and on an as-converted basis) and (c) 96% of Holdco’s combined Series C preferred stock (voting as a single class and on an as-converted basis) and (ii) after giving effect to the pre-closing conversion, (x) 67% of Holdco’s Class A common stock, (y) 85% of Holdco’s Class B common stock and (z) 76% of Holdco’s common stock. The Stockholder Support Agreement provides, among other things, that the Holdco stockholders party thereto will (i) (a) vote or act by written consent in favor of the approval and adoption of the merger agreement, the mergers and the other transactions contemplated by the merger agreement, including the pre-closing conversion, and (b) vote against, and withhold consent with respect to, approval of any proposal, transaction, agreement or action, without regard to the terms of such proposal, transaction, agreement or action, made in opposition to, in competition with or inconsistent with, the merger agreement, the mergers or the other transactions contemplated by the merger agreement, (ii) acknowledge that each such stockholder’s approval is irrevocable and each such stockholder is aware of its rights to demand appraisal for its shares pursuant to Section 262 of the DGCL and that each such stockholder has received and read a copy of Section 262 of the DGCL, and (iii) waive any rights under Section 262 of the DGCL.

Pursuant to the merger agreement, at the first effective time, certain stockholders of Holdco and Amprius will enter into a joinder to the Registration Rights Agreement dated September 14, 2022, as amended, by and among Amprius, Holdco and the other holders named therein.

More information about Amprius, Holdco and the proposed transaction is contained in this proxy statement/prospectus. Amprius and Holdco urge you to read the accompanying proxy statement/prospectus carefully and in its entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 23.

If you have any questions regarding this proxy statement/prospectus, you may contact D.F. King & Co., Inc., Amprius’ proxy solicitor, toll free at (800) 207-3158, banks and brokers can call collect at (212) 269-5550, or email at AMPX@dfking.com.

Amprius and Holdco are excited about the opportunities the mergers bring to both Amprius’ and Holdco’s stockholders and thank you for your consideration and continued support.

 

		Sincerely,   Dr. Kang Sun
		Chief Executive Officer
June 26, 2023		Amprius Technologies, Inc. and Amprius, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated June 26, 2023, and is first being mailed to Amprius’ and Holdco’s stockholders on or about June 27, 2023.

 

AMPRIUS TECHNOLOGIES, INC.

1180 Page Avenue

Fremont, California 94538

(800) 425-8803

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON JULY 26, 2023

Dear Stockholders of Amprius:

On behalf of the board of directors of Amprius Technologies, Inc., a Delaware corporation, which we refer to as “Amprius,” we are pleased to deliver this proxy statement/prospectus for the 2023 special meeting of stockholders of Amprius, which we refer to as the “Amprius special meeting,” to be held on July 26, 2023 at 10:00 a.m., local time, via live webcast at www.virtualshareholdermeeting.com/AMPX2023SM, unless postponed or adjourned to a later date, for the following purposes:

 

•

Proposal No. 1: To consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger and Reorganization, dated as of May 9, 2023, which we refer to as the “merger agreement,” a copy of which is attached as Annex A to this proxy statement/prospectus, by and among Amprius, Amprius, Inc., which we refer to as “Holdco,” Combine Merger Sub, Inc., a wholly owned direct subsidiary of Amprius, which we refer to as “Merger Sub I,” and Combine Merger Sub, LLC, a wholly owned direct subsidiary of Amprius, which we refer to as “Merger Sub II” and, together with Merger Sub I, the “Merger Subs,” pursuant to which Merger Sub I will merge with and into Holdco (with Holdco surviving the merger as a wholly owned subsidiary of Amprius), which we refer to as the “first merger,” and then Holdco (as the surviving entity of the first merger) will merge with and into Merger Sub II, which we refer to as the “second merger” and, together with the first merger and the other transactions contemplated by the merger agreement, the “mergers,” and the transactions contemplated thereby, including the mergers and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder pursuant to the terms of the merger agreement;

 

•

Proposal No. 2: To approve and adopt the amended and restated certificate of incorporation of Amprius, which we refer to as the “proposed charter,” in the form attached as Annex B to this proxy statement/prospectus, to authorize a new class of non-voting common stock; and

 

•

Proposal No. 3: To consider and, if necessary, vote upon an adjournment of the Amprius special meeting to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 and 2.

Amprius will transact no other business at the Amprius special meeting except such business as may be properly brought before the Amprius special meeting or any adjournment or postponement thereof. Please refer to the attached proxy statement/prospectus for further information with respect to the business to be transacted at the Amprius special meeting.

The Amprius Board has fixed June 26, 2023, as the record date for the determination of stockholders entitled to notice of, and to vote at, the Amprius special meeting and any adjournment or postponement thereof. Only holders of record of shares of Amprius’ capital stock at the close of business on the record date are entitled to notice of, and to vote at, the Amprius special meeting. At the close of business on the record date, Amprius had 85,983,560 shares of common stock outstanding and entitled to vote.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the mergers and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, D.F. King & Co., Inc. toll-free at (800)-207-3158, banks and brokers can call collect at (212)-269-5550, or email at AMPX@dfking.com.

Your vote is important. The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for approval of Proposal No. 1. The affirmative vote of holders of at least two-thirds of the voting power of the outstanding shares of Amprius’ common stock is required for approval of Proposal No. 2. In addition, the affirmative vote of the holders of a majority of the outstanding shares of Amprius common stock that are not owned, directly or indirectly, by (1) Holdco; (2) any holder of Holdco common stock or preferred stock; (3) any member of the Amprius Board; (4) any officer of Amprius; or (5) any associate or immediate family member of the foregoing persons (the shares held by holders other than those listed in (1) through (5), the “Unaffiliated Shares” and the holders of the Unaffiliated Shares, the “Unaffiliated Stockholders”) is required to approve Proposal Nos. 1 and 2. The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for approval of Proposal No. 3. Each of Proposal Nos. 1 and 2 are conditioned upon each other. Therefore, the mergers cannot be consummated without the approval of Proposal Nos. 1 and 2.

Even if you plan to attend the Amprius special meeting virtually, Amprius requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the Amprius special meeting if you are unable to attend.

THE AMPRIUS BOARD OF DIRECTORS HAS DETERMINED AND BELIEVES THAT EACH OF THE PROPOSALS OUTLINED ABOVE IS ADVISABLE TO, AND IN THE BEST INTERESTS OF, AMPRIUS AND ITS STOCKHOLDERS (INCLUDING THE UNAFFILIATED STOCKHOLDERS) AND HAS APPROVED EACH SUCH PROPOSAL. THE AMPRIUS BOARD OF DIRECTORS RECOMMENDS THAT AMPRIUS’ STOCKHOLDERS VOTE “FOR” EACH SUCH PROPOSAL.

By Order of the Amprius Board of Directors,

Dr. Kang Sun

Chief Executive Officer

Fremont, California

June 26, 2023

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus refers to important business and financial information about Amprius that is not included in or delivered with this document. You may obtain this information without charge upon your written or oral request by contacting the Chief Financial Officer of Amprius Technologies, Inc., 1180 Page Avenue, Fremont, California 94538 or by calling (800) 425-8803.

To ensure timely delivery of these documents, any request should be made no later than July 12, 2023 to receive them before the Amprius special meeting.

For additional details about where you can find information about Amprius, please see the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

 

i

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE MERGERS			1
PROSPECTUS SUMMARY			12
RISK FACTORS			23
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			61
THE SPECIAL MEETING OF AMPRIUS’ STOCKHOLDERS			63
THE MERGERS			67
THE MERGER AGREEMENT			106
AGREEMENTS RELATED TO THE MERGERS			116
MATTERS BEING SUBMITTED TO A VOTE OF AMPRIUS’ STOCKHOLDERS			118
AMPRIUS’ BUSINESS			121
HOLDCO’S BUSINESS			133
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			134
MANAGEMENT PRIOR TO AND FOLLOWING THE MERGERS			150
AMPRIUS’ EXECUTIVE COMPENSATION			158
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			169
DESCRIPTION OF AMPRIUS’ CAPITAL STOCK AFTER THE MERGERS			175
SHARES ELIGIBLE FOR FUTURE SALE			184
COMPARISON OF RIGHTS OF HOLDERS OF AMPRIUS STOCK AND HOLDCO STOCK			186
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS			193
PRINCIPAL STOCKHOLDERS OF AMPRIUS			194
PRINCIPAL STOCKHOLDERS OF COMBINED ORGANIZATION			196
LEGAL MATTERS			199
EXPERTS			199
WHERE YOU CAN FIND MORE INFORMATION			199
TRADEMARK NOTICE			200
OTHER MATTERS			201
INDEX TO FINANCIAL STATEMENTS			F-1

 

Annex A		Merger Agreement
Annex B		Amended and Restated Certificate of Incorporation of Amprius Technologies, Inc.
Annex C		Amended and Restated Bylaws of Amprius Technologies, Inc.
Annex D		Opinion of the Special Committee’s Financial Advisor
Annex E		Appraisal Rights (Section 262 of the Delaware General Corporation Law)
Annex F		Glossary of Industry Terms

 

ii

QUESTIONS AND ANSWERS ABOUT THE MERGERS

The following section provides answers to frequently asked questions about the mergers. This section, however, provides only summary information. For a more complete response to these questions and for additional information, please refer to the cross-referenced sections.

Q: Why are the two companies proposing to merge?

A: Amprius originally entered the public markets via a business combination transaction with Kensington Capital Acquisition Corp. IV, which we refer to as Kensington, in September 2022, which transaction we refer to as the “Business Combination.” As a result of the Business Combination, the historical stockholders of the original Amprius Technologies, Inc., now named Amprius Technologies Operating, Inc., which we refer to as “Legacy Amprius,” largely retained their holdings in Amprius indirectly through their holdings in Holdco. Holdco currently holds approximately 77% of Amprius’ common stock.

Holdco is an investment company with no operations other than holding equity interests in its subsidiaries. At various times in the past, Holdco formed and invested in subsidiaries to pursue other battery-related businesses. Because the nature and circumstances of the different businesses varied widely, Holdco’s board of directors, which we refer to as the “Holdco Board,” determined that it was in the best interests of Holdco’s stockholders to cause each of its operating subsidiaries (Berzelius (Nanjing) Co. Ltd., which we refer to as “Berzelius,” Apex (Wuxi) Co., Ltd., which we refer to as “Apex,” Amprius Energy, Inc., which we refer to as “Amprius Energy” and Legacy Amprius) to become fully independent companies so that each could pursue its business separately. In January and February 2022, Holdco distributed its ownership in each of Berzelius, Apex and Amprius Energy to its stockholders. Thereafter, Holdco’s sole material asset was its interest in Legacy Amprius. As a result of the Business Combination, Holdco became Amprius’ majority stockholder, with control over the election of directors and other matters requiring stockholder approval. Holdco is owned by a number of stockholders, many of whom continue to drive Amprius’ growth as employees and members of its management team.

The mergers will result in the Holdco stockholders owning their shares in Amprius directly rather than through Holdco. Holdco and Amprius believe that the mergers will create more opportunities for Amprius and maximize long-term stockholder value, including by improving corporate governance and enhancing Amprius’ public float and liquidity. For a discussion of Amprius’ and Holdco’s reasons for the mergers, please see the section titled “The Mergers—Amprius Reasons for the Mergers” and “The Mergers—Holdco Reasons for the Mergers” in this proxy statement/prospectus.

Q: What are the mergers?

A: Amprius, Merger Sub I, Merger Sub II and Holdco entered into the merger agreement on May 9, 2023. The merger agreement contains the terms and conditions of the proposed mergers involving Amprius and Holdco. Under the merger agreement, Merger Sub I will merge with and into Holdco, with Holdco surviving as a wholly owned subsidiary of Amprius, following which Holdco will then merge with and into Merger Sub II, with Merger Sub II surviving as a wholly owned subsidiary of Amprius, which we refer to as the “surviving entity.”

Prior to the effective time of the first merger, which we refer to as the “first effective time,” in accordance with the applicable provisions of Holdco’s amended and restated certificate of incorporation, (i) each share of Holdco’s voting preferred stock (comprised of Holdco’s Series A preferred stock, Series B preferred stock, Series C preferred stock and Series E-2 preferred stock) will be automatically converted into one share of Holdco’s Class A common stock, and (ii) each share of Holdco’s non-voting preferred stock (comprised of Holdco’s Series B-NV preferred stock, Series C-NV preferred stock, Series D-1 preferred stock, Series E preferred stock and Series E-1 preferred stock) will be automatically converted into one share of Holdco’s Class B common stock (the conversions in the foregoing clauses (i) and (ii), collectively, the “pre-closing conversion”).

 

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At the first effective time, by virtue of the first merger, each share of Holdco’s Class A common stock and Holdco’s Class B common stock issued and outstanding immediately prior to the first effective time will be automatically converted into the right to receive the applicable portion of the Per Share Merger Consideration (as defined below) to be calculated in accordance with a discounted exchange ratio. Based on an assumed discounted exchange ratio of 0.7056 (the “Discounted Exchange Ratio”) and other assumptions described under “—What will Holdco’s stockholders and option holders receive in the mergers?”, it is expected that the “Per Share Merger Consideration” will be comprised of 29,363,779 shares of Amprius’ common stock and 28,606,816 shares of Amprius’ non-voting common stock. Pursuant to the merger agreement, at the first effective time, each option to purchase Holdco stock that is outstanding immediately prior to the first effective time, whether vested or unvested, will be converted into an option to purchase a number of shares of Amprius’ common stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Holdco’s Class A common stock subject to such Holdco option immediately prior to the first effective time and (y) the Discounted Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Holdco option immediately prior to the first effective time divided by (B) the Discounted Exchange Ratio. In addition, each Holdco warrant to purchase Holdco stock outstanding immediately prior to the first effective time will be canceled and automatically replaced, without any further action required on the part of the holder, with warrants representing the right to receive, on a net exercise basis, a number of shares of Amprius’ common stock equal to (x) the Discounted Exchange Ratio multiplied by the number of shares of Holdco’s Class A common stock underlying such Holdco warrant, minus (y) the aggregate exercise price of such Holdco warrant divided by $8.71, rounded to the nearest whole share.

At the effective time of the second merger, which we refer to as the “second effective time,” by virtue of the second merger, (i) each share of Holdco (as the surviving entity of the first merger) common stock issued and outstanding immediately prior to the second effective time will be cancelled and cease to exist and (ii) the membership interests of Merger Sub II outstanding immediately prior to the second effective time will be converted into and become the membership interests of the surviving entity, which will constitute 100% of the outstanding interests of the surviving entity.

Following the mergers, Amprius’ stockholders (other than Holdco) will continue to own and hold their existing shares of Amprius common stock, and all outstanding and unexercised warrants and options to purchase shares of Amprius’ common stock will remain in effect pursuant to their terms.

Q: Why am I receiving this proxy statement/prospectus?

A: You are receiving this proxy statement/prospectus because you have been identified as a stockholder of Amprius as of the record date, or a stockholder of Holdco eligible to execute the Holdco written consent. If you are a stockholder of Amprius, you are entitled to vote at Amprius’ stockholder meeting (referred to herein as the “Amprius special meeting”) to approve Proposal Nos. 1, 2 and 3. If you are a stockholder of Holdco, you are being requested to sign and return the Holdco written consent to adopt the merger agreement and approve the transactions contemplated thereby, including the mergers.

This document serves as:

 

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a proxy statement of Amprius used to solicit proxies for the Amprius special meeting; and

 

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a prospectus of Amprius used to offer shares of Amprius’ common stock and non-voting common stock and warrants to purchase Amprius’ common stock to be issued in connection with the mergers.

In addition, promptly after the second effective time, Amprius intends to file with the Securities and Exchange Commission, which we refer to as the “SEC,” (i) a registration statement on Form S-8 relating to the shares of Amprius common stock issuable upon exercise of certain options to purchase shares of Holdco’s common stock assumed by Amprius pursuant to the merger agreement and (ii) pursuant to Amprius’ registration rights agreement, a registration statement relating to the resale of certain shares of Amprius common stock issued

 

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pursuant to the merger agreement and shares issuable upon exercise of certain options assumed by Amprius pursuant to the merger agreement.

Q: What is required to consummate the mergers?

A: To consummate the mergers, Amprius’ stockholders must approve Proposal Nos. 1 and 2.

Proposal No. 1, the approval of the mergers and the issuance of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder pursuant to the merger agreement, requires the affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter. Proposal No. 2, the approval of the proposed charter in the form attached as Annex B to this proxy statement/prospectus, requires the affirmative vote of holders of at least two-thirds of the voting power of the outstanding shares of Amprius’ common stock as of the record date. In addition, the affirmative vote of a majority of the shares of outstanding common stock held by the Unaffiliated Stockholders is required to approve Proposal Nos. 1 and 2. The foregoing votes of the Amprius stockholders are referred to as the “Amprius Requisite Stockholder Approval.” Each of Proposal Nos. 1 and 2 are conditioned upon each other. Therefore, the mergers cannot be consummated without the Amprius Requisite Stockholder Approval in favor of Proposal Nos. 1 and 2. Holdco, which owns approximately 77% of the outstanding Amprius common stock, is party to a support agreement with Amprius, which we refer to as the “Amprius Support Agreement,” pursuant to which, among other things, Holdco has agreed to vote in favor of the approval and adoption of the merger agreement, the proposed charter, the mergers and the other transactions at the time specified therein. Such shares will not be counted as part of the Unaffiliated Stockholder vote but will be included for, among other things, the purposes of establishing a quorum. The Amprius Support Agreement also prohibits transfers of Amprius capital stock except in limited circumstances.

To consummate the mergers, the Holdco stockholders must (i) adopt and approve the merger agreement and the transactions contemplated thereby (including the pre-closing conversion) by an affirmative vote and consent of the majority of the outstanding shares of each of (a) Holdco’s voting preferred stock and the non-voting preferred stock (voting as a single class and on an as-converted basis), (b) Holdco’s Series D-1 preferred stock and combined Series E preferred stock (voting as a single class and on an as-converted basis) and (c) Holdco’s combined Series C preferred stock (voting as a single class and on an as-converted basis) and (ii) after giving effect to the pre-closing conversion, approve and adopt the merger agreement and the transactions contemplated thereby (including the conversion of Holdco securities at the first effective time, which we refer to as the “Conversion of Securities”) by an affirmative vote and consent of the majority of the outstanding shares of each of (x) Holdco’s Class A common stock, (y) Holdco’s Class B common stock and (z) Holdco’s common stock, which we collectively refer to, with respect to all of the foregoing, as the “Holdco Requisite Stockholder Approval.”

In connection with the execution of the merger agreement, certain stockholders of Holdco entered into a support agreement, which we refer to as the “Stockholder Support Agreement,” with Amprius and Holdco, which stockholders collectively own approximately (i) (a) 78% of Holdco’s voting preferred stock and the non-voting preferred stock (voting as a single class and on an as-converted basis), (b) 72% of Holdco’s Series D-1 preferred stock and combined Series E preferred stock (voting as a single class and on an as-converted basis) and (c) 96% of Holdco’s combined Series C preferred stock (voting as a single class and on an as-converted basis) and (ii) after giving effect to the pre-closing conversion, (x) 67% of Holdco’s Class A common stock, (y) 85% of Holdco’s Class B common stock and (z) 76% of Holdco’s common stock. The Stockholder Support Agreement provides, among other things, that the Holdco stockholders party thereto will (i) vote or act by written consent in favor of the approval and adoption of the merger agreement, the mergers and the other transactions contemplated by the merger agreement, including the pre-closing conversion (including without limitation by executing the Holdco written consent) and (ii) vote against, and withhold consent with respect to, approval of any proposal,

 

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transaction, agreement or action, without regard to the terms of such proposal, transaction, agreement or action, made in opposition to, in competition with or inconsistent with, the merger agreement, the mergers or the other transactions contemplated by the merger agreement. The Stockholder Support Agreement also prohibits transfers of Holdco capital stock except in limited circumstances. For a more complete description of the closing conditions under the merger agreement, we urge you to read the section titled “The Merger Agreement—Conditions to the Completion of the Mergers” in this proxy statement/prospectus.

Q: What will happen to Amprius if, for any reason, the mergers do not close?

A: Failure to obtain the Amprius Requisite Stockholder Approval and the Holdco Requisite Stockholder Approval may result in a material delay in, or the abandonment of, the mergers. If the mergers are not completed, Amprius and Holdco each may lose all of the intended benefits of the mergers. If the mergers are not completed, Holdco will continue to be Amprius’ controlling stockholder. In addition, Amprius and Holdco will have incurred substantial expenses for which no ultimate benefit will have been received by either company. See “Risk Factors—Risks Related to the Mergers” for more information.

Q: What will Holdco’s stockholders and option holders receive in the mergers?

A: Prior to the first effective time, (i) each share of Holdco’s voting preferred stock will be automatically converted into one share of Holdco’s Class A common stock and (ii) each share of Holdco’s non-voting preferred stock will be automatically converted into one share of Holdco’s Class B common stock. At the first effective time, by virtue of the first merger, each share of Holdco’s Class A common stock and Holdco’s Class B common stock issued and outstanding immediately prior to the first effective time will be automatically converted into the right to receive the applicable portion of the Per Share Merger Consideration. The Per Share Merger Consideration will be calculated in accordance with the Discounted Exchange Ratio as set forth in an allocation certificate as described in more detail in the merger agreement. In addition, at the first effective time, each option to purchase Holdco stock that is outstanding immediately prior to the first effective time, whether vested or unvested, will be converted into an option to purchase a number of shares of Amprius’ common stock and each Holdco warrant to purchase Holdco stock outstanding immediately prior to the first effective time will be canceled and automatically replaced with warrants representing the right to receive, on a net exercise basis, shares of Amprius’ common stock.

Based on the assumptions set forth below, immediately after the mergers, (i) Holdco’s stockholders as of immediately prior to the first effective time will own approximately 74% of the outstanding capital stock of Amprius, comprised of 59% of Amprius’ common stock and 100% of Amprius’ non-voting common stock, as compared to the 77% of Amprius’ common stock currently held by Holdco, (ii) the percentage of Amprius’ outstanding capital stock held by current stockholders (other than Holdco) will increase from approximately 23% before the mergers to 26% immediately after the mergers (or, on a fully-diluted basis, from 55.6% to 55.8%) and (iii) the directors and officers of Amprius, all of whom are expected to continue to be the directors and executive officers of the combined organization following the closing of the mergers, will collectively beneficially own 14% of the outstanding capital stock of Amprius, which is expected to represent 22% of the voting power of Amprius, as none of the shares owned by the directors and executive officers of Amprius will be non-voting common stock. For more information, see the section titled “Principal Stockholders of the Combined Organization.”

Unless otherwise specified, the voting and economic interests of Holdco’s stockholders and Amprius’ directors and officers immediately after the mergers assumes the following:

 

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no stockholders of Holdco exercise or have a continuing right to exercise their appraisal rights;

 

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at the closing of the mergers, 29,363,779 shares of Amprius common stock and 28,606,816 shares of Amprius non-voting common stock are issued to Holdco’s stockholders, the options to purchase Holdco’s common stock convert into options to purchase an aggregate of 7,025,652 shares of Amprius common stock and the warrants to purchase Holdco’s stock convert into warrants to purchase an aggregate of 20,153 shares of Amprius common stock;

 

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for purposes of calculating the economic interests of Holdco’s stockholders immediately after the mergers, that none of Holdco’s stockholders hold any shares of Amprius common stock other than the shares to be issued in connection with the mergers;

 

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that there are no other issuances of equity interests of Amprius or Holdco prior to or in connection with the mergers; and

 

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that there are no issuances or exercises of options or warrants to purchase Holdco’s common stock or Amprius’ common stock prior to or in connection with the mergers.

The assumptions set forth above are based on a “Discounted Exchange Ratio” of 0.7056, calculated by multiplying 0.98 by the “Exchange Ratio” of 0.72, which is calculated by obtaining the result of the following formula (rounded down to two decimal places):

 

		((A x B) + C + D) ÷ E
		B

where

A = The total number of Amprius shares owned by Holdco, which is 65,515,552.

B = $8.71.

C = The aggregate exercise price of all options to purchase Holdco’s common stock options (whether vested or unvested) and all the Holdco warrants to the extent issued and outstanding as of immediately prior to the first effective time, which we assume to be $14,709,223.25.

D = cash and cash equivalents held by Holdco, which we assume to be $100,000, minus (i) indebtedness of Holdco, which we assume there is none, and (ii) outstanding expenses incurred by Holdco in the mergers, which we assume to be $380,000.

E = The total number of fully-diluted shares of Holdco, which was 92,143,424 shares as of the date of the merger agreement.

If the actual facts differ from the assumptions set forth above, the resulting Exchange Ratio and Discounted Exchange Ratio will be different.

Further, unless otherwise specified, the voting and economic interests of Holdco’s stockholders and Amprius’ directors and officers set forth in this proxy statement/prospectus is based on 85,673,465 shares of Amprius common stock outstanding as of June 14, 2023 and excludes the following:

 

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13,832,769 shares of Amprius common stock issuable upon the exercise of outstanding options under the Amprius Technologies, Inc. 2016 Equity Incentive Plan, which we refer to as the “2016 Plan,” with a weighted average exercise price of $1.35 per share;

 

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16,400,000 shares of Amprius common stock issuable upon the exercise of Amprius’ private warrants, with an exercise price of $11.50 per share;

 

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29,268,236 shares of Amprius common stock issuable upon the exercise of Amprius’ public warrants, with an exercise price of $11.50 per share;

 

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2,052,500 shares of Amprius common stock issuable upon the exercise of Amprius’ warrants issued as part of units in a private placement in connection with the Business Combination (such private placement, the “PIPE” and the warrants issued in the PIPE, the “PIPE warrants”);

 

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13,733,248 shares of Amprius common stock reserved for future issuance under the Amprius Technologies, Inc. 2022 Equity Incentive Plan, which we refer to as the “2022 Plan;”

 

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479,646 shares of Amprius common stock issuable upon the vesting of outstanding restricted stock units granted under the 2022 Plan; and

 

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1,836,101 shares of Amprius common stock reserved for future issuance under the Amprius Technologies, Inc. 2022 Employee Stock Purchase Plan, which we refer to as the “ESPP.”

For a more complete description of what Holdco’s stockholders and option holders will receive in the mergers, please see the section titled “The Merger Agreement—Merger Consideration” in this proxy statement/prospectus.

Q: What will Amprius’ stockholders, option holders and warrant holders receive in the mergers?

A: At the second effective time, Amprius’ stockholders other than Holdco will continue to own and hold their existing shares of Amprius’ common stock, and all outstanding and unexercised options and warrants to purchase shares of Amprius’ common stock will remain in effect pursuant to their terms.

Q: Who will be the directors and executive officers of Amprius following the mergers?

A: In connection with the mergers, there will be no change to the directors or executive officers of Amprius. Following the closing of the mergers, Amprius’ directors and executive officers will continue to be as follows:

 

Name		Age(1)				Position
Dr. Kang Sun			68			President, Chief Executive Officer and Class III Director
Donald R. Dixon			75			Chair and Class III Director
Kathleen Ann Bayless			66			Class I Director
Dr. Wen Hsieh			50			Class I Director
Dr. Steven Chu			75			Class II Director
Mary Gustanski			61			Class II Director
Justin Mirro			54			Class II Director
Sandra Wallach			58			Chief Financial Officer
Jonathan Bornstein			65			President of Amprius Lab
Dr. C. Ionel Stefan			51			Chief Technology Officer

 

(1)	Ages shown are as of June 14, 2023.

Q: Did the Amprius special committee have a financial advisor?

A: On May 8, 2023, Houlihan Lokey Capital, Inc., which we refer to as “Houlihan Lokey,” verbally rendered its opinion to the special committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the special committee dated May 8, 2023) to the effect that the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement was fair to Amprius from a financial point of view.

Houlihan Lokey’s opinion was directed to the special committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to Amprius of the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement and did not address any other aspect or implication of the mergers or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex D to this proxy statement/prospectus and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, a recommendation to the special committee, the Amprius Board, any security holder of Amprius or any other person as to how to act or vote with respect to any matter relating to the mergers.

 

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For a more complete description, see the section of this proxy statement/prospectus captioned “The Mergers—Opinion of the Special Committee’s Financial Advisor.”

Q: Did the Holdco Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the mergers?

A: The Holdco Board did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the mergers. The Holdco Board believes that, based upon the financial skills and background of its directors, it was qualified to conclude that the mergers were fair from a financial perspective to its stockholders. Accordingly, Holdco stockholders will be relying on the judgment of the Holdco Board as described above in valuing Amprius’ business and assuming the risk that the Holdco Board may not have properly valued such business.

Q: How does the Amprius Board recommend that I, as a stockholder of Amprius, vote?

A: After careful consideration, on May 8, 2023, a special committee of the Amprius Board, comprised of Justin Mirro, as the sole independent and disinterested director of Amprius, which we refer to as the “special committee,” (i) determined that the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, are advisable and are fair to, and in the best interests of, Amprius and the Unaffiliated Stockholders and (ii) recommended that the Amprius Board approve and adopt the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, and recommend that Amprius’ stockholders approve and adopt the same.

On May 9, 2023, and based in part upon the recommendation of the special committee, the Amprius Board unanimously (i) determined that the merger agreement, the mergers and the other transactions contemplated by the merger agreement, are advisable and are fair to, and in the best interests of, Amprius and its stockholders (including the Unaffiliated Stockholders), (ii) approved and declared advisable the mergers and the other transactions contemplated by the merger agreement, including the mergers, the issuance of Amprius common stock, non-voting common stock, options and warrants in connection with the mergers, the amendment and restatement of Amprius’ certificate of incorporation and the amendment and restatement of Amprius’ bylaws, (iii) approved and authorized each of the transaction documents, including the merger agreement, and (iv) recommended that the stockholders of Amprius approve the merger agreement and the transactions contemplated thereby, including the mergers, the issuance of Amprius common stock, non-voting common stock, options and warrants in connection with the mergers and the amendment and restatement of Amprius’ certificate of incorporation. The Amprius Board accordingly recommends that the Amprius stockholders vote:

 

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“FOR” Proposal No. 1 to approve and adopt the merger agreement and the transactions contemplated thereby, including the mergers and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder in connection with the mergers;

 

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“FOR” Proposal No. 2 to approve and adopt the proposed charter to authorize a new class of non-voting common stock; and

 

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“FOR” Proposal No. 3 to, if necessary, adjourn the Amprius special meeting if a quorum is present, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 or 2.

 

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Q: What interests do Amprius’ directors and officers have in the mergers?

A: Amprius’ directors and officers may have interests in the mergers that are different from, in addition to or in conflict with, yours. These interests include, among other things:

 

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Certain executive officers and directors of Amprius have a direct or indirect ownership interest in Holdco capital stock, the treatment of which is described in the section titled “The Mergers—Merger Consideration,” and “The Merger Agreement—Merger Consideration,” which descriptions are incorporated herein by reference. As of June 14, 2023, the following executive officers and directors of Amprius have a direct or indirect ownership interest in Holdco capital stock: Donald R. Dixon and Dr. C. Ionel Stefan.

 

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Certain of Amprius’ executive officers and non-employee directors hold options to purchase shares of Holdco common stock, which will be assumed by Amprius upon the closing of the mergers. The treatment of such equity awards in connection with the mergers is described in the section entitled “The Merger Agreement—Treatment of Holdco’s Option Awards,” which description is incorporated by reference herein. As of June 14, 2023, the following executive officers and directors hold options to purchase shares of Holdco common stock: Dr. Steven Chu, Dr. Kang Sun, Jonathan Bornstein and Dr. C. Ionel Stefan.

See the sections titled “The Mergers—Interests of Amprius Directors and Executive Officers in the Mergers—Ownership Interests in Holdco” and “The Mergers—Treatment of Holdco Equity Awards” for more information.

Q: What interests do Holdco’s directors and officers have in the mergers?

A: Holdco’s directors and officers may have interests in the mergers that are different from, in addition to or in conflict with, yours. These interests include, among other things, that certain of Holdco’s executive officers and non-employee directors have a direct or indirect ownership interest in Holdco capital stock and hold options to purchase shares of Holdco Class A common stock, which will be assumed by Amprius upon the closing of the mergers. The treatment of such equity awards in connection with the mergers is described in the section entitled “The Merger Agreement—Treatment of Holdco’s Option Awards.” As of June 14, 2023, the following Holdco executive officers and directors have a direct or indirect ownership interest in Holdco capital stock: Donald R. Dixon, Dr. Yi Cui and Alan Salzman. As of June 14, 2023, the following Holdco executive officers and directors hold options to purchase shares of Holdco Class A common stock: Dr. Kang Sun, William Deihl and Dr. Steven Chu.

See the section titled “The Mergers—Interests of Holdco Directors and Executive Officers in the Mergers—Ownership Interests in Holdco” and “—Treatment of Holdco Equity Awards” for more information.

Q: As a stockholder of Holdco, how does the Holdco Board recommend that I vote?

A: After careful consideration, the Holdco Board recommends that Holdco’s stockholders execute the Holdco written consent indicating their vote:

 

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in favor of the adoption of the merger agreement and all related agreements attached to the merger agreement; and

 

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in favor of the approval of the pre-closing conversion, the conversion of Holdco’s securities in the mergers and the other transactions contemplated by the merger agreement.

Q: What risks should I consider in deciding whether to vote in favor of the mergers or to execute and return the Holdco written consent, as applicable?

A: You should carefully review the section of this proxy statement/prospectus titled “Risk Factors,” which sets forth certain risks and uncertainties related to the mergers, risks and uncertainties to which the combined

 

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organization’s business will be subject, and risks and uncertainties to which each of Amprius and Holdco, as an independent company, is subject.

Q: When do you expect the mergers to be consummated?

A: We anticipate that the mergers will occur during the third quarter of 2023, soon after the Amprius special meeting to be held on July 26, 2023, but we cannot predict the exact timing. For more information, please see the section titled “The Merger Agreement—Conditions to the Completion of the Mergers” in this proxy statement/prospectus.

Q: What are the material U.S. federal income tax consequences of the mergers to U.S. Holders of Holdco shares?

A: A U.S. Holder (as defined below) of Holdco’s common stock more likely than not will not recognize any gain or loss for U.S. federal income tax purposes on the exchange of shares of Holdco common stock for shares of Amprius common stock in the mergers.

Please review the information in the section titled “The Mergers—Material U.S. Federal Income Tax Consequences of the Mergers” for a more complete description of the material U.S. federal income tax consequences of the mergers to U.S. Holders of Holdco common stock. The tax consequences to you of the mergers will depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you of the mergers, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws.

Q: What do I need to do now?

A: Amprius and Holdco urge you to read this proxy statement/prospectus carefully, including its annexes, and to consider how the mergers affect you.

If you are a stockholder of Amprius as of the record date, you may provide your proxy instructions in one of four different ways. First, you can mail your signed proxy card in the enclosed return envelope. Second, you may provide your proxy instructions via phone by following the instructions on your proxy card or voting instruction form. Third, you may provide your proxy instructions via the internet by following the instructions on your proxy card or voting instruction form. Finally, you may vote online at the Amprius special meeting, as described below. Please provide your proxy instructions only once, unless you are revoking a previously delivered proxy instruction, and as soon as possible so that your shares can be voted at the Amprius special meeting.

If you are a stockholder of Holdco, you may execute and return your Holdco written consent to Holdco in accordance with the instructions provided by Holdco.

Q: What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable?

A: If you are a stockholder of Amprius as of the record date, the failure to return your proxy card or otherwise provide proxy instructions (a) will have the same effect as voting against Proposal Nos. 1 and 2, (b) will reduce the aggregate number of votes required to approve Proposal No. 3 and (c) your shares will not be counted for purposes of determining whether a quorum is present at the Amprius special meeting.

Q: May I vote virtually at the Amprius special meeting of stockholders of Amprius?

A: If your shares of Amprius’ common stock are registered directly in your name with Amprius’ transfer agent as of the record date, you are considered to be the stockholder of record with respect to those shares, and the proxy materials and proxy card are being sent directly to you by Amprius. If you are a stockholder of record

 

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of Amprius as of the record date, you may attend the Amprius special meeting virtually and vote your shares online. Even if you plan to attend the Amprius special meeting virtually, Amprius requests that you sign and return the enclosed proxy to ensure that your shares will be represented at the Amprius special meeting if you become unable to attend.

