affirmative vote of the directors then in office nominated by Wu and (ii) each committee of the Board will consist of a number of directors proportionate to the number of directors on the Board nominated by Wu, in each case, pursuant to the terms of the Stockholders Agreement.

(c) Advisory Charter Proposal C — So long as Wu owns at least 10% of the total voting power of Microvast Holdings, (i) in addition to the Board and the chairman of the Board, special meetings of the stockholders may be called by Wu and (ii) the Proposed Charter may only be amended by the affirmative vote of the holders of at least 75% of the total voting power of Microvast Holdings.

(d) Advisory Charter Proposal D — Microvast Holdings will elect to not be governed by Section 203 of the General Corporation Law of the State of Delaware.

(e) Advisory Charter Proposal E — Modify the forum selection provision to provide that the designation of Delaware courts as the exclusive forum for litigation matters does not apply to claims arising under the Securities Act or the Exchange Act and to designate the U.S. federal district courts as the exclusive forum for claims arising under the Securities Act.

We refer to the foregoing sub-proposals collectively as the “Advisory Charter Proposals”.

(4)    Proposal No. 4 — The Nasdaq Proposal — To consider and vote upon a proposal as required by the rules of the Nasdaq Stock Market, to approve the issuance of (a) up to an aggregate of 230,000,000 shares of common stock of Tuscan, par value $0.0001 per share (“Common Stock”) to the securityholders of Microvast in the Business Combination, (b) an aggregate of 6,736,111 shares of Common Stock upon conversion (the “Bridge Notes Conversion”) of an aggregate of $57,500,000 outstanding promissory notes issued by Microvast (the “Bridge Notes”), which Bridge Notes Conversion will occur simultaneously with the Business Combination, and (c) an aggregate of 48,250,000 shares of Common Stock at a price of $10.00 per share, for an aggregate purchase price of $482,500,000 (the “PIPE Financing”) pursuant to a series of subscription agreements (the “PIPE Subscription Agreements”) with certain investors (the “PIPE Investors”), which will close simultaneously with the Business Combination. We refer to this proposal as the “Nasdaq Proposal”.

(5)    Proposal No. 5 — The Director Election Proposal — To consider and vote upon a proposal to elect seven directors to the board of directors of Tuscan to serve staggered terms on the board until the first, second and third annual meetings of stockholders, respectively, following the consummation of the Business Combination until their successors are duly elected and qualified. We refer to this proposal as the “Director Election Proposal”.

(6)    Proposal No. 6 — The Incentive Plan Proposal — To consider and vote upon a proposal to approve the adoption of the Microvast Holdings, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). A copy of the 2021 Plan is attached to this proxy statement as Annex C. We refer to this proposal as the “Incentive Plan Proposal”.

(7)    Proposal No. 7 — The Adjournment Proposal — To consider and vote upon a proposal to adjourn the special meeting to a later date or dates if it is determined by Tuscan and Microvast that more time is necessary to further solicit proxies necessary for the approval of one or more of the Proposals. We refer to this proposal as the “Adjournment Proposal”, and together with the Business Combination Proposal, the Charter Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal and the Incentive Plan Proposal, the “Proposals”.

These items of business are described in the attached proxy statement, which Tuscan encourages you to read in its entirety before voting. Only holders of record of Common Stock at the close of business on June 21, 2021, the record date, are entitled to notice of the special meeting and to vote and have their votes counted at the special meeting and any adjournments or postponements of the special meeting.

After careful consideration, Tuscan’s board of directors has determined that the Business Combination Proposal, the Charter Proposal, each of the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Adjournment Proposal are fair to and in the best interests of Tuscan and its stockholders and unanimously recommends that you vote or give instruction to vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposal, “FOR” each of the Advisory Charter Proposals, “FOR” the Nasdaq Proposal, “FOR” the election of all of the persons nominated for election as directors, “FOR” the Incentive Plan Proposal and “FOR” the Adjournment Proposal, if presented.

Each of the Business Combination Proposal, the Charter Proposal, the Director Election Proposal, the Nasdaq Proposal and the Incentive Plan Proposal is interdependent upon the others and must be approved in order for Tuscan to consummate the Business Combination. The Charter Advisory Proposals and the Adjournment Proposal are not conditioned on the approval of any other Proposal.

The Sponsor and our directors, Stefan M. Selig, Richard O. Rieger and Amy Butte, have agreed, among other things, (1) to vote all of their shares of Common Stock in favor of the approval of the Proposals, (2) to refrain from transferring any of shares of Common Stock that they hold, and (3) to abstain from exercising any conversion rights.

All Tuscan stockholders are cordially invited to attend the special meeting, which will be held virtually over the internet at https://www.cstproxy.com/tuscanholdingscorp/sm2021. To ensure your representation at the special meeting, however, you are urged to complete, sign, date and return the enclosed proxy card as soon as possible. If you are a stockholder of record of Common Stock, you may also cast your vote in person (by participating virtually) at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting and vote in person (by participating virtually), obtain a proxy from your broker or bank.

A complete list of Tuscan stockholders of record entitled to vote at the special meeting will be available for ten days before the special meeting at the principal executive offices of Tuscan for inspection by stockholders during ordinary business hours for any purpose germane to the special meeting.

A majority of the issued and outstanding shares of Common Stock entitled to vote as of the record date at the special meeting must be present, in person or represented by proxy, at the special meeting to constitute a quorum and in order to conduct business at the special meeting. Approval of (1) the Business Combination Proposal, (2) the Nasdaq Proposal, (3) the Incentive Plan Proposal, (4) each of the Advisory Charter Proposals and (5) the Adjournment Proposal, in each case, will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Approval of the Charter Proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Common Stock on the record date. Directors are elected by a plurality of the votes cast in the Director Election Proposal; this means that the seven individuals nominated for election to the Board who receive the most “FOR” votes (among the shares of Common Stock represented in person or by proxy and entitled to vote thereon at the special meeting) will be elected.

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

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

ALL HOLDERS (“PUBLIC STOCKHOLDERS”) OF COMMON STOCK ISSUED IN TUSCAN’S INITIAL PUBLIC OFFERING (“PUBLIC SHARES”) HAVE THE RIGHT TO HAVE THEIR SHARES OF COMMON STOCK CONVERTED INTO CASH IN CONNECTION WITH THE PROPOSED BUSINESS COMBINATION. PUBLIC STOCKHOLDERS ARE NOT REQUIRED TO AFFIRMATIVELY VOTE FOR OR AGAINST THE BUSINESS COMBINATION PROPOSAL, TO VOTE ON THE BUSINESS COMBINATION PROPOSAL AT ALL, OR TO BE HOLDERS OF RECORD ON THE RECORD DATE IN ORDER TO HAVE THEIR PUBLIC SHARES CONVERTED INTO CASH. THIS MEANS THAT ANY PUBLIC STOCKHOLDER HOLDING PUBLIC SHARES MAY EXERCISE CONVERSION RIGHTS REGARDLESS OF WHETHER THEY ARE ENTITLED TO VOTE ON THE BUSINESS COMBINATION PROPOSAL AND REGARDLESS OF WHETHER THEY VOTE AT ALL. TO EXERCISE CONVERSION RIGHTS, PUBLIC STOCKHOLDERS MUST TENDER THEIR PUBLIC SHARES TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY, TUSCAN’S TRANSFER AGENT, NO LATER THAN TWO (2) BUSINESS DAYS PRIOR TO THE SPECIAL MEETING. YOU MAY TENDER YOUR PUBLIC SHARES BY EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR PUBLIC SHARES ELECTRONICALLY USING CONTINENTAL STOCK TRANSFER & TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE MERGER IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE CONVERTED INTO CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR CONVERSION RIGHTS. SEE THE SECTION TITLED “SPECIAL MEETING OF STOCKHOLDERS — CONVERSION RIGHTS” FOR MORE SPECIFIC INSTRUCTIONS.