If your shares of Amprius’ common stock are held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you by your broker or other nominee together with a voting instruction card. As the beneficial owner, you are also invited to attend the Amprius special meeting. Because a beneficial owner is not the stockholder of record, you may not vote these shares virtually at the Amprius special meeting unless you obtain a proxy from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the Amprius special meeting.

Q: When and where is the Amprius special meeting of Amprius’ stockholders?

A: The Amprius special meeting will be held at 10:00 a.m., local time, on July 26, 2023 via live webcast at www.virtualshareholdermeeting.com/AMPX2023SM, unless postponed or adjourned to a later date. All of Amprius’ stockholders as of the record date, or their duly appointed proxies, may attend the Amprius special meeting. In order to participate in the meeting, you must access the meeting website at www.virtualshareholdermeeting.com/AMPX2023SM, and enter the 16-digit control number found on the proxy card provided to you with this proxy statement/prospectus. Stockholders who attend the Amprius special meeting via live webcast will be able to participate, vote shares electronically and submit questions prior to and during the meeting.

Q: If my Amprius shares are held in “street name” by my broker, will my broker vote my shares for me?

A: Unless your broker has discretionary authority to vote on certain matters, your broker will not be able to vote your shares of Amprius’ common stock without instructions from you. Brokers are not expected to have discretionary authority to vote for any of the proposals. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.

Q: May I change my vote after I have submitted a proxy or provided proxy instructions?

A: Yes. An Amprius stockholder can revoke its proxy at any time before the final vote at the Amprius special meeting. If you are the record holder of your shares, you may revoke your proxy in any one of the following ways:

 

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You may submit another properly completed proxy card with a later date.

 

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You may grant a subsequent proxy through the internet.

 

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You may send a timely written notice that you are revoking your proxy to Amprius’ Corporate Secretary at 1180 Page Avenue, Fremont, California 94538.

 

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You may attend the Amprius special meeting virtually and vote online. Simply attending the meeting will not, by itself, revoke your proxy.

Your most current proxy card or internet proxy is the one that is counted.

If your shares are held by your broker, bank or other agent, you should follow the instructions provided by your broker, bank or other agent.

Q: Who is paying for this proxy solicitation?

A: Amprius is responsible for the cost of the printing and filing of this proxy statement/prospectus and the proxy card. Amprius has engaged D.F. King & Co., Inc. (“D.F. King”) to assist in the solicitation of proxies for the special meeting. Amprius has agreed to pay D.F. King a fee of $25,000. Amprius will reimburse D.F. King for reasonable out-of-pocket expenses and will indemnify D.F. King and its affiliates against certain claims, liabilities, losses, damages and expenses. Amprius may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners of Amprius’ common stock.

 

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Q: Who can help answer my questions?

A: If you are a stockholder of Amprius and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the mergers, including the procedures for voting your shares, you should contact our proxy solicitor at:

D.F. King & Co., Inc.

48 Wall Street, 22nd Floor

New York, NY 10005

Call Toll-Free: (800)-207-3158

Banks and Brokers Call: (212)-269-5550

AMPX@dfking.com

You may also contact Amprius at:

Amprius Technologies, Inc.

1180 Page Avenue

Fremont, California 94538

Tel: (800) 425-8803

Attn: Sandra Wallach, Chief Financial Officer

If you are a stockholder of Holdco, and would like additional copies, without charge, of this proxy statement/prospectus or if you have questions about the mergers, including the procedures for voting your shares, you should contact:

Amprius, Inc.

1180 Page Avenue

Fremont, California 94538

Tel: (800) 425-8803

Attn: William Deihl, Chief Financial Officer

 

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RISK FACTORS

The combined organization will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with Amprius’ business because these risks may also affect the combined organization — these risks can be found under the heading “Risk Factors—Risks Related to Amprius” in this proxy statement/prospectus and in Amprius’ Annual Report on Form 10-K, as updated by subsequent Quarterly Reports on Form 10-Q, and other documents Amprius has filed with the SEC. You should also read and consider the other information in this proxy statement/prospectus. Please see the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

Risks Related to the Mergers

The mergers are subject to approval of the merger agreement by Amprius’ stockholders and Holdco’s stockholders. Failure to obtain these approvals would prevent the closing of the mergers.

Before the mergers can be completed, the stockholders of each of Amprius and Holdco must approve the merger agreement. The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for Proposal No. 1. The affirmative vote of holders of at least two-thirds of the voting power of the outstanding shares of Amprius’ common stock is required for approval of Proposal No. 2. In addition, the affirmative vote of the holders of a majority of the Unaffiliated Shares is required to approve Proposal Nos. 1 and 2. Although Holdco is party to the Amprius Support Agreement, and certain stockholders of Holdco are party to the Stockholder Support Agreement, there can be no guarantee that the required stockholder approvals, in particular the Unaffiliated Stockholder vote, will be obtained. Failure to obtain the required stockholder approvals may result in a material delay in, or the abandonment of, the mergers. Any delay in completing the mergers may materially adversely affect the timing and benefits that are expected to be achieved from the mergers.

The mergers may be completed even though certain events occur prior to the closing that materially and adversely affect Amprius or Holdco.

The merger agreement does not provide Holdco with the ability to refuse to complete the mergers if there is a material adverse change with respect to the assets or business of Amprius, other than to the extent such adverse change also constitutes a breach of a representation or warranty made by Amprius in the merger agreement.

The merger agreement provides that Amprius may refuse to complete the mergers if there is any event, circumstance, change, development, effect or occurrence that, individually or in the aggregate, has or would reasonably be expected to have, a material adverse effect on the business, condition, assets, liabilities or operations of Holdco, or would prevent, materially delay or materially impede the performance by Holdco of its obligations under the merger agreement or the consummation of the mergers.

If changes occur that are adverse to Amprius or Holdco, and Amprius and Holdco still complete the mergers, the market price of the combined organization’s common stock may suffer. This in turn may reduce the benefits of the mergers to the stockholders of Amprius, Holdco or both.

Some Amprius and Holdco officers and directors have interests in the mergers that are different from the respective stockholders of Amprius and Holdco and that may influence them to support or approve the mergers.

Certain officers and directors of Amprius and Holdco participate in arrangements that provide them with interests in the mergers that are different from the interests of the respective stockholders of Amprius and

 

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Holdco, including, among others, the continued service as an officer and/or director of the combined organization, continued indemnification, and the potential ability to sell an increased number of shares of common stock of the combined organization in accordance with Rule 144 under the Securities Act of 1933, as amended. Certain directors and executive officers of Amprius own Holdco securities or options to purchase Holdco securities, certain directors of Amprius are also directors of Holdco, and Dr. Sun is the Chief Executive Officer of both Amprius and Holdco, although none of Amprius’ directors or executive officers have or share beneficial ownership with respect to any shares of Amprius common stock owned by Holdco.

In addition, all of Holdco’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the merger agreement. These interests, among others, may influence such executive officers and directors of Amprius and Holdco to support or approve the mergers. For more information concerning the interests of Amprius’ and Holdco’s executive officers and directors, see the sections titled “The Mergers—Interests of Amprius Directors and Executive Officers in the Mergers” and “The Mergers—Interests of Holdco Directors and Executive Officers in the Mergers.”

There is no assurance that the efforts of the special committee to evaluate the fairness and effects of the mergers were sufficient.

Because certain officers and directors of Amprius have interests in the mergers that are different from the interests of the respective stockholders of Amprius, a special committee of the Amprius Board, comprised of Justin Mirro, as the sole independent and disinterested director of Amprius, was created for the purpose of evaluating and negotiating the mergers and determining whether the merger agreement and the proposed mergers are in the best interests of Amprius. The special committee, which consulted with its financial and legal advisers, conducted a process to evaluate the proposed mergers and engaged in discussions and negotiations with Holdco and its advisers. Following the conclusion of this process and after receiving input from its financial and legal advisers, the special committee issued its recommendation for the Amprius Board to approve the mergers on the terms of the merger agreement, conditioned on the affirmative vote of the Unaffiliated Stockholders. Notwithstanding the foregoing, there can be no assurance that the efforts of the special committee in connection with the mergers were sufficient, nor can there be an assurance that the Unaffiliated Stockholder vote provides sufficient protection for the minority stockholders. There can be no assurance that the terms of the mergers are fair and in the best interests of Amprius and the Unaffiliated Stockholders, despite the recommendation of the special committee.

If the conditions to the mergers are not met, the mergers will not occur.

Even if the mergers are approved by the stockholders of Amprius and Holdco, specified conditions must be satisfied or waived to complete the mergers. For example, it is a condition to the mergers that Amprius obtain the affirmative vote of the holders of a majority of the Unaffiliated Shares. Satisfaction of this condition cannot be waived by the parties. These conditions are set forth in the merger agreement and described in the section titled “The Merger Agreement—Conditions to the Completion of the Mergers” in this proxy statement/prospectus. Amprius cannot assure you that all of the conditions will be satisfied or waived. If the conditions are not satisfied or waived, the mergers will not occur or will be delayed, and Amprius and Holdco each may lose some or all of the intended benefits of the mergers.

The mergers will involve substantial costs.

Amprius and Holdco have incurred and expect to continue to incur substantial costs and expenses relating directly to the mergers, including fees and expenses payable to financial advisors, other professional fees and expenses, insurance premium costs, fees and costs relating to regulatory filings and notices, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses. If the mergers are not completed, Amprius and Holdco will have incurred substantial expenses for which no ultimate benefit will have been received by either company.

 

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Litigation relating to the mergers could require Amprius or Holdco to incur significant costs and suffer management distraction and could delay or enjoin the mergers.

Amprius and Holdco could be subject to demands or litigation related to the mergers, whether or not the mergers are consummated. Regardless of the merits of any particular claim, such actions may create uncertainty relating to the mergers, or delay or enjoin the mergers, and responding to such actions could divert time, resources and management’s attention away from Amprius’ and/or Holdco’s business operations, as applicable.

In connection with the mergers, Amprius may be indirectly responsible for Holdco’s liabilities.

In connection with the mergers, Holdco will merge with and into a wholly owned subsidiary of Amprius, and Amprius may be indirectly responsible for Holdco’s liabilities. These liabilities could have a material adverse effect on Amprius’ business, financial condition and results of operations to the extent Amprius did not identify such liabilities or underestimated the scope of such liabilities.

In particular, Amprius and Holdco are party to a Tax Sharing Agreement, which applies to taxable periods prior to (and including) the closing of the Business Combination, which we refer to as a “Consolidated Return Year,” in which Holdco and Legacy Amprius were members of a U.S. federal consolidated group. Under the Tax Sharing Agreement with Holdco, Holdco generally would be required to indemnify us for the U.S. federal income tax liabilities of the U.S. federal consolidated group of which Holdco and Legacy Amprius were members (and any similar consolidated, combined or unitary tax group for state tax purposes) for any Consolidated Return Year. Because Holdco will merge with and into a wholly owned subsidiary of Amprius, Amprius will be responsible for any tax liabilities of Holdco, including the U.S. federal income tax liabilities of the U.S. federal consolidated group of which Holdco and Legacy Amprius were members (and any similar consolidated, combined or unitary tax group for state tax purposes) for any Consolidated Return Year. While Holdco and Amprius do not expect any tax liabilities of Holdco prior to or as a result of the mergers to be material, there is a risk that a taxing authority will disagree, in which case Amprius’ effective tax rate may increase.

If the mergers do not qualify as a tax-free “reorganization”, the mergers may be taxable event for holders of shares of Holdco capital stock.

The mergers are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” There can be no assurance that the IRS will not challenge the intended tax treatment of the mergers and, if challenged, that a court would not sustain the IRS’s position. If the mergers do not qualify as a tax-free “reorganization” under Section 368(a) of the Code, then the mergers will be a taxable event for holders of Holdco capital stock. For more information on the material U.S. federal income tax consequences of the mergers, see “The Mergers—Material U.S. Federal Income Tax Consequences of the Mergers.”

Risks Related to Amprius

These risk factors are not exhaustive, and investors are encouraged to perform their own investigation with respect to the business, financial condition, prospects and results of operations of Amprius. Unless the context otherwise requires, all references in this subsection “—Risks Related to Amprius” to “we,” “us” or “our” refer to Amprius.

Risks Related to Our Technology, Products and Manufacturing

If our batteries fail to perform as expected, our ability to develop, market and sell our batteries would be adversely affected.

Our batteries may contain defects in design and manufacture that may cause them to not perform as expected or that may require repairs, recalls and design changes. Our batteries are inherently complex and

 

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incorporate technology and components that have not been used for certain applications and that may contain defects and errors, particularly when first introduced to such applications. Although our batteries undergo quality control testing prior to release for shipment, there can be no assurance that we will be able to detect and fix all defects prior to shipment, and nonconformances, defects or errors could occur or be present in batteries that we release for shipment to customers. If our batteries fail to perform as expected, our customers may delay deliveries, our customer may terminate orders or we may initiate product recalls, each of which could adversely affect our sales and brand and could adversely affect our business, financial condition, prospects and results of operations.

Our battery architecture is different from our peers’ and may behave differently in customer use applications, certain applications of which we have not yet evaluated. This could limit our ability to deliver to certain applications. In addition, our historical data on the performance and reliability of our batteries is limited, and therefore our batteries could fail unexpectedly in the field resulting in significant warranty costs or brand damage in the market. Further, the silicon anode structure of our battery is different from traditional lithium-ion batteries and therefore our batteries could be susceptible to different and unknown failure modes leading our batteries to fail and cause a safety event in the field. Such an event could result in the failure of our end customers’ product as well as the loss of life or property, resulting in severe financial penalties for us, including the loss of revenue, cancellation of supply contracts and the inability to win new business due to reputational damage in the market. In addition, some of our supply agreements require us to bear certain costs relating to recalls and replacements of end products when such recalls and replacements are due to defects of our battery products that are incorporated in such end products.

We may not succeed in developing a new high-volume manufacturing line that meets our requirements for cell quality, yield, throughput and other performance metrics. Additionally, assuming we are able to develop a high-volume manufacturing line, it may be unreliable, require regular and significant maintenance and could be capital and resource intensive to operate.

To date, we have manufactured on a kWh-scale capacity. Our ability to manufacture our batteries at scale depends on the successful development of an automated, high-volume manufacturing line for our silicon anode that meets our requirements for cell quality, throughput, yield, and other performance metrics. Currently, we do not have a manufacturing line capable of producing our silicon anode batteries at scale. As part of our manufacturing expansion plans, in addition to designing and building a GWh-scale manufacturing facility, we are in the process of developing an automated, high-volume manufacturing line.

Although we have received our first large-scale anode production machine, we are customizing the machine for our production processes and must then complete tuning and testing before the machine goes online for production purposes. There is no guarantee that the customization, development and implementation of this manufacturing line will be successful. In addition, there is no guarantee that we will be able to correspondingly expand our manufacturing capacity for other battery components following the installation and implementation of such large-scale anode production machine. We and our potential suppliers and other equipment vendors may encounter significant engineering challenges, performance issues, delays, unforeseen development costs and other obstacles in building the high-volume manufacturing line, and if we are not successful, or if we encounter significant delays, our business, financial condition, prospects and results of operations would be adversely affected.

In addition, in order for us to produce our batteries at scale and at a cost advantage, we must achieve levels of quality, throughput, and yield demonstrated for mature battery production. As we have not produced our batteries at scale, our ability to achieve such rates is untested and subject to significant constraints and uncertainties. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, failures by suppliers to deliver necessary components of our batteries in a timely manner and at prices and volumes acceptable to us, environmental hazards and remediation costs, costs associated with commissioning of machines, difficulty or delays in obtaining governmental permits,

 

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damages or defects in electronic systems, industrial accidents, fires, seismic activity and natural disasters, and problems with equipment vendors. Should operational risks materialize, they may result in lower yield, which would negatively affect our revenue growth and profitability.

Additionally, the development of the manufacturing line will require us to make intensive capital expenditures before we are able to benefit from such development. The manufacturing line may also suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Further, unexpected equipment malfunctions may significantly affect the intended operational efficiency, thus materially and adversely affecting our business, financial condition, prospects and results of operations.

We may not meet our manufacturing cost targets, which would limit the size of our market opportunities.

We will require significant capital to develop and grow our business and expect to incur significant expenses, including those relating to the expansion of our manufacturing capacity, development of our high-volume manufacturing line, raw material procurement, leases, sales and distribution as we build our brand and market our batteries, and general and administrative costs. Our profitability will not only depend on our ability to successfully market our batteries, but also our ability to control our costs. Some of the processes in the manufacturing of our silicon anodes require chemical vapor deposition (“CVD”), for which equipment is more costly than those involved in standard anode production techniques. If we are unable to cost efficiently design, manufacture, market, sell and distribute our batteries, our margins, profitability and prospects would be materially and adversely affected. We have not yet commenced high-volume production of our batteries, and any cost advantage for the production of our batteries at scale, compared to conventional lithium-ion batteries, will require us to manufacture at rates of cell quality, throughput, and yield demonstrated for mature batteries and battery material that we have not yet achieved. If we are unable to achieve these targeted rates, our business will be adversely impacted.

We rely on, and will continue to rely on, complex equipment for our operations, and production involves a significant degree of risk and uncertainty in terms of operational performance and costs.

We rely heavily on, and will continue to rely heavily on, complex equipment for our operations and the production of our batteries, which involves a significant degree of uncertainty and risk in terms of operational performance and costs. Our manufacturing equipment consists of many components, which may suffer unexpected malfunctions from time to time and may depend on repairs and spare parts to resume operations, which may not be available when needed. Problems with our manufacturing processes could result in the loss of manufacturing equipment, damage to manufacturing facilities, monetary losses, delays, unanticipated fluctuations in production and personal injury to or death of workers. Should these precautions be inadequate or an event be larger than expected, we could have significant equipment or facility damage that would impact our ability to deliver our battery products and require additional cash to recover. In addition, in some cases, operational problems may result in environmental damage, administrative fines, increased insurance costs and potential legal liabilities. Any of these operational problems, or a combination of them could have a material adverse effect on our cash flows, business, financial condition, prospects or results of operations.

Furthermore, manufacturing technology may evolve rapidly, and we may decide to update our manufacturing processes more quickly than expected. Moreover, as we scale the commercial production of our batteries, our experience may cause us to discontinue the use of already installed equipment in favor of different or additional equipment. The useful life of any equipment that would be retired early as a result would be shortened, causing the depreciation on such equipment to be accelerated, and our results of operations could be negatively impacted.

 

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Our establishment of a volume manufacturing facility is subject to many risks, including, among others, risks relating to re-zoning, construction, permitting, delays, cost overruns, supply chain constraints, and operating in a new geographic area away from our current headquarters.

We currently operate only at a kWh-scale manufacturing capacity. As part of our manufacturing expansion plans, we are in the process of designing a GWh-scale manufacturing facility for our batteries, concurrently with the development of our high-volume manufacturing line for our silicon anode. We may not be successful in establishing our GWh-scale manufacturing facility. On April 15, 2023, we entered into a lease agreement for premises consisting of approximately 774,000 square feet of space located in Brighton, Colorado, and we are in the process of designing and building our GWh-scale manufacturing facility on these premises. The current zoning for this site does not allow for manufacturing our batteries. As such, the landlord is in the process of applying to re-zone the site for our planned development and use. While we expect the re-zoning to be completed by September 2023, the re-zoning application may not be approved and we may not be able to obtain the necessary licenses or permits for the manufacturing facility, which will delay the expected timing for our GWh-scale manufacturing facility. Until the re-zoning is complete, we will not be able to apply for permits required to repurpose the facility for manufacturing. Furthermore, if the re-zoning process is unsuccessful, we expect that we would terminate the lease in accordance with its terms and recommence our search for an alternate location for our expansion efforts, which will delay our operational timeline.

In addition, we will need to operate the manufacturing facility in a new geographic area away from our current headquarters. Our potential suppliers and other equipment vendors may also encounter delays, additional costs, and other obstacles in building our manufacturing line, which are currently unknown. Additionally, although we have tested and validated the performance of our products on one supplier’s platform, there is uncertainty as to whether our planned manufacturing line will be successful. If we fail to complete the construction in an efficient manner, or fail to recruit the required personnel and generally manage our growth effectively, large-scale production of our batteries could be curtailed or delayed.

Achieving capacity at commercial scale of high energy density lithium-ion batteries will require us to make significant and increasing capital expenditures to scale our production capacity and improve our supply chain processes. Further, because our silicon anode process requires different equipment than traditional anode manufacturing, our capital equipment costs are likely to be higher than equipment used for production of graphite anodes. Based on our current expectations, we estimate that our capital equipment expenditures will range between $120.0 million and $150.0 million to achieve 1.0 GWh per year of manufacturing capacity. The actual costs and time to complete our silicon anode process may materially exceed such estimates, if we are able to at all. Even if we are successful in the establishment of the new facility, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, supply chain constraints, natural disasters, including earthquakes, fire, floods and typhoons, power failures, telecommunications failures, break-ins, war, riots, terrorist attacks and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy, or cause the loss or corruption of data or malfunctions of software or hardware, and have a material adverse effect on our business.

We may not succeed in retaining and attracting key employees, particularly technical talent, needed to operate and build our business successfully.

Our success depends on our ability to attract and retain our executive officers, key employees and other qualified personnel, particularly technical talent, and as a relatively small company with key talent residing in a limited number of employees, our operations may be severely disrupted if we lost their services. In particular, we are highly dependent on the services of Dr. Kang Sun, our Chief Executive Officer, and other senior technical and management personnel, including our executive officers, who would be difficult to replace.

If Dr. Sun or any other key personnel were to depart, we may not be able to successfully attract and retain senior leadership necessary to grow our business. As we build our brand and become better known, there is increased risk that competitors or other companies will seek to hire our personnel. The failure to attract, integrate, train, motivate and retain these personnel could seriously harm our business and prospects.

 

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In addition, designing, building and operating our new manufacturing facility and large-scale production tools will require us to hire highly skilled personnel, including battery factory design and operations experts. There are currently a limited number of people with this experience in the United States. Recruiting and training skilled engineers, workers and other laborers will take significant cost and time, and an inability to do so timely or at all would inhibit the successful design, build-out and operation of the new manufacturing facility, thus negatively affecting our business and our results of operations.

Certain of our officers and members of the Amprius Board provide services to Holdco and other entities formerly affiliated with Holdco.

Certain of our officers and members of the Amprius Board provide services to Holdco. Also, Dr. Kang Sun, our Chief Executive Officer, serves on the boards of certain entities that were formerly affiliated with Holdco, including Apex and Berzelius. These entities are developing silicon composite based anodes, batteries and materials that could be competitive to (or components of products competitive to) the products being developed by the Company. In addition, we have purchased, and may continue to purchase raw materials, development materials and finished batteries from Berzelius and Apex. As a result, Dr. Sun could face potential conflicts in his duties to the Company and these other companies, and there could be potential conflicts of interests in our transactions with such entities. If such conflicts of interest are not resolved or result in decisions less favorable to our business or more favorable to the businesses of these other companies, our business and financial results may suffer. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Party Transactions” and “Certain Relationships and Related Party Transactions—Amprius and Holdco Transactions” for more information.

We may encounter delays and technical obstacles in developing new battery products such as different cell formats to meet varied market requirements.

Our customers often require unique battery configurations or custom designs for their products. Once we enter into contracts with customers to produce batteries for their products, we expect to tailor the design of our batteries specifically to the products that these customers manufacture. This development process requires not only substantial lead time between the commencement of design efforts for customized batteries and the commencement of volume shipments of the battery cells to the customer, but also the cooperation and assistance of the customer in order to determine the requirements for each specific application. Technical problems may arise that affect the acceptance of our battery products by the customers. Our ability to tailor our batteries to meet the needs of our customers is affected by whether we can, amongst other things:

 

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receive and maintain necessary intellectual property protections;

 

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obtain governmental approvals and registrations;

 

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comply with governmental regulations;

 

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further develop and refine our technology; and

 

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anticipate customer needs and preferences successfully.

If we are unable to design and develop new battery products that meet our customers’ requirements, we may lose opportunities to obtain purchase orders, and our reputation and prospects may be damaged.

Certain components of our batteries are hazardous and pose safety risks that may cause accidents in our manufacturing facility. We may be subject to financial and reputational risks due to product recalls and product liability claims, and we could face substantial liabilities that exceed our resources.

Due to the high energy density inherent in lithium-ion batteries, our batteries can pose certain safety risks, including the risk of fire. Accidents causing death or personal injury or property damage, can occur, and no high

 

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energy density battery will ever be 100% safe. For example, under certain abuse conditions, lithium-ion batteries can go into thermal runaway, which can result in fire. Although we incorporate safety procedures in the research, development, manufacture and transportation of batteries that are designed to minimize safety risks, the manufacture or use of our battery products may still cause accidents. Any accident, whether occurring at our manufacturing facilities or from the use of our battery products, may result in significant production interruption, delays or claims for substantial damages caused by personal injuries or property damage.

In addition, due to the harsh environments in which batteries are used—extremely low temperature and pressure, and combat for military applications—our batteries go through rigorous testing to ensure safe behavior under abuse-case conditions. Although such tests have been successful to date, we cannot assure you such tests will be successful in the future. If we have to make design changes to address any safety issues, we may have to delay or suspend our planned production, which could materially damage our brand, business, financial condition, prospects and results of operations.

Product liability claims, even those without merit or those that do not involve our battery products, could harm our business, financial condition, prospects and results of operations.

A successful product liability claim against us, resulting from safety issues or otherwise, could require us to pay a substantial monetary award. We may not be able to cover any substantial monetary judgment against us. Moreover, a product liability claim against us or our competitors could generate substantial negative publicity about our battery products and could have a material adverse effect on our brand, business, financial condition, prospects and results of operations.

We may not be able to accurately estimate the future supply and demand for our batteries, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to accurately predict our manufacturing requirements, we could incur additional costs or experience delays.

We anticipate being required to provide forecasts of our demand to our current and future suppliers prior to the scheduled delivery of products to potential customers. Currently, there is limited historical basis for making judgments on the demand for our batteries and our ability to develop, manufacture, and deliver our battery products. Our customers’ final purchase orders may not be consistent with our estimates. If we overestimate our requirements, our suppliers may deliver excess inventory, which indirectly would increase our costs and result in unprofitable sales or write-offs. Given that our batteries are often customized to meet our customers’ specifications, they are susceptible to obsolescence due to their limited shelf life. Because we have no history of large-scale production, we may also be unable to forecast accurately the pace of manufacturing or the take-up of our battery products by our customers.

If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt manufacturing of our battery products and result in delays in shipments and revenues. In addition, lead times for materials and components that our suppliers order may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time. If we fail to order sufficient quantities of battery components in a timely manner, the delivery of our batteries to our potential customers could be delayed, which would harm our business, financial condition and results of operations. Producing additional battery products to make up for any shortages within a short time frame may be difficult, making us unable to fulfill the purchase orders, especially due to the customized nature of our batteries. In either case, our business, financial condition, prospects and results of operations may be adversely affected.

We may not be able to establish supply relationships for necessary materials, components or equipment or may be required to pay more than anticipated for components or equipment, which could negatively impact our business.

We rely on third-party suppliers for components necessary to develop and manufacture our batteries, including key supplies such as our silane gas, substrate foil, electrolytes, separators, and cathode materials. We face risks relating to the availability of these materials and components, including that we will be subject to

 

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demand shortages and supply chain challenges and generally may not have sufficient purchasing power to eliminate the risk of price increases for the raw materials and lines we need. For example, we expect to procure the silane gas needed for our manufacturing from one vendor, a global supplier of silane and silicon materials; however, we expect that they may not be able to supply the volume required for highly scaled production. We are also in the process of collaborating with other key suppliers but have not yet entered into agreements for the supply of scaled production quantities of these materials. To the extent that we are unable to enter into commercial agreements with these suppliers on beneficial terms, or these suppliers experience difficulties ramping up their supply of materials to meet our requirements, high-volume production of our batteries will be delayed and we will not be able to meet our production timelines.

Separately, we may be subject to various supply chain requirements regarding, among other things, conflict minerals and labor practices. We may be required to incur substantial costs to comply with these requirements, which may include locating new suppliers to replace existing ones. We may not be able to find any new suppliers for certain raw materials or components required for our operations, or such suppliers may be unwilling or unable to provide us with products.

We expect to incur significant costs related to procuring materials required to manufacture and assemble our batteries. We expect to use various materials in our batteries that will require us to negotiate purchase agreements and delivery lead-times on advantageous terms. We may not be able to control fluctuation in the prices for these materials or negotiate agreements with suppliers on terms that are beneficial to us. Substantial increases in the prices for our raw materials, or our inability to reduce our raw material costs as we scale, would negatively impact our prospects.

Any disruption in the supply of components or materials could temporarily disrupt research and development activities or production of our batteries until an alternative supplier is able to supply the required material. Changes in business conditions, unforeseen circumstances, governmental changes, and other factors beyond our control or which we do not presently anticipate, could also affect our suppliers’ ability to deliver components to us on a timely basis. Any of the foregoing could materially and adversely affect our business, financial condition, prospects and results of operations.

We are actively monitoring the impacts of Russia’s invasion of Ukraine and continuing to assess its potential to adversely affect our business. Our business has not been directly impacted by this ongoing military conflict, as we have no assets or operations, and we have not purchased materials from, Russia, Belarus or Ukraine. To date, we have not experienced any material disruption in our business. Accordingly, we have not yet taken measures to mitigate potential adverse effects of such conflict. However, the length and outcome of Russia’s invasion of Ukraine is highly unpredictable. The conflict may continue to cause significant market and other disruptions, including significant volatility in commodity prices, supply of components and supply chain interruptions, which could materially and adversely affect our business, financial condition, prospects and results of operations.

Currency fluctuations, geopolitics, trade barriers, embargoes, tariffs or shortages and other general economic or political conditions may limit our ability to obtain key components for our batteries or significantly increase freight charges, raw material costs and other expenses associated with our business, which could materially and adversely affect our business, financial condition, prospects and results of operations.

Risks Related to Our Business and Industry

The battery market is intensely competitive. Competitors include new entrants and established companies, many of which have significantly greater resources than us. Our battery products must compete with advances in new battery chemistries and manufacturing methods as well as continued improvements in conventional batteries and battery anodes.

The battery market in which we compete continues to evolve rapidly and is highly competitive. To date, we have focused our efforts on our silicon anode technology, which is designed to outperform conventional

 

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lithium-ion battery technology and other battery technologies. However, lithium-ion battery technology has been widely adopted and our current competitors have, and future competitors may have, greater resources than us and may also be able to devote greater resources to the development of their current and future technologies. These competitors also may have greater access to customers and may be able to establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their resources and competitive positioning. In addition, lithium-ion battery manufacturers may make improvements in energy density faster than they have historically, continue to reduce cost and expand supply of conventional batteries and therefore reduce our energy density advantage and price premium, which would negatively impact the prospects for our business or negatively impact our ability to sell our battery products at a market-competitive price and with sufficient margins.

There are a number of companies seeking to develop alternative approaches to lithium-ion battery technology. We expect competition in battery technology to intensify. Developments in alternative technologies or improvements in batteries technology made by competitors may materially adversely affect the sales, pricing and gross margins of our batteries. If a competing technology is developed that has superior operational or price performance, our business will be harmed. If we fail to accurately predict and ensure that our battery technology can address customers’ changing needs or emerging technological trends, or if our customers fail to achieve the benefits expected from our silicon anode technology, our business will be harmed.

We expect to commit significant resources to scale our battery manufacturing capacity and maintain a competitive position, and these commitments may be made without knowing whether such investments will result in products potential customers will accept. There is no assurance we will successfully identify new customer requirements, develop and bring our batteries to market on a timely basis, or that products and technologies developed by others will not render our batteries obsolete or noncompetitive, any of which would adversely affect our business, financial condition and results of operations.

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

Our future sales opportunities depend in part on the growth of markets for battery-powered aviation applications. These applications may develop slower or at a size that is less than expected, to the extent they develop at all.

Our growth and future demand for our battery products is dependent in part upon the adoption by consumers of alternative fuel vehicles in general and battery-powered aviation applications in particular. The market for new energy vehicles is still evolving, characterized by changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards, and changing consumer demands and behaviors.

Market estimates and growth forecasts are also subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. For example, if the assumptions that we base our market forecasts on, including the continued development and availability of high performance batteries at a competitive price point, OEM investment in aircraft and software, consumer preference and, with respect to electric air transportation, regulatory approval and the requisite infrastructure, are incorrect, this expected growth may occur slower than expected, if it occurs at all. If the market for battery-powered applications in general does not develop as expected, or develops more slowly than expected, our business, financial condition, prospects and results of operations could be harmed.

 

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Developments in alternative technology or other fossil fuel alternatives may adversely affect the demand for our battery products.

Significant developments in alternative technologies, such as fuel cell technology, advanced diesel, ethanol or natural gas, or breathing batteries, may materially and adversely affect our business, financial condition, prospects and results of operations in ways that we may not currently anticipate. Existing and other battery technologies, fuels or sources of energy may emerge as customers’ preferred alternatives to our battery products. Any failure by us to develop new 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 products, which could result in decreased revenue and adversely affect our prospects.

Our research and development efforts may not be sufficient to adapt to changes in alternative fuels or aviation and electric vehicle (“EV”) technology. As technologies evolve, we plan to develop more efficient manufacturing processes, and advanced battery chemistry, which may also negatively impact the adoption of our other battery products. However, we may not compete effectively with alternative systems if we are not able to develop, source and integrate the latest technology into our battery products.

We have pursued and may continue to pursue development agreements and other strategic alliances, which could have an adverse impact on our business if they are unsuccessful.

We have entered into development agreements and master supply agreements with certain of our customers, and may in the future enter into similar arrangements and development agreements with our customers, including with Airbus and the U.S. Army. While offering potential benefits, these strategic alliances with OEMs and others could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by our partners and costs of establishing and maintaining new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the actions of our partners and, to the extent any of them 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 them. For example, if we rely on our partners’ manufacturing facilities, those operations would be outside of our control. We could experience delays if our partners do not meet agreed-upon timelines or experience capacity constraints, and in turn, we could lose customers and face reputational harm.

Our ability to grow will depend, in part, on our ability to contract with aviation and EV OEMs to incorporate our batteries in their products, which will require significant time and expense, and may not come to fruition.

Our success, and our ability to increase revenue and operate profitably, depends in part on our ability to contract with aviation and EV OEMs. This process will require significant time and resources, especially for incorporation into EVs. For example, EV manufacturers frequently require several years of evaluation prior to incorporating new products, like our batteries, into their EVs. This evaluation process includes, among other things, extensive safety and abuse tests, performance tests and cost modeling. We have not begun this process with any EV manufacturers. Thus, our efforts to expand our manufacturing and sales to OEMs may not be successful, and may never result in products that achieve market acceptance, create additional revenue or become profitable, thus harming our business, financial condition, prospects and results of operations.

Our research and development efforts strive to create products that are on the cutting edge of technology and meeting the evolving requirements of our customers, but competition in our industry is high. To secure acceptance of our battery products, we must also constantly develop and introduce cost-effective, increasingly more scalable silicon anode batteries with enhanced functionality and performance to meet evolving industry standards. If we are unable to retain and grow our existing customer relationships, or convert early trial deployments into meaningful orders, our business, financial condition, prospects and results of operations could be materially adversely affected.

 

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If existing customers do not make subsequent purchases from us or renew their contracts with us, our revenue could decline, and our results of operations would be adversely impacted.

We derive a significant portion of our revenue from existing customers that expand their relationships with us. Increasing the size and number of the deployments of our existing customers is an important part of our growth strategy. We may not be effective in executing this or any other aspect of our growth strategy.

For our customers who individually represent 10% or more of our revenue, three customers together accounted for 76% of our revenue during the three months ended March 31, 2023, three customers together accounted for 90% of our revenue during the three months ended March 31, 2022, four customers together accounted for 73% of our revenue during the year ended December 31, 2022 and two customers together accounted for 80% of our revenue during the year ended December 31, 2021. Certain of our customers, including customers that represent a significant portion of our business, have in the past reduced their spend with us or terminated their agreements with us, which has reduced our anticipated future cash receipts or revenue from these customers. It is not possible for us to predict the future level of demand from our larger customers for our battery products, and there can be no assurance that our existing customers will continue to purchase from us.