This proxy statement is dated [•], 2021 and is first being mailed to Tuscan Holdings Corp. stockholders beginning on [•], 2021.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on [•], 2021: Tuscan’s proxy statement is available at https://[•].

cause certain closing conditions not to be satisfied (subject to cure), (6) by Tuscan if, prior to obtaining the requisite stockholder approval, the Microvast board of directors makes an adverse recommendation change, or (7) by Microvast at any time prior to receipt of the Microvast stockholder approval in order to enter into a definitive agreement with respect to a superior proposal, if the Microvast Board determines in good faith, in consultation with its outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law, in which case, a $63,000,000 termination fee is payable by Microvast upon termination of the Merger Agreement. See the section titled “The Merger Agreement — Termination.”

•        In addition to voting on the Business Combination Proposal, the stockholders of Tuscan will vote on the Charter Proposal, each of the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal, the Incentive Plan Proposal and, if necessary, the Adjournment Proposal. See the sections titled “The Charter Proposal,” “The Advisory Charter Proposals,” “The Nasdaq Proposal,” “The Director Election Proposal,” “The Incentive Plan Proposal” and “The Adjournment Proposal.”

•        After the Business Combination, (1) if Tuscan’s nominees are elected to the Board, the directors of Tuscan will be Yang Wu, Yanzhuan Zheng, Stanley Whittingham, Arthur Wong, Craig Webster, Stephen Vogel and Ying Wei and (2) the executive officers of Microvast Holdings will be the current executive officers of Microvast. See the sections titled “The Director Election Proposal” “Management of Tuscan Following the Business Combination.”

FREQUENTLY USED TERMS

In this proxy statement:

“2021 Plan” means the Microvast Holdings 2021 Equity Incentive Plan.

“2030 Framework” means the 2030 climate and energy policy framework agreed to by the European Union (EU) member states in 2014.

“ASC” means Accounting Standards Codification.

“Board” means the board of directors of Microvast Holdings.

“Business Combination” means the Merger and the other transactions contemplated by the Merger Agreement.

“Charter” means the Amended and Restated Certificate of Incorporation of Tuscan, dated March 5, 2019, as amended on December 4, 2020 and on May 10, 2021.

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

“Company” means Tuscan and, following the consummation of the Business Combination, Microvast Holdings.

“China” and “PRC” means the People’s Republic of China, excluding, for purposes of this proxy statement, Taiwan, Hong Kong and Macau.

“Closing” means the closing of the Business Combination.

“Conversion” means the election of a Public Stockholder to convert all or a portion of the Public Shares held by such Public Stockholder in accordance with Tuscan’s charter in connection with the Business Combination.

“DGCL” means the General Corporation Law of the State of Delaware.

“EIT Law” means the Enterprise Income Tax Law of the PRC.

“Escrow Agreement” means the Stock Escrow Agreement, dated March 5, 2019, by and among Tuscan, the Sponsor, Continental Stock Transfer & Trust Company and the other parties thereto.

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

“FCG” means full concentration gradient.

“Founder Shares” means the 5,750,000 shares of Common Stock issued to Sponsor in November 2018 for $25,000 in cash in connection with Tuscan’s organization.

“GWh” means gigawatt hours.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

“LFP” means lithium iron phosphate.

“Li-ion” means Lithium ion.

“LTO” means lithium titanate oxide.

“Merger” means the merger in which Merger Sub will merge with and into Microvast, with Microvast surviving the merger.

“Merger Agreement” means the Agreement and Plan of Merger (as it may be amended and/or restated from time to time), dated as of February 1, 2021, by and among Microvast, Tuscan and Merger Sub, pursuant to which Merger Sub will merge with and into Microvast, with Microvast surviving the merger, a copy of which is attached hereto as Annex A.

“Merger Sub” means TSCN Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Tuscan.

“Microvast” means Microvast, Inc., a Delaware corporation.