Achieving renewal or expansion of deployments may require us to increasingly engage in sophisticated and costly sales efforts that may not result in additional sales. In addition, our customers’ decisions to expand the use of our battery products depends on a number of factors, including general economic conditions, the functioning of our batteries, and our customers’ satisfaction with our battery products. If our efforts to expand within our existing customer base are not successful, our business may suffer.

We may require additional capital to support business growth, and this capital might not be available on commercially reasonable terms or at all.

We may need additional capital before we commence production at scale, and it may not be available on acceptable terms, if at all. For example, our capital budget assumes, among other things, that our development timeline progresses as planned and our corresponding expenditures are consistent with current expectations, both of which are subject to various risks and uncertainties, including those described herein, and, as needed, that we are able to utilize the Committed Equity Financing (as defined below).

More specifically, we expect our capital expenditures and working capital requirements to increase materially in the near future, as we design our automated, high-volume manufacturing line and scale up production. Through this process, we expect our operating expenses will increase substantially on account of increased headcount and other general and administrative expenses necessary to support a rapidly growing company.

As a result, we may need to access the debt and equity capital markets, including through the Committed Equity Financing, to obtain additional financing in the future. However, these sources of financing may not be available on acceptable terms, or at all. Our ability to obtain additional financing will be subject to a number of factors, including:

 

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market conditions;

 

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the level of success with our current manufacturing capabilities;

 

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our operating performance;

 

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investor sentiment; and

 

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our ability to incur additional debt in compliance with any agreements governing our then-outstanding debt.

Additionally, the sale of a substantial number of securities under our existing registration statements, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales. See “ —Risks Related to Ownership

 

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of Our Common Stock—Sales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, could cause the market price of our common stock to drop significantly, even if our business is doing well.”

Further, the military conflict between Russia and Ukraine, which began in February 2022, has had an adverse impact on the global economy and financial markets. Although our business has not been directly impacted by this ongoing military conflict, as we have no assets or operations, and we have not purchased materials from, Russia, Belarus or Ukraine, it is impossible to predict the extent to which our operations, or those of our customers, suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be material.

In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. These factors may make the timing, amount, terms or conditions of additional financings unattractive to us. If we raise additional funds by issuing equity, equity-linked or debt securities, those securities may have rights, references or privileges senior to the rights of our currently issued and outstanding equity or debt, and our existing stockholders may experience dilution. If we are unable to generate sufficient funds from operations, raise additional capital or access our existing funds, we may be forced to take actions to reduce our capital or operating expenditures, including by eliminating redundancies, or reducing or delaying our production facility expansions, which may adversely affect our business, financial condition, prospects and results of operations.

It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to B. Riley Principal Capital II, LLC, or the actual gross proceeds resulting from those sales.

On September 27, 2022, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital II, LLC (“BRPC II”), pursuant to which BRPC II committed to purchase up to $200.0 million of shares of our common stock, subject to certain limitations and conditions set forth in the Purchase Agreement (such transaction, the “Committed Equity Financing”). The shares of our common stock that may be issued under the Purchase Agreement may be sold by us to BRPC II at our discretion from time to time until January 1, 2025.

We generally have the right to control the timing and amount of any sales of our shares of common stock to BRPC II under the Purchase Agreement. Sales of our common stock, if any, to BRPC II under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to BRPC II all, some or none of the shares of our common stock that may be available for us to sell to BRPC II pursuant to the Purchase Agreement.

As consideration for BRPC II’s commitment to purchase shares of common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 84,793 shares of common stock (such shares, the “Initial Commitment Shares”) to BRPC II. Upon our receipt of total aggregate gross cash proceeds equal to $100.0 million from BRPC II under the Purchase Agreement, we will issue 84,793 additional shares of common stock (collectively with the Initial Commitment Shares, the “Commitment Shares”) to BRPC II. Any shares of common stock issued in the Committed Equity Financing to BRPC II other than the Commitment Shares will be purchased by BRPC II at current market prices less a 3.0% fixed discount. Because the purchase price per share to be paid by BRPC II for the shares of common stock that we may elect to sell to BRPC II under the Purchase Agreement, if any, will fluctuate based on the market prices of our common stock at the time we elect to sell shares to BRPC II pursuant to the Purchase Agreement, if any, it is not possible for us to predict, prior to any such sales, the number of

 

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shares of common stock that we will sell to BRPC II under the Purchase Agreement, the purchase price per share that BRPC II will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by BRPC II under the Purchase Agreement.

Although the Purchase Agreement provides that we may sell up to an additional $197.6 million of our common stock to BRPC II, only 16,409,222 shares of our common stock were registered for resale under a registration statement on Form S-1, which we refer to as the “Committed Equity Registration Statement,” filed with the SEC on September 30, 2022 and declared effective by the SEC on December 27, 2022, as amended by Post-Effective Amendment No. 1. If it becomes necessary for us to issue and sell to BRPC II under the Purchase Agreement more than the 16,825,366 shares being registered for resale under the Committed Equity Registration Statement in order to receive aggregate gross proceeds equal to $200.0 million under the Purchase Agreement, we must first file with the SEC one or more additional registration statements to register under the Securities Act the resale by BRPC II of any such additional shares of our common stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective before we may elect to sell any additional shares of our common stock to BRPC II under the Purchase Agreement.

Under the applicable rules of the NYSE, in no event may we issue to BRPC II under the Purchase Agreement more than 16,825,366 shares of common stock, which number of shares is equal to 19.99% of the shares of the common stock outstanding immediately prior to the execution of the Purchase Agreement (such cap, the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with the applicable NYSE rules. The Exchange Cap is not applicable to issuances and sales of common stock pursuant to VWAP Purchases (as defined in the Purchase Agreement) and Intraday VWAP Purchases (as defined in the Purchase Agreement) that we may effect pursuant to the Purchase Agreement, to the extent such shares of common stock are sold in such VWAP Purchases and Intraday VWAP Purchases (as applicable) at a price equal to or in excess of the applicable “minimum price” (as defined in the applicable listing rules of the NYSE) of the common stock, calculated at the time such VWAP Purchases and Intraday VWAP Purchases (as applicable) are effected by us under the Purchase Agreement, if any, as adjusted to take into account our issuance of the Commitment Shares to BRPC II and our reimbursement of a certain amount of BRPC II’s legal fees and expenses. Moreover, we may not issue or sell any shares of common stock to BRPC II under the Purchase Agreement that, when aggregated with all other shares of common stock then beneficially owned by BRPC II and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” and Rule 13d-3 thereunder), would result in BRPC II beneficially owning more than 4.99% of the outstanding shares of common stock.

Any issuance and sale by us under the Purchase Agreement of a substantial number of shares of common stock in addition to the 16,409,222 shares of common stock that were registered for resale by BRPC II under the Committed Equity Registration Statement could cause additional substantial dilution to our stockholders. The number of shares of our common stock ultimately offered for sale by BRPC II is dependent upon the number of shares of common stock, if any, we ultimately elect to sell to BRPC II under the Purchase Agreement.

Our future growth and success depend in part on our ability to grow our customer base and effectively sell to a wide variety of customers.

Our potential customers are manufacturers of products that tend to be large enterprises or governmental agencies. Therefore, our future success will depend on our ability to grow our customer base and effectively sell to a wide variety of customers. Sales to these end-customers involve risks that may not be present (or that are present to a lesser extent) with sales to smaller customers. These risks include, but are not limited to, (i) increased purchasing power and leverage held by large customers in negotiating contractual arrangements with us and (ii) longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our solutions.

 

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Large organizations often undertake a significant evaluation process that results in a lengthy sales cycle. In addition, product purchases by large organizations are frequently subject to budget constraints, multiple approvals and unanticipated administrative, processing and other delays. Finally, large organizations typically have longer implementation cycles, require greater product functionality and scalability, require a broader range of services, demand that vendors take on a larger share of risks, require acceptance provisions that can lead to a delay in revenue recognition and expect greater payment flexibility. All of these factors can add further risk to business conducted with these potential customers.

In addition, if we were unable to maintain or increase our customer retention rates or generate new customers in a cost-effective manner, our business, financial condition and results of operations would likely be adversely affected. We cannot assure you that we will be able to maintain or grow our customer base in a cost-effective way. If we are unable to develop high quality products at scale, or introduce new products, we may fail to attract new customers or lose our existing customers, which could adversely affect our growth and profitability.

Our business model has yet to be tested and any failure to realize our strategic plans would have an adverse effect on our operating results and business, harm our reputation and could result in substantial liabilities that exceed our resources.

There is additional risk associated with new enterprises like Amprius, that are encountering new challenges and issues for the first time, many of which are beyond our control, including substantial risks and expenses in the course of establishing or entering new markets, organizing operations and undertaking marketing activities. The likelihood of our success must be considered in light of these risks, expenses, complications, delays and the competitive environment in which we operate. There is, therefore, nothing at this time upon which to base an assumption that our business plan will prove successful, and we may not be able to generate significant revenue, raise additional capital or operate profitably. We will continue to encounter risks and difficulties frequently experienced by early commercial stage companies, including scaling up our infrastructure and headcount, and may encounter unforeseen expenses, difficulties or delays in connection with our growth. In addition, as a result of the capital requirements of our business, we can be expected to continue to sustain substantial operating expenses without generating sufficient revenue to cover expenditures. Any investment in our company is therefore highly speculative and could result in the loss of your entire investment.

It is difficult to predict our future revenues and appropriately budget for our expenses, and we have limited insight into trends that may emerge and affect our business. In the event that actual results differ from our estimates or we adjust our estimates in future periods, our business, financial condition, prospects and results of operations could be materially affected.

We are an early stage company with a history of financial losses and expect to incur significant expenses and continuing losses for the foreseeable future.

We have incurred significant operating losses since our inception. We incurred net losses of $9.1 million and $2.9 million during the three months ended March 31, 2023 and 2022, respectively, and net losses of $17.3 million and $9.9 million during the years ended December 31, 2022 and 2021, respectively. We believe that we will continue to incur operating and net losses each quarter until at least the time we begin scaled production of our batteries.

We expect the rate at which we will incur losses to be significantly higher in future periods as we, among other things: continue to incur significant expenses in connection with building out our high-volume manufacturing facility and manufacturing line; endeavor to hire the experienced scientific, quality-control, and manufacturing personnel needed to operate our scaled manufacturing processes; build up inventories of components for our batteries; increase our sales and marketing activities; develop our distribution infrastructure;

 

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and increase our general and administrative functions to support our growing operations. We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in revenues, which would further increase our losses.

If we fail to effectively manage our future personnel growth, we may not be able to market and sell our batteries successfully.

Our future success depends upon our ability to grow, and if we are unable to manage our personnel growth effectively, we may incur unexpected expenses and be unable to meet our eventual customers’ requirements, all of which could materially adversely affect our business, financial condition, prospects and results of operations. To manage our current and anticipated future growth effectively, we must continue to maintain and enhance our infrastructure, financial and accounting systems, and controls. We must also attract, train and retain a significant number of scientists, engineers, sales and marketing personnel, technical and manufacturing personnel, and management personnel, and the availability of such personnel may be constrained. For more information, see “ —Risks Related to Our Technology, Products and Manufacturing—We may not succeed in retaining and attracting key employees, particularly technical talent, needed to operate and build our business successfully.”

As we continue to grow, including from the integration of employees and businesses acquired in connection with future acquisitions, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our profitability and our ability to retain and recruit qualified personnel who are essential for our future success. If we do not effectively manage our growth, we may not be able to execute on our growth plan, respond to competitive pressures, take advantage of market opportunities, satisfy customer requirements or manufacture high-quality battery products. Additionally, we may not be able to expand and upgrade our infrastructure to accommodate future growth.

Failure to effectively manage our growth could also lead us to over-invest or under-invest in development and operations; result in weaknesses in our infrastructure, systems or controls; give rise to operational mistakes, financial losses, loss of productivity or business opportunities; and result in loss of employees and reduced productivity of remaining employees. Our growth is expected to require significant capital expenditures, which may lower our earnings, and may divert financial resources from other projects such as the development of new products and services. If we are unable to manage our growth effectively, our expenses may increase more than expected, our revenue may not increase or may grow more slowly than expected and we may be unable to implement our business strategy.

We have been, and may in the future be, adversely affected by the global COVID-19 pandemic and/or any other pandemic.

We face various risks related to epidemics, pandemics and other outbreaks, including the recent COVID-19 pandemic. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. If a significant portion of our workforce is unable to work due to COVID-19 illness, quarantine or other government restrictions in connection with COVID-19, our operations may be negatively impacted. The spread of COVID-19 has also impacted our potential customers and suppliers by disrupting the manufacturing, delivery and overall supply chain of battery and device manufacturers. As a result, the effects of the COVID-19 pandemic could impact the availability of materials and resources necessary for our operations.

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. For example, some employees at our headquarters located in Fremont, California were subject to a stay-at-home order from the state government for a period of time. These measures have and may continue to adversely impact our employees and operations and the operations of our suppliers, vendors and business

 

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partners, and may negatively impact our sales and marketing activities. 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 could adversely affect our future manufacturing plans, sales and marketing activities, business and results of operations. We may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, suppliers, vendors and business partners.

The extent to which the COVID-19 pandemic continues to impact our business, financial condition, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating activities can 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 economic recession that has occurred or may occur in the future.

There are no comparable recent events that may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain.

Certain members of our management do not have experience in operating a public company.

Certain of our executive officers do not have experience in the management of a publicly traded company. Our management team may not successfully or effectively manage our recent transition to being a public company due to significant regulatory oversight and reporting obligations under federal securities laws and the continuous scrutiny of securities analysts and investors. We may not have adequate personnel with the appropriate level of knowledge, experience and training in the policies, practices or internal controls over financial reporting required of public companies in the United States. As a result, we may be required to pay higher outside legal, accounting or consulting costs than our competitors, and our management team members may have to devote a higher proportion of their time to issues relating to compliance with the laws applicable to public companies, both of which might put us at a disadvantage relative to competitors.

Our insurance coverage 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. As a general matter, the policies that we do have may include significant deductibles or self-insured retentions, 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 could adversely affect our business, financial condition and results of operations.

Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.

We regularly maintain cash balances at third-party financial institutions, including Silicon Valley Bank, in excess of the Federal Deposit Insurance Corporation insurance limit. Silicon Valley Bank’s temporary failure to return certain of our deposits briefly impacted access to our invested cash or cash equivalents, and a similar failure of a depository institution to return these deposits, or if a depository institution is subject to other adverse conditions in the financial or credit markets, could further impact access to our invested cash or cash equivalents and could adversely impact our operating liquidity and financial performance.

 

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We have previously identified material weaknesses in our internal controls over financial reporting. If we are unable to develop and maintain an effective system of internal controls and procedures required by Section 404(a) of the Sarbanes-Oxley Act of 2002, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our stock price, business and operating results.

Effective internal controls over financial reporting is necessary for us to provide reliable financial reports in a timely manner. In connection with the audit of our financial statements for the years ended December 31, 2022 and 2021, we identified two material weaknesses in our internal control over financial reporting that have not been remediated as of March 31, 2023. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The first material weakness was related to not designing or maintaining an effective control environment specific to the areas of our financial reporting and close process, including ineffective review, analysis and approval of journal entries and ineffective review of monthly financial statements. The second material weakness was related to inadequate segregation of incompatible duties due to the small size of our accounting and finance team.

In order to address these identified material weaknesses, we are in the process of increasing resources within our finance department, including the expansion of our accounting, control and compliance functions to develop and implement continued improvements and enhancements to address the overall deficiencies that led to the material weaknesses. Our management believes that these actions will enable us to address the material weaknesses that were identified in a timely manner and maintain a properly designed and effective system of internal control over financial reporting and provide appropriate segregation of duties. However, these remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.

We plan to continue to assess our internal controls and procedures and intend to take further action as necessary or appropriate to address any other matters we identify. We cannot assure you that the measures we have taken to date and may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in internal control over financial reporting or that it will prevent or avoid potential future material weaknesses. The effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If we are unable to remediate our current material weaknesses or any material weaknesses in the future, our ability to record, process and report financial information accurately, and to prepare financial statements within the time periods specified by the forms of the SEC, could be adversely affected which, in turn, may adversely affect our reputation and business and the market price of our common stock. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation of our business.

In addition, it is possible that control deficiencies could be identified by our management, by our independent registered public accounting firm in the future or may occur without being identified. Such a failure could result in regulatory scrutiny and cause investors to lose confidence in our reported financial condition, lead to a default under future indebtedness and otherwise have a material adverse effect on our business, financial condition, cash flow or results of operations.

 

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As a public company, we are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, which we refer to as the “Sarbanes-Oxley Act,” to furnish a report by management on, among other things, the effectiveness of its internal control over financial reporting for annual reports on Form 10-K that we file with the SEC beginning with our Annual Report on Form 10-K for the year ending December 31, 2023. Future assessments will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Eventually, it is possible that our independent registered public accounting firm will also be required to audit the effectiveness of our internal control over financial reporting in future annual reports on Form 10-K to be filed with the SEC. We are required to disclose changes made in our internal control over financial reporting on a quarterly basis. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the applicable stock exchange or other regulatory authorities, which would require additional financial and management resources. We have begun the process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404 in the future, but we may not be able to complete our evaluation, testing and any required remediation in a timely fashion.

Our ability to utilize our net operating losses (“NOLs”), tax credit carryforwards, and certain other tax attributes to offset future taxable income may be subject to certain limitations.

In general, under Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change net operating loss carryforwards, or NOLs, and certain other pre-change tax attributes to offset future taxable income. The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. If Legacy Amprius experienced an ownership change at any time since its incorporation, we may already be subject to limitations on our ability to utilize Legacy Amprius’ existing NOLs and other tax attributes to offset taxable income or tax liability. In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. Further, the NOLs and other tax attributes of Holdco may also be subject to limitation on use. As a result, even if we earn net taxable income in the future, our ability to use our, Holdco’s or Legacy Amprius’ pre-change NOL carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to us. Accordingly, our existing NOLs and other tax attributes may not be available to offset future income tax liabilities.

There is also a risk that changes in law or regulatory changes, including suspensions on the use of net operating losses, tax credits, and other tax attributes, possibly with retroactive effect, may result in our, Holdco’s and Legacy Amprius’ existing net operating losses, tax credits, or other tax attributes expiring or otherwise being unavailable to offset future income tax liabilities. Also, starting in fiscal year 2022, the Tax Cuts and Jobs Act requires taxpayers to capitalize research and development expenditures and to amortize domestic expenditures over five years and foreign expenditures over 15 years, which may result in the acceleration of future taxable income (and associated income tax liabilities) for us and reduce our cash flows.

The unavailability, reduction or elimination of government and economic incentives could have a material adverse effect on our business, financial condition, prospects and results of operations.

We currently, and expect to continue to, benefit from certain government subsidies and economic incentives including tax credits, rebates and other incentives that support the development and adoption of clean energy technology. For example, the Inflation Reduction Act of 2022 introduced or extended a number of tax credits to promote clean energy development. We cannot assure you that we will be able to benefit from such programs or that these subsidies and incentive programs will be available to us at the same or comparable levels in the future.

We have received commitments of state and local incentive packages providing approximately $10.0 million in tax incentives relating to our design and buildout of a, GWh-scale facility in Brighton, Colorado. Specifically, the Colorado Economic Development Commission approved up to an approximately $5.5 million in

 

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Job Growth Incentive Tax Credits for us, over an eight-year period, which are contingent upon us meeting net new job creation and salary requirements. The City of Brighton also approved incentives with a total estimated value of $0.9 million, including a five-year property tax rebate of 100% and a 50% rebate on the city’s use tax collected on construction materials. In addition, the Adams County Regional Economic Partnership approved incentives in the form of tax abatement with performance-based contingencies. If our development timeline is delayed or we are not able to achieve the performance-based goals set for the incentives, we may not receive any funding or benefits from the state and local governments of Colorado.

Further, government incentives are subject to uncertainties and may be discontinued at any time. In October 2022, we were awarded a $50.0 million cost sharing grant from the United States Department of Energy, which we refer to as the “U.S. DOE.” The cost sharing grant was dependent on the successful negotiation of a final contract. In June 2023, the Company and the U.S. DOE mutually agreed to discontinue the negotiation of the cost sharing contract.

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 clean and renewable energy products or other reasons, or our loss of any grants or incentives, may require us to seek additional financing, which may not be obtainable on commercially attractive terms or at all, and may result in the diminished competitiveness of the battery cell industry generally or our silicon anode battery cells in particular. Any change in the level of subsidies and incentives from which we benefit could materially and adversely affect our business, financial condition, prospects and results of operations.

A significant portion of our business depends on sales to the public sector, and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the public sector could have a material adverse effect on our business.

We currently rely on U.S. government contracts (as a prime contractor or subcontractor) for a material portion of our revenue and to partially fund our research and development activities, and we believe that the success and growth of our business will continue to depend on our successful procurement of government contracts.

Sales to government agencies are subject to a number of challenges and risks. Selling to government agencies can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. We also must comply with laws and regulations relating to the formation, administration, and performance of contracts, which provide public sector customers rights, many of which are not typically found in commercial contracts.

Accordingly, our business, financial condition, prospects and results of operations may be adversely affected by certain events or activities, including, but not limited to:

 

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changes in fiscal or contracting policies or decreases in available government funding;

 

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changes in government programs or applicable requirements;

 

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changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding;

 

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appeals, disputes, or litigation relating to government procurement, including but not limited to bid protests by unsuccessful bidders on potential or actual awards of contracts to us or our partners by the government;

 

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the adoption of new laws or regulations or changes to existing laws or regulations;

 

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influence by, or competition from, third parties with respect to pending, new, or existing contracts with government customers; and

 

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increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our subcontractors.

Any such event or activity, among others, could cause governments and governmental agencies to delay or refrain from purchasing our battery products in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, financial condition, prospects and results of operations.

Government contracts often also contain provisions and are subject to laws and regulations that provide government customers with additional rights and remedies not typically found in commercial contracts. These rights and remedies allow government customers, among other things, to:

 

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terminate existing contracts for convenience;

 

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reduce orders under or otherwise modify contracts;

 

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for contracts subject to the Truth in Negotiations Act, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate, and current;

 

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for some contracts, (i) demand a refund, make a forward price adjustment, or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (ii) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated;

 

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decline to exercise an option to renew a multi-year contract;

 

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claim rights in solutions, systems, or technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services, and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position;

 

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prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest;

 

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suspend or debar us from doing business with the applicable government; and

 

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control or prohibit the export of our battery products and technology.

Government contracts are also generally subject to greater scrutiny by the government, which can initiate reviews, audits and investigations regarding our compliance with government contract requirements. Current and new regulations or procurement requirements (including, for example regulations regarding counterfeit and corrupt parts, supply chain diligence, mandatory socioeconomic compliance requirements and cybersecurity) or changes to current requirements could increase our costs and risk of non-compliance. Failure to comply with government contracting laws, regulations and contract requirements, or adverse findings from a government audit or investigation can lead to criminal, civil or administrative proceedings (including pursuant to the False Claims Act), termination of contracts, forfeiture of profits, suspension of payments, adverse media coverage, fines and suspension or debarment from doing business with U.S. government agencies, all of which may have an adverse effect on our reputation, business, financial condition, prospects and results of operations.

 

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Our technology and our website, systems, and data we maintain may be subject to intentional disruption, security breaches and other security incidents, or alleged violations of laws, regulations, or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales. We may be required to expend significant resources to continue to modify or enhance our protective measures to detect, investigate and remediate vulnerabilities to security breaches and incidents. Any actual or alleged failure to comply with applicable cybersecurity or data privacy legislation or regulation could have a material adverse effect on our business, reputation, results of operations or financial condition.

We expect to face significant challenges with respect to information security and maintaining the security and integrity of our systems and other systems used in our business, as well as with respect to the data stored on or processed by these systems. We also anticipate receiving and storing confidential business information of our partners and customers. Advances in technology, an increased level of sophistication and expertise of hackers, and new discoveries in the field of cryptography can result in a compromise or breach of the systems used in our business or of security measures used in our business to protect confidential information, personal information, and other data. We may be a target for attacks designed to disrupt our operations or to attempt to gain access to our systems or to data that we possess, including proprietary information that we obtain from our partners pursuant to our agreements with them. We also are at risk for interruptions, outages and breaches of our and our outsourced service providers’ operational systems and security systems, our integrated software and technology, and data that we or our third-party service providers process or possess. These may be caused by, among other causes, physical theft, viruses, or other malicious code, denial or degradation of service attacks, ransomware, social engineering schemes, and insider theft or misuse. We have suffered security incidents in the past. In December 2021, we experienced a ransomware incident and notified certain employees of such incident. The security risks we and our outsourced service providers face could also be elevated in connection with the Russian invasion of Ukraine, as we and our outsourced service providers are vulnerable to a heightened risk of cyberattacks from or affiliated with nation-state actors, including retaliatory attacks from Chinese or Russian actors against U.S.-based companies.

The availability and effectiveness of our silicon anode technology and our ability to conduct our business and operations depend on the continued operation of information technology and communications systems, some of which we have yet to develop or otherwise obtain the ability to use. Systems we currently use or may use in the future in conducting our business, including data centers and other information technology systems, will be vulnerable to damage or interruption. Such systems could also be subject to break-ins, sabotage and intentional acts of vandalism, as well as disruptions and security breaches and security incidents as a result of non-technical issues, including intentional or inadvertent acts or omissions by employees, service providers, or others. We currently use, and may use in the future, outsourced service providers to help provide certain services, and any such outsourced service providers face similar security and system disruption risks as us. Our ability to monitor our outsourced service providers’ security measures is limited, and, in any event, third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, acquisition, disclosure, loss, alteration, or destruction of personal, confidential, or other data, including data relating to individuals. Some of the systems used in our business will not be fully redundant, and our disaster recovery planning cannot account for all eventualities. Any data security incidents or other disruptions to any data centers or other systems used in our business could result in lengthy interruptions in our service and may adversely affect our reputation, business, financial condition, prospects and results of operations.

Significant capital and other resources may be required in efforts to protect against information security breaches, security incidents, and system disruptions, or to alleviate problems caused by actual or suspected information security breaches and other data security incidents and system disruptions. The resources required may increase over time as the methods used by hackers and others engaged in online criminal activities and otherwise seeking to obtain unauthorized access to systems or data, and to disrupt systems, are increasingly sophisticated and constantly evolving. In particular, ransomware attacks have become more prevalent in the industrial sector, which could materially and adversely affect our ability to operate and may result in significant expense.

 

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In addition, we may face increased compliance burdens regarding such requirements with regulators and customers regarding our battery products and also incur additional costs for oversight and monitoring of our supply chain. These additional compliance and logistical burdens are attenuated through our international partnerships. We also cannot be certain that these systems, networks, and other infrastructure or technology upon which we rely, including those of our third-party suppliers or service providers, will be effectively implemented, maintained or expanded as planned, or will be free from bugs, defects, errors, vulnerabilities, viruses, ransomware, or other malicious code. We may be required to expend significant resources to make corrections or to remediate issues that are identified or to find alternative sources.

Any failure or perceived failure by us or our service providers to prevent information security breaches or other security incidents or system disruptions, or any compromise of security that results in or is perceived or reported to result in unauthorized access to, or loss, theft, alteration, release or transfer of, our information, or any personal information, confidential information, or other data could result in loss or theft of proprietary or sensitive data and intellectual property, could harm our reputation and competitive position and could expose us to legal claims, regulatory investigations and proceedings, and fines, penalties, and other liability. Any such actual or perceived security breach, security incident or disruption could also divert the efforts of our technical and management personnel and could require us to incur significant costs and operational consequences in connection with investigating, remediating, eliminating and putting in place additional tools, devices, policies, and other measures designed to prevent actual or perceived security breaches and other incidents and system disruptions. Moreover, we could be required or otherwise find it appropriate to expend significant capital and other resources to respond to, notify third parties of, and otherwise address the incident or breach and its root cause, and most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving certain types of data.

Further, we cannot assure that any limitations of liability provisions in our current or future contracts that may be applicable would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or other security-related matter. We also cannot be sure that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover claims related to a security breach or incident, or that the insurer will not deny coverage as to any future claim. The successful assertion of claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our reputation, financial condition, and results of operations.

Additionally, laws, regulations, and other actual and potential obligations relating to privacy, data hosting and other processing of data, data protection, and data security are evolving rapidly, and we expect to potentially be subject to new laws and regulations, or new interpretations of laws and regulations, in the future in various jurisdictions. These laws, regulations, and other obligations, and changes in their interpretation, could require us to modify our operations and practices, restrict our activities, and increase our costs. Further, these laws, regulations, and other obligations are complex and evolving rapidly, and we cannot provide assurance that we will not be subject to claims, allegations, or other proceedings related to actual or alleged obligations relating to privacy, data protection, or data security. It is possible that these laws, regulations, and other obligations may be inconsistent with one another or be interpreted or asserted to be inconsistent with our business or practices. We anticipate needing to dedicate substantial resources to comply with laws, regulations, and other obligations relating to privacy and data security in order to comply. Any failure or alleged or perceived failure to comply with any applicable laws, regulations, or other obligations relating to privacy, data protection, or data security could also result in regulatory investigations and proceedings, and misuse of or failure to secure data relating to individuals could also result in claims and proceedings against us by governmental entities or others, penalties and other liability, and damage to our reputation and credibility, and could have a negative impact on our business, financial condition, prospects and results of operations.

 

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UBS Securities LLC (“UBS”), one of the underwriters in the IPO, was to be compensated, in part, on a deferred basis for already-rendered underwriting services in connection with the IPO, yet UBS gratuitously, and without any consideration from Kensington, waived such compensation. As a result, UBS disclaims any responsibility for Amprius’ registration statement on Form S-4 and the related proxy statement/prospectus filed in connection with the Business Combination and will not be associated with the disclosure or underlying business analysis related to the Business Combination.

UBS acted as an underwriter in the IPO. The underwriters in the IPO received an underwriting discount of $0.20 per unit, or $4.6 million in the aggregate, upon the closing of the IPO. Subject to certain limitations, an additional fee of $0.18 per unit, or approximately $4.0 million in the aggregate, was agreed to be paid to the underwriters for deferred underwriting commissions at the consummation of the Business Combination. Prior to the consummation of the Business Combination, on September 6, 2022, UBS sent Kensington a letter stating that it is resigning, and is ceasing and refusing to act, as an underwriter in connection with the Business Combination and the related registration statement on Form S-4. In addition, following the delivery of such resignation letter, UBS gratuitously, and without any consideration from Kensington, waived its claim to the deferred underwriting commission, despite having performed all of its obligations to obtain the fee upon closing of the Business Combination. UBS did not communicate to Kensington its reasons for its resignation or waiving the deferred underwriting commission, and Kensington did not correspond with UBS about the reasons for its resignation or waiver.

Amprius does not currently have any ongoing relationship with UBS. UBS was not involved in the preparation of any disclosure included in Amprius’ proxy statement/prospectus filed with the SEC on September 1, 2022 relating to the Business Combination. Further, UBS did not assist in the preparation or review of any materials for Kensington or Legacy Amprius in connection with the Business Combination and did not participate in any other aspect of the Business Combination. As such, the resignation by UBS did not impact Kensington’s evaluation of the Business Combination. However, investors should be aware that a fee waiver for services already rendered is unusual. As a result of such resignation, UBS disclaims any responsibility for Amprius’ registration statement on Form S-4 and the related proxy statement/prospectus filed in connection with the Business Combination and will not be associated with the disclosure or underlying business analysis related to the Business Combination. You should not put any reliance on the fact that UBS was previously involved with any aspect of the Business Combination.

Risks Related to Intellectual Property

We rely heavily on our intellectual property portfolio. If we are unable to protect our intellectual property rights, our business and competitive position would be harmed.

We may not be able to prevent unauthorized use of our intellectual property, which could harm our business and competitive position. We rely upon a combination of various intellectual property protections afforded by patent, copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as contractual protections afforded by license agreements and other agreements, to establish, maintain and enforce rights in our proprietary technologies. In addition, we seek to protect our intellectual property rights through nondisclosure and invention assignment agreements with our employees and consultants, and through non-disclosure agreements with business partners and other third parties. Despite our efforts to protect our proprietary rights, third parties may, without proper authorization, attempt to copy or otherwise obtain and use our intellectual property or be able to design around our intellectual property. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or will take to prevent misappropriation may not be adequate, sufficient, or effective. Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive and could divert management’s attention, which could harm our business, results of operations and financial condition. Moreover, certain proprietary technology that is stored on computer systems could be penetrated by intruders and potentially misappropriated. There is no guarantee that our efforts to protect our computer systems will be effective. In addition, existing intellectual property laws and contractual remedies may afford less protection than needed to safeguard our intellectual property portfolio.

 

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Patent, copyright, trademark and trade secret laws vary significantly throughout the world. A number of foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the United States and efforts to protect against the unauthorized use of our intellectual property rights, technology and other proprietary rights may be more expensive and difficult outside of the United States. Further, we have not established our intellectual property rights in all countries in the world, and competitors may copy our designs and technology and operate in countries in which we have not protected our intellectual property. Failure to adequately protect our intellectual property rights could result in our competitors using our intellectual property to offer products, and competitors’ ability to design around our intellectual property would enable competitors to offer similar or better batteries, in each case potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue which, would adversely affect our business, financial condition, prospects and results of operations.

We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial costs.

Companies, organizations or individuals, including our current and future competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, distribute, or sell our battery products, which could make it more difficult for us to operate our business. From time to time, we may receive inquiries from holders of patents or trademarks inquiring whether we are infringing their proprietary rights and/or seek court declarations that such third parties’ applications do not infringe upon our intellectual property rights. Companies holding patents or other intellectual property rights relating to batteries, electric motors or electronic power management systems may bring suits alleging infringement by our battery products of such rights or otherwise asserting their rights and seeking licenses. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

 

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cease selling, incorporating or using products that incorporate the challenged intellectual property;

 

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pay substantial damages;

 

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obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or

 

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redesign our batteries.

We have in the past experienced infringement claims from non-practicing organizations (sometimes referred to as “patent trolls”) filing lawsuits for patent infringement. For example, in December 2020, we settled a patent infringement case against us and agreed to make licensing payments in connection with such settlement. We may be subject to additional infringement claims in the future, and even if we believe such claims are without merit, such claims are time-consuming, expensive to litigate or settle and can divert management’s resources and attention. An adverse determination could require that we pay damages, which could be substantial, or stop using technologies found to be in violation of a third-party’s rights and could prevent us from selling our batteries. In order to avoid these restrictions, we may have to seek a license for the technology. Any such license may not be available on reasonable terms or at all, could require us to pay significant royalties and may significantly increase our operating expenses or otherwise seriously harm our business or operating results.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology, our business, financial condition, prospects and results of operations could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s attention.

We also license patents and other intellectual property from third parties, and we may face claims that our use of this intellectual property infringes the rights of others. In such cases, we may seek indemnification from

 

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our licensors under our license contracts with them. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation, and other factors.

Our patent applications may not result in issued patents or our patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from interfering with our commercialization of our batteries.

Our patent applications may not result in issued patents, which may have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours. The registration of patents involves complex legal and factual questions and the breadth of claims allowed is uncertain. As a result, we cannot be certain that the patent applications that we file will result in patents being issued, or that our patents and any patents that may be issued to us will afford protection against competitors with similar technology. Numerous patents and pending patent applications owned by others exist in the fields in which we have developed and is and will be developing our technology. In addition to those who may claim priority, any of our existing or pending patents may also be challenged by others on the basis that they are otherwise invalid or unenforceable. Furthermore, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States, and thus we cannot be certain that foreign patent applications related to issued U.S. patents will be issued.

Even if our patent applications succeed and we are issued patents in accordance with them, it is still uncertain whether these patents will be contested, circumvented, invalidated or limited in scope in the future. The rights granted under any issued patents may not provide us with meaningful protection or competitive advantages, and some foreign countries provide significantly less effective patent enforcement than what the United States provides. In addition, the claims under any patents that issued to us may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to ours. The intellectual property rights of others could also bar or limit us from licensing, exploiting, or enforcing any patents issued to us. In addition, patents issued to us may be infringed upon or designed around by others and others may obtain patents that it needs to license or design around, either of which would increase costs and may adversely affect our business, financial condition, prospects and results of operations.

We may obtain licenses on technology that has not been commercialized or has been commercialized only to a limited extent, and the success of our business may be adversely affected if such technology does not perform as expected.

From time to time, we may license from third parties, technologies that have not been commercialized or which have been commercialized only to a limited extent. These technologies may not perform as expected within our silicon anode battery cells and related products. If the cost, performance characteristics, manufacturing process or other specifications of these licensed technologies fall short of our targets, our expected sales, costs, time to market, competitive advantage, future product pricing and potential operating margins may be adversely affected.

Risks Related to Litigation and Regulatory Compliance

Our operations expose us to litigation, environmental and other legal compliance risks. Compliance with laws and regulations can be expensive, and our failure to comply with these laws and regulations may result in monetary damages and fines, adverse publicity and a material adverse effect on our business.

We are subject to a variety of litigation, environmental, health and safety, investment screening and national security laws, and other legal compliance risks. These risks include, among other things, possible liability relating to product liability matters, personal injuries, intellectual property rights, contract-related claims, health and safety liabilities, employment-related liabilities, environmental matters, investment screening and national

 

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security laws, and compliance with U.S. and foreign laws, competition laws and laws governing improper business practices.

Our operations in the United States are subject to numerous environmental laws and regulations, including federal, state and local laws and regulations relating to, among other things: water; natural resources; discharges; emissions; chemicals; solid and hazardous waste storage, treatment and disposal; remediation of releases of hazardous materials; and contamination. Compliance with these laws can be difficult and costly. For example, battery life cycle management regulations and regulations governing the transport of batteries may impose substantial requirements on our operations in the United States. Our operations may be required to obtain and comply with environmental permits, many of which may be difficult and expensive to obtain and must be renewed on a periodic basis. A failure to comply with these laws, regulations or permits could result in substantial liabilities, including fines, penalties, the suspension or loss of permits, and possibly orders to cease the non-compliant operations. Our manufacturing process will have hazards such as, but not limited to, hazardous materials, machines with moving parts, and high voltage and/or high current electrical systems typical of large manufacturing equipment and related safety incidents. There may be safety incidents that damage machinery or manufacturing components, slow or stop production, or harm employees. Consequences may include litigation, regulation, fines, increased insurance premiums, mandates to temporarily halt production, workers’ compensation claims, or other actions that impact our brand, finances or ability to operate.

As a business with international reach, we are subject to complex laws and regulations, including investment screening laws, in jurisdictions in which we operate. Those laws and regulations may be interpreted in different ways. They may also change from time to time, as may related interpretations and other guidance. Changes in laws or regulations could result in higher expenses and payments, and uncertainty relating to laws or regulations may also affect how we conduct our operations and structure our investments and could limit our ability to enforce our rights.

Changes in environmental and climate laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in manufacturing designs, subject us to additional costs and restrictions, including increased energy and raw materials costs, and could increase environmental compliance expenditures. We are subject to various environmental laws and regulations on air emission, waste water discharge, solid waste, noise and the disposal of hazardous materials. Cobalt and lithium are toxic materials that are important raw materials in our batteries. We also use, generate and discharge other toxic, volatile and hazardous chemicals and wastes in our research, development and manufacturing activities. Under U.S. environmental regulations, we are required to maintain the pollutant emission levels at the facility within the levels prescribed by the relevant governmental authorities and obtain a pollution discharge permit for water and air emissions. Future changes to environmental laws or permit requirements could require us to install new control equipment or otherwise change operations in order to comply with any such change in laws or permit requirements. In addition, certain laws and regulations require enterprises like us that generate hazardous wastes to engage companies which are licensed and qualified to process the hazardous wastes, and to collect, store, dispose of and transfer the hazardous waste.

If we fail to comply with national and local environmental protection laws and regulations, the relevant governmental authorities may impose fines or deadlines to cure instances of noncompliance, and may even order us to cease operations if we fail to comply with their requirements. In particular, any breach by us in connection with requirements relating to the handling of hazardous wastes may subject us to monetary damages and fines. In addition, if any third party suffers any loss as a result of our pollutant emission practices, our improper handling of hazardous wastes or our noncompliance with environmental regulations, such third parties may seek damages from us.

We cannot assure you that we will be able to comply with all environmental laws and regulations at all times as the environmental legal regime is evolving and becoming more stringent, especially in the United States. Therefore, if these or other governments where we do business impose more stringent regulations in the future,

 

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we will have to incur additional substantial costs and expenses in order to comply with new regulations, which may negatively affect our results of operations. If we fail to comply with any of the present or future environmental regulations in any material aspect or cause any loss to any third parties due to our pollutant emission practices, improper handling of hazardous wastes or other environmental noncompliance, we may suffer from negative publicity and may be required to pay substantial fines, pay damages to such third parties, or suspend or even cease operations, all of which may materially and adversely affect our business, financial condition, prospects and results of operations. Environmental laws and regulations may become more stringent in the future, which could increase costs of compliance or require us to manufacture with alternative technologies and materials.

We may be subject to review and enforcement actions under domestic and foreign laws that screen investments and to other national-security-related laws and regulations. In certain jurisdictions, these legal and regulatory requirements may be more stringent than in the United States and may impact battery companies more specifically. As a result of these laws and regulations, investments by particular investors may need to be filed with local regulators, which in turn may impose added costs on our business, impact our operations, and/or limit our ability to engage in strategic transactions that might otherwise be beneficial to us and our investors.

We are subject to a variety of laws and regulations related to the safety and transportation of our batteries. Our failure to comply with these laws and regulations may have a material adverse effect on our business and results of operations.

Many federal, state and local authorities require certification by Underwriters Laboratory, Inc., an independent, not-for-profit corporation engaged in the testing of products for compliance with certain public safety standards, or other safety regulation certification prior to marketing battery cells. Foreign jurisdictions also have regulatory authorities overseeing the safety of consumer products. Our batteries may not meet the specifications required by these authorities. A determination that any of our battery products are not in compliance with these rules and regulations could result in the imposition of fines or an award of damages to private litigants.

In addition, lithium batteries have been identified as a Class 9 dangerous good during transport. To be safely transported (by air, sea, rail or roadways), they must meet various international, national, state and local regulations, including, for example, the provisions laid out in United Nations standard UN 38.3. This standard applies to batteries transported either on their own or installed in a device. UN 38.3 has been adopted by regulators and competent authorities around the world, thus making it a requirement for global market access. Our failure to manage the transportation of our batteries could subject us to increased costs or future liabilities.

Failure to comply with certain health and production safety laws and regulations governing hazardous materials could materially adversely affect our business and results of operations.

In the sourcing of our battery products throughout the world, we process, store, dispose of and otherwise use large amounts of hazardous materials. As a result, we are subject to extensive and evolving health and production safety laws and regulations governing, among other things: the health of our employees and safety production requirements regarding the generation, handling, storage, use and transportation of hazardous materials. Compliance with these laws and regulations results in ongoing costs. Failure to comply with these laws or regulations, or to obtain or comply with the relevant permits, could result in fines, criminal charges or other sanctions by regulators. Furthermore, we may be ordered to rectify a noncompliance within a stipulated deadline; and if we fail to do so, we may be ordered to cease operations. Our ongoing compliance with health and safety laws, regulations and permits could require us to incur significant expenses, limit our ability to modify or expand our facilities or continue manufacturing and make other capital improvements. In addition, private parties, including current or former employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our batteries.

 

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We are or will be subject to anti-corruption and anti-bribery and anti-money laundering and similar laws, and non-compliance 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 the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and possibly other anti-bribery and anti-corruption laws and anti-money laundering laws in various jurisdictions in which we conduct, or in the future may conduct, activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit us and our officers, directors, employees, business partners agents, representatives and third-party intermediaries from corruptly offering, promising, authorizing or providing, directly or indirectly anything of value to recipients in the public or private sector.

We may leverage third parties to sell our battery products and conduct our business abroad. We, our officers, directors, employees, business partners agents, representatives and third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and we may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners or third-party intermediaries even if we do not explicitly authorize such activities. We cannot assure you that all of our officers, directors, employees, business partners agents, representatives and third-party intermediaries will not take actions in violation of applicable law, for which we may be ultimately held responsible. As our international activities and sales expand, our risks under these laws may increase.

These laws also require 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 and compliance procedures designed to prevent any such actions. While we have certain policies and procedures to address compliance with such laws, we cannot assure you that none of our officers, directors, employees, business partners agents, representatives and third-party intermediaries will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.

Any allegations or violation of the FCPA or other applicable anti-bribery and anti-corruption laws and anti-money laundering laws could subject us to whistleblower complaints, adverse media coverage, investigations, settlements, prosecutions, enforcement actions, fines, damages, loss of export privileges, and severe administrative, civil and criminal sanctions, suspension or debarment from government contracts, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our reputation, business, financial condition, prospects and results of operations. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.

We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate these controls.

Our battery products may be subject to U.S. export control laws and regulations including the Export Administration Regulations, the International Traffic in Arms Regulations, and trade and economic sanctions maintained by the Office of Foreign Assets Control. As such, an export license may be required to export, reexport, or transfer our battery products to certain countries, end-users, and end-uses. If we were to fail to comply with such U.S. export controls laws and regulations, U.S. economic sanctions, or other similar laws, we could be subject to both civil and criminal penalties, including substantial fines, possible incarceration for employees and managers for willful violations, and the possible loss of our export or import privileges. Obtaining the necessary export license for a particular sale or offering may not be possible and may be time-consuming and may result in the delay or loss of sales opportunities. Furthermore, U.S. export control laws and economic sanctions prohibit the export of products to certain U.S. embargoed or sanctioned countries, governments, and

 

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persons, as well as for prohibited end-uses. Even though we take precautions to ensure that we and our partners comply with all relevant export control laws and regulations, any failure by us or our partners to comply with such laws and regulations could have negative consequences for us, including reputational harm, government investigations and penalties.

Changes in our battery products or changes in export and import regulations in such countries may create delays in the introduction of our products into international markets, prevent our end-customers with international operations from deploying our battery products globally or, in some cases, prevent or delay the export or import of our battery products to certain countries, governments or persons altogether. Any change in export or import laws or regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing export, import or sanctions laws or regulations, or change in the countries, governments, persons, or technologies targeted by such export, import or sanctions laws or regulations, could result in decreased use of our battery products by, or in our decreased ability to export or sell our battery products to, existing or potential end-customers with international operations. Any decreased use of our battery products or limitation on our ability to export to or sell our battery products in international markets could adversely affect our business, financial condition, and results of operations.

We may be subject to U.S. foreign investment regulations which may impose conditions on or limit certain investors’ ability to purchase our stock, potentially making the stock less attractive to investors. Our future investments in U.S. companies may also be subject to U.S. foreign investment regulations.

Certain investments that involve the acquisition of, or investment in, a U.S. business by a non-U.S. investor may be subject to review and approval by the Committee on Foreign Investment in the United States (“CFIUS”). Whether CFIUS has jurisdiction to review an acquisition or investment transaction depends on, among other factors, the nature and structure of the transaction, including the level of beneficial ownership interest and the nature of any information or governance rights involved. For example, investments that result in “control” of a U.S. business by a foreign person always are subject to CFIUS jurisdiction. Significant CFIUS reform legislation, which was fully implemented through regulations that became effective on February 13, 2020, expanded the scope of CFIUS’s jurisdiction to investments that do not result in control of a U.S. business by a foreign person but afford certain foreign investors certain information or governance rights in a U.S. business that has a nexus to “critical technologies,” “critical infrastructure” and/or “sensitive personal data.” Based on its export control classification, our battery technology is considered a “critical technology.”

CFIUS could choose to review past or proposed transactions involving new or existing foreign investors in us or in Holdco even if a filing with CFIUS is or was not required at the time of the transaction. Any review and approval of an investment or transaction by CFIUS may have outsized impacts on transaction certainty, timing, feasibility, and cost, among other things. CFIUS policies and practices are rapidly evolving, and in the event that CFIUS reviews one or more proposed or existing investment by investors, there can be no assurances that such investors will be able to maintain, or proceed with, such investments on terms acceptable to such investors. CFIUS could seek to impose limitations or restrictions on, or prohibit, investments by such investors (including, but not limited to, limits on purchasing our stock, limits on information sharing with such investors, requiring a voting trust, governance modifications, or forced divestiture, among other things).

Recent and potential tariffs imposed by the U.S. government or a global trade war could increase the cost of our products, which could have a material adverse effect on our business, financial condition and results of operations.

The U.S. government has and continues to make significant changes in U.S. trade policy and has taken certain actions that could negatively impact U.S. trade, including imposing tariffs on certain goods imported into the United States. In retaliation, China has implemented, and continues to evaluate imposing additional tariffs on a wide range of American products. There is also a concern that the imposition of additional tariffs by the United States could result in the adoption of tariffs by other countries as well, leading to a global trade war. More

 

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specifically, the U.S. government has from time to time imposed significant tariffs on certain product categories imported from China. Such tariffs, if expanded to other categories, could have a significant impact on our business, particularly the importation of parts of our batteries and certain production equipment that are manufactured in China. If we attempt to renegotiate prices with suppliers or diversify our supply chain in response to tariffs, such efforts may not yield immediate results or may be ineffective. We might also consider increasing prices to the end consumer; however, this could reduce the competitiveness of our products and adversely affect net sales. If we fail to manage these dynamics successfully, gross margins and profitability could be adversely affected. As of the date of this report, tariffs have not had a material impact on our business, but increased tariffs or trade restrictions implemented by the United States or other countries in connection with a global trade war could have a material adverse effect on our business, financial condition and results of operations. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and China or other countries, what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. Any further deterioration in the relations between the United States and China could exacerbate these actions and other governmental intervention. For example, a future event that created additional U.S.-China tensions could potentially increase the risks associated with the business and operations of U.S.-based technology companies in China.

In June 2022, the import restrictions contained in the Uyghur Forced Labor Prevention Act (“UFLPA”) became effective. The UFLPA creates a rebuttable presumption that any goods mined, produced or manufactured, wholly or in part in the Xinjiang Uyghur Autonomous Region (“XUAR”) of China, or produced by a listed entity, were made with forced labor and are not entitled to entry into the United States. If a shipment is detained, importers are required to present clear and convincing evidence that such goods are not made with forced labor. While we do not source goods from the XUAR or from listed parties, because we import from China, there is risk that our ability to import components and products may be adversely affected by the UFLPA.

The U.S. or foreign governments may take additional administrative, legislative, or regulatory action that could materially interfere with our ability to source from or sell products in certain countries. Sustained uncertainty about, or worsening of, current global economic conditions and further escalation of trade tensions between the United States and its trading partners, especially China, could result in a global economic slowdown and long-term changes to global trade, including retaliatory trade restrictions that restrict our ability to operate in China. Any alterations to our business strategy or operations made in order to adapt to or comply with any such changes would be time-consuming and expensive, and certain of our competitors may be better suited to withstand or react to these changes.

From time to time, we may be involved in legal proceedings and commercial or contractual disputes, which could have an adverse impact on our profitability and financial position.

We may be involved in legal proceedings and commercial or contractual disputes that, from time to time, are significant. These are typically claims that arise in the normal course of business including, without limitation, commercial or contractual disputes, including warranty claims and other disputes with potential customers and suppliers, intellectual property matters, personal injury claims, environmental issues, tax matters and employment matters.

Furthermore, our predecessor, Kensington, was a special purpose acquisition company (“SPAC”). SPACs have been subject to increased regulatory oversight and scrutiny, including from the SEC. Any governmental or regulatory investigation or inquiry related to the Business Combination or otherwise could have a material adverse effect on our business and negatively affect our reputation.

It is difficult to predict the outcome or ultimate financial exposure, if any, represented by these matters, and there can be no assurance that any such exposure will not be material. Such claims may also negatively affect our reputation.

 

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Risks Related to Ownership of Our Common Stock

There can be no assurance that we will be able to comply with the continued listing standards of the NYSE.

Our common stock and public warrants are listed on the NYSE under the symbols “AMPX” and “AMPX.W,” respectively. If the NYSE delists our securities from trading on its exchange for failure to meet the listing standards and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences including:

 

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a limited availability of market quotations for our securities;

 

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reduced liquidity for our securities;

 

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a determination that our common stock is a “penny stock,” which will require brokers trading our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for shares of our common stock;

 

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a limited amount of analyst coverage; and

 

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a decreased ability to issue additional securities or obtain additional financing in the future.

Anti-takeover provisions in our certificate of incorporation, amended and restated bylaws and Delaware law could make an acquisition of us more difficult, limit attempts by stockholders to replace or remove our management and limit the market price of our common stock.

Our certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that could have the effect of rendering more difficult, delaying or preventing an acquisition deemed undesirable by the Amprius Board. These provisions include:

 

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authorizing “blank check” preferred stock, which could be issued by the Amprius Board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

 

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limiting the liability of, and providing indemnification to, our directors and officers;

 

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prohibiting cumulative voting in the election of directors;

 

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providing that vacancies on the Amprius Board may be filled only by majority of directors then in office of the Amprius Board, even though less than a quorum;

 

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prohibiting the ability of our stockholders to call special meetings;

 

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establishing an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to the Amprius Board;

 

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dividing directorships of the Amprius Board into three classes, each to be elected for a term of three years, so that only one class of directorships is up for election at each annual meeting of the stockholders; and

 

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specifying that special meetings of our stockholders can be called only by a majority of the Amprius Board, the chair of the Amprius Board, our President or Chief Executive Officer.

These provisions may frustrate or prevent any attempts by stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of the Amprius Board, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware and have not elected not to be governed by Section 203 of the DGCL, Amprius is governed by the provisions of Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

 

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Amprius’ bylaws and the proposed bylaws provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a chosen judicial forum for disputes with us or our directors, officers, employees or stockholders.

The Amprius bylaws provide that, unless otherwise consented to by us in writing, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another State court in Delaware or the federal district court for the District of Delaware) shall, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings: (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our stockholders, directors, officers, or other employees to us or our stockholders; (iii) any action arising pursuant to any provision of the DGCL or the proposed charter or the proposed bylaws; or (iv) any other action asserting a claim that is governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than such court or for which such court does not have subject matter jurisdiction. This provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. The Amprius bylaws further provide that, unless otherwise consented to by us in writing, the federal district courts of the United States will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and consented to this provision. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find the choice of forum provision contained in the Amprius bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

Concentration of ownership among our executive officers, directors and affiliates may prevent new investors from influencing significant corporate decisions.

As of June 14, 2023, our executive officers and directors as a group beneficially own approximately 15% of the Amprius common stock outstanding. Additionally, certain of our executive officers and directors own interests in Holdco, which owns approximately 77% of our common stock outstanding, and certain of our directors are members of the Holdco Board. As a result, these stockholders are currently able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, any amendment of the certificate of incorporation and approval of significant corporate transactions.

We will incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on our business, financial condition and results of operations.

As a public company, we face increased legal, accounting, insurance, administrative and other costs and expenses that Legacy Amprius did not face as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. The development and implementation of the standards and controls necessary

 

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for us to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is likely that we will 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.

Compliance with public company requirements has increased costs and made certain activities more time-consuming. A number of these requirements require us to carry out activities Legacy Amprius had not done previously. For example, the Amprius Board has committees that did not exist on the Legacy Amprius board of directors, and we have adopted new internal controls and disclosure controls and procedures. In addition, we are incurring expenses associated with SEC reporting requirements. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of us. As a public company, it is also more expensive to obtain director and officer liability insurance. The additional reporting and other obligations imposed by these rules and regulations have and will continue to increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require us to spend money that could otherwise be used on our research and development programs and to achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

We do not expect to declare any dividends in the foreseeable future.

We do not anticipate declaring any cash dividends to holders of our common stock in the foreseeable future. Consequently, investors may need to rely on sales of their shares after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

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 our securities adversely, the price and trading volume of our securities could decline.

The trading market for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business, market or competitors. If any of the analysts who may cover us change their recommendation regarding our common stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock and warrants would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

We qualify as an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we are eligible for and intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they may deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in

 

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which the market value of our common stock that are held by non-affiliates exceeds $700 million as of June 30 of that fiscal year, (ii) the last day of the fiscal year in which we have total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which we have issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2027. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected not to opt out of such extended transition period and, therefore, we may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Investors may find our common stock less attractive because we rely on these exemptions, which may result in a less active trading market for our common stock and its price may be more volatile.

Additionally, we qualify as 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. We expect to remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by non-affiliates exceeds $250,000,000 as of the prior June 30, or (ii) our annual revenues exceeded $100,000,000 during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700,000,000 as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, comparison of our financial statements with other public companies may be difficult or impossible.

Sales of substantial amounts of our common stock in the public markets, or the perception that such sales could occur, could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our securities in the public market could occur at any time. We currently have three registration statements that register the issuance or resale of an aggregate of up to 143,963,252 shares of common stock, constituting approximately 96% of our issued and outstanding common stock as of June 14, 2023 (assuming the exercise in full of all of the warrants associated with such shares of common stock).

These sales, any future sales of a substantial number of shares of our securities in the public market 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 our securities. Despite such a decline in the public trading price, certain securityholders may still experience a positive rate of return on the securities they purchased due to the lower price that they purchased their shares compared to other public investors and be incentivized to sell securities when others are not.

Additionally, we have filed a registration statement to register shares reserved for future issuance under our equity compensation plans and the shares issuable upon exercise of the options outstanding under the 2016 Plan, which were an aggregate of 13,832,769 shares of common stock as of June 14, 2023. Subject to applicable securities laws, the satisfaction of any vesting restrictions and the expiration or waiver of the lock-up restrictions contained in our proposed bylaws, the shares issued thereunder will be available for immediate resale in the public market.

As of June 14, 2023, approximately 88% of our outstanding shares of common stock are subject to lock-up restrictions. Sales of our common stock following the expiration of these lock-up restrictions or pursuant to the exercise of registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales could also cause the market price of our common stock to decline if such equity holders sell or are perceived by the market as intending to sell any such securities and make it more difficult for you to sell your shares of common stock at a time and price that you deem appropriate.

 

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We may issue additional shares of common stock under an employee incentive plan (including the 2022 Plan and the ESPP) or may issue preferred stock. Any such issuances would dilute the interest of our stockholders and likely present other risks.

We may issue a substantial number of additional shares of common stock under our employee incentive plan (including the 2022 Plan and the ESPP) or we may issue preferred stock. The issuance of additional securities:

 

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may significantly dilute the equity interests of our investors;

 

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may subordinate the rights of our stockholders if preferred stock is issued with rights senior to those afforded our common stock;

 

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could cause a change in control if a substantial number of securities are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

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may adversely affect prevailing market prices for our common stock and/or warrants.

Risks Related to Our Warrants

There is no guarantee that our warrants will be in the money at the time they become exercisable, and they may expire worthless.

The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon the market price of our common stock. If the market price for our common stock is less than $11.50 per share, in the case of our private warrants and public warrants, or $12.50 per share, in the case of the PIPE warrants, we believe warrant holders will be unlikely to exercise their warrants. There is no guarantee that the warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless.

We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to the warrant holders, thereby making the public warrants worthless.

We have the ability to redeem outstanding public warrants or PIPE warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our common stock equals or exceeds $18.00 per share (as may be adjusted), in the case of the public warrants, or $20.00 per share (as may be adjusted), in the case of the PIPE warrants, for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to public warrant or PIPE warrant holders and provided certain other conditions are met. If and when the public warrants or PIPE warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. As a result, we may redeem the public warrants or PIPE warrants as set forth above even if the holders are otherwise unable to exercise the public warrants or PIPE warrants. Redemption of the outstanding public warrants or PIPE warrants could force holders (i) to exercise public warrants or PIPE warrants and pay the exercise price therefor at a time when it may be disadvantageous, (ii) to sell public warrants or PIPE warrants at the then-current market price when holders might otherwise wish to hold public warrants or PIPE warrants or (iii) to accept the nominal redemption price that, at the time the outstanding public warrants or PIPE warrants are called for redemption, may be substantially less than the market value of the public warrants or PIPE warrants.

We may amend the terms of the warrants in a manner that may be adverse to holders of warrants with the approval by the holders of at least 50% of the then outstanding warrants. As a result, the exercise price of warrants could be increased, the exercise period could be shortened and the number of shares of common stock purchasable upon exercise of a warrant could be decreased, all without warrant holder approval.

The public warrants and private warrants were issued in registered form under the respective warrant agreements. The Warrant Agreement, dated as of March 1, 2022, which we refer to as the “Warrant Agreement,”

 

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by and among us and Continental Stock Transfer & Trust Company, provides that the terms of the public warrants and private warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants and, solely with respect to any amendment to the terms of the private warrants or any provision of the Warrant Agreement with respect to the private warrants, 50% of the number of the then outstanding private warrants. The Warrant Agreement, dated as of September 14, 2022, which we refer to as the “PIPE Warrant Agreement,” by and among us and Continental Stock Transfer & Trust Company, provides that the terms of the PIPE warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least 50% of the then outstanding PIPE warrants to make any change that adversely affects the interests of the registered holders of PIPE warrants. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 50% of such then-outstanding warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 50% of such then-outstanding warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or shares, shorten the exercise period or decrease the number of shares of common stock issuable upon exercise of a warrant.

The warrants are exercisable for common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

As of June 14, 2023, outstanding warrants to purchase an aggregate of 47,720,736 shares of common stock are exercisable in accordance with the terms of the warrant agreement governing those securities. The exercise price of the private warrants and public warrants is $11.50 per share, and the exercise price of the PIPE warrants is $12.50 per share. To the extent the warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the holders of common stock and increase the number of shares eligible for resale in the public market. Shares of common stock issuable pursuant to the warrants are not subject to lock-up restrictions. As such, once the warrants are exercised, the holder of such shares issuable upon the exercise of the warrants will be able to resell the shares to the market, subject to other applicable laws. Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our common stock. Further, there is no guarantee that the warrants will ever be in the money prior to their expiration, and as such, such warrants may expire worthless.

Risks Related to Holdco

The Amprius common stock to be issued pursuant to the mergers may be restricted from immediate resale, so the Holdco stockholders may not receive liquidity immediately following the mergers.

The shares of Amprius common stock and non-voting common stock issued in connection with the mergers may be restricted as a result of the lock-up restrictions contained in the proposed bylaws depending on the timing of the closing of the mergers. Under the merger agreement, all shares of Amprius common stock and non-voting common stock issued in connection with the mergers, as well as any shares issued in respect of options or warrants received under the merger agreement, will be subject to the lock-up terms substantially consistent with those in the existing lock-up arrangements applicable to the shares of Amprius common stock owned by Holdco, as set forth in the proposed bylaws, which expire upon the earlier of (i) September 14, 2023 and (ii) the date on which the closing price per Amprius common stock for any 20 trading days within any 30 consecutive trading day period is at least $12.50. As a result, the Holdco stockholders may not have liquidity immediately following the closing of the mergers.

In addition, Holdco stockholders will bear the economic risk of any decrease in the value of Amprius common stock or non-voting common stock during any period such common stock cannot be sold. By the time

 

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Holdco stockholders are able to sell the Amprius common stock or non-voting common stock, it may have a different value than the value at the closing of the mergers.

Because the lack of a public market for Holdco’s capital stock makes it difficult to value Holdco’s capital stock, the stockholders of Holdco may receive shares of Amprius’ common stock and non-voting common stock in the mergers that have a value that is less than, or greater than, the fair market value of Holdco’s capital stock.

The outstanding capital stock of Holdco is privately held and is not traded in any public market. The lack of a public market makes it extremely difficult to determine the fair market value of Holdco. Because the percentage of Amprius’ common stock and non-voting common stock to be issued to Holdco’s stockholders in connection with the mergers was determined based on negotiations between the parties, it is possible that the value of Amprius’ common stock and non-voting common stock to be received by Holdco’s stockholders will be less than the fair market value of Holdco, or Amprius may pay more than the aggregate fair market value for Holdco.

In addition, the Discounted Exchange Ratio includes a 2% discount. As a result, each Holdco stockholder will receive interests in Amprius that are lower than its current indirect ownership in Amprius.

Further, by pursuing the mergers, Holdco will be forgoing other liquidity alternatives, which could be on terms as attractive or more or less attractive than the terms of the mergers.

Because of the fluctuation of the stock price of Amprius common stock, the market value that the Holdco equityholders will receive at the closing of the mergers may be significantly different.

At the closing of the mergers, each Holdco equityholder will receive their portion of the merger consideration calculated based on the Discounted Exchange Ratio, which uses a fixed price of $8.71 for Amprius’ common stock. The number of shares, options and warrants to be issued to each Holdco equityholder upon the consummation of the mergers will not be adjusted in the event of any change in the stock price of Amprius prior to closing. As Amprius’ market share prices fluctuate, based on numerous factors, including factors beyond Amprius’ or Holdco’s control, the value of the securities that each Holdco equityholder will receive at closing will correspondingly fluctuate and may be lower or higher than the value used for calculating the Discounted Exchange Ratio. The use of the fixed price of $8.71 instead of a floating price in determination of the Discounted Exchange Ratio may contribute to the risk that the actual market value of securities to be issued in the mergers will be different from $8.71.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Such forward-looking statements include, but are not limited to, statements regarding Amprius’ or Holdco’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

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Amprius and Holdco’s ability to consummate the mergers;

 

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the expected benefits of the mergers;

 

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the expected timing for the closing of the mergers;

 

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Amprius’ financial and business performance following the mergers, including financial and business metrics;

 

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

 

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Amprius’ ability to develop a high-volume manufacturing line and otherwise scale in a cost-effective manner;

 

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Amprius’ ability to add manufacturing capacity and the costs and timing to add such capacity;

 

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the expected addressable market for Amprius’ products;

 

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developments relating to Amprius’ competitors and industry;

 

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

 

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Amprius’ future capital requirements and sources and uses of cash;

 

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Amprius’ ability to obtain funding for Amprius’ operations;

 

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Amprius’ business, expansion plans and opportunities; and

 

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the outcome of any known and unknown litigation and regulatory proceedings.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing Amprius’ views as of any subsequent date, and Amprius does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, Amprius’ actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

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the occurrence of any event, change or other circumstances that could delay, impede or prevent the mergers or give rise to the termination of the merger agreement

 

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the inability to consummate the mergers due to the failure to obtain approval of the Amprius Requisite Stockholder Approval or of the parties to satisfy other conditions to the closing in the merger agreement;

 

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the inability to realize the benefits of the mergers;

 

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Amprius’ ability to execute its business model, including scaling production and increasing the addressable market for its products and services;

 

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Amprius’ ability to raise capital;

 

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the outcome of any legal proceedings that may be instituted against Amprius;

 

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the ability to maintain the listing of Amprius’ securities on the NYSE;

 

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the possibility that Amprius may be adversely affected by other economic, business or competitive factors, including supply chain interruptions, and may not be able to manage other risks and uncertainties;

 

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changes in applicable laws or regulations;

 

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the effect of the COVID-19 pandemic and/or the military conflict between Russia and Ukraine, or other macroeconomic factors, on Amprius’ business;

 

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

 

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other risks and uncertainties described in this proxy statement/prospectus, including risk factors discussed in the section titled “Risk Factors.”

For a discussion of the factors that may cause Amprius, Holdco or the combined organization’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied in such forward-looking statements, or for a discussion of risk associated with the ability of Amprius and Holdco to complete the mergers and the effect of the merger on the business of Amprius, Holdco and the combined organization, see the section titled “Risk Factors.”

Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in reports filed with the SEC by Amprius including the risk factors included in Amprius’ most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the SEC. See the section titled “Where You Can Find More Information.”

If any of these risks or uncertainties materialize or any of these assumptions prove incorrect, the results of Amprius, Holdco or the combined organization could differ materially from the forward-looking statements. All forward-looking statements in this proxy statement/prospectus are current only as of the date on which the statements were made. Amprius and Holdco do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events.

 

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THE SPECIAL MEETING OF AMPRIUS’ STOCKHOLDERS

Date, Time and Place

The Amprius special meeting will be held on July 26, 2023, via live webcast at www.virtualshareholdermeeting.com/AMPX2023SM commencing at 10:00 a.m., local time, unless postponed or adjourned to a later date. Amprius is sending this proxy statement/prospectus to its stockholders as of the record date for the special meeting in connection with the solicitation of proxies by the Amprius Board for use at the Amprius special meeting and any adjournments or postponements of the Amprius special meeting. This proxy statement/prospectus is first being furnished to Amprius’ stockholders on or about June 27, 2023.

Purpose of the Amprius Special Meeting

The purpose of the Amprius special meeting is:

 

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To approve and adopt the merger agreement and the transactions contemplated thereby, including the mergers and the issuance of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder in accordance with the merger agreement.

 

2.

To approve and adopt the proposed charter, in the form attached as Annex B to this proxy statement/prospectus, to authorize a new class of non-voting common stock.

 

3.

To consider and, if necessary, vote upon an adjournment of the Amprius special meeting to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 and 2.

 

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To transact such other business as may properly come before the Amprius special meeting or any adjournment or postponement thereof.

Recommendations of the Special Committee and the Amprius Board

The special committee (i) determined that the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, are advisable and are fair to, and in the best interests of, Amprius and the Unaffiliated Stockholders and (ii) recommended that the Amprius Board approve and adopt the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders and recommend that Amprius’ stockholders approve and adopt the same.

The Amprius Board has (i) determined that the merger agreement, the mergers and the other transactions contemplated by the merger agreement, are advisable and are fair to, and in the best interests of, Amprius and its stockholders (including the Unaffiliated Stockholders), (ii) approved and declared advisable the mergers and the other transactions contemplated by the merger agreement, including the mergers, the issuance of Amprius common stock, non-voting common stock, options and warrants in connection with the mergers, the amendment and restatement of Amprius’ certificate of incorporation and the amendment and restatement of Amprius’ bylaws and (iii) approved and authorized each of the transaction documents, including the merger agreement. The Amprius Board recommends that Amprius’ stockholders vote “FOR” Proposal No. 1 to approve and adopt the merger agreement and the transactions contemplated thereby.

The Amprius Board has (i) determined that the amendment and restatement of Amprius’ amended and restated certificate of incorporation, in the form attached hereto as Annex B, is fair to, advisable and in the best interests of, Amprius and its stockholders (including the Unaffiliated Stockholders) and (ii) authorized and approved the amendment and restatement of Amprius’ current amended and restated certificate of incorporation. The Amprius Board recommends that Amprius’ stockholders vote “FOR” Proposal No. 2 to approve and adopt the amendment and restatement of Amprius’ current amended and restated certificate of incorporation.

 

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The Amprius Board has resolved that the Amprius Board shall, if necessary, recommend the adjournment of the Amprius special meeting to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 or 2. The Amprius Board recommends that, if necessary, Amprius’ stockholders vote “FOR” Proposal No. 3 to adjourn the Amprius special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 or 2.

Record Date and Voting Power

Only holders of record of Amprius’ common stock at the close of business on the record date, June 26, 2023, are entitled to notice of, and to vote at, the Amprius special meeting. There were approximately 56 holders of record of Amprius’ common stock at the close of business on the record date. At the close of business on the record date, 85,983,560 shares of Amprius’ common stock were issued and outstanding. On each matter to be voted upon, you have one vote for each share of common stock you own as of the record date. See the section titled “Principal Stockholders of Amprius” in this proxy statement/prospectus for information regarding persons known to Amprius’ management to be the beneficial owners of more than 5% of the outstanding shares of Amprius’ common stock.

Voting and Revocation of Proxies

The proxy accompanying this proxy statement/prospectus is solicited on behalf of the Amprius Board for use at the Amprius special meeting.

If you are a stockholder of record of Amprius as of the record date referred to above, you may vote virtually at the Amprius special meeting or vote by proxy using the enclosed proxy card. Whether or not you plan to attend the Amprius special meeting, Amprius urges you to vote by proxy to ensure your vote is counted. You may still attend the Amprius special meeting virtually and vote online if you have already voted by proxy. As a stockholder of record, you may vote in any of the following ways:

 

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Vote by Internet:

 

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Before the Meeting: Go to www.proxyvote.com or scan the QR Barcode. Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on July 25, 2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

 

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During the Meeting: Go to www.virtualshareholdermeeting.com/AMPX2023SM. You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.

 

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Vote by Phone: 1-800-690-6903. Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on July 25, 2023. Have your proxy card in hand when you call and then follow the instructions.

 

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Vote by Mail: Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

If your shares of Amprius’ common stock are held by your broker as your nominee, that is, in “street name,” the enclosed voting instruction card is sent by the institution that holds your shares. Please follow the instructions included on that proxy card regarding how to instruct your broker to vote your shares of Amprius’ common stock. Unless your broker has discretionary authority to vote on certain matters, your broker will not be able to vote your shares of Amprius’ common stock without instructions from you. Brokers are not expected to have discretionary authority to vote for any of the proposals. To make sure that your vote is counted, you should instruct your broker to vote your shares, following the procedures provided by your broker.