“Microvast Board” means the Microvast Board of Directors.

“Microvast Holdings” refers to Tuscan following the Business Combination, which shall be renamed “Microvast Holdings, Inc.”

“Microvast Holders” means the stockholders of Microvast prior to the consummation of the Business Combination.

“Microvast Plan” means the Microvast, Inc. Stock Incentive Plan, as amended.

“MPS” means Microvast Power System (Houzhou) Co. Ltd., a Sino-foreign equity joint venture company established and existing under the laws of the PRC and majority-owned subsidiary of Microvast.

“MPS CL Investors” means the MPS convertible loan investors.

“MPS Investors” means, collectively, the MPS CL Investors and MPS Minority Investors.

“MPS Minority Investors” means the MPS minority equity investors.

“MWh” means megawatt hours.

“Nasdaq” means Nasdaq Stock Market.

“NMC-1” means nickel manganese cobalt version 1.

“NMC-2” means nickel manganese cobalt version 2.

“Ochem” means Ochem Chemical Co., Ltd.

“Ochemate” means Ochemate Material Technologies Co., Ltd.

“OEM” means original equipment manufacturer.

“PCAOB” means the U.S. Public Company Accounting Oversight Board.

“PIPE Financing” means the issuance of an aggregate of 48,250,000 shares of Common Stock at the Closing to the PIPE Investors at a price of $10.00 per share, for an aggregate purchase price of $482,500,000.

“PIPE Investors” means investors in the PIPE Financing.

“PIPE Subscription Agreements” means the subscription agreements signed by the PIPE Investors in connection with the PIPE Financing.

“Private Units” means the private placement of an aggregate of 687,000 Tuscan Units issued to the Sponsor Group and EarlyBirdCapital.

“Proposed Bylaws” means the proposed Amended and Restated Bylaws of Microvast Holdings, in the form attached hereto as Annex B-2.

“Proposed Charter” means the proposed Second Amended and Restated Certificate of Incorporation of Microvast Holdings, in the form attached hereto as Annex B-1.

“Public Shares” means the Common Stock issued in Tuscan’s initial public offering.

“Public Stockholders” means all holders of Public Shares.

“R&D” means research and development.

“Registration Rights and Lock-Up Agreement” means the Registration Rights and Lock-Up Agreement to be entered into at the Closing by Microvast Holdings, the Microvast Holders, the CL Affiliates and the Sponsor Group pursuant to the Merger Agreement.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.

“SEC” means the United States Securities and Exchange Commission.

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

“special meeting” means the special meeting of stockholders of Tuscan that is the subject of this proxy statement.

“Sponsor” means Tuscan Holdings Acquisition LLC, a Delaware limited liability company.

“Sponsor Group” means the Sponsor and certain officers and directors of Tuscan.

“Stockholders Agreement” means a Stockholders Agreement to be entered into at the Closing by Microvast Holdings, the Sponsor and Wu pursuant to the Merger Agreement.

“Tuscan” means Tuscan Holdings Corp., a Delaware corporation.

“Tuscan Support Agreement” means a support agreement entered into by the Sponsor Group, Tuscan and Microvast pursuant to which the Sponsor Group agreed to vote all shares of Common Stock held by them in favor of the Business Combination and each other proposal being submitted for the vote of Tuscan stockholders herein and abstain from exercising any Conversion rights that they may have in connection with the Business Combination.

“U.S. GAAP” means the generally accepted accounting principles in the United States of America.

“UL” means Underwriter Laboratories, U.S. Quality Certification.

“United Kingdom” or “U.K.” means the United Kingdom of Great Britain and Northern Ireland.

“United States” or “U.S.” means the United States of America.

“US$”, “$” or “U.S. dollars” means the lawful currency of the United States.

“Wh/kg” means watt hours per kilogram.

“Wh/l” means watt hours per liter.

“Wu” means Yang Wu, the Chief Executive Officer of Microvast.