All properly executed proxies that are not revoked will be voted at the Amprius special meeting and at any adjournments or postponements of the Amprius special meeting in accordance with the instructions contained in

 

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the proxy. If a holder of Amprius’ common stock executes and returns a proxy and does not specify otherwise, the shares represented by that proxy will be voted “FOR” Proposal No. 1 to approve and adopt the merger agreement and the transactions contemplated thereby, including the mergers and the issuance of shares of Amprius’ common stock and non-voting common stock to Holdco’s stockholders, options to purchase shares of Amprius’ common stock to Holdco’s optionholders and warrants exercisable for shares of Amprius’ common stock to Holdco’s warrantholder pursuant to the merger agreement; “FOR” Proposal No. 2 to approve and adopt the proposed charter; and “FOR” Proposal No. 3 to approve, if necessary, the adjournment of the Amprius special meeting to solicit additional proxies if there are not sufficient votes in favor of Proposal Nos. 1 or 2 in accordance with the recommendation of the Amprius Board.

Amprius’ stockholders of record may change their vote at any time before their proxy is voted at the Amprius special meeting in one of three ways. First, a stockholder of record of Amprius can send a timely written notice to the Secretary of Amprius stating that the stockholder would like to revoke its proxy. Second, a stockholder of record of Amprius can submit new proxy instructions either on a new proxy card or by telephone or via the internet. Third, a stockholder of record of Amprius can attend the Amprius special meeting and vote virtually. Attendance alone will not revoke a proxy. If a stockholder of Amprius of record or a stockholder who owns shares of Amprius’ common stock in “street name” has instructed a broker to vote its shares of Amprius’ common stock, the stockholder must follow directions received from its broker to change those instructions.

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your shares of Amprius common stock, you may contact D.F. King & Co., Inc., Amprius’ proxy solicitor, toll free at (800)-207-3158, banks and brokers can call collect at (212)-269-5550, or email at AMPX@dfking.com.

Required Vote

The presence, virtually or represented by proxy, at the Amprius special meeting of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote at the Amprius special meeting is necessary to constitute a quorum at the meeting. Abstentions and broker non-votes will be counted towards a quorum. The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for Proposal No. 1. The affirmative vote of holders of at least two-thirds of the voting power of Amprius’ common stock outstanding as of the record date is required for approval of Proposal No. 2. In addition, the affirmative vote of the holders of a majority of the outstanding Unaffiliated Shares is required to approve Proposal Nos. 1 and 2. The affirmative vote of the majority of the voting power of the Amprius shares present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for approval of Proposal No. 3.

Holdco has committed to voting in favor of each of the proposals presented by Amprius for approval by holders of its common stock. Such shares will not be counted as part of the Unaffiliated Stockholder vote but will be included for, among other things, the purposes of establishing a quorum.

Votes will be counted by the inspector of election appointed for the Amprius special meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and broker non-votes. Abstentions will have the same effect as “AGAINST” votes for Proposal Nos. 1, 2 and 3. Broker non-votes will have the same effect as “AGAINST” votes for Proposal No. 2. For Proposal Nos. 1 and 3, broker non-votes will have no effect and will not be counted towards the vote total.

Each of Proposal Nos. 1 and 2 are conditioned upon each other. Therefore, the mergers cannot be consummated without the Amprius Requisite Stockholder Approval of Proposal Nos. 1 and 2.

 

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Solicitation of Proxies

Amprius is responsible for the cost of the printing and filing of this proxy statement/prospectus and the proxy card. Amprius has engaged D.F. King & Co., Inc. (“D.F. King”) to assist in the solicitation of proxies for the special meeting. Amprius has agreed to pay D.F. King a fee of $25,000. Amprius will reimburse D.F. King for reasonable out-of-pocket expenses and will indemnify D.F. King and its affiliates against certain claims, liabilities, losses, damages and expenses. Amprius may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners of Amprius’ common stock. Amprius’ directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Other Matters

As of the date of this proxy statement/prospectus, the Amprius Board does not know of any business to be presented at the Amprius special meeting other than as set forth in the notice accompanying this proxy statement/prospectus. If any other matters should properly come before the Amprius special meeting, it is intended that the shares represented by proxies will be voted with respect to such matters in accordance with the judgment of the persons voting the proxies.

 

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THE MERGERS

This section and the section titled “The Merger Agreement” in this proxy statement/prospectus describe the material aspects of the mergers, including the merger agreement. While Amprius and Holdco believe that this description covers the material terms of the mergers and the merger agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement/prospectus for a more complete understanding of the mergers and the merger agreement, including the merger agreement attached as Annex A, the opinion of Houlihan Lokey attached as Annex D and the other documents to which you are referred herein. See the section titled “Where You Can Find More Information” in this proxy statement/prospectus.

Background of the Mergers

Legacy Amprius has developed and, since 2018, been in commercial production of ultra-high energy density lithium-ion batteries for mobility applications leveraging disruptive silicon anodes.

Prior to the Business Combination, over 99% of Legacy Amprius’ common stock was owned by Holdco, a privately held, venture-backed Delaware corporation. Holdco also was the corporate parent of three other operating subsidiaries—Berzelius, Apex and Amprius Energy.

Throughout 2021 and 2022, the Holdco Board evaluated potential transactions to finance Legacy Amprius and Holdco’s other subsidiaries. In January and February 2022, Holdco distributed its equity interests in all subsidiaries other than Legacy Amprius (Berzelius, Apex and Amprius Energy, collectively, the “Spun Off Subsidiaries”) to Holdco stockholders (the “Spin-off”).

The Business Combination

On September 14, 2022, Legacy Amprius consummated the Business Combination, whereby Legacy Amprius became a wholly owned subsidiary of Kensington, and Kensington changed its name to Amprius Technologies, Inc. As a result of the Business Combination, Holdco became Amprius’ majority stockholder, holding 65,515,552 shares of Amprius’ common stock, which we refer to as the “Holdco Owned Shares.”

In evaluating the Business Combination, Kensington and Holdco considered alternative business combination structures in which Holdco’s stockholders would receive shares of Amprius’ common stock, such as a merger of Holdco with and into Kensington. The parties chose to make Legacy Amprius the party to the Business Combination, among other reasons, to improve investor communication by presenting a simpler, clearer description of the business and to avoid the possibility that the parties would be required to provide SEC-compliant financial statements that included the Spun Off Subsidiaries, the production of which would have been impractical.

In connection with the Business Combination, Amprius disclosed Legacy Amprius’ expectation that, following the closing of the Business Combination, Holdco would evaluate options to facilitate its stockholders holding Amprius common stock directly, including a potential transaction in which Holdco would merge with and into a wholly owned subsidiary of Amprius and Holdco’s stockholders would receive shares of Amprius common stock in exchange for their Holdco shares. The fact that such options were being considered was also disclosed by Holdco on September 19, 2022 in a Schedule 13D.

The Formation of the Special Committee

In September 2022, Amprius’ counsel, Wilson Sonsini Goodrich & Rosati Professional Corporation, (“Wilson Sonsini”), advised the Amprius Board that the Amprius Board should form a special committee of independent directors if it wished to consider a potential transaction with Holdco, and that such special committee should represent the interests of the minority shareholders from the onset, prior to consideration of

 

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any discussions or proposals. Justin Mirro was identified as an independent and disinterested director with respect to such a transaction. At the request of Mr. Mirro, representatives of Wilson Sonsini provided references to law firms that could potentially serve as independent legal counsel to a special committee, including Morris, Nichols, Arsht & Tunnell LLP, which we refer to as “Morris Nichols.”

On October 18, 2022, the Amprius Board unanimously adopted resolutions (a) establishing a special committee, which we refer to as the “special committee,” to review, evaluate and negotiate a transaction involving Holdco related to the distribution of shares of Amprius common stock to Holdco’s stockholders (such transaction or any alternative thereto and any related transaction, a “Potential Transaction”); (b) delegating to the special committee the full power and authority of the Amprius Board to, among other things, (i) explore, review, approve or disapprove the terms of any Potential Transaction and all matters relating to the Potential Transaction, (ii) negotiate and approve the definitive documentation (if any) relating to a Potential Transaction, (iii) review, evaluate and, if applicable, approve any issuance of equity or equity interests in connection with the Potential Transaction, and (iv) retain legal counsel and any other advisors that the special committee deems necessary, useful, or advisable to assist the special committee in performing its duties and responsibilities; (c) appointing Mr. Mirro to serve as the sole member of the special committee; and (d) determining that Mr. Mirro is disinterested and independent of Holdco. The Amprius Board further resolved that Amprius would not consummate any Potential Transaction unless it was approved or recommended by the special committee and approved by a majority of Amprius’ disinterested stockholders, and that such conditions could not be waived.

On November 3, 2022, the special committee spoke with a representative of Morris Nichols to interview Morris Nichols as potential independent legal counsel to the special committee. After interviewing with two other law firms, the special committee determined to engage Morris Nichols as its independent legal counsel based on the firm’s experience in advising special committees and the special committee confirmed that Morris Nichols had no actual or potential conflicts of interest with respect to an engagement, and could provide independent advice to the special committee. An engagement letter formally documenting the special committee’s engagement of Morris Nichols was executed on November 10, 2022.

The Holdco Proposal

In November 2022, the Holdco Board retained Baker & McKenzie LLP, which we refer to as “Baker McKenzie,” as counsel to Holdco. Throughout the month of November, members of the Holdco Board worked with Baker McKenzie to review the terms of comparable precedent transactions for mergers between a holding company and publicly traded operating companies and to formulate a proposal for a transaction between Holdco and Amprius.

On December 4, 2022, the Holdco Board met to discuss a potential transaction with Amprius, with representatives of Baker McKenzie in attendance. The Holdco Board discussed the fact that simplifying the Holdco structure would be in the best interests of both the Holdco stockholders as well as the overall Amprius business. The Holdco Board reviewed a draft of a letter to the Amprius Board regarding a Potential Transaction and also discussed with Baker McKenzie the potential terms of such a transaction.

The Special Committee’s Process and Deliberation

On December 4, 2022, Donald R. Dixon, in his capacity as the chairman of the Holdco Board, delivered a letter to the Amprius Board on behalf of Holdco (the “December 4 Letter”) stating that Holdco was prepared to begin discussions regarding a Potential Transaction. The letter stated that Holdco expected the Potential Transaction would be effectuated as a tax-free reorganization and be subject to the approval of a special committee of the Amprius Board and the approval of a majority of Amprius’ stockholders not affiliated with Holdco.

On December 6, 2022, representatives of Morris Nichols spoke with representatives of Baker McKenzie regarding the December 4 Letter and to seek clarification on their understanding that Holdco proposed to follow

 

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the framework established under Kahn v. M & F Worldwide Corporation, a decision of the Delaware Supreme Court that provides a legal framework for implementing minority stockholder protections in negotiating a transaction involving a controlling stockholder, and its progeny (“MFW”), which Baker McKenzie orally confirmed.

On December 8, 2022, Baker McKenzie sent Morris Nichols a letter on behalf of Holdco (the “December 8 Letter”). In the letter, Mr. Dixon clarified and reconfirmed that the intent of Holdco’s original December 4 Letter was that any Potential Transaction would be conditioned upon approval by a fully empowered special committee of the Amprius Board consisting of independent, non-management directors and upon the approval of the holders of a majority of the shares of Amprius common stock owned by disinterested stockholders in accordance with the MFW framework. Holdco further confirmed that such conditions could not be waived. Morris Nichols acknowledged receipt of the December 8 Letter and confirmed it would share the letter with Amprius and the special committee.

On December 9, 2022, Baker McKenzie sent Morris Nichols a term sheet in respect of a Potential Transaction on behalf of Holdco (the “December 9 Term Sheet”), which contemplated the merger of Holdco with and into Amprius or a subsidiary of Amprius, in a tax-free reorganization. The December 9 Term Sheet provided that (a) the Holdco Owned Shares would be cancelled in exchange for newly issued Amprius shares, based on an exchange ratio, rounded to the nearest whole share, equal to (i) the number of Holdco Owned Shares, multiplied by (ii) the 90-day volume-weighted average price (the “VWAP”) of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger, plus (iii) the aggregate exercise price of all vested options and warrants of Holdco, divided by (iv) the fully-diluted share count of Holdco (excluding unvested options), on an as-converted to common stock basis, divided by (v) the 90-day VWAP of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger; (b) each vested option to acquire Holdco shares would be cancelled in exchange for shares of Amprius common stock (taking into account the exchange ratio); (c) each unvested option to acquire Holdco shares would be assumed by Amprius and converted into an option to acquire shares of Amprius common stock (taking into account the exchange ratio); (d) each warrant to acquire Holdco shares would be cancelled in exchange for shares of Amprius common stock (taking into account the exchange ratio); (e) major Holdco stockholders would agree to lock-up restrictions substantially consistent with the existing lock-up restrictions applicable to the Holdco Owned Shares; (f) if Amprius’ stockholders failed to approve the transaction, Amprius would reimburse Holdco for its expenses, up to $1 million; (g) if the Amprius Board changed its recommendation, Holdco would be entitled to a break fee equal to 3% of the transaction value; (h) at closing, any unpaid transaction expenses of Holdco would be assumed by Amprius with no reduction to the exchange ratio; and (i) Amprius would indemnify Holdco officers, directors, employees and stockholders in connection with any claim, action, suit, proceeding or investigation arising out of the fact that such person is or was a director, officer, employee or stockholder of Holdco prior to the closing.

On December 16, 2022, the special committee held a meeting, with representatives of Morris Nichols in attendance. Morris Nichols advised the special committee on its fiduciary duties and discussed the framework under MFW. Morris Nichols reported on its legal diligence to date, including calls with Amprius and its counsel to gather background information and its review of corporate documents. The special committee and Morris Nichols discussed the potential benefits and risks of a Potential Transaction to Amprius and the minority stockholders, the tax benefits of a Potential Transaction to Holdco’s stockholders (as compared to alternative structures, such as a distribution by Holdco of the Holdco Owned Shares) and the impact of that benefit on the negotiating strategy, and relevant Delaware case law relating to similar transaction structures.

On December 20, 2022, the special committee held a meeting, with representatives of Morris Nichols in attendance. The special committee invited representatives from two financial advisory firms, including Houlihan Lokey, to present their qualifications to serve as the special committee’s independent financial advisor. Such firms were identified by Morris Nichols in consultation with the special committee. Following these presentations, on December 22, the special committee selected Houlihan Lokey to serve as its independent financial advisor. The special committee determined to engage Houlihan Lokey as its independent financial

 

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advisor based on the firm’s experience in working with special committees on unique and complex matters and confirmed that Houlihan Lokey had no conflicts of interest with respect to an engagement. On January 9, 2023, Amprius, the special committee and Houlihan Lokey entered into an engagement letter providing for the engagement of Houlihan Lokey as financial advisor to the special committee.

On January 5, 2023, the special committee held a meeting, with representatives of Morris Nichols in attendance. Morris Nichols discussed the concepts of independence and disinterestedness under Delaware law. Morris Nichols and the special committee discussed any interests and relationships that could be viewed as relevant to the special committee’s independence and disinterestedness. Mr. Mirro confirmed that he did not have any interests in or relationship with Legacy Amprius or Holdco or any of its directors prior to the Business Combination. Mr. Mirro also confirmed that he was willing and able to serve as a member of the special committee and was independent and disinterested with respect to a Potential Transaction. Amprius’ Chief Financial Officer, Amprius’ Vice President of Legal Affairs and representatives of Wilson Sonsini then joined the meeting at the invitation of the special committee. The members of management and the Wilson Sonsini representatives provided their views on the December 9 Term Sheet, including regarding the potential benefits and risks of a Potential Transaction to Amprius and the minority stockholders, Potential Transaction structures, the contemplated exchange ratio and alternative formulations, the treatment of Holdco options, lock-up terms and mechanisms to account for costs associated with the Potential Transaction. The members of management and the Wilson Sonsini representatives also discussed (a) the Spin-off; (b) issuing non-voting shares of Amprius to the Holdco stockholders holding non-voting shares of Holdco; (c) Amprius’ receipt of preclearance from the SEC to exclude the balances and activities of Holdco’s former subsidiaries from Amprius’ financial disclosures made in and after the Business Combination, in light of, among other things, the separate and distinct operations of such former subsidiaries and the general impracticality of obtaining audited financial statements from Chinese entities; and (d) a request for a similar preclearance from the SEC in connection with a Potential Transaction (which was later obtained from the SEC on February 2). The members of management and the Wilson Sonsini representatives left the meeting, following which the special committee and Morris Nichols continued discussion regarding the potential benefits and risks of a Potential Transaction to Amprius and the minority stockholders.

On January 12, 2023, the special committee held a meeting with representatives of Morris Nichols and Houlihan Lokey in attendance. Houlihan Lokey provided an update on its diligence with Amprius and Holdco management and the status of its financial analysis. Morris Nichols reviewed the December 9 Term Sheet and highlighted certain legal considerations relevant to a potential counteroffer, if one was deemed advisable. The special committee and its advisors discussed the tax benefits to Holdco and its stockholders of a Potential Transaction as compared to alternative structures and the impact of that benefit on the negotiations. Morris Nichols discussed, reflecting prior consultation with Wilson Sonsini on the topic, a potential structure under which foreign holders would receive non-voting shares that would convert to voting shares upon a sale into the market or transfer to a U.S. holder. The special committee and its advisors discussed this potential structure and the benefits and risks associated therewith, including the effects of such a structure on stockholders’ relative voting power following a Potential Transaction and on Amprius’ trading profile. Morris Nichols then discussed the treatment of Holdco options in a Potential Transaction and the tax liabilities that would be incurred by such option holders if vested Holdco options were deemed exercised prior to the closing of a Potential Transaction (and the potential cash outlay that could be required by Amprius to cover such obligations, even if such option holders economically assumed the tax liabilities in full through a stock-based settlement). The special committee and its advisors discussed the possibility of Amprius assuming such options and that such assumption of options could contribute positively to employee and management retention and incentivization but would increase the complexity of the exchange ratio (as the exchange ratio would need to account for the aggregate value of the options as an obligation of the other Holdco shareholders). The special committee and its advisors then discussed considerations relevant to the exchange ratio for a Potential Transaction, including potential expenses and liabilities that could arise in connection with a Potential Transaction, mechanisms to account for such expenses and liabilities and the relationship between Amprius stock price assumed for purposes of the Potential Transaction and potential exchange ratio constructs, including that a higher assumed Amprius stock price, by ascribing a higher implied value to assumed options and warrants, would, all else equal, reduce the number of

 

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Amprius shares issued and issuable as a result of the Potential Transaction. The special committee and its advisors also discussed the other aspects of the December 9 Term Sheet, including the lock-up provisions, the proposed expense reimbursement and the proposed break fee. The special committee’s advisors discussed potential dilution to Amprius’ stockholders that could result under the terms set forth in the December 9 Term Sheet (including the assumption by Amprius of certain Holdco expenses and potential liabilities), which the special committee deemed unacceptable.

Houlihan Lokey then discussed its observations and certain observations of members of management relating to possible benefits of a Potential Transaction, noting that a Potential Transaction could enhance public float and liquidity and could improve capital markets access, increase institutional investor and analyst interest, increase eligibility for inclusion in certain indices and enhance the ability of Amprius to use common stock as currency. Houlihan Lokey then discussed the hypothetical implied aggregate economic accretion or dilution to Amprius potentially resulting from the Potential Transaction based on various assumed discounts, Amprius stock prices and transaction expense scenarios.

On January 13, 2023, the Amprius Board held a regular meeting, with members of management and representatives of Wilson Sonsini in attendance. A representative of Morris Nichols joined for a portion of the meeting and reported that the special committee had engaged Morris Nichols and Houlihan Lokey and that the special committee, together with its advisors, was continuing to evaluate the Potential Transaction and the December 9 Term Sheet.

On January 18, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. Houlihan Lokey reported on its preliminary diligence with Holdco and Amprius management, including that Holdco management had indicated Holdco did not have material assets, liabilities or known contingent liabilities (other than the Holdco Owned Shares and certain small amounts of cash and working capital balances on its balance sheet). Houlihan Lokey then reviewed publicly available financial terms of several precedent downstream merger transactions, noting the discounts in such precedents and discussing the relevance of the various precedents to the Potential Transaction. Houlihan Lokey then discussed considerations relevant to the exchange ratio in a Potential Transaction, including regarding a discount and mechanisms to account for expenses and liabilities incurred by Amprius. Houlihan Lokey also reviewed and discussed illustrative exchange ratio constructs, the effects that changes in Amprius stock price utilized in the exchange ratio have on the number of shares of Amprius common stock issued or issuable as a result of a Potential Transaction and factors that could make a Potential Transaction accretive to Amprius and accretive to the minority stockholders from a relative ownership and voting power perspective. The special committee discussed with its advisors the potential benefits and risks of a Potential Transaction to Amprius and the minority stockholders, as compared to the status quo. During such discussion (a) Houlihan Lokey explained that a Potential Transaction with appropriate terms could increase the relative ownership and voting power of the minority stockholders and that, although a Potential Transaction could place near-term pressure on Amprius’ stock price because of the potentially increased trading volume, a Potential Transaction could potentially benefit Amprius longer-term, including because (i) a Potential Transaction would reduce concentration in ownership of Amprius’ stock, thereby enhancing public float and liquidity, and (ii) a Potential Transaction (and resulting effects on public float and liquidity) could improve capital markets access, helping to facilitate efficient access to capital for growth, increase institutional investor and analyst interest and increase eligibility for inclusion in certain indices; (b) Houlihan Lokey discussed certain situations in which corporate simplifications had been followed by a boost in trading volume and stock price performance; (c) Houlihan Lokey reviewed potential considerations relating to a Potential Transaction from Holdco’s perspective, including that (i) Holdco would lose its controlling ownership stake as a result of a Potential Transaction, and (ii) alternative structures, such as a distribution by Holdco of the Holdco Owned Shares, would likely cause Holdco and its stockholders to incur significant tax liabilities and limit flexibility on the timing of such liabilities, and (d) the special committee’s advisors discussed potential risks, benefits and other considerations relevant to Amprius and the minority stockholders, including (i) potential liabilities arising out of a Potential Transaction, (ii) that although a Potential Transaction would reduce concentration in ownership of Amprius’ stock, Amprius would have several

 

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stockholders that own more than 5% of the stock immediately following the Potential Transaction, and (iii) that the issuance of nonvoting shares in a Potential Transaction would increase the relative voting power of Amprius’ other stockholders until such non-voting shares convert into voting shares.

Following discussion with its advisors, the special committee determined that a Potential Transaction with appropriate terms and consideration to be negotiated by the special committee would be in the best interests of the minority stockholders. The special committee determined that in its counteroffer the exchange ratio should include a discount, given the tax benefits of the Potential Transaction to Holdco and its stockholders, the potential liabilities that Amprius could incur as a result of the Potential Transaction and to help ensure that the minority stockholders would not experience dilution as a result of the Potential Transaction. The special committee determined that its counteroffer to Holdco should reflect a discount of 5%, in addition to an adjustment to compensate Amprius for all expenses and for Holdco’s net liabilities (including expenses) at the time of the closing of the Potential Transaction. The special committee further determined that its counteroffer should reflect an assumption of Holdco’s vested and unvested options, including because of the potential that such assumption would contribute positively to Amprius employee and management retention and incentivization. Following discussion with its advisors, the special committee approved certain other terms of the counteroffer, which were incorporated into the January 18 Term Sheet (as defined below) summarized below.

Later on January 18, 2023, Morris Nichols sent Baker McKenzie a revised term sheet reflecting the terms approved by the special committee at the meeting earlier that day (the “January 18 Term Sheet”). The January 18 Term Sheet provided that (a) the Holdco Owned Shares would be cancelled in exchange for newly issued Amprius shares, based on an exchange ratio, rounded down to two decimal places, equal to (i) the number of Holdco Owned Shares, multiplied by (ii) the greater of $11.00 and the 90-day VWAP of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger, multiplied by (iii) 0.95, plus (iv) the aggregate exercise price of all options (whether vested or unvested) and warrants of Holdco (which were all in-the-money), minus (v) all net liabilities of Holdco, plus all transaction expenses incurred by either Holdco or Amprius in connection with the negotiation or consummation of the Potential Transaction, divided by (vi) the fully-diluted share count of Holdco, on an as-converted to common stock basis, divided by (vii) the greater of $11.00 and the 90-day VWAP of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger; (b) each option to acquire Holdco shares (whether vested or unvested) would be assumed by Amprius and converted into a number of options to acquire shares of Amprius common stock, implied by and adjusted based on the exchange ratio; (c) each warrant to acquire Holdco shares would be cancelled in exchange for shares of Amprius common stock (taking into account the exchange ratio); (d) all shares issued in the Potential Transaction (or issuable upon exercise of options assumed in the Potential Transaction) would be subject to lock-up terms substantially consistent with those in the existing lock-up arrangements applicable to Holdco Owned Shares; (e) as a condition to closing, each share of Holdco preferred stock would convert into one share of Holdco Class A common stock or Holdco Class B common stock, as applicable, effective immediately prior to the closing; (f) in the merger, shares of Holdco Class B common stock would be converted into the right to receive shares of a newly authorized class of non-voting common stock of Amprius; (g) the merger would be subject to a condition with respect to the lack of exercise of appraisal rights by the Holdco stockholders; and (h) at the signing of the definitive agreement in respect of the merger, Holdco, and stockholders of Holdco holding shares comprising a majority of each class and series of Holdco stock, would enter into support agreements agreeing to approve the Potential Transaction and major stockholders would agree not to engage in business combinations with Amprius for three years following the Potential Transaction without the approval of independent, disinterested Amprius directors. The January 18 Term Sheet also removed the expense reimbursement, break fee and indemnification provisions related to stockholders of Holdco.

On January 19, 2023, representatives of Morris Nichols spoke with representatives of Baker McKenzie regarding the January 18 Term Sheet. During the call, Baker McKenzie explained Holdco’s position that a discount was inappropriate in consideration of the fact that the shares held by non-Holdco Amprius stockholders were not being adversely affected by the Potential Transaction. In response, Morris Nichols conveyed the special committee’s view that a discount was appropriate given the tax benefits of the Potential Transaction to Holdco

 

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and its stockholders, the potential liabilities that Amprius could incur as a result of the Potential Transaction and to help ensure that the minority stockholders would not experience dilution as a result of the Potential Transaction. Morris Nichols also discussed the shares entitled to participate in the minority stockholder vote under MFW. Also on January 19, Mr. Mirro spoke with Mr. Dixon and conveyed the need for Holdco to present a compelling offer to the special committee. Morris Nichols, together with Houlihan Lokey, conveyed these positions again on a call with Baker McKenzie on January 20.

On January 26, 2023, Baker McKenzie delivered a revised term sheet to Morris Nichols (the “January 26 Term Sheet”). The January 26 Term Sheet provided that (a) a 1% discount to the exchange ratio would be applied at closing, and that Amprius shares representing such discount would be held in escrow for three years; (b) Holdco stockholders would agree to indemnify Amprius for 50% of any litigation expenses, if any, that Amprius could incur in connection with the Potential Transaction; and (c) such escrow would serve as Amprius’ sole source of recovery against Holdco’s stockholders for litigation expenses. The January 26 Term Sheet retained language providing that the exchange ratio would be rounded down to two decimal places but modified the exchange ratio formula to equal (i) the number of Holdco Owned Shares, multiplied by (ii) the 90-day VWAP of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger, plus (iii) the aggregate exercise price of all vested options and warrants of Holdco, plus (iv) all cash of Holdco, minus all debt of Holdco, minus all transaction expenses incurred by Holdco in connection with the negotiation or consummation of the Potential Transaction, divided by (v) the fully-diluted share count of Holdco (excluding unvested options), on an as-converted to common stock basis, divided by (vi) the 90-day VWAP of Amprius common stock as of the date of the signing of the definitive agreement in respect of the merger. The January 26 Term Sheet also included a request for reimbursement of up to $500,000 for expenses incurred by Holdco if the Amprius Board changed its recommendation relating to a Potential Transaction or failed to obtain necessary approvals from its stockholders.

On January 31, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. The special committee and its advisors discussed the January 26 Term Sheet. The special committee determined that the escrow construct contemplated by the January 26 Term Sheet was not acceptable due to, among other things, the fact that such a construct may not be accretive to the minority stockholders from a relative ownership perspective. Houlihan Lokey discussed preliminary financial perspectives regarding a Potential Transaction. Houlihan Lokey also discussed preliminary, illustrative sensitivity tables showing certain aggregate economic implications of a Potential Transaction to Amprius based on various assumed discounts and Amprius stock prices, and discussed various assumptions underlying such tables, including those relating to expenses and the treatment of options. Later on January 31, Mr. Mirro spoke with Mr. Dixon and conveyed that the January 26 Term Sheet was not acceptable.

On February 2, 2023, at the direction of the special committee, Morris Nichols delivered a revised term sheet to Baker McKenzie (the “February 2 Term Sheet”). The February 2 Term Sheet reverted to the terms set forth in the January 18 Term Sheet, but (a) provided that a 3% discount would be applied to the result of the exchange ratio formula; (b) accepted the other changes to the exchange ratio formula (except for the exclusion of unvested options); (c) noted that to the extent that, as of signing, the 90-day VWAP for Amprius common stock is less than the $11.00 floor previously proposed, a 120-day VWAP or other metric would be used; and (d) noted the special committee’s assumption that Holdco would settle any non-cash assets or non-debt liabilities (other than transaction expenses) prior to closing.

On February 3, 2023, representatives of Morris Nichols spoke with representatives of Baker McKenzie regarding the February 2 Term Sheet. During the call, Baker McKenzie explained that Holdco was supportive of the terms set forth in the February 2 Term Sheet, but with a 1.25% discount, and that Holdco desired to reach an agreement soon and begin discussions with its stockholders regarding the Potential Transaction.

On February 4, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. The special committee and its advisors discussed the counteroffer conveyed by

 

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Baker McKenzie during the February 3 call with Morris Nichols. Houlihan Lokey representatives discussed preliminary, illustrative sensitivity tables showing certain aggregate economic implications of a Potential Transaction to Amprius based on various discounts and Amprius stock prices and certain assumptions underlying such tables. The special committee’s advisors also discussed the exchange ratio rounding contemplated by the term sheets (and that such rounding had the effect of applying a further discount to the unrounded exchange ratio) and the effects of various discounts on the aggregate number of Amprius shares issued and issuable as a result of the Potential Transaction.

On February 6, 2023, the special committee held a meeting, with representatives of Morris Nichols in attendance. Morris Nichols discussed the potential share count and voting power impacts of the Potential Transaction at various discounts and discussed the exchange ratio rounding contemplated by the term sheets. Morris Nichols also discussed a preliminary analysis of Amprius’ post-merger stockholder base. Over the next several days, Morris Nichols communicated with Wilson Sonsini and instructed Wilson Sonsini to begin preparing a draft merger agreement for Morris Nichols’ review. Morris Nichols and Wilson Sonsini also discussed voting agreements as a potential alternative to Amprius’ issuance of non-voting shares.

On February 11, 2023, at the direction of the special committee, Morris Nichols delivered a revised term sheet to Baker McKenzie (the “February 11 Term Sheet”). The February 11 Term Sheet reflected a 2% discount but was otherwise identical to the February 2 Term Sheet.

On March 23, 2023, Mr. Dixon sent a letter to the Amprius Board on behalf of Holdco stating that Holdco was terminating discussions regarding the Potential Transaction. Mr. Dixon separately conveyed to Mr. Mirro that Holdco was uncertain of the level of Holdco stockholder support for the Potential Transaction because Amprius’ stock price implied that the consideration in the Potential Transaction had a value less than the liquidation preference of certain series of Holdco’s preferred stock. Later on March 23, Amprius announced its business and financial results for the fourth fiscal quarter and full year ended December 31, 2022 and also announced the verification of its 500 Wh/kg battery platform. The closing price of Amprius’ common stock on March 23 was $7.65, as compared to $5.50 on March 22.

On March 31, 2023, the closing price of Amprius’ common stock had reached $8.71, and members of the Holdco Board determined that the recovery was sufficient to merit re-engagement on the transaction. On that day, representatives of Baker McKenzie reached out to Morris Nichols to schedule a call, and on April 1, 2023, representatives of Morris Nichols spoke with representatives of Baker McKenzie. Baker McKenzie conveyed that Holdco was interested in reengaging in discussions and that Holdco would accept the terms set forth in the February 11 Term Sheet, subject to using a fixed $8.71 value for Amprius shares for purposes of certain calculations in the exchange ratio, which represented the closing price of Amprius’ common stock on March 31.

On April 2, 2023, Baker McKenzie sent an email to Morris Nichols in which Baker McKenzie, on behalf of Holdco, confirmed that Holdco was interested in reengaging in discussions regarding the Potential Transaction and that Holdco reaffirmed its commitment to comply with the framework and conditions established under MFW. Later on April 2, Baker McKenzie delivered a revised term sheet to Morris Nichols reflecting a fixed $8.71 value for Amprius shares for purposes of certain calculations in the exchange ratio, but otherwise identical to the February 11 Term Sheet (the “April 2 Term Sheet”).

On April 3, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. The special committee and its advisors discussed the developments since the last special committee meeting and the impact of using a fixed $8.71 share price in the exchange ratio formula. The special committee determined that using a fixed $8.71 share price was acceptable, in part because, due to the rounding mechanic in the exchange ratio, the calculated exchange ratio would only change if the 90-day VWAP was substantially higher than $8.71 and the $11.00 floor previously proposed. The special committee and its advisors also discussed voting agreements as a potential alternative to Amprius’ issuance of non-voting shares. The special committee approved a term sheet reflecting the terms of the April 2 Term Sheet, but providing that

 

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all Holdco shares would be converted into the right to receive shares of Amprius common stock and that at the signing of the definitive agreement in respect of the merger, each foreign holder of Holdco would deliver a voting agreement providing that the shares it receives in the merger would be voted in the same manner as non-foreign holders (until such shares are sold into the market or to a U.S. person) (the “April 3 Term Sheet”). After the meeting, Morris Nichols delivered the April 3 Term Sheet to Baker McKenzie. Later on April 3, Baker McKenzie conveyed to Morris Nichols that Holdco desired to revert to the construct under prior term sheets of issuing non-voting shares to foreign holders, including because such construct avoided potential delays associated with obtaining voting agreements from each foreign holder. Following consultation with the special committee, Morris Nichols conveyed to Baker McKenzie that the special committee agreed to revert to the prior construct of issuing non-voting shares to foreign holders. Morris Nichols and Baker McKenzie updated the April 2 Term Sheet to be dated as of April 3 (the “Final Term Sheet”) and Morris Nichols conveyed to Baker McKenzie that Morris Nichols and Wilson Sonsini would be preparing draft definitive documents reflecting such terms.

During the remainder of the week, Wilson Sonsini and Morris Nichols worked to prepare a draft merger agreement and draft ancillary documents. Representatives of Wilson Sonsini spoke with representatives of Baker McKenzie regarding the process for obtaining approvals from Holdco’s stockholders. Baker McKenzie conveyed that Holdco did not think it would be advisable to condition the Potential Transaction on approval by a majority of each class and series of Holdco stock, but that Holdco would seek support agreements from holders sufficient to provide the requisite approval of the Potential Transaction under Holdco’s certificate of incorporation.

On April 8, 2023, Morris Nichols sent a draft of the merger agreement to Baker McKenzie consistent with the Final Term Sheet. The draft defined Unaffiliated Stockholders for purposes of the minority vote of stockholders as Amprius stockholders other than (a) Holdco; (b) the stockholders of Holdco; (c) the members of the Amprius Board, including the special committee; (d) Amprius’ Section 16 officers; and (e) any associate or immediate family member of any of the foregoing.

On April 14, 2023, representatives of Morris Nichols and Wilson Sonsini spoke with representatives of Baker McKenzie regarding a transaction checklist and the status of ancillary documents.