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS for stockholders

The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the proposals to be presented at the special meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the special, which, in light of public health concerns regarding the coronavirus (COVID-19) pandemic, will be held via live webcast at https://www.cstproxy.com/tuscanholdingscorp/sm2021 on [__], 2021, at 9:00 a.m. eastern time. The special meeting can be accessed by visiting https://www.cstproxy.com/tuscanholdingscorp/sm2021, where you will be able to listen to the meeting live and vote during the meeting. Additionally, you have the option to listen to the special meeting by dialing +1-888-965-8995 (toll-free within the U.S. and Canada) or +1-415-655-0243 (outside of the U.S. and Canada, standard rates apply). The passcode for telephone access is 48091861#, but please note that you cannot vote or ask questions if you choose to participate telephonically. Please note that you will only be able to access the special meeting by means of remote communication.

Q:     Why am I receiving this proxy statement?

A:     The parties to the Merger Agreement have agreed to the Business Combination under the terms of the Merger Agreement that is described in this proxy statement. A copy of the Merger Agreement is attached to this proxy statement as Annex A, and Tuscan encourages its stockholders to read it in its entirety. Tuscan’s stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement, which, among other things, provides for the merger of Merger Sub with and into Microvast, with Microvast surviving the merger. As a result of the Business Combination, Tuscan will become the holding company for the Microvast business.

Tuscan’s stockholders are being asked to consider and vote upon the matters to be considered at the special meeting, which consist of the Business Combination Proposal, the Charter Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal, the Incentive Plan Proposal and, if necessary, the Adjournment Proposal:

•        The Business Combination Proposal — to consider and vote upon a proposal to adopt the Merger Agreement, a copy of which is attached to this proxy statement as Annex A, and the Business Combination contemplated therein, including the Merger. See the section titled “The Business Combination Proposal.”

•        The Charter Proposal — a proposal to adopt the Proposed Charter in the form attached hereto as Annex B-1 and the Proposed Bylaws in the form attached hereto as Annex B-2. See the section titled “The Charter Proposal.”

•        The Advisory Charter Proposals — to consider and vote upon, on a non-binding advisory basis, a proposal to approve certain differences between the Charter and the Proposed Charter, which are being presented in accordance with SEC requirements as four separate sub-proposals. See the section titled “The Advisory Charter Proposals.”

•        The Nasdaq Proposal — a proposal to approve (1) the issuance of up to an aggregate of 230,000,000 shares of Common Stock to the Microvast Holders in connection with the Business Combination (consisting of the Closing Shares and the Earn-Out Shares), (2) the issuance of 6,736,111 shares of Common Stock in the Bridge Notes Conversion and (3) the issuance of an aggregate of 48,250,000 shares of Common Stock at a price of $10.00 per share, for an aggregate purchase price of $482,500,000 pursuant to a series of PIPE Subscription Agreements with the PIPE Investors, which PIPE Financing will close simultaneously with the Business Combination. See the section titled “The Nasdaq Proposal.”

•        The Director Election Proposal — a proposal to elect seven directors to the board of directors of Tuscan to serve staggered terms on the board until the first, second and third annual meetings of stockholders, respectively, following the consummation of the Business Combination and until their successors are duly elected and qualified. See the section titled “The Director Election Proposal.”

•        The Incentive Plan Proposal — a proposal to approve the adoption of the 2021 Plan. A copy of the 2021 Plan is attached hereto as Annex C. See the section titled “The Incentive Plan Proposal.”

•        The Adjournment Proposal — a proposal to adjourn the special meeting to a later date or dates if it is determined by Tuscan and Microvast that more time is necessary to further solicit proxies necessary for the approval of one or more of the Proposals. See the section titled “The Adjournment Proposal”, and together with the Business Combination Proposal, the Charter Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal and the Incentive Plan Proposal, the “Proposals”.

Each of the Business Combination Proposal, the Charter Proposal, the Director Election Proposal, the Nasdaq Proposal and the Incentive Plan Proposal is interdependent upon the others and must be approved in order for Tuscan to consummate the Business Combination. The Advisory Charter Proposals and the Adjournment Proposal are not conditioned on the approval of any other Proposal.

This proxy statement contains important information about the Business Combination and the Proposals. Stockholders should read it carefully.

The vote of stockholders is important. Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement.

Q:     Why is Tuscan proposing the Business Combination?

A:     Tuscan was organized to effect a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities.

In March 2019, Tuscan completed its initial public offering of 27,600,000 units (the “Tuscan Units”), which included the full exercise by the underwriters of their over-allotment option. Each Tuscan Unit consists of one share of Common Stock and one redeemable warrant (“Tuscan Warrant”) entitling the holder to purchase one share of Common Stock at an initial exercise price of $11.50 per share. The Tuscan Units were sold at an offering price of $10.00 per unit, generating gross proceeds of $276,000,000. Simultaneous with the consummation of the initial public offering, Tuscan consummated the private placement of an aggregate of 687,000 Tuscan Units (“Private Units”) at a price of $10.00 per unit, generating gross proceeds of $6,870,000. The Private Units are identical to the Tuscan Units sold in the initial public offering, except that the warrants underlying the Private Units (the “Private Warrants”) are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees.

Like most blank check companies, the Charter provides for the return of the proceeds of Tuscan’s initial public offering held in the trust account to the holders of Public Shares if there is no qualifying business combination(s) consummated on or before a certain date (in Tuscan’s case, originally December 7, 2020). Tuscan was not expected to be able to consummate an initial business combination by such date and, on December 3, 2020, Tuscan received stockholder approval to extend the date by which it must complete an initial business combination from December 7, 2020 to April 30, 2021. In connection with such extension, holders of 3,198 Public Shares exercised their right to convert their shares into cash at a conversion price of approximately $10.22 per share, for an aggregate conversion amount of approximately $32,684. Additionally, on May 10, 2021, at a reconvened annual meeting of stockholders initially convened on April 28, 2021, Tuscan received stockholder approval to further extend the date by which it must complete a business combination from April 30, 2021 to July 31, 2021. In connection with such extension, holders of an aggregate of 13,290 Public Shares exercised their right to convert their shares into cash.

Since the initial public offering, Tuscan’s activity has been limited to the evaluation of business combination candidates.

Microvast is a technology innovator for Li-ion batteries that designs, develops and manufactures battery systems for electric vehicles and energy storage that feature ultra-fast charging capabilities, long life and superior safety.

Based on its due diligence investigations of Microvast and the industry in which it operates, including the financial and other information provided by Microvast in the course of the negotiations, Tuscan believes that the Business Combination will provide Tuscan stockholders with an opportunity to participate in a company with significant growth potential. See the sections titled “The Business Combination Proposal — Tuscan’s Board of Directors’ Reasons for Approval of the Business Combination” and “Risk Factors.”

Q:     Will the management of Tuscan change in the Business Combination?

A:     Yes. After the Business Combination, if Tuscan’s nominees are elected to the Board, the directors of Tuscan will be Yang Wu, Yanzhuan Zheng, Stanley Whittingham, Arthur Wong, Craig Webster, Stephen Vogel and Ying Wei. After the Business Combination, the executive officers of Microvast Holdings will be the current executive officers of Microvast.

Q:     Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

A:     Yes. Upon the Closing, we intend to apply to list the Common Stock on the Nasdaq under the symbol “MVST”.

Q:     Do I have conversion rights?

A:     If you are a holder of Public Shares, you have the right to demand that Tuscan convert such shares into cash. Tuscan sometimes refers to these rights to demand conversion of the Public Shares into a pro rata portion of the cash held in Tuscan’s trust account as “conversion rights.”

Under the Charter, the Business Combination may only be consummated if Tuscan would have net tangible assets of at least $5,000,001 upon consummation of the Business Combination.

Q:     How do I exercise my conversion rights?