On April 19, 2023, Baker McKenzie sent a revised draft of the merger agreement to Morris Nichols and Wilson Sonsini. Among other changes, the revised draft (a) modified the definition of Holdco Requisite Stockholder Approval to eliminate a reference to approval by a majority of each class and series of Holdco stock; (b) modified the definition of Unaffiliated Stockholders to eliminate the exclusion of Amprius’ directors and Section 16 officers from such definition; (c) deleted the dispute resolution process regarding the contents of the Updated Estimated Closing Certificate (as defined in the merger agreement) and provided that any such disputes would not prevent or delay closing; (d) added an intervening event construct with respect to a change in Amprius Board recommendation; (e) provided that Amprius would continue to hold the Amprius special meeting notwithstanding a change in the Amprius Board’s recommendation; (f) provided that Holdco could terminate the merger agreement upon an adverse change in the Amprius Board’s recommendation; and (g) provided that Amprius would indemnify Holdco’s directors, officers, employees, fiduciaries and agents between signing and closing. Over the next week, Morris Nichols and Wilson Sonsini worked to revise the draft merger agreement.

On April 21, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. The special committee and Morris Nichols discussed open items in the draft merger agreement and responses thereto, including regarding (a) the definitions of Unaffiliated Stockholders and Holdco Requisite Stockholder Approval; (b) the definition of material adverse effect; (c) the ability of the Amprius Board to change its recommendation; and (d) Amprius’ obligations in respect of indemnification and advancement obligations of Holdco. It was noted that the existing lock-up provisions, as applied to the shares to be issued pursuant to the merger agreement, could expire before closing depending on the timing of satisfaction of the closing conditions. Following discussion with its advisors, the special committee determined not to pursue an additional extension of such lock-up, as applied to the shares to be issued pursuant to the merger agreement;

 

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however, the special committee determined it would be supportive of modifying the lock-up so that it would not expire within 30 days of closing if management deemed it advisable to aid in the administration of issuing shares.

Later on April 21, representatives of Morris Nichols and Wilson Sonsini spoke with representatives of Baker McKenzie regarding communications to be sent to Holdco’s stockholders and the process for obtaining support agreements.

On April 24, 2023, representatives of Morris Nichols and Wilson Sonsini spoke with representatives of Baker McKenzie regarding remaining open items in the draft merger agreement, including Amprius’ obligations in respect of indemnification and advancement obligations of Holdco, the timing of such obligations, and the definition of Unaffiliated Stockholders.

On April 25, 2023, the special committee held a meeting, with a representative of Morris Nichols in attendance. The special committee and Morris Nichols discussed remaining open items in the draft merger agreement, including the definition of Unaffiliated Stockholders, the timing of the indemnification obligations and whether such indemnification obligations would be guaranteed by Amprius. Morris Nichols reported that management conveyed that it believed it could effectively administer the issuance of shares and did not believe modifying the lock-up so that it would not expire within 30 days of closing was necessary from an administrative standpoint. The special committee confirmed its earlier determination not to pursue an additional extension of the lock-up.

On April 28, 2023, Wilson Sonsini sent a revised draft merger agreement to Baker McKenzie. Among other changes, the revised draft reverted to the original definition of Unaffiliated Stockholders. Later that day, a Baker McKenzie representative spoke with a Wilson Sonsini representative and conveyed that Holdco would agree to a construct whereby Amprius shares controlled by the special committee would be entitled to vote on the Potential Transaction for purposes of its approval by Unaffiliated Stockholders but would be voted in the same manner as the shares held by other Unaffiliated Stockholders.

On May 1, 2023, the special committee held a meeting, with representatives of Morris Nichols in attendance. The special committee and Morris Nichols discussed remaining open items in the draft merger agreement, including the definition of Unaffiliated Stockholders and the proposal conveyed by Baker McKenzie in respect thereof, which the special committee determined to reject.

On May 4, 2023, representatives of Morris Nichols and Wilson Sonsini spoke with representatives of Baker McKenzie remaining open items in the draft merger agreement, including the definition of Unaffiliated Stockholders. Morris Nichols conveyed the special committee’s position discussed at the May 1 special committee meeting. Later on May 4, Mr. Mirro spoke with Mr. Dixon to convey the special committee’s position on the definition of Unaffiliated Stockholders and Mr. Dixon, on behalf of Holdco, agreed to such position.

On May 5, 2023, representatives of Morris Nichols and Wilson Sonsini spoke with representatives of Baker McKenzie regarding the draft merger agreement. Also on May 5, Baker McKenzie conveyed that Holdco desired to amend Holdco’s existing registration rights agreement with Amprius to (a) expand the definition of registrable securities such that it would include shares issued under the merger agreement; and (b) modify certain provisions related to piggyback registration rights. Baker McKenzie explained that certain Holdco stockholders had requested such amendments be implemented as an inducement to their willingness to execute a Stockholder Support Agreement. Over the weekend, the parties worked to finalize the merger agreement and ancillary documents.

On May 8, 2023, the special committee held a meeting, with representatives of Morris Nichols and Houlihan Lokey in attendance. Morris Nichols again advised the special committee on its fiduciary duties and discussed and reviewed the terms of the merger agreement and ancillary documents. Morris Nichols discussed the amendments to the registration rights agreement proposed by Holdco and noted that Holdco, Amprius and

 

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Kensington Capital Sponsor IV LLC, a party to the registration rights agreement and an affiliate of Mr. Mirro, would have to approve such amendments. The special committee, and Mr. Mirro on behalf of Kensington Capital Sponsor IV LLC, agreed to approve such amendments to facilitate the transactions contemplated by the merger agreement, as an inducement to certain Holdco stockholders’ willingness to enter into the Stockholder Support Agreement. Houlihan Lokey representatives reviewed and discussed with the special committee its financial analysis (summarized below under “—Opinion of the Special Committee’s Financial Advisor”) and rendered to the special committee Houlihan Lokey’s oral opinion (which was later confirmed by delivery of a written opinion, dated May 8, 2023, addressed to the special committee) that, subject to the assumptions, limitations, qualifications and other matters stated in its written opinion, as of the date of the opinion, the Discounted Exchange Ratio provided for in the Transaction pursuant to the merger agreement is fair to Amprius from a financial point of view. For a detailed discussion of Houlihan Lokey’s opinion, please see “—Opinion of the Special Committee’s Financial Advisor” beginning on page 81. The special committee then adopted resolutions (a) determining that the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of Amprius common stock and non-voting common stock pursuant to the merger agreement, are advisable, fair to, and in the best interests of Amprius and the Unaffiliated Stockholders; and (b) recommending that the Amprius Board approve and adopt the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of Amprius common stock and non-voting common stock pursuant to the merger agreement, and recommend that Amprius’ stockholders approve and adopt the same.

On May 9, 2023, the Holdco Board held a meeting, with representatives of Baker McKenzie in attendance, where Baker McKenzie described the proposed final transaction terms. The members of the Holdco Board approved the merger agreement, the transactions contemplated thereby and related documents, agreements and actions, as well the recommendation that Holdco stockholders approve such transactions.

On May 9, 2023, the Amprius Board held a meeting, with five of the six members of the Amprius Board, members of management and representatives of Wilson Sonsini in attendance, where Wilson Sonsini described the proposed final transaction terms. Shortly after the meeting, the members of the Amprius Board, based in part on the recommendation of the special committee and acting via a unanimous written consent, unanimously approved the merger agreement, the transactions contemplated thereby and related documents, agreements and actions, as well the recommendation that Amprius’ stockholders approve such transactions. Later that day, the parties executed the merger agreement. After markets closed on May 10, Amprius announced its entry into the merger agreement.

Amprius Reasons for the Mergers

Amprius’ mission is to accelerate electrification by making the highest energy density lithium-ion batteries in the world. The Business Combination with Kensington catalyzed the next stage in our growth, providing access to the public markets. As described above, as a result of the Business Combination, Holdco became Amprius’ majority stockholder, with control over the election of directors and other matters requiring stockholder approval. Holdco is owned by a number of stockholders, many of whom continue to drive our growth as employees and members of our management team.

The mergers will result in the Holdco stockholders owning their shares in Amprius directly rather than through a holding company. Amprius believes that the merger with Holdco will create more opportunities for Amprius and maximize long-term stockholder value. Because the mergers contemplated by the merger agreement involve Holdco, our majority stockholder, Holdco agreed that the mergers would be conditioned upon the approval of a fully empowered independent special committee of the Amprius Board and upon the approval of Amprius’ disinterested stockholders. Holdco agreed that these conditions could not be waived. The Amprius Board also agreed that Amprius would not consummate the mergers unless approved or recommended by the special committee and Amprius’ disinterested stockholders.

 

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The Amprius Board established the special committee and empowered the special committee to evaluate and negotiate the mergers. Together with its independent advisors, the special committee negotiated the mergers and believes the mergers are in the best interests of Amprius and its stockholders, including stockholders unaffiliated with Holdco. The consummation of the mergers is conditioned on the approval of the Unaffiliated Stockholders. The discussion below of the information and factors considered by the special committee includes the positive and negative factors considered by the special committee, but it is not intended to be exhaustive and may not include all the factors considered by the special committee. The special committee did not quantify or assign any specific weights to the various factors that it considered in reaching its determination. Rather, the special committee viewed its position and recommendation as being based on the totality of the information and factors it considered.

In evaluating the mergers, the special committee consulted with its independent advisors and considered a number of factors, including the following factors that it believed generally weighed in favor of the mergers:

 

•

Elimination of Amprius’ Majority Stockholder. The special committee considered that, as a result of the mergers, Amprius will no longer have a majority stockholder with control over the election of directors and other matters requiring stockholder approval, and that the resulting de-concentration of ownership could improve corporate governance by allowing for stockholder influence over corporate decision-making through a broad and unaffiliated stockholder base;

 

•

Enhanced Public Float and Liquidity. The special committee considered that, following the expiration of lock-up periods, the mergers may result in enhanced public float and liquidity, which the special committee believes could improve capital markets access for long-term efficient access to capital for growth, increase institutional investor and analyst interest, increase eligibility for inclusion in certain indices and enhance Amprius’ ability to use common stock for incentive compensation;

 

•

Attractive Discount. The special committee considered that, as a result of the discount implied by the Discounted Exchange Ratio, the mergers should be accretive to minority stockholders from a relative ownership and voting power perspective, and that the number of shares issued or issuable as a result of the mergers would not exceed the number of Holdco Owned Shares;

 

•

Employee Relations. A substantial portion of the equity interests held by long-time employees of Amprius, including key employees such as Amprius’ Chief Executive Officer, Chief Technology Officer and President of Amprius Lab, are held as illiquid shares or options in Holdco. The special committee considered that, as a result of the mergers, those equity interests will convert into common stock and options to purchase common stock of Amprius, providing those employees liquidity for their holdings, and that this would promote employee satisfaction, goodwill and retention;

 

•

Alignment of Management and Employees. The special committee considered that as a result of the mergers, management, employees and public stockholders will own all equity securities in the same public entity (including through Amprius’ assumption of Holdco’s options), better aligning our employees and management with Amprius’ success;

 

•

Receipt of Fairness Opinion from Houlihan Lokey. The special committee considered the financial analyses reviewed by Houlihan Lokey with the special committee as well as the oral opinion of Houlihan Lokey rendered to the special committee on May 8, 2023 (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the special committee dated May 8, 2023) to the effect that the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement was fair to Amprius from a financial point of view. See “—Opinion of the Special Committee’s Financial Advisor”;

 

•

Transaction Certainty. The special committee considered that, concurrently with the execution and delivery of the merger agreement, the holders of shares constituting the Holdco Requisite Stockholder Approval delivered support agreements agreeing to vote their Holdco shares in favor of the mergers; and

 

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•

Other Merger Agreement Terms. The special committee considered that, among other rights of Amprius, Amprius is not obligated to consummate the mergers if any Holdco stockholder has sought, or continues to have a right to seek, appraisal rights, or if, during the pendency of the mergers, a Holdco material adverse effect occurs.

The special committee also considered the following factors relating to procedural safeguards that the special committee believes support its decision and the fairness of the mergers:

 

•

The Amprius Board formed the special committee at the outset of the process and empowered it to explore, review, approve or disapprove the terms of the mergers and all matters relating to the mergers;

 

•

The Amprius Board resolved at the outset of the process that Amprius would not consummate any mergers unless it was approved or recommended by the special committee and approved by a majority of Amprius’ disinterested stockholders, and that such conditions could not be waived;

 

•

Holdco agreed at the outset of the process that any mergers would be conditioned upon the approval of a fully empowered special committee of the Amprius Board consisting of independent, non-management directors and upon the approval of the holders of a majority of Amprius’ common stock owned by disinterested stockholders in accordance with the framework established under MFW and that such conditions could not be waived;

 

•

The special committee retained its own independent financial and legal advisors to evaluate the mergers, and was empowered to review, identify and negotiate the merger agreement and the transactions contemplated thereby, including the mergers, and any alternatives thereto, and to make a recommendation to the Amprius Board as to what actions, if any, should be taken by Amprius with respect thereto, and that the special committee had the full authority to determine that Amprius should not engage in a transaction with Holdco;

 

•

The special committee engaged in a careful process, allowing time for the special committee to engage in analyses, deliberations and negotiations on an arm’s length basis;

 

•

At the direction of the special committee, the terms of the merger agreement and the transactions contemplated thereby were extensively negotiated by the special committee and its independent financial and legal advisors, and were closely reviewed and analyzed by the special committee; and

 

•

The approval of the mergers is conditioned on the affirmative vote of the Unaffiliated Stockholders (as more fully described under “The Special Meeting of Amprius’ Stockholders—Required Vote”);

 

•

The special committee also considered a variety of uncertainties, risks and potentially negative factors, including:

 

•

The potential for near-term stock price pressure following the consummation of the mergers, given the potential for increased public float and liquidity, and that the lock-up restrictions applicable to shares issued or issuable in the mergers could expire prior to or shortly after the consummation of the mergers;

 

•

The expenses and transaction costs related to the mergers, including in connection with any litigation that may result from the announcement, pendency or consummation of the mergers, and that certain of such expenses and costs are being paid by Amprius;

 

•

The potential that, as a result of the mergers, Amprius could become subject to presently contingent or unknown liabilities of Holdco, including potential liabilities arising out of Holdco’s indemnification and advancement obligations, and, as the sole member of the entity surviving the second merger, Holdco’s prior ownership of Legacy Amprius, the Spun Off Subsidiaries and the Spin-off;

 

•

The fact that, in the mergers, Holdco will not pay consideration to the other Amprius stockholders, but will instead effectively surrender a portion of its ownership in Amprius (through the Discounted Exchange Ratio);

 

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•

The fact that, immediately following the consummation of the mergers, a significant portion of the outstanding stock of Amprius will comprise Amprius non-voting common stock, and that the timing of the conversion of such shares into Amprius common stock is uncertain and not within Amprius’ control;

 

•

The fact that there can be no assurance that all conditions to the parties’ obligations to complete the mergers will be satisfied, including Amprius’ disinterested stockholders approving the mergers, or that the mergers will be consummated in a timely manner or at all; and

 

•

The potential for diversion of management and employee attention during the pendency of mergers.

In addition, the special committee considered the interests that certain of Amprius’ directors and executive officers may have with respect to the mergers that are different from or in addition to their interests as stockholders of Amprius, including with respect to the fact that Dr. Kang Sun, Donald R. Dixon, Dr. Wen Hsieh and Dr. Steven Chu are securityholders and board members of Amprius and Holdco, as more fully described under “—Interests of Amprius Directors and Executive Officers in the Mergers.” The special committee was also aware that legal counsel to Amprius served as counsel to Holdco prior to the Business Combination and that affiliates of Amprius legal counsel own Holdco shares representing approximately 0.22% of Holdco’s outstanding capital stock.

After taking into account all relevant factors, including those described above, the special committee concluded that the potential benefits of the mergers outweighed the negative or unfavorable considerations and determined that the merger agreement and the transactions contemplated thereby, including the proposed charter and the issuance of shares of Amprius common stock and non-voting common stock pursuant to the merger agreement, are advisable, fair to, and in the best interests of Amprius and the Unaffiliated Stockholders.

Holdco Reasons for the Mergers

In the course of reaching its decision to approve the mergers, the Holdco Board consulted with Holdco’s legal counsel, reviewed a significant amount of information and considered a number of factors, including, among others:

 

•

the potential to provide its current stockholders with greater liquidity by owning stock in a public company, including Holdco’s belief that stockholders will have some liquidity following the expiration of the lock-up restrictions contained in the proposed bylaws;

 

•

the expectation that the merger with Amprius would be a more time- and cost-effective means to access liquidity for its stockholders than other options considered by the Holdco Board, and in particular the fact that the Potential Transaction is the only structure for Holdco stockholders to receive shares of Amprius on a more-likely-than-not tax free basis;

 

•

the terms and conditions of the merger agreement, including, without limitation, the following:

 

•

the determination that the expected relative percentage ownership of Amprius’ stockholders and Holdco’s stockholders in the combined organization was appropriate based, in the judgment of the Holdco Board, on the board of directors’ assessment of the approximate valuations of Amprius and Holdco;

 

•

the expectation that the mergers more likely than not will be treated as a tax-free “reorganization” for U.S. federal income tax purposes;

 

•

the limited number and nature of the conditions of the obligation of Amprius to consummate the mergers;

 

•

the absence of any post-closing liability to the Holdco stockholders resulting from the mergers; and

 

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•

the belief that the other terms of the merger agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, were reasonable in light of the entire transaction;

 

•

the shares of Amprius’ common stock issued to Holdco’s stockholders will be registered on a Form S-4 registration statement and will become freely tradable for Holdco’s stockholders who are not affiliates of Holdco, subject to the terms of the lock-up agreement;

 

•

the mergers may enable certain stockholders of Amprius and Holdco to increase the value of their current shareholding; and

 

•

the likelihood that the mergers will be consummated on a timely basis.

The Holdco Board also considered a number of uncertainties and risks in its deliberations concerning the mergers and the other transactions contemplated by the merger agreement, including the following:

 

•

the possibility that the mergers might not be consummated in a timely manner or at all, including the challenges of obtaining the approval of the Unaffiliated Stockholder in light of the relatively small pool of Unaffiliated Stockholders;

 

•

the expenses to be incurred in connection with the mergers and related administrative challenges associated with combining the companies;

 

•

the fact that the representations and warranties of Amprius in the merger agreement do not survive the closing of the mergers and the potential risk of liabilities that may arise post-closing; and

 

•

various other risks associated with the combined organization and the mergers, including the risks described in the section titled “Risk Factors” in this proxy statement/prospectus.

Opinion of the Special Committee’s Financial Advisor

On May 8, 2023, Houlihan Lokey verbally rendered its opinion to the special committee (which was subsequently confirmed in writing by delivery of Houlihan Lokey’s written opinion addressed to the special committee dated May 8, 2023) to the effect that the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement was fair to Amprius from a financial point of view.

Houlihan Lokey’s opinion was directed to the special committee (in its capacity as such) and only addressed the fairness, from a financial point of view, to Amprius of the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement and did not address any other aspect or implication of the mergers or any other agreement, arrangement or understanding. The summary of Houlihan Lokey’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of its written opinion, which is attached as Annex D to this proxy statement/prospectus and describes certain of the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Houlihan Lokey in connection with the preparation of its opinion. However, neither Houlihan Lokey’s opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, a recommendation to the special committee, the Amprius Board, any security holder of Amprius or any other person as to how to act or vote with respect to any matter relating to the mergers.

In arriving at its opinion, Houlihan Lokey, among other things:

 

1.

reviewed the execution version of May 8, 2023 of the merger agreement, which was entered into on May 9, 2023;

 

2.

reviewed certain publicly available business and financial information relating to Amprius that Houlihan Lokey deemed to be relevant, including certain publicly available research analyst estimates with respect to the future financial performance of Amprius;

 

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3.

reviewed certain information relating to the historical, current and future operations, financial condition and prospects of Amprius made available to Houlihan Lokey by Amprius management, including estimates related to fees and expenses that have, or will be, incurred by or on behalf of Amprius in connection with the mergers (the “Amprius Transaction Expense Estimate”) and certain information relating to the historical, current and future operations, financial condition and prospects of Holdco made available to Houlihan Lokey by Holdco management, including a current estimate of Holdco assets, liabilities, contingent liabilities and estimates related to fees and expenses that have, or will be, incurred by or on behalf of Holdco in connection with the mergers (collectively, the “Holdco Estimates”);

 

4.

spoke with certain members of the managements of Holdco and Amprius and certain of their representatives and advisors regarding the respective businesses, operations, financial condition and prospects of Holdco and Amprius, the mergers and related matters;

 

5.

considered publicly available financial terms of certain transactions that Houlihan Lokey deemed to be relevant;

 

6.

reviewed the current and historical market prices and trading volume for certain of Amprius’ publicly traded securities, and, for illustrative purposes, the current and historical market prices and trading volume of the publicly traded securities of certain other companies that Houlihan Lokey deemed to be relevant; and

 

7.

conducted such other financial studies, analyses and inquiries and considered other information and factors as Houlihan Lokey deemed appropriate.

Houlihan Lokey relied upon and assumed, without independent verification, the accuracy and completeness of all data, material and other information furnished, or otherwise made available, to Houlihan Lokey, discussed with or reviewed by Houlihan Lokey, or publicly available, and does not assume any responsibility with respect to such data, material and other information. In addition, (i) the management of Amprius advised Houlihan Lokey, and Houlihan Lokey assumed, that the Amprius Transaction Expense Estimate reviewed by Houlihan Lokey was reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the matters covered thereby, and (ii) the management of Holdco advised Houlihan Lokey, and Houlihan Lokey assumed, that the Holdco Estimates reviewed by Houlihan Lokey were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of such management as to the matters covered thereby, and Houlihan Lokey expressed no opinion with respect to the Amprius Transaction Expense Estimate, the Holdco Estimates or the assumptions on which such estimates were based. Houlihan Lokey relied upon and assumed, without independent verification, that upon consummation of the mergers there will have been no changes to the information provided to Houlihan Lokey by the managements of Holdco and Amprius relating to the calculation of the Exchange Ratio as of May 8, 2023 that would be material to Houlihan Lokey’s analyses or the opinion. Houlihan Lokey relied upon and assumed, without independent verification, that there was no change in the business, assets, liabilities, financial condition, results of operations, cash flows or prospects of Holdco and Amprius since the respective dates of the most recent financial statements and other information, financial or otherwise, provided to Houlihan Lokey that would be material to Houlihan Lokey’s analyses or opinion, and that there was no information or any facts that would make any of the information reviewed by Houlihan Lokey incomplete or misleading. The management of Amprius does not prepare financial projections in the ordinary course and did not prepare financial projections in connection with the mergers, other than the Amprius Transaction Expense Estimate. Accordingly, for the purposes of Houlihan Lokey’s analyses and opinion, Houlihan Lokey (with the special committee’s consent) relied upon the Pubco Stock Price (as defined in the merger agreement) as an appropriate basis on which to conduct its analyses.

Houlihan Lokey relied upon and assumed, without independent verification, that (a) the representations and warranties of all parties to the merger agreement and all other related documents and instruments that are referred to therein are true and correct, (b) each party to the merger agreement and such other related documents and

 

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instruments will fully and timely perform all of the covenants and agreements required to be performed by such party, (c) all conditions to the consummation of the mergers will be satisfied without waiver thereof, and (d) the mergers will be consummated in a timely manner in accordance with the terms described in the merger agreement and such other related documents and instruments, without any amendments or modifications thereto. Houlihan Lokey also assumed, with the consent of the special committee, that the mergers will qualify as a tax-free transaction. Houlihan Lokey relied upon and assumed, without independent verification, that (i) the mergers will be consummated in a manner that complies in all respects with all applicable foreign, federal and state statutes, rules and regulations, and (ii) all governmental, regulatory, and other consents and approvals necessary for the consummation of the mergers will be obtained and that no delay, limitations, restrictions or conditions will be imposed or amendments, modifications or waivers made that would result in the disposition of any assets of Holdco or Amprius, or otherwise have an effect on the mergers, Holdco or Amprius or any expected benefits of the mergers that would be material to Houlihan Lokey’s analyses or opinion.

In connection with the opinion, Houlihan Lokey was not requested to make, and did not make, any physical inspection or independent appraisal or evaluation of any of the assets, properties or liabilities (fixed, contingent, derivative, off-balance-sheet or otherwise) of Holdco, Amprius or any other party, nor was Houlihan Lokey provided with any such appraisal or evaluation. Houlihan Lokey did not estimate, and expressed no opinion regarding, the liquidation value of any entity or business. Houlihan Lokey did not undertake any independent analysis of any potential or actual litigation, regulatory action, possible unasserted claims or other contingent liabilities, to which Holdco or Amprius was or may have been a party or was or may have been subject, or of any governmental investigation of any possible unasserted claims or other contingent liabilities to which Holdco or Amprius was or may have been a party or was or may have been subject. Furthermore, Houlihan Lokey expressed no opinion or view as to the effects on the mergers, Holdco or Amprius of the unusual volatility recently experienced by the credit, financial and stock markets or any potential changes or developments in such markets or volatility.

Houlihan Lokey was not requested to, and did not, (a) initiate or participate in any discussions or negotiations with, or solicit any indications of interest from, third parties with respect to the mergers, the securities, assets, business or operations of Amprius or any other party, or any alternatives to the mergers or (b) advise the special committee, the Amprius Board or any other party with respect to alternatives to the mergers. The opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Houlihan Lokey as of, May 8, 2023. Houlihan Lokey did not undertake, and was under no obligation, to update, revise, reaffirm or withdraw the opinion, or otherwise comment on or consider events occurring or coming to Houlihan Lokey’s attention after May 8, 2023. Houlihan Lokey did not express any opinion as to what the value of Amprius common stock, non-voting common stock, Exchanged Options and warrants actually will be when issued pursuant to the mergers or the price or range of prices at which Holdco Class A common stock, Holdco Class B common stock, Holdco options, Holdco warrants, Amprius common stock, non-voting common stock, Exchanged Options or warrants may be purchased or sold, or otherwise be transferable, at any time.

The opinion was furnished for the use of the special committee (in its capacity as such) in connection with its evaluation of the mergers and may not be used for any other purpose without Houlihan Lokey’s prior written consent. The opinion was not intended to be, and did not constitute, a recommendation to the special committee, the Amprius Board, any security holder or any other party as to how to act or vote with respect to any matter relating to the mergers or otherwise.

Houlihan Lokey was not requested to opine as to, and the opinion did not express an opinion as to or otherwise address, among other things: (i) the underlying business decision of the special committee, the Amprius Board, Amprius, its security holders or any other party to proceed with or effect the mergers, (ii) the terms of any arrangements, understandings, agreements or documents related to, or the form, structure or any other portion or aspect of, the mergers or otherwise (other than the Discounted Exchange Ratio to the extent expressly specified therein), (iii) the fairness of any portion or aspect of the mergers to the holders of any class of

 

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securities, creditors or other constituencies of either of Amprius or Holdco, or to any other party, except if and only to the extent expressly set forth in the last sentence of the opinion, (iv) the relative merits of the mergers as compared to any alternative business strategies or transactions that might be available for Holdco, Amprius or any other party, (v) the fairness of any portion or aspect of the mergers to any one class or group of Amprius’ or any other party’s security holders or other constituents vis-à-vis any other class or group of Amprius’ or such other party’s security holders or other constituents (including, without limitation, the allocation of any consideration amongst or within such classes or groups of security holders or other constituents, such as the holders of Holdco options and Holdco warrants), (vi) whether or not Holdco, Amprius, their respective security holders or any other party is receiving or paying reasonably equivalent value in the mergers, (vii) the solvency, creditworthiness or fair value of Holdco, Amprius or any other participant in the mergers, or any of their respective assets, under any applicable laws relating to bankruptcy, insolvency, fraudulent conveyance or similar matters, or (viii) the fairness, financial or otherwise, of the amount, nature or any other aspect of any compensation to or consideration payable to or received by any officers, directors or employees of any party to the mergers, any class of such persons or any other party, relative to the Discounted Exchange Ratio or otherwise. Furthermore, no opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Houlihan Lokey relied, with the consent of the special committee, on the assessments by the special committee, the Amprius Board, Holdco, Amprius and their respective advisors, as to all legal, regulatory, accounting, insurance, tax and other similar matters with respect to Holdco, Amprius and the mergers or otherwise.

In performing its analyses, Houlihan Lokey considered general business, economic, industry and market conditions, financial and otherwise, and other matters as they existed on, and could be evaluated as of, the date of its opinion. No company, transaction or business used in Houlihan Lokey’s analyses for comparative purposes is identical to Amprius or the mergers and an evaluation of the results of those analyses is not entirely mathematical. The estimates contained in the Amprius Transaction Expense Estimate prepared by the management of Amprius, the Holdco Estimates prepared by the management of Holdco and the implied reference range values indicated by Houlihan Lokey’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by the analyses. In addition, any analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold, which may depend on a variety of factors, many of which are beyond the control of Amprius and Holdco. Much of the information used in, and accordingly the results of, Houlihan Lokey’s analyses are inherently subject to substantial uncertainty.

Houlihan Lokey’s opinion was only one of many factors considered by the special committee in evaluating the mergers. Neither Houlihan Lokey’s opinion nor its analyses were determinative of the Discounted Exchange Ratio or of the views of the special committee or Amprius management with respect to the mergers or the Discounted Exchange Ratio. Under the terms of its engagement by the special committee, neither Houlihan Lokey’s opinion nor any other advice or services rendered by it in connection with the mergers or otherwise, should be construed as creating, and Houlihan Lokey should not be deemed to have, any fiduciary duty to, or agency relationships with, the Amprius Board, Amprius, Holdco, any security holder or creditor of Amprius or Holdco or any other person, regardless of any prior or ongoing advice or relationships. The type and amount of consideration payable in the mergers were determined through negotiation between the special committee and Holdco, and the decision to enter into the merger agreement was solely that of the special committee and the Amprius Board.

Financial Analyses

In preparing its opinion to the special committee, Houlihan Lokey performed a variety of analyses, including those described below. The summary of Houlihan Lokey’s analyses is not a complete description of the analyses underlying Houlihan Lokey’s opinion. The preparation of such an opinion is a complex process involving various quantitative and qualitative judgments and determinations with respect to the financial,

 

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comparative and other analytical methods employed and the adaptation and application of these methods to the unique facts and circumstances presented. As a consequence, neither Houlihan Lokey’s opinion nor its underlying analyses are readily susceptible to summary description. Houlihan Lokey arrived at its opinion based on the results of all analyses undertaken by it and assessed as a whole and did not draw, in isolation, conclusions from or with regard to any individual analysis, methodology or factor. While the results of each analysis were taken into account in reaching Houlihan Lokey’s overall conclusion with respect to fairness, Houlihan Lokey did not make separate or quantifiable judgments regarding individual analyses. Accordingly, Houlihan Lokey believes that its analyses and the following summary must be considered as a whole and that selecting portions of its analyses, methodologies and factors, without considering all analyses, methodologies and factors, could create a misleading or incomplete view of the processes underlying Houlihan Lokey’s analyses and opinion.

The following is a summary of the material financial analyses performed by Houlihan Lokey in connection with the preparation of its opinion and reviewed with the special committee on May 8, 2023. The order of the analyses does not represent relative importance or weight given to those analyses by Houlihan Lokey. The analyses summarized below include information presented in tabular format. The tables alone do not constitute a complete description of the analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies underlying, and the assumptions, qualifications and limitations affecting, each analysis, could create a misleading or incomplete view of Houlihan Lokey’s analyses.

For purposes of its analyses, Houlihan Lokey reviewed a number of financial metrics, including:

 

•

VWAP — the volume-weighted average price for the applicable security for a particular period;

 

•

Equity Value — generally, the market value as of a specified date of the relevant company’s outstanding equity securities (taking into account outstanding options and other securities convertible, exercisable or exchangeable into or for equity securities of the company); and

 

•

Enterprise Value — generally, the market value as of a specified date of the relevant company’s outstanding equity securities (taking into account outstanding options and other securities convertible, exercisable or exchangeable into or for equity securities of the company), plus the amount of its net debt (the amount of its outstanding indebtedness, non-convertible preferred stock, capital lease obligations and non-controlling interests), less the amount of cash and cash equivalents on its balance sheet.

Has / Gets Analysis. Houlihan Lokey compared (i) the implied per share equity value reference ranges of pre-mergers Amprius common stock (“Has”) to (ii) the implied per share equity value reference ranges of Amprius common stock pro forma for consummation of the mergers (“Gets”).

Houlihan Lokey calculated the “Gets” by taking the quotient of (i) the implied pre-mergers total equity value reference range, minus the estimated Holdco net debt (from the Holdco Estimates), minus the Amprius Transaction Expense Estimate, divided by (ii) the number of shares of Amprius common stock outstanding on a fully diluted basis pro forma for consummation of the mergers. The results of the analysis are as follows:

 

		Selected Illustrative (Discount) / Premium (10.0%) – 10.0%
		“Has”				“Gets”
30-Day VWAP as of May 5, 2023 ($8.39)		$	7.55 – 9.22			$	7.71 – 9.40
Pubco Stock Price ($8.71)(1)		$	7.84 – 9.58			$	8.01 – 9.76

 

(1)	Reflects closing price per share of Amprius common stock as of March 31, 2023.

Gives / Gets Analysis. Houlihan Lokey compared (i) the implied aggregate value reference ranges of Amprius securities issuable to holders of Holdco securities in connection with the mergers (“Gives”) to (ii) the

 

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implied aggregate value reference ranges of shares of Amprius common stock held by Holdco, net of (a) the estimated Holdco net debt (pursuant to the Holdco Estimates) and (b) the Amprius Transaction Expense Estimate (“Gets”).

Houlihan Lokey calculated the “Gives” by multiplying (i) the implied per share base value reference range for Amprius’ common stock by (ii) the aggregate number of shares and share equivalents of Amprius’ common stock issued to holders of Holdco securities in connection with the mergers (with the number of Amprius’ common stock share equivalents determined by the number of Amprius options expected to be issued in connection with the mergers and based upon application of the treasury method). The results of the analysis are as follows (with values reflecting dollars in millions):

 

		Selected Illustrative (Discount) / Premium (10.0%) – 10.0%
		“Gives”				“Gets”
30-Day VWAP as of May 5, 2023 ($8.39)		$	475.6 – 584.7			$	490.9 – 600.8
Pubco Stock Price ($8.71)(1)		$	494.6 – 607.8			$	510.0 – 624.1

 

(1)	Reflects closing price per share of Amprius common stock as of March 31, 2023.

Selected Downstream Merger Transaction Observations. Houlihan Lokey considered certain financial terms of certain precedent transactions involving downstream mergers. The financial data reviewed included (i) transaction value, which was calculated as the product of (a) the number of shares held by a parent company in its subsidiary immediately preceding the transaction, reduced for any applicable implied share discount, multiplied by (b) the unaffected subsidiary share price prior to announcement of the proposed transaction, and (ii) implied share discount, generally based on comparison of the number of subsidiary shares held by a parent company to the implied number of shares received by the parent company’s shareholders upon consummation of the transaction.

The selected transactions included the following:

 

Date Announced
Proposed Transaction(1)		Definitive Agreement		Parent		Subsidiary
11/18/2019		4/8/2020		Standard Diversified Inc.		Turning Point Brands, Inc.
6/10/2019(2)		9/9/2019		Privateer Holdings, Inc.		Tilray, Inc.
2/4/2008		12/9/2008		Smith Investment Company		A.O. Smith Corporation
4/27/2006		6/26/2006		Fidelity National Financial Inc.		Fidelity National Information Services, Inc.
11/28/2005(3)		11/28/2005		American BioScience, Inc.		American Pharmaceutical Partners, Inc.
3/29/2000		3/29/2000		Seagate Technology, Inc.		VERITAS Software Corporation
4/1/1997		4/1/1997		Durwood, Inc.		AMC Entertainment Inc.
4/21/1994(4)		4/21/1994		Petrie Stories Corporation		Toys “R” Us, Inc.

 

(1)	Reflects date of published indication of interest, intention to pursue reorganization transaction or other public announcement of contemplated transaction.

(2)	Implied share discount reflects pro rata distribution of interest in Tilray, Inc. to Privateer Holdings, Inc. shareholders based on ownership interests, subject to adjustments for transaction expenses and outstanding dilutive securities.

(3)	Implied share discount based on fact that shares American Bioscience, Inc. owned in American Pharmaceutical Partners, Inc. were exchanged for the same number of shares in American Pharmaceutical Partners, Inc.

(4)	Implied share discount based on shares issued in respect of shares in Toys “R” Us, Inc. in transaction over total Toys “R” Us, Inc. shares held by Petrie Stores Corporation. Additional shares also issued to Petrie Stores Corporation based on cash over market value of Toys “R” Us, Inc. shares.

 

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The selected downstream merger transaction analysis indicated the following, compared to the nominal discount in the mergers of 2.0% and the effective discount implied by the mergers of 3.3%:

 

		Transaction Value				Implied Share Discount
Low		$	256.0				0.0	%
High		$	15,579.6				14.6	%
Median		$	1,745.0				0.7	%
Mean		$	3,322.6				3.4	%

Other Information

Houlihan Lokey observed certain additional information that was not considered part of its financial analysis for its opinion but was noted solely for illustrative purposes, including, among other things, the following:

Illustrative Only Selected Companies Observations. Houlihan Lokey reviewed certain data for selected companies, with publicly traded equity securities, that Houlihan Lokey deemed relevant.

The financial data reviewed included:

 

•

Enterprise value as a multiple of estimated calendar year 2025 (“CY 2025E”) revenue; and

 

•

Enterprise value as a multiple of estimated calendar year 2026 (“CY 2026E”) revenue.

The selected companies and resulting data were as follows:

 

		Enterprise Value(1) to  Revenue(2)
Selected Company		CY 2025E				CY 2026E
Enovix Corporation			10.3x				3.3x
FREYR Battery			0.7x				0.2x
QuantumScape Corporation			38.0x				40.0x
SES AI Corporation			0.4x				0.1x
Solid Power, Inc.			3.0x				1.3x

 

(1)	Based on publicly available financial information and the relevant company’s closing share price as of May 5, 2023.

(2)	Based on publicly available research analyst estimates with respect to the future financial performance of the selected companies, which has been calendarized to Amprius’ fiscal year end of December 31.

Houlihan Lokey compared these selected companies observations to (i) Amprius’ implied enterprise value as a multiple of CY 2025E revenue of 8.0x (based on the Pubco Stock Price of $8.71) and 7.7x (based on the VWAP of Amprius’ common stock for the 30-day period ended May 5, 2023), and (ii) Amprius’ implied enterprise value as a multiple of CY 2026E revenue of 1.6x (based on the Pubco Stock Price of $8.71 and the VWAP of Amprius’ common stock for the 30-day period ended May 5, 2023). The CY 2025E and CY 2026E revenue figures were based on publicly available research analyst estimates with respect to the future financial performance of Amprius.

Historical Trading Analysis. Houlihan Lokey reviewed certain historical stock price information for Amprius’ common stock. This review indicated that for the 161 trading day period ended May 5, 2023, shares of Amprius’ common stock traded in a range between $4.34 and $14.38, as compared to the Pubco Stock Price of $8.71, which was the closing per share price of Amprius’ common stock as of March 31, 2023. Houlihan Lokey also reviewed certain historical VWAPs for Amprius’ common stock. The review indicated that on May 5, 2023

 

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and for certain periods ended on May 5, 2023 set forth below, the daily VWAPs for Amprius’ common stock were as follows.

 

		1-Day				5-Day				10-Day				20-Day				1-Month				2 Month				3 Month				Post- Listing(1)
VWAP as of 5/5/2023		$	8.82			$	8.90			$	9.05			$	9.06			$	9.00			$	7.95			$	7.82			$	10.69

 

(1)	Based on the 161 trading day period ended May 5, 2023.

Miscellaneous

Houlihan Lokey was engaged by the special committee to act as its financial advisor in connection with the Transaction and provide financial advisory services, including an opinion to the special committee as to whether the Discounted Exchange Ratio provided for in the mergers pursuant to the merger agreement was fair to Amprius from a financial point of view. The special committee engaged Houlihan Lokey based on Houlihan Lokey’s experience, reputation and its independence from the parties. Houlihan Lokey is regularly engaged to provide financial advisory services in connection with mergers and acquisitions, financings, and financial restructurings. Amprius has paid aggregate fees to Houlihan Lokey pursuant to its engagement by the special committee, equal to $850,000 for services performed prior to May 8, 2023 ($600,000 of which was paid to Houlihan Lokey for rendering the opinion). Houlihan Lokey will receive additional fees of $150,000 prior to or upon consummation of the mergers. No portion of Houlihan Lokey’s fee is contingent upon the successful completion of the mergers. Amprius has also agreed to reimburse Houlihan Lokey for certain expenses and to indemnify Houlihan Lokey, its affiliates and certain related parties against certain liabilities and expenses, including certain liabilities under the federal securities laws, arising out of or related to Houlihan Lokey’s engagement.

In the ordinary course of business, certain of Houlihan Lokey employees and affiliates, as well as investment funds in which they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade, in debt, equity, and other securities and financial instruments (including loans and other obligations) of, or investments in Holdco, Amprius, or any other party that may be involved in the mergers and their respective affiliates or security holders or any currency or commodity that may be involved in the mergers.

Houlihan Lokey and certain of its affiliates may provide investment banking, financial advisory and/or other financial or consulting services to Holdco, Amprius, other participants in the mergers or certain of their respective affiliates or security holders in the future, for which Houlihan Lokey and its affiliates may receive compensation. In addition, Houlihan Lokey and certain of its affiliates and certain of Houlihan Lokey’s and their respective employees may have committed to invest in private equity or other investment funds managed or advised by the participants in the mergers or certain of their respective affiliates or security holders, and in portfolio companies of such funds, and may have co-invested with Amprius, other participants in the mergers or certain of their respective affiliates or security holders, and may do so in the future. Furthermore, in connection with bankruptcies, restructurings, distressed situations and similar matters, Houlihan Lokey and certain of its affiliates may have in the past acted, may currently be acting and may in the future act as financial advisor to debtors, creditors, equity holders, trustees, agents and other interested parties (including, without limitation, formal and informal committees or groups of creditors) that may have included or represented and may include or represent, directly or indirectly, or may be or have been adverse to, Holdco, Amprius, other participants in the mergers or certain of their respective affiliates or security holders, for which advice and services Houlihan Lokey and its affiliates have received and may receive compensation.

Interests of Amprius Directors and Executive Officers in the Mergers

In considering the recommendation of the Amprius Board with respect to issuing shares of Amprius’ common stock as contemplated by the merger agreement and the other matters to be acted upon by Amprius’

 

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stockholders at the Amprius special meeting, Amprius’ stockholders should be aware that certain members of the Amprius Board and certain of Amprius’ executive officers have interests in the mergers that may be different from, or in addition to, the interests of other Amprius stockholders. These interests may present them with actual or potential conflicts of interest, and these interests are described below.

Each of the special committee, Amprius Board and the Holdco Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching their respective decisions to approve the merger agreement and the mergers, and to recommend, as applicable, that Amprius’ stockholders approve the proposals to be presented to Amprius’ stockholders for consideration at the Amprius special meeting as contemplated by this proxy statement/prospectus, and that Holdco’s stockholders sign and return the Holdco written consent as contemplated by this proxy statement/prospectus.

Ownership Interests in Amprius

The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for Proposal No. 1. The affirmative vote of holders of at least two-thirds of the voting power of the outstanding shares of Amprius’ common stock is required for approval of Proposal No. 2. In addition, the affirmative vote of the holders of a majority of the outstanding Unaffiliated Shares is required to approve Proposal Nos. 1 and 2. The affirmative vote of the majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter is required for approval of Proposal No. 3. Each of Proposal Nos. 1 and 2 are conditioned upon each other. Therefore, the mergers cannot be consummated without the Amprius Requisite Stockholder Approval of Proposal Nos. 1 and 2. Abstentions will have the same effect as votes “AGAINST” Proposal Nos. 1, 2 and 3. Broker non-votes will have the same effect as votes “AGAINST” Proposal Nos. 1 and 2. For Proposal No. 3, broker non-votes will have no effect and will not be counted towards the vote total.

The table below sets forth information regarding the beneficial ownership of Amprius’ common stock as of June 14, 2023 by (i) each person, or group of affiliated persons, known by Amprius to beneficially own more than 5% of Amprius’ common stock; (ii) each of Amprius’ named executive officers; (iii) each of Amprius’ directors; and (iv) all of Amprius’ executive officers and directors as a group. The table also includes in a separate column the shares of Amprius common stock or options to purchase Amprius common stock issuable in connection with the mergers in respect of shares of Holdco common stock or options to purchase Holdco common stock held by the respective directors, executive officers and entities.

 

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Shares of Amprius common stock subject to stock options and warrants that are currently exercisable or exercisable within 60 days of June 14, 2023 or issuable pursuant to restricted stock units, which are subject to vesting and settlement conditions expected to occur within 60 days of June 14, 2023, are deemed to be outstanding and to be beneficially owned by the person holding the stock option, warrant or restricted stock unit for the purpose of computing the percentage ownership of that person. However, these shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

 

		Amprius Shares Beneficially Owned								Number of Amprius Shares Issuable in Respect of Holdco Shares Beneficially Owned				Post-Closing Ownership in Amprius
Name of Beneficial Owner		Number				Percentage								Number				Percentage (Economic)				Percentage (Voting)
Greater than 5% Stockholders:
Amprius, Inc.(1)			65,515,552				76.5	%			—				—				—				—
Kensington Capital Partners, LLC(2)			7,369,142				8.1	%			—				7,369,142				8.9	%			13.6	%
Named Executive Officers and Directors:
Dr. Kang Sun(3)			1,853,998				2.1	%			4,517,372				6,371,370				7.5	%			11.4	%
Sandra Wallach(4)			312,416				*				—				312,416				*				*
Jonathan Bornstein(5)			2,263,470				2.6	%			184,455				2,447,925				3.0	%			4.7	%
Donald R. Dixon(6)			506,974				*				7,051,960				7,558,934				9.6	%			15.2	%
Kathleen Ann Bayless			—				—				—				—				—				—
Mary Gustanski			—				—				—				—				—				—
Dr. Steven Chu(7)			111,974				*				352,800				464,774				*				*
Dr. Wen Hsieh(4)			106,974				*				—				106,974				*				*
Justin Mirro(8)			8,569,142				9.4	%			—				8,569,142				10.3	%			15.7	%
All directors and executive officers as a group (10 persons)			14,595,247				15.1	%			12,348,185				26,943,432				28.6	%			41.1	%

 

*	Represents less than 1%.

(1)

Certain directors and executive officers of Amprius own Holdco securities or options to purchase Holdco securities, and certain directors of Amprius are also directors of Holdco, but none of Amprius’ directors or executive officers are deemed to have or share beneficial ownership with respect to any shares of common stock owned by Holdco.

(2)

Consists of (i) 2,558,142 shares of Amprius common stock, (ii) 4,700,000 shares of Amprius common stock issuable upon the exercise of private warrants and (iii) 111,000 shares of Amprius common stock issuable upon the exercise of the PIPE warrants. Mr. Mirro, a director of Amprius, is the managing member of Kensington Capital Partners, LLC.

(3)	Consists of (i) 1,853,998 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023 and (ii) 4,517,372 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023.

(4)	Consists of shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023.

(5)	Consists of (i) 2,263,470 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023 and (ii) 184,455 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023.

(6)

Consists of (a) (i) 106,974 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023, (ii) 100,000 shares of Amprius common stock held by The Dixon Revocable Trust, of which Mr. Dixon is co-trustee, (iii) 100,000 shares of Amprius common stock issuable upon the exercise of the PIPE warrants held by The Dixon Revocable Trust, (iv) 96,267 shares of Amprius common stock held by Trident Capital Fund- VI, L.P. (“Trident Fund VI”), 96,267 shares of Amprius common stock issuable upon the exercise of PIPE warrants held by Trident Fund VI, (v) 3,733 shares of Amprius common

 

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stock held by Trident Capital Fund - VI Principals Fund, L.L.C. (“Trident Principals VI”) and (vi) 3,733 shares of Amprius common stock issuable upon the exercise of PIPE warrants held by Trident Principals VI and (b) (i) 6,568,313 shares of Amprius common stock issuable to Trident Fund VI in connection with the mergers and (ii) 254,742 shares of Amprius common stock issuable to Trident Principals VI in connection with the mergers. Trident Capital Management VI, L.L.C. (“TCM VI”) is the sole general partner of Trident Fund VI and the sole managing member of Trident Principals VI. Mr. Dixon, chairman of the Amprius Board, and John Moragne are the managing members of TCM VI. Mr. Dixon disclaims beneficial ownership of the shares held by entities affiliated with Trident Capital except to the extent of his pecuniary interest therein.

(7)

Consists of (i) 106,974 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023, (ii) 2,500 shares of Amprius common stock, (iii) 2,500 shares of Amprius common stock issuable upon the exercise of PIPE warrants and (iv) 352,800 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023.

(8)

Consists of (i) 1,000,000 shares of Amprius common stock held by Mr. Mirro as trustee of the Justin E. Mirro Qualified Annuity Trust dated 6/27/20, (ii) 200,000 shares of Amprius common stock issuable upon exercise of private warrants held by Mr. Mirro, (iii) 2,558,142 shares of Amprius common stock held by Kensington Capital Partners, LLC, (iv) 4,700,000 shares of Amprius common stock issuable upon the exercise of private warrants held by Kensington Capital Partners, LLC and (v) 111,000 shares of Amprius common stock issuable upon the exercise of the PIPE warrants held by Kensington Capital Partners, LLC. Mr. Mirro is the managing member of Kensington Capital Partners, LLC. Mr. Mirro disclaims beneficial ownership of the shares held by Kensington Capital Partners, LLC except to the extent of his pecuniary interest therein.

Ownership Interests in Holdco

Certain of Amprius’ directors and executive officers or entities affiliated with them currently hold shares of Holdco’s capital stock, which such shares of capital stock will be converted into shares of Amprius’ common stock at the effective time. The table below sets forth the ownership of Holdco’s capital stock as of June 14, 2023 by Holdco’s directors and executive officers. The number of Amprius shares issuable in the mergers in respect of the listed number of Holdco shares will be adjusted based on the Discounted Exchange Ratio.

 

Directors and Executive Officers		Number of Shares of Capital Stock as of June 14, 2023
Executive Officers:
Dr. C. Ionel Stefan(1)			76,291
Non-Employee Directors:
Donald R. Dixon(2)			9,994,275

 

(1)	Consists of 76,291 shares of Holdco Class A common stock.

(2)

Consists of (i) 184,338 shares of Holdco Series B preferred stock held by Mr. Dixon, (ii) 140,074 shares of Holdco Series C preferred stock held by Mr. Dixon, (iii) 4,904,101 shares of Holdco Series A preferred stock held by Trident Fund VI, (iv) 3,177,407 shares of Holdco Series B preferred stock held by Trident Fund VI, (v) 1,227,326 shares of Holdco Series C preferred stock held by Trident Fund VI, (vi) 190,198 shares of Holdco Series A preferred stock held by Trident Principals VI, (vii) 123,231 shares of Holdco Series B preferred stock held by Trident Principals VI and (viii) 47,600 shares of Holdco Series C preferred stock held by Trident Principals VI. TCM VI is the sole general partner of Trident Fund VI and the sole managing member of Trident Principals VI. Mr. Dixon and John Moragne are the managing members of TCM VI. Mr. Dixon disclaims beneficial ownership of the shares held by entities affiliated with Trident Capital except to the extent of his pecuniary interest therein.

 

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Treatment of Holdco Equity Awards

Under the merger agreement and subject to the terms thereof, at the effective time, each outstanding and unexercised option to purchase shares of Holdco’s capital stock as of immediately prior to the effective time, whether or not vested, shall be converted into and become an option to purchase shares of Amprius’ common stock, in accordance with the terms and conditions of such Holdco option, immediately prior to the effective time.

Certain of Amprius’ directors and executive officers currently hold options to purchase shares of Holdco’s Class A common stock. The table below sets forth certain information with respect to such options. The number of Amprius shares underlying options issuable in the merger in exchange for the options to purchase Holdco Class A common stock listed below and the corresponding exercise prices will be adjusted based on the Discounted Exchange Ratio.

 

Option holder Name		Grant Date				Expiration Date				Exercise Price ($)				Number of Shares of Class A Common Stock Underlying Option as of June 14, 2023				Number of Vested Shares of Class A Common Stock Underlying Option as of June 14, 2023
Dr. Kang Sun			04/28/2014				04/28/2024			$	0.65				1,211,930				1,211,930
			12/14/2016				12/14/2026			$	0.68				292,321				292,321
			03/16/2017				03/16/2027			$	0.43				60,000				60,000
			12/12/2017				12/12/2027			$	0.43				300,000				300,000
			01/02/2019				01/02/2029			$	1.69				300,000				300,000
			09/18/2020				09/18/2030			$	1.73				1,393,713				1,393,713
			12/16/2021				12/16/2031			$	2.55				2,844,212				2,844,212
Jonathan Bornstein			07/23/2013				07/23/2023			$	0.60				216,416				216,416
			03/17/2015				03/17/2025			$	0.68				5,000				5,000
			03/16/2017				03/16/2027			$	0.43				40,000				40,000
Dr. C. Ionel Stefan			01/20/2015				01/20/2025			$	0.68				5,000				5,000
			03/16/2017				03/16/2027			$	0.43				60,000				60,000
			12/16/2021				12/16/2031			$	2.55				201,110				201,110
Dr. Steven Chu			01/08/2014				01/08/2024			$	0.65				250,000				250,000
			12/12/2017				12/12/2027			$	0.43				250,000				250,000

Director Positions Following the Mergers

In connection with the mergers, there will be no change to the directors of Amprius. For a description of Amprius’ director compensation, see the section titled “Amprius’ Executive Compensation—Director Compensation” included elsewhere in this proxy statement/prospectus.

Interests of Holdco Directors and Executive Officers in the Mergers

In considering the recommendation of the Holdco Board with respect to adopting and approving the merger agreement, Holdco’s stockholders should be aware that certain members of the Holdco Board and certain executive officers of Holdco may have interests in the mergers that may be different from, or in addition to, the interests of other Holdco stockholders. Each of the special committee, the Amprius Board and the Holdco Board was aware of these potential conflicts of interest and considered them, among other matters, in reaching their respective decisions to approve the merger agreement and the mergers, and to recommend, as applicable, that Amprius’ stockholders approve the proposals to be presented to Amprius’ stockholders for consideration at the Amprius special meeting as contemplated by this proxy statement/prospectus, and that Holdco’s stockholders sign and return the Holdco written consent as contemplated by this proxy statement/prospectus.

 

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Ownership Interests in Amprius

Certain of Holdco’s directors and executive officers or entities affiliated with them are beneficial owners of Amprius’ common stock. The table below sets forth information regarding the beneficial ownership of Amprius’ common stock as of June 14, 2023 by Holdco’s directors and executive officers. The table also includes in a separate column the shares of Amprius common stock issuable in connection with the mergers in respect of shares of Holdco capital stock and options to purchase Holdco common stock held by the respective directors, executive officers and entities.

Shares of Amprius common stock subject to stock options and warrants that are currently exercisable or exercisable within 60 days of June 14, 2023 or issuable pursuant to restricted stock units, which are subject to vesting and settlement conditions expected to occur within 60 days of June 14, 2023, are deemed to be outstanding and to be beneficially owned by the person holding the stock option, warrant or restricted stock unit for the purpose of computing the percentage ownership of that person. However, these shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

 

		Amprius Shares Beneficially Owned								Number of Amprius Shares Issuable in Respect of Holdco Shares Beneficially Owned				Post-Closing Ownership in Amprius
Name of Beneficial Owner		Number				Percentage								Number				Percent age (Economic)				Percent age (Voting)
Dr. Kang Sun(1)			1,853,998				2.1	%			4,517,372				6,371,370				7.5	%			11.4	%
William Deihl(2)			477,107				*				241,517				718,624				*				1.4	%
Donald R. Dixon(3)			506,974				*				7,051,960				7,558,934				9.6	%			15.2	%
Dr. Steven Chu(4)			111,974				*				352,800				464,774				*				*
Dr. Yi Cui(5)			777,950				*				2,150,701				2,928,651				3.7	%			5.9	%
Dr. Wen Hsieh(6)			106,974				*				—				106,974				*				*
Alan Salzman(7)			400,000				*				6,823,055				7,223,055				9.2	%			14.5	%

 

*	Represents less than 1%.

(1)

Consists of (i) 1,853,998 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023 and (ii) 4,517,372 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023. Dr. Sun is Chief Executive Officer of Holdco and a member of the Holdco Board and Chief Executive Officer of Amprius and a member of the Amprius Board.

(2)

Consists of (i) 477,107 shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023 and (ii) 241,517 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023. Mr. Deihl is Chief Financial Officer of Holdco.

(3)

Consists of (a) (i) 106,974 shares of Amprius’ common stock underlying options that are exercisable within 60 days of June 14, 2023, (ii) 100,000 shares of Amprius’ common stock held by The Dixon Revocable Trust, of which Mr. Dixon is co-trustee, (iii) 100,000 shares of Amprius’ common stock issuable upon the exercise of PIPE warrants held by The Dixon Revocable Trust, (iv) 96,267 shares of common stock held by Trident Fund VI, 96,267 shares of common stock issuable upon the exercise of PIPE warrants held by Trident Fund VI, (v) 3,733 shares of common stock held by Trident Principals VI and (vi) 3,733 shares of common stock issuable upon the exercise of PIPE warrants held by Trident Principals VI. TCM VI is the sole general partner of Trident Fund VI and the sole managing member of Trident Principals VI and (b) (i) 6,568,313 shares of Amprius common stock issuable to Trident Fund VI in connection with the mergers and (ii) 254,742 shares of Amprius common stock issuable to Trident Principals VI in connection with the mergers. Mr. Dixon, and John Moragne are the managing members of TCM VI. Mr. Dixon disclaims beneficial ownership of the shares held by entities affiliated with Trident Capital except to the extent of his pecuniary interest therein. Mr. Dixon is chairman of the Holdco Board and chairman of the Amprius Board.

(4)	Consists of (i) 106,974 shares of Amprius’ common stock underlying options that are exercisable within 60 days of June 14, 2023, (ii) 2,500 shares of common stock, (iii) 2,500 shares of common stock issuable upon

 

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the exercise of PIPE warrants and (iv) 352,800 shares of Amprius common stock underlying Exchanged Options that are exercisable within 60 days of June 14, 2023. Dr. Chu is a member of the Holdco Board and a member of the Amprius Board.

(5)

Consists of (i) 727,950 shares of the Amprius’ common stock underlying options that are exercisable within 60 days of June 14, 2023, (ii) 25,000 shares of Amprius’ common stock held by the Yi Cui and Meng Sui Family Trust, of which Dr. Cui is co-trustee, (iii) 25,000 shares of Amprius’ common stock issuable upon the exercise of PIPE warrants held by the Yi Cui and Meng Sui Family Trust, of which Dr. Cui is co-trustee, (iv) 1,935,631 shares of Amprius common stock issuable to the Yi Cui and Meng Sui Family Trust in connection with the mergers, (v) 107,535 shares of Amprius common stock issuable to the Meng Sui 2022 Grantor Retained Annuity Trust, of which Dr. Cui is co-trustee and (vi) 107,535 shares of Amprius common stock issuable to the Yi Cui 2022 Grantor Retained Annuity Trust, of which Dr. Cui is co-trustee. Dr. Cui is a member of the Holdco Board.

(6)	Consists of shares of Amprius common stock underlying options that are exercisable within 60 days of June 14, 2023. Dr. Hsieh is a member of the Holdco Board and a member of the Amprius Board.

(7)

Consists of (i) 100,000 shares of Amprius common stock held by VantagePoint CleanTech Partners II, L.P. (“VP CleanTech II”), (ii) 100,000 shares Amprius common stock issuable upon the exercise of PIPE warrants held by VP CleanTech II, (iii) 100,000 shares of Amprius common stock held by VantagePoint Venture Partners 2006 (Q), L.P. (“VP 2006”), (iv) 100,000 shares of Amprius common stock issuable upon the exercise of PIPE warrants held by VP 2006, (v) 3,970,981 shares of Amprius common stock issuable to VP CleanTech II in connection with the mergers and (vi) 3,252,074 shares of Amprius common stock issuable to VP 2006 in connection with the mergers. Alan Salzman is the managing member of VantagePoint Venture Associates 2006, L.L.C., the general partner for VP 2006 and the Chief Executive Officer of VantagePoint CleanTech Management, Ltd., the general partner for VantagePoint CleanTech Associates II, L.P., the general partner for VP CleanTech II and may be deemed to beneficially own the shares held by VP 2006 and VP CleanTech II. Mr. Salzman disclaims beneficial ownership of the shares held by VP 2006 and VP CleanTech II except to the extent of his pecuniary interest therein. Mr. Salzman is a member of the Holdco Board.

Ownership Interests in Holdco

Certain of Holdco’s directors or entities affiliated with them currently hold shares of Holdco’s capital stock, which such shares of capital stock will be converted into shares of Amprius’ common stock at the effective time. The table below sets forth the ownership of Holdco’s capital stock as of June 14, 2023 by Holdco’s directors. As of June 14, 2023, Holdco’s executive officers do not own any shares of Holdco’s capital stock. The number of Amprius shares issuable in the mergers in respect of the listed number of Holdco shares will reflect the application of the Discounted Exchange Ratio.

 

Directors		Number of Shares of Capital Stock as of June 14, 2023
Donald R. Dixon(1)			9,994,275
Dr. Yi Cui(2)			3,048,045
Alan Salzman(3)			9,669,863

 

(1)

Consists of (i) 184,338 shares of Holdco Series B preferred stock held by Mr. Dixon, (ii) 140,074 shares of Holdco Series C preferred stock held by Mr. Dixon, (iii) 4,904,101 shares of Holdco Series A preferred stock held by Trident Fund VI, (iv) 3,177,407 shares of Holdco Series B preferred stock held by Trident Fund VI, (v) 1,227,326 shares of Holdco Series C preferred stock held by Trident Fund VI, (vi) 190,198 shares of Holdco Series A preferred stock held by Trident Principals VI, (vii) 123,231 shares of Holdco Series B preferred stock held by Trident Principals VI and (viii) 47,600 shares of Holdco Series C preferred stock held by Trident Principals VI. TCM VI is the sole general partner of Trident Fund VI and the sole managing member of Trident Principals VI. Mr. Dixon, chairman of the Amprius Board, and John Moragne

 

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are the managing members of TCM VI. Mr. Dixon disclaims beneficial ownership of the shares held by entities affiliated with Trident Capital except to the extent of his pecuniary interest therein.

(2)

Consists of (i) 152,402 shares of Holdco Class A common stock held by the Meng Sui 2022 Grantor Retained Annuity Trust, of which Dr. Cui is co-trustee, (ii) 152,402 shares of Holdco Class A common stock held by the Yi Cui 2022 Grantor Retained Annuity Trust, of which Dr. Cui is co-trustee and (iii) 2,743,241 shares of Holdco Class A common stock held by the Yi Cui and Meng Sui Family Trust, of which Dr. Cui is co-trustee.

(3)

Consists of (i) 3,056,579 shares of Holdco Series A preferred stock held by VantagePoint CleanTech Partners II, L.P. (“VP CleanTech II”), (ii) 1,650,319 shares of Holdco Series B preferred stock held by VP CleanTech II, (iii) 637,463 shares of Holdco Series C preferred stock held by VP CleanTech II, (iv) 2,037,720 shares of Holdco Series A preferred stock held by VantagePoint Venture Partners 2006 (Q), L.P. (“VP 2006”), (v) 1,650,319 shares of Holdco Series B preferred stock held by VP 2006 and (vi) 637,463 shares of Holdco Series C preferred stock held by VP 2006. Mr. Salzman is the managing member of VantagePoint Venture Associates 2006, L.L.C., the general partner for VP 2006 and the Chief Executive Officer of VantagePoint CleanTech Management, Ltd., the general partner for VantagePoint CleanTech Associates II, L.P., the general partner for VP CleanTech II and may be deemed to beneficially own the shares held by VP 2006 and VP CleanTech II. Mr. Salzman disclaims beneficial ownership of the shares held by VP 2006 and VP CleanTech II except to the extent of his pecuniary interest therein.

Treatment of Holdco Equity Awards

Under the merger agreement and subject to the terms thereof, at the effective time, each outstanding and unexercised option to purchase shares of Holdco’s capital stock as of immediately prior to the first effective time, whether or not vested, shall be converted into and become an option to purchase shares of Amprius’ common stock, in accordance with the terms and conditions of such Holdco option, immediately prior to the effective time. Certain of Holdco’s directors and executive officers currently hold options to purchase shares of Holdco’s Class A common stock. The table below sets forth certain information with respect to such options. The number of Amprius shares underlying options issuable in the merger in exchange for the options to purchase Holdco Class A common stock listed below and the corresponding exercise prices will be adjusted based on the Discounted Exchange Ratio.

 

Option holder Name		Grant Date				Expiration Date				Exercise Price ($)				Number of Shares of Class A Common Stock Underlying Option as of June 14, 2023				Number of Vested Shares of Class A Common Stock Underlying Option as of June 14, 2023
Dr. Kang Sun(1)			04/28/2014				04/28/2024			$	0.65				1,211,930				1,211,930
			12/14/2016				12/14/2026			$	0.68				292,321				292,321
			03/16/2017				03/16/2027			$	0.43				60,000				60,000
			12/12/2017				12/12/2027			$	0.43				300,000				300,000
			01/02/2019				01/02/2029			$	1.69				300,000				300,000
			09/18/2020				09/18/2030			$	1.73				1,393,713				1,393,713
			12/16/2021				12/16/2031			$	2.55				2,844,212				2,844,212
William Deihl(2)			10/22/2013				10/22/2023			$	0.60				50,000				50,000
			12/9/2015				12/09/2025			$	0.68				100,000				100,000
			3/16/2017				03/16/2027			$	0.43				30,000				30,000
			6/26/2018				06/26/2028			$	1.69				75,000				75,000
			12/16/2021				12/16/2031			$	2.55				87,287				87,287
Dr. Steven Chu(3)			01/08/2014				01/08/2024			$	0.65				250,000				250,000
			12/12/2017				12/12/2027			$	0.43				250,000				250,000

 

(1)	Dr. Kang Sun is the Chief Executive Officer of Holdco and a member of the Holdco Board and Chief Executive Officer of Amprius and a member of the Amprius Board.

 

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(2)	Mr. Deihl is Chief Financial Officer of Holdco.

(3)	Dr. Chu is a member of the Holdco Board and a member of the Amprius Board.

Indemnification and Insurance

Under the merger agreement, following the first effective time, Amprius must cause the surviving entity of the mergers to indemnify, defend and hold harmless and to provide advancement of expenses to, Holdco’s directors and officers in connection with any claim, action, suit, proceeding or investigation arising out of the fact that such person is or was a director or officer of Holdco prior to the first effective time, to the same extent such persons are indemnified or have the right to advancement of expenses by Holdco as of immediately prior to the first effective time. From and after the first effective time, Amprius will guaranty, and will cause the surviving entity of the mergers to honor, the covenants contained in the merger agreement. In addition, pursuant to the merger agreement, Amprius is obligated to honor the indemnification agreements between Holdco and certain stockholders that are affiliated with Holdco’s directors and officers.

Under the merger agreement, prior to the closing of the mergers, Holdco must obtain or have obtained (at Holdco’s sole cost and expense) a non-cancelable run-off directors and officers “tail” insurance policy (providing coverage that, taken as a whole, is no less favorable than under such person’s policy as in effect on the date of the merger agreement), for a period of six years after the closing of the mergers to provide insurance coverage for events, acts or omissions occurring on or prior to the closing of the mergers for all persons who were directors or officers of Holdco on or prior to the closing of the mergers.

Limitations of Liability and Indemnification

In addition to the indemnification obligations required by the certificate of incorporation of Amprius and amended and restated bylaws of Amprius, prior to the date of the merger agreement, Amprius had entered into indemnification agreements with each of its directors and executive officers. These agreements provide for the indemnification of Amprius’ directors and executive officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were agents of Amprius. Amprius believes that these certificate of incorporation provisions, amended and restated bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

Holdco Stock Options

As of June 14, 2023, an aggregate of 9,956,990 shares of Holdco stock were issuable upon the exercise of outstanding stock options under Holdco’s 2008 Stock Plan, which we refer to as the “2008 Plan,” at a weighted-average exercise price of $1.50 per share. At the first effective time, each Holdco option that is outstanding and unexercised immediately prior to the first effective time under the 2008 Plan, as amended, whether or not vested, will be converted into and become an option to purchase shares of Amprius’ common stock. In connection with the mergers, the 2008 Plan will be terminated and no additional awards will be granted under the 2008 Plan thereafter.

Form of the Mergers

The merger agreement provides that at the first effective time, Merger Sub I will merge with and into Holdco, with Holdco surviving the first merger as a wholly owned subsidiary of Amprius, and promptly following the first merger, and as part of the same overall transaction, Holdco (as the surviving entity of the first merger, which we refer to as the “First-Step Surviving Corporation”) will merge with and into Merger Sub II.

Per Share Merger Consideration

At the first effective time:

 

•

each share of Holdco’s Class A common stock issued and outstanding immediately prior to the first effective time will automatically convert into the right to receive a number of Amprius common stock equal to the applicable Per Share Merger Consideration;

 

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•

each share of Holdco’s Class B common stock issued and outstanding immediately prior to the first effective time will automatically convert into the right to receive a number of Amprius non-voting common stock equal to the applicable Per Share Merger Consideration;

 

•

all shares of Holdco’s Class A common stock held in the treasury of Holdco will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto;

 

•

all shares of Holdco’s Class B common stock held in the treasury of Holdco will be canceled without any conversion thereof and no payment or distribution will be made with respect thereto;

 

•

each share of Merger Sub I’s common stock issued and outstanding immediately prior to the first effective time will be converted into and exchanged for one share of common stock, par value $0.01 per share, of the First-Step Surviving Corporation;

 

•

each option to purchase Holdco stock that is outstanding immediately prior to the first effective time, whether vested or unvested, will convert at the first effective time into an option to purchase a number of Amprius common stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Holdco’s common stock subject to such Holdco option immediately prior to the first effective time and (y) the Discounted Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Holdco option immediately prior to the first effective time divided by (B) the Discounted Exchange Ratio. Except as specifically provided above, following the first effective time, each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding Holdco option immediately prior to the first effective time; and

 

•

each Holdco warrant issued and outstanding immediately prior to the first effective time will be canceled and will automatically be replaced, without any further action required on the part of the holder, with warrants solely in book-entry form, representing thereafter the right to receive on a net exercise basis a number of shares of Amprius’ common stock equal to (x) the Discounted Exchange Ratio multiplied by the number of shares of Holdco’s Class A common stock underlying such Holdco warrant minus (y) the aggregate exercise price of such Holdco warrant divided by Amprius’ stock price of $8.71, rounded to the nearest whole share.

Holdco and Amprius agree and acknowledge that simultaneous with the first effective time, all Amprius common stock shares owned by Holdco will be deemed terminated and cancelled for no additional consideration.

The merger agreement provides that, at the second effective time, by virtue of the second merger: (i) each share of common stock of the First-Step Surviving Corporation issued and outstanding immediately prior to the second effective time will be cancelled and cease to exist without any conversion thereof or payment therefor; and (ii) the membership interests of Merger Sub II outstanding immediately prior to the second effective time will be converted into and become the membership interests of the surviving entity, which will constitute 100% of the outstanding equity interests of the surviving entity. From and after the second effective time, the membership interests of Merger Sub II will be deemed for all purposes to represent the number of membership interests into which they were converted in accordance with the immediately preceding sentence.

Following the mergers, Amprius’ stockholders (other than Holdco) will continue to own and hold their existing shares of Amprius common stock, and all outstanding and unexercised warrants and options to purchase shares of Amprius’ common stock will remain in effect pursuant to their terms. It is expected that, based on the assumptions described under “Questions and Answers About the Mergers—What will Holdco’s stockholders and option holders receive in the mergers?”, immediately after the mergers, (i) Holdco’s stockholders as of immediately prior to the first effective time will own approximately 74% of the outstanding capital stock of Amprius, comprised of 59% of Amprius’ common stock and 100% of Amprius’ non-voting common stock, as compared to the 77% of Amprius’ common stock currently held by Holdco, (ii) the percentage of Amprius’ outstanding capital stock held by current stockholders (other than Holdco) will increase from approximately 23% before the mergers to 26% immediately after the mergers (or, on a fully-diluted basis, from 55.6% to 55.8%) and (iii) the directors and officers of Amprius, all of

 

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whom are expected to continue to be the directors and executive officers of the combined organization following the closing of the mergers, will collectively beneficially own 14% of the outstanding capital stock of Amprius, which is expected to represent 22% of the voting power of Amprius, as none of the shares owned by the directors and executive officers of Amprius will be non-voting common stock.

There will be no adjustment to the total number of shares of Amprius’ common stock that Holdco’s stockholders will be entitled to receive for changes in the market price of Amprius’ common stock. Accordingly, the market value of the shares of Amprius’ common stock issued pursuant to the mergers will depend on the market value of the shares of Amprius’ common stock at the time the mergers close, and could vary significantly from the market value on the date of this proxy statement/prospectus.

The merger agreement provides that, at the closing, Amprius will instruct an exchange agent to reserve and allocate, for the benefit of Holdco’s stockholders, the number of Amprius common stock and Amprius non-voting common stock sufficient to deliver the aggregate Per Share Merger Consideration payable (the “Exchange Fund”). Amprius must cause the exchange agent, pursuant to irrevocable instructions, to allocate the Per Share Merger Consideration out of the Exchange Fund in accordance with the merger agreement. All shares deposited will not be certificated and will be represented in book-entry form.

As promptly as practicable after the first effective time, Amprius must cause the exchange agent to mail to each holder of record of shares of Holdco common stock which were converted pursuant to the merger agreement into the right to receive the applicable portion of the Per Share Merger Consideration: a letter of transmittal, which will be in a form reasonably acceptable to Amprius and Holdco and will specify (i) that delivery will be effected, and risk of loss and title to the certificates evidencing such shares of capital stock of Holdco, if any, will pass, only upon proper delivery of the certificates to the exchange agent or confirmation of cancellation of such certificates in a form reasonably acceptable to Amprius and the exchange agent; and (ii) instructions for use in effecting the surrender of the certificates, if any, pursuant to the letter of transmittal. Until surrendered as contemplated by the merger agreement, each certificate entitled to receive the applicable Per Share Merger Consideration in accordance with the merger agreement will be deemed at all times after the first effective time to represent only the right to receive upon such surrender the applicable Per Share Merger Consideration that such holder is entitled to receive in accordance with the merger agreement.

The merger agreement provides that the Per Share Merger Consideration payable upon conversion of Holdco common stock in accordance with the terms hereof will be deemed to have been paid and issued in full satisfaction of all rights pertaining to such Holdco common stock.

The Per Share Merger Consideration will be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification or other like change with respect to Amprius common stock and Amprius non-voting shares occurring on or after the date of the merger agreement and prior to the first effective time (but, for the avoidance of doubt, shall not be adjusted to reflect any change in the capitalization of Holdco).

Effective Time of the Mergers

The merger agreement requires the parties to consummate the first merger as promptly as practicable (and in any event no later than five business days) after all of the conditions to the consummation of the mergers contained in the merger agreement are satisfied or waived. The first merger will become effective upon the filing of a first certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed by Amprius and Holdco and specified in the first certificate of merger, and which time is referred to herein as the first effective time. Promptly after the first effective time, but in all cases within three business days, the second merger will become effective by filing a second certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed by Amprius and Holdco and specified in the second certificate of merger, and which time is referred to herein as the “second effective time.” Neither Amprius nor Holdco can predict the exact timing of the consummation of the mergers.

 

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Regulatory Approvals

In the United States, Amprius must comply with applicable federal and state securities laws and the rules and regulations of NYSE in connection with the issuance of shares of Amprius’ common stock and the filing of this proxy statement/prospectus with the SEC. As of the date hereof, the registration statement of which this proxy statement/prospectus is a part has not become effective.

Each of the parties to the merger agreement must use its reasonable best efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and parties to contracts with Holdco as set forth in the merger agreement necessary for the consummation of the transactions and to fulfill the conditions to the mergers.

Tax Treatment of the Mergers

Amprius and Holdco intend for the mergers to qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code. Amprius and Holdco have agreed to use their reasonable best efforts to cause the mergers to qualify as a reorganization under Section 368(a)(1)(A) of the Code, and to not take, or fail to take, any actions that could reasonably be expected to cause the mergers to fail to so qualify. For a description of certain of the considerations regarding U.S. federal tax consequences of the mergers, see the section titled “The Mergers—Material U.S. Federal Income Tax Consequences of the Mergers” below.

Material U.S. Federal Income Tax Consequences of the Mergers

The following discussion is a summary of the material U.S. federal income tax consequences of the mergers to U.S. Holders (as defined below) who exchange their Holdco common stock for Amprius common stock in the mergers, but does not purport to be a complete analysis of all potential tax effects of the mergers. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service, or the IRS, in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. Neither Amprius nor Holdco has sought or intends to seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS or a court will not take a position regarding the tax consequences of the mergers contrary to that discussed below. This discussion assumes that the mergers will be consummated in accordance with the merger agreement and as described in this proxy statement/prospectus.

This discussion is limited to U.S. Holders that hold Holdco common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, as property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to a U.S. Holder’s particular circumstances, including the impact of the alternative minimum tax or the additional Medicare tax on net investment income. In addition, it does not address tax consequences relevant to Holdco stockholders subject to special rules, including, without limitation:

 

•

U.S. expatriates and former citizens or long-term residents of the United States;

 

•

persons whose functional currency is not the U.S. dollar;

 

•

persons holding Holdco common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;

 

•

banks, insurance companies, mutual funds and other financial institutions;

 

•

real estate investment trusts or regulated investment companies;

 

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•

brokers, dealers or traders in securities;

 

•

“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;

 

•

S corporations, partnerships or other entities or arrangements treated as partnerships or disregarded entities for U.S. federal income tax purposes (and investors therein);

 

•

persons for whom Holdco common stock constitutes “qualified small business stock” within the meaning of Section 1202 of the Code or “Section 1244 stock” for purposes of Section 1244 of the Code;

 

•

tax-exempt organizations or governmental organizations;

 

•

persons subject to special tax accounting rules as a result of any item of gross income with respect to Holdco common stock being taken into account in an “applicable financial statement” (as defined in the Code);

 

•

persons deemed to sell Holdco common stock under the constructive sale provisions of the Code;

 

•

persons who acquired their Holdco common stock pursuant to the exercise of warrants or conversion rights under convertible instruments;

 

•

persons who acquired their Holdco common stock in a transaction subject to the gain rollover provisions of Section 1045 of the Code;

 

•

persons who hold or received Holdco common stock pursuant to the exercise of any employee stock option or otherwise as compensation; and

 

•

persons who hold their Holdco common stock through tax-qualified retirement plans.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Holdco common stock, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships holding Holdco common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE MERGERS ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of Holdco common stock that, for U.S. federal income tax purposes, is or is treated as:

 

•

an individual who is a citizen or resident of the United States;

 

•

a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

 

•

an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

 

•

a trust that (i) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) over all of its substantial decisions or (ii) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

 

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U.S. Federal Income Tax Consequences of the Mergers to U.S. Holders of Holdco Common Stock

The mergers more likely than not qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code.

Neither Amprius nor Holdco intends to obtain a ruling from the IRS with respect to the tax consequences of the mergers. If the IRS were to successfully challenge the tax-free “reorganization” status of the mergers, the tax consequences would differ materially from those described in this proxy statement/prospectus.

Assuming the mergers qualify as a tax-free “reorganization” under Section 368(a) of the Code, the tax consequences to U.S. Holders of Holdco common stock will be as follows:

 

•

a U.S. Holder of shares of Holdco common stock generally more likely than not will not recognize any gain or loss upon the exchange of shares of Holdco common stock for shares of Amprius common stock in the mergers;

 

•

a U.S. Holder of shares of Holdco common stock will have an aggregate tax basis in the shares of Amprius common stock received in the mergers equal to the aggregate tax basis of the shares of Holdco common stock surrendered in exchange therefor;

 

•

a U.S. Holder of shares of Holdco common stock will have a holding period for the shares of Amprius common stock received in the mergers that includes its holding period for its shares of Holdco common stock surrendered in exchange therefor;

 

•

if a U.S. Holder of shares of Holdco common stock acquired different blocks of shares of Holdco common stock at different times or at different prices, the shares of Amprius common stock received in the mergers will be allocated pro rata to each block of shares of Holdco common stock, and the basis and holding period of such shares of Amprius common stock will be determined on a block-for-block approach depending on the basis and holding period of each block of shares of Holdco common stock exchanged for such shares of Amprius common stock.

Tax Consequences if the Merger Fails to Qualify as a Reorganization

If the mergers do not qualify as a tax-free “reorganization” within the meaning of Section 368(a) of the Code, a U.S. Holder of Holdco common stock generally would recognize gain or loss for U.S. federal income tax purposes on each share of Holdco common stock surrendered in the mergers in an amount equal to the difference between the fair market value, at the time of the mergers, of the Amprius common stock received in the mergers and such U.S. Holder’s tax basis in the Holdco common stock surrendered in the mergers. Gain or loss must be calculated separately for each block of Holdco common stock exchanged by such U.S. Holder if such blocks were acquired at different times or for different prices. Any gain or loss recognized generally would be capital gain or loss, and generally would be long-term capital gain or loss if the U.S. Holder’s holding period in a particular block of Holdco common stock exceeds one year at the effective time. Under current law, long-term capital gain of non-corporate U.S. Holders (including individuals) generally is taxed at reduced U.S. federal income tax rates. The deductibility of capital losses is subject to limitations. A U.S. Holder’s tax basis in shares of Amprius common stock received in the mergers would be equal to the fair market value thereof as of the effective time, and such U.S. Holder’s holding period in such shares would begin on the day following the mergers.

Compliance and Recordkeeping

Assuming the mergers qualify as a tax-free “reorganization” under Section 368(a) of the Code, current Treasury Regulations require each U.S. Holder who receives shares of Amprius common stock in the mergers to retain permanent records pertaining to the mergers, and make such records available to any authorized IRS officers and employees. Such records should specifically include information regarding the amount, basis, and fair market value of all transferred property, and relevant facts regarding any liabilities assumed or extinguished

 

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as part of such reorganization. Additionally, certain U.S. Holders who are “significant holders” of Holdco common stock (generally, a U.S. Holder that owns at least 1% of the outstanding Holdco common stock or has a basis in Holdco non-stock securities of at least $1,000,000 immediately before the mergers) must comply with certain reporting requirements. Significant holders generally will be required to file a statement with their U.S. federal income tax returns for the taxable year in which the mergers occur setting forth certain information with respect to the transaction. Such statement must include the U.S. Holder’s tax basis in such holder’s Holdco common stock surrendered in the mergers, the fair market value of such stock, the date of the mergers and the name and employer identification number of each of Holdco and Amprius. U.S. Holders should consult their tax advisors to determine whether they are significant holders required to provide the foregoing statement.

U.S. HOLDERS OF HOLDCO COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE MERGERS, INCLUDING THE APPLICABLE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES, AND ANY TAX REPORTING REQUIREMENTS OF THE MERGERS AND RELATED TRANSACTIONS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.

NYSE Listing

Amprius’ common stock currently is listed on NYSE, under the symbol “AMPX.” Amprius has agreed to use commercially reasonable efforts to:

 

•

maintain its existing listing on NYSE; and

 

•

to cause the shares of Amprius common stock to be issued in connection with the mergers to be approved for listing on the NYSE.

In addition, under the merger agreement, each party’s obligation to complete the mergers is subject to the satisfaction or waiver by each of the parties, at or prior to the mergers, of various conditions, including that the shares of Amprius’ common stock to be issued in the mergers shall have been approved for listing on the NYSE as of the closing of the mergers.

Anticipated Accounting Treatment

The mergers will be accounted for as an equity reorganization of Amprius under which the stockholders of Holdco become direct stockholders of Amprius. Pursuant to the merger agreement, Holdco stockholders will exchange their shares in Holdco for shares in Amprius. At the time of the mergers, it is expected that Holdco’s only material assets are the 65,515,552 shares of Amprius common stock and that Holdco has no material liabilities which would be required to be disclosed in its financial statements.

Appraisal Rights

If the first merger is completed, Holdco’s stockholders and beneficial owners of shares of Holdco’s capital stock who continuously hold shares through the effective date of the first merger, who properly demand the appraisal of their shares, who do not vote in favor of, or deliver a written consent approving, the mergers and the merger agreement, and who otherwise comply with the requirements of Section 262 of the DGCL, which we refer to as “Section 262,” are entitled to appraisal rights under Section 262 in connection with the first merger. Holders of Amprius common stock are not entitled to appraisal rights under Delaware law or other appraisal rights in connection with the mergers.

All references in Section 262 and in this summary to a (i) “stockholder” or “holder of record” are to the record holder of shares of Holdco capital stock, (ii) “beneficial owner” are to a person who is the beneficial owner of shares of Holdco capital stock held either in voting trust or by a nominee on behalf of such person, and (iii) “person” are to an individual, corporation, partnership, unincorporated association or other entity.

 

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The discussion below is not a complete summary regarding the appraisal rights of Holdco’s stockholders and beneficial owners of Holdco capital stock under Delaware law and is qualified in its entirety by reference to the text of Section 262, which is attached to this proxy statement/prospectus as Annex E. Stockholders and beneficial owners intending to exercise appraisal rights should carefully review the text of Section 262. Failure to follow precisely any of the statutory procedures set forth in Section 262 may result in a termination or waiver of these rights. This summary does not constitute legal or other advice, nor does it constitute a recommendation that Holdco’s stockholders or beneficial owners of Holdco capital stock exercise their appraisal rights under Delaware law.

Under Section 262, where a merger is approved by stockholders by written consent in lieu of a meeting of stockholders pursuant to Section 228 of the DGCL, either the constituent corporation, before the effective date of the merger, or the surviving company, within 10 days after the effective date of the merger, must notify each stockholder of the constituent corporation entitled to appraisal rights, if any, of the approval of the merger and that appraisal rights are available. The notice may, and, if given on or after the effective date of the merger, must, also notify each such stockholder of the effective date of the merger.

If the first merger is completed, within 10 days after the effective date of the first merger, Holdco (as the surviving company) or Merger Sub II (as the surviving entity in the second merger) will notify the persons entitled to appraisal rights, if any, that the mergers have been approved, the effective date of the mergers and that appraisal rights are available. Any person who is entitled to appraisal rights and desires to exercise their appraisal rights must deliver a written demand for appraisal to Holdco (or Merger Sub II, as applicable) within 20 days after the date of mailing of that notice, and such person must not have delivered a written consent approving the mergers. A demand for appraisal will be sufficient if it reasonably informs Holdco (or Merger Sub II, as applicable) of the identity of the person making such demand and that such person intends thereby to demand appraisal of his, her or its shares of Holdco capital stock. A demand for appraisal made by a beneficial owner must additionally reasonably identify the holder of record of the shares for which the demand is made, be accompanied by documentary evidence of such beneficial owner’s beneficial ownership of stock and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which such beneficial owner consents to receive notices given by Holdco (or Merger Sub II, as applicable) and to be set forth on the verified list (as defined below). Failure to deliver a written consent approving the mergers will not in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262. All demands for appraisal should be addressed to Amprius, Inc., 1180 Page Avenue, Fremont, California 94538, Attention: Chief Financial Officer. ALL DEMANDS MUST BE RECEIVED BY HOLDCO (OR MERGER SUB II, AS APPLICABLE) WITHIN TWENTY (20) DAYS AFTER THE DATE HOLDCO (OR MERGER SUB II, AS APPLICABLE) MAILS A NOTICE TO PERSONS ENTITLED TO APPRAISAL RIGHTS, IF ANY, NOTIFYING THEM THAT THE MERGERS HAVE BEEN APPROVED AND THAT APPRAISAL RIGHTS ARE AVAILABLE.

If a Holdco stockholder or beneficial owner of Holdco capital stock fails to deliver a written demand for appraisal within the time period specified above, such person will be entitled to receive the merger consideration for such person’s shares of Holdco capital stock as provided for in the merger agreement but will have no appraisal rights with respect to his, her or its shares of Holdco’s capital stock.

At any time within 60 days after the first effective time, any person who has delivered a written demand for appraisal but has neither commenced an appraisal proceeding nor joined an appraisal proceeding as a named party has the right to withdraw such person’s demand and accept the terms of the first merger by delivering a written withdrawal to Holdco (or Merger Sub II, as applicable). If, following a demand for appraisal, a person who has demanded appraisal has withdrawn such person’s demand for appraisal in accordance with Section 262, such person will have the right to receive the merger consideration, without interest, for such person’s shares of Holdco capital stock.

Within 120 days after the first effective time, any person who has delivered a demand for appraisal in accordance with Section 262 and who is entitled to appraisal rights thereunder will, upon written request to

 

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Holdco (or Merger Sub II, as applicable), be entitled to receive a statement setting forth the aggregate number of shares not voted in favor of the merger agreement and with respect to which demands for appraisal rights have been received and the aggregate number of stockholders or beneficial owners holding or owning such shares. This statement will be given within 10 days after a written request therefor is received by the surviving company or within 10 days after expiration of the period for delivery of demands for appraisal, whichever is later. Within 120 days after the first effective time, either the surviving company or any person who has delivered a demand for appraisal in accordance with, and otherwise complied with, Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares held by all such stockholders. Upon the filing of the petition by any person other than the surviving company, service of a copy of the petition must be made upon the surviving company. The surviving company has no obligation to file a petition in the Delaware Court of Chancery in the event there are dissenting stockholders, and neither Holdco (as the surviving company in the first merger) nor Merger Sub II (which is expected to be the surviving company after both mergers have been completed) has any present intent to file a petition in the Delaware Court of Chancery in respect of any demands for appraisal arising in connection with the mergers. Accordingly, it is the obligation of stockholders and beneficial owners of Holdco capital stock to initiate all necessary action to perfect their appraisal rights in respect of shares of Holdco capital stock within the period prescribed in Section 262.

If a petition for appraisal is duly filed by a stockholder or a beneficial owner of Holdco capital stock and a copy of the petition is delivered to the surviving company, the surviving company will then be obligated, within 20 days after receiving service of a copy of the petition, to file in the office of the Delaware Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all persons who have demanded appraisal of their shares and with whom agreements as to the value of their shares have not been reached by the surviving company. We refer to this list as the “verified list.” The Delaware Register in Chancery, if so ordered by the Delaware Court of Chancery, shall give notice of the time and place fixed for the hearing of such petition to the surviving company and to the persons shown on the verified list. At the hearing on the petition, the Delaware Court of Chancery will determine the persons who have complied with Section 262 and who have become entitled to the appraisal rights provided thereby. The Delaware Court of Chancery may require the persons who have demanded appraisal for their shares and who hold stock represented by certificates to submit their stock certificates to the Delaware Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any person fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that person.

After determination of the persons entitled to appraisal of their shares, the Delaware Court of Chancery will appraise the “fair value” of the shares, taking into account all relevant factors. This value will be exclusive of any element of value arising from the accomplishment or expectation of the mergers but may include interest, if any, upon the amount determined to be the fair value. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the first effective time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the first effective time and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving company may pay to each person entitled to appraisal an amount in cash, in which case interest shall accrue thereafter only upon the sum of (1) the difference, if any, between the amount paid and the fair value of the shares as determined by the Delaware Court of Chancery, and (2) interest theretofore accrued, unless paid at that time.

In determining fair value, the Delaware Court of Chancery is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.”

 

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Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that this exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders and beneficial owners of shares of Holdco’s capital stock should be aware that the fair value of such person’s shares as determined under Section 262 could be more than, the same as, or less than the value that such person is entitled to receive under the terms of the merger agreement.

Costs of the appraisal proceeding may be imposed upon the parties by the Delaware Court of Chancery as the Court deems equitable in the circumstances. Upon the application of a person whose name appears on the verified list who participated in the proceeding and incurred expenses in connection therewith, the Delaware Court of Chancery may order all or a portion of those expenses, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, to be charged pro rata against the value of all shares entitled to appraisal. In the absence of such a determination of assessment, each party bears its own expenses. Any person who has demanded appraisal rights will not, after the first effective time, be entitled to vote shares subject to that demand for any purpose or to receive payments of dividends or any other distributions on those shares, other than dividends or other distributions payable to stockholders of record at a date prior to the first effective time; however, if no petition for appraisal is filed within 120 days after the first effective time, or if the person delivers a written withdrawal of his or her demand for appraisal and an acceptance of the terms of the mergers within 60 days after the first effective time, then the right of that person to appraisal will cease and that person will be entitled to receive the merger consideration for shares of his, her or its Holdco capital stock pursuant to the merger agreement. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any person without the approval of the court.

Failure to follow the steps required by Section 262 for perfecting appraisal rights may result in the loss of appraisal rights. In view of the complexity of Section 262, stockholders and beneficial owners of Holdco capital stock who may wish to dissent from the mergers and pursue appraisal rights should consult their legal advisors.

 

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THE MERGER AGREEMENT

The following is a summary of the material terms of the merger agreement. A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus. The merger agreement has been attached to this proxy statement/prospectus to provide you with information regarding its terms. It is not intended to provide any other factual information about Amprius, Holdco or the Merger Subs. The following description does not purport to be complete and is qualified in its entirety by reference to the merger agreement. You should refer to the full text of the merger agreement for details of the mergers and the terms and conditions of the merger agreement.

The merger agreement contains representations and warranties that Amprius and the Merger Subs, on the one hand, and Holdco, on the other hand, have made to one another as of specific dates. These representations and warranties have been made for the benefit of the other parties to the merger agreement and may be intended not as statements of fact but rather as a way of allocating the risk to one of the parties if those statements prove to be incorrect. In addition, the assertions embodied in the representations and warranties are qualified by information in a confidential disclosure letter provided by Holdco to Amprius in connection with signing the merger agreement. While Amprius and Holdco do not believe that this disclosure letter contains information required to be publicly disclosed under the applicable securities laws, other than information that has already been so disclosed, the disclosure letter does contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the attached merger agreement. Accordingly, you should not rely on the representations and warranties as current characterizations of factual information about Amprius or Holdco, because they were made as of specific dates, may be intended merely as a risk allocation mechanism between Amprius, the Merger Subs and Holdco and are modified by the disclosure letter.

General

Under the merger agreement, at the first effective time, Merger Sub I will merge with and into Holdco, with Holdco surviving the first merger as a wholly owned subsidiary of Amprius, and promptly following the first merger, and as part of the same overall transaction, Holdco, as the First-Step Surviving Corporation will merge with and into Merger Sub II with Merger Sub II surviving the second merger as the surviving entity.

Merger Consideration and Conversion of Securities

Prior to the first effective time, (i) each share of Holdco’s voting preferred stock issued and outstanding as of such time will automatically convert into one share of Holdco’s Class A common stock and (ii) each share of Holdco non-voting preferred stock issued and outstanding as of such time will automatically convert into one share of Holdco’s Class B common stock.

At the first effective time, by virtue of the first merger, each share of Holdco’s Class A common stock and Holdco’s Class B common stock issued and outstanding immediately prior to the first effective time (excluding certain shares to be canceled pursuant to the merger agreement and shares held by stockholders who have exercised and perfected appraisal rights) will be automatically converted into the right to receive the applicable portion of the Per Share Merger Consideration to be calculated in accordance with the Discounted Exchange Ratio. Based on the assumptions described under “Questions and Answers About the Mergers—What will Holdco’s stockholders and option holders receive in the mergers?”, it is expected that the Per Share Merger Consideration will be comprised of 29,363,779 shares of Amprius’ common stock and 28,606,816 shares of Amprius’ non-voting common stock. Pursuant to the merger agreement, at the first effective time, each option to purchase Holdco stock that is outstanding immediately prior to the first effective time, whether vested or unvested, will be converted into an option to purchase a number of shares of Amprius’ common stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Holdco’s Class A common stock subject to such Holdco option immediately prior to the first effective time and (y) the Discounted

 

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Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Holdco option immediately prior to the first effective time divided by (B) the Discounted Exchange Ratio. In addition, each Holdco warrant to purchase Holdco’s stock outstanding immediately prior to the first effective time will be canceled and automatically replaced, without any further action required on the part of the holder, with warrants representing the right to receive, on a net exercise basis, a number of shares of Amprius’ common stock equal to (x) the Discounted Exchange Ratio multiplied by the number of shares of Holdco’s Class A common stock underlying such Holdco warrant, minus (y) the aggregate exercise price of such Holdco warrant divided by $8.71, rounded to the nearest whole share.

At the second effective time, by virtue of the second merger, (i) each share of Holdco (as the First-Step Surviving Corporation) common stock issued and outstanding immediately prior to the second effective time will be cancelled and cease to exist and (ii) the membership interests of Merger Sub II outstanding immediately prior to the second effective time will be converted into and become the membership interests of the surviving entity, which will constitute 100% of the outstanding interests of the surviving entity.

The “Per Share Merger Consideration” means, (a) with respect to each share of Holdco’s Class A common stock (including any such shares outstanding as a result of the conversion of each share of Holdco’s voting preferred stock (comprised of Holdco’s Series A preferred stock, Series B preferred stock, Series C preferred stock and Series E-2 preferred stock) in the conversion prior to the first effective time), the right to receive the number of Amprius common stock shares equal to the Discounted Exchange Ratio and (b) with respect to each share of Holdco’s Class B common stock (including any such shares outstanding as a result of the conversion of each share of Holdco’s non-voting preferred stock (comprised of Holdco’s Series B-NV preferred stock, Series C-NV preferred stock, Series D-1 preferred stock, Series E preferred stock and Series E-1 preferred stock) in the conversion prior to the first effective time), the right to receive the number of Amprius non-voting shares equal to the Discounted Exchange Ratio.

The “Discounted Exchange Ratio” under the merger agreement is calculated by multiplying 0.98 by the “Exchange Ratio.” The Exchange Ratio under the merger agreement is calculated by obtaining the result of the following formula (rounded down to two decimal places):

 

((A x B) + C + D) ÷ E

B

where

A = The total number of Amprius shares owned by Holdco, which is 65,515,552.

B = $8.71.

C = The aggregate exercise price of all options to purchase Holdco’s common stock options (whether vested or unvested) and all the Holdco warrants to the extent issued and outstanding as of immediately prior to the first effective time, which we assume to be $14,709,223.25.

D = cash and cash equivalents held by Holdco, which was $132,191 as of the date of the merger agreement, minus (i) indebtedness of Holdco, which we assume there is none and (ii) outstanding expenses incurred by Holdco in the mergers, which we assume to be $380,000.

E = The total number of fully-diluted shares of Holdco, which was 92,143,424 shares as of the date of the merger agreement.

The merger agreement provides that, at the closing, Amprius will instruct an exchange agent to reserve and allocate, for the benefit of Holdco’s stockholders, the number of shares of Amprius common stock and Amprius non-voting common stock sufficient to deliver the aggregate Per Share Merger Consideration payable (the “Exchange Fund”). Amprius must cause the exchange agent, pursuant to irrevocable instructions, to allocate the Per Share Merger Consideration out of the Exchange Fund in accordance with the merger agreement. All shares deposited will not be certificated and will be represented in book-entry form.

 

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As promptly as practicable after the first effective time, Amprius will cause the exchange agent to mail to each holder of record of shares of Holdco common stock which were converted pursuant to the merger agreement into the right to receive the applicable portion of the Per Share Merger Consideration: a letter of transmittal, which shall be in a form reasonably acceptable to Amprius and Holdco and shall specify (i) that delivery shall be effected, and risk of loss and title to the certificates evidencing such shares of capital stock of Holdco, if any, shall pass, only upon proper delivery of the certificates to the exchange agent or confirmation of cancellation of such certificates in a form reasonably acceptable to Amprius and the exchange agent; and (ii) instructions for use in effecting the surrender of the certificates, if any, pursuant to the letter of transmittal. Until surrendered as contemplated by the merger agreement, each certificate entitled to receive the applicable Per Share Merger Consideration in accordance with the merger agreement shall be deemed at all times after the first effective time to represent only the right to receive upon such surrender the applicable Per Share Merger Consideration that such holder is entitled to receive in accordance with the merger agreement.

The merger agreement provides that, the Per Share Merger Consideration payable upon conversion of Holdco common stock in accordance with the terms hereof shall be deemed to have been paid and issued in full satisfaction of all rights pertaining to such Holdco common stock.

The Per Share Merger Consideration will be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification or other like change with respect to Amprius common stock and Amprius non-voting common stock occurring on or after the date of the merger agreement and prior to the first effective time (but, for the avoidance of doubt, shall not be adjusted to reflect any change in the capitalization of Holdco).

Amended and Restated Certificate of Incorporation of Amprius

Amprius shall solicit stockholder approval for purposes of adopting and approving the proposed charter at the special meeting. Amprius shall have filed the proposed charter no later than immediately prior to the first effective time.

Conditions to the Completion of the Mergers

Each party’s obligation to complete the mergers is subject to the satisfaction or waiver by each of the parties to the merger agreement, at or prior to the closing, of various conditions, which include the following:

 

•

the registration statement on Form S-4, of which this proxy statement/prospectus is a part, must have been declared effective by the SEC in accordance with the Securities Act and must not be subject to any stop order or proceeding, or any proceeding threatened by the SEC, seeking a stop order with respect to the registration statement that has not been withdrawn;

 

•

no governmental authority shall have enacted, issued, promulgated, enforced or entered any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the transactions, including the mergers, illegal or otherwise prohibiting consummation of the transactions;

 

•

all necessary consents, approvals and authorizations (as described in Holdco’s disclosure schedules to the merger agreement) must have been obtained from and made with all governmental authorities;

 

•

all necessary regulatory filings must have been obtained and all consents, approvals and authorizations pursuant to such filings must have been obtained from the appropriate governmental authorities;

 

•

the affirmative vote of the:

 

•

majority of the voting power of Amprius’ common stock present virtually or represented by proxy duly authorized at the Amprius special meeting and entitled to vote on the matter to approve Proposal No. 1;

 

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•

holders of at least two-thirds of the voting power of the outstanding shares of Amprius’ common stock for Proposal No. 2; and

 

•

holders of a majority of the Unaffiliated Shares for Proposal Nos. 1 and 2.

 

•

the shares of Amprius’ common stock to be issued in the merger pursuant to the merger agreement must have been approved for listing, subject to official notice of issuance, on NYSE;

 

•

all required filings under the HSR Act must have been completed and any applicable waiting period (and any extension thereof) applicable to the consummation of the transactions under the HSR Act must have expired or been terminated, and any pre-closing approvals or clearances reasonably required thereunder must have been obtained; and

 

•

Amprius must have filed the proposed charter and adopted the proposed bylaws.

In addition, the obligation of Amprius and the Merger Subs to complete the mergers is further subject to the satisfaction or waiver of the following conditions:

 

•

the representations and warranties of Holdco regarding certain matters related to due organization and qualification, subsidiaries, authority, organizational documents, capitalization, CFIUS and brokers of Holdco in the merger agreement must be true and correct in all material respects on the closing date of the mergers as though made on the closing date of the mergers (without giving effect to any references therein to any Holdco material adverse effect or other materiality qualifications), except if such representations and warranties address matters as of a particular date, then as of that particular date;

 

•

the remaining representations and warranties of Holdco in the merger agreement must be true and correct on the closing date of the mergers as though made on the closing date of the mergers or, if such representations and warranties address matters as of a particular date, then as of that particular date, except in where the failure to be so true and correct, taken as a while, would not reasonably be expected to have a Holdco material adverse effect (without giving effect to any references therein to any Holdco material adverse effect or other materiality qualifications);

 

•

Holdco must have performed or complied in all material respects with all agreements and covenants required by the merger agreement to be performed or complied with by it on or prior to the first effective time;

 

•

Holdco must have effected the conversion of Holdco’s preferred stock and Holdco’s non-voting preferred stock into shares of Holdco’s common stock prior to the first effective time;

 

•

certain investor agreements with holders of Holdco’s capital stock shall have been terminated;

 

•

Amprius shall have received each of the following, which must be in full force and effect:

 

•

an officer’s certificate certifying as to the satisfaction of certain conditions;

 

•

a certification that shares of Holdco common stock are not “United States real property interests” under Section 897(c) of the Code, together with a notice to the IRS (which must be filed by Amprius with the IRS following the closing) in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2);

 

•

the allocation certificate;

 

•

payoff letters with respect to any and all Holdco indebtedness;

 

•

evidence the release of all Holdco liens; and

 

•

a tax opinion from Wilson Sonsini Goodrich & Rosati that the mergers, taken together as an integrated transaction, are more likely than not to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.

 

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•

no Holdco material adverse effect shall have occurred between the date of the merger agreement and the closing of the mergers;

 

•

the Holdco written consents evidencing the Holdco Requisite Stockholder Approval shall be in full force and effect; and

 

•

no outstanding capital stock of Holdco shall have sought to, or continue to have a right to seek, appraisal, dissenters’, or similar rights under applicable law with respect to their capital stock of Holdco by virtue of the mergers.

In addition, the obligation of Holdco to complete the mergers is further subject to the satisfaction or waiver of the following conditions:

 

•

the representations and warranties of Amprius and the Merger Subs regarding certain matters related to due organization, authority, capitalization, and brokers of Amprius and Merger Subs in the merger agreement must be true and correct in all material respects on the closing date of the mergers as though made on the closing date of the mergers (without giving effect to any references therein to any Amprius material adverse effect or other materiality qualifications), except if such representations and warranties address matters as of a particular date, then as of that particular date;

 

•

the remaining representations and warranties of Amprius and the Merger Subs in the merger agreement must be true and correct on the closing date of the mergers as though made on the closing date of the merger or, if such representations and warranties address matters as of a particular date, then as of that particular date, except in where the failure to be so true and correct, taken as a while, would not reasonably be expected to have an Amprius material adverse effect (without giving effect to any references therein to any Amprius material adverse effect or other materiality qualifications);

 

•

Amprius and the Merger Subs must have performed or complied in all material respects with all agreements and covenants required by the merger agreement to be performed or complied with by it on or prior to the first effective time; and

 

•

Holdco shall have received each of the following, which must be in full force and effect:

 

•

an officer’s certificate certifying as to the satisfaction of certain conditions; and

 

•

a tax opinion from Baker & McKenzie LLP that the mergers, taken together as an integrated transaction, will more likely than not qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code.

Representations and Warranties

The merger agreement contains customary representations and warranties of Amprius, Merger Subs and Holdco for a transaction of this type relating to, among other things:

 

•

corporate organization and qualification;

 

•

organizational documents;

 

•

capitalization;

 

•

authority to enter into the merger agreement and the related agreements;

 

•

no conflict;

 

•

required filings and consents;

 

•

compliance;

 

•

votes required for completion of the mergers and approval of the proposals that will come before the Amprius special meeting and that will be the subject of the Holdco written consent;

 

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brokers; and

 

•

tax matters.

The merger agreement contains further customary representations and warranties of Amprius and Merger Subs for a transaction of this type relating to, among other things:

 

•

the Amprius special committee approval and Amprius board approval of the mergers and the merger agreement;

 

•

Merger Sub I’s board approval of the mergers and the merger agreement and votes required for Merger Sub I’s stockholders’ approval;

 

•

Merger Sub II’s managing member’s approval of the merger and the merger agreement and votes required for Merger Sub II’s members’ vote;

 

•

SEC filings and Sarbanes-Oxley; and

 

•

no prior operations of Merger Subs.

The merger agreement contains further customary representations and warranties of Holdco for a transaction of this type relating to, among other things:

 

•

subsidiaries;

 

•

financial statements;

 

•

absence of material changes or events;

 

•

absence of litigation;

 

•

real property;

 

•

intellectual property rights;

 

•

material contracts;

 

•

permits and restrictions;

 

•

votes required for Holdco’s board approval of the merger agreement and completion of the mergers;

 

•

employee and labor matters and benefit plans;

 

•

insurance;

 

•

exchange act requirements;

 

•

transactions with interested parties;

 

•

compliance with regulations by the Committee on Foreign Investment; and

 

•

compliance with anti-bribery laws.

The representations and warranties are, in many respects, qualified by materiality and knowledge, and will not survive the mergers, but their accuracy forms the basis of one of the conditions to the obligations of Amprius, Merger Subs and Holdco to complete the mergers.

Change in Board Recommendation

At any time prior to the proper approval of Proposal Nos. 1 and 2 at the Amprius special meeting, Amprius must not change the Amprius board recommendation that Amprius’ stockholders vote “FOR” Proposal Nos. 1 and 2, subject to the fiduciary duties of the board of directors of Amprius and the Amprius special committee in the case of an Intervening Event (as defined below).

 

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