A:     A holder of Public Shares may exercise conversion rights regardless of whether the holder votes on the Business Combination Proposal or is a holder of Public Shares on the record date. If you are a holder of Public Shares and wish to exercise your conversion rights, you must deliver your stock to Tuscan’s transfer agent physically or electronically using the DWAC (Deposit Withdrawal at Custodian) System no later than two business days prior to the special meeting. Any holder of Public Shares exercising conversion rights will be entitled to have his, her, or its shares converted for a full pro rata portion of the amount then in the trust account (which is anticipated to be approximately $           per share, as of two business days prior to the date of the special meeting). Such amount, less any owed but unpaid income taxes on the funds in the trust account, will be paid promptly upon consummation of the Business Combination. However, under Delaware law, the proceeds held in the trust account could be subject to claims which could take priority over those of Public Stockholders exercising conversion rights. Therefore, the per-share distribution from the trust account in such a situation may be less than originally anticipated due to such claims.

Any request for conversion, once made by a holder of Public Shares, may be withdrawn at any time up to the vote on the Business Combination Proposal. If you deliver your shares for conversion to Tuscan’s transfer agent and later decide not to elect conversion, you may request that Tuscan’s transfer agent return the shares (physically or electronically). You may make such request by contacting Tuscan’s transfer agent at the phone number or address listed at the end of this section.

If a holder of Public Shares requests conversion of shares as described above, then, if the Business Combination is consummated, Tuscan will convert these shares into a pro rata portion of funds deposited in the trust account. If you exercise your conversion rights, then you will be exchanging your shares of Common Stock for cash and will no longer be a common stockholder of Tuscan upon consummation of the Business Combination.

If you are a holder of Public Shares and you exercise your conversion rights, it will not result in the loss of any of the Tuscan Warrants that you may hold.

Q:     If I hold Public Shares, what are the U.S. federal income tax consequences of converting my Public Shares for cash?

A:     In connection with the Business Combination, each issued and outstanding Public Share may be converted for cash.

There is some uncertainty regarding the federal income tax consequences to the holders of Common Stock who exercise their conversion rights. The uncertainty of tax consequences relates primarily to the individual circumstances of the taxpayer and include (i) whether the conversion results in a dividend, taxable as ordinary

income, or a sale, taxable as capital gain, and (ii) whether such capital gain is “long-term” or “short-term.” Whether the conversion qualifies for sale treatment, resulting in taxation as capital gain rather than ordinary income, will depend largely on whether the holder owns (or is deemed to own) any shares of Common Stock following the conversion, and if so, the total number of shares of Common Stock held by the holder both before and after the conversion relative to all shares of Common Stock outstanding both before and after the conversion. The conversion generally will be treated as a sale, rather than a dividend, if the conversion (i) is “substantially disproportionate” with respect to the holder, (ii) results in a “complete termination” of the holder’s interest in Tuscan or (iii) is “not essentially equivalent to a dividend” with respect to the holder. Due to the personal and subjective nature of certain of such tests and the absence of clear guidance from the IRS, there is uncertainty as to whether a holder who elects to exercise its conversion rights will be taxed on any gain from the conversion as ordinary income or capital gain.

See Risk Factors, “There is uncertainty regarding the federal income tax consequences of the conversion to the holders of Common Stock.” For an additional discussion of the U.S. federal income tax treatment of Public Shares in connection with the Merger, see the section entitled “U.S. Federal Income Tax Considerations of the Conversion to the holders of Common Stock.”

Q:     Do I have appraisal rights if I object to the Business Combination?

A:     No. Tuscan stockholders and warrant holders do not have appraisal rights in connection with the Business Combination under the DGCL.

Q:     What happens to the funds deposited in the trust account after consummation of the Business Combination?

A:     After consummation of the Business Combination, the funds in the trust account will be used by Tuscan to pay holders of the Public Shares who exercise conversion rights, to pay Tuscan’s tax obligations incurred prior to the closing, to repay loans included on Tuscan’s balance sheet as of the closing and permitted to be repaid under the Merger Agreement, to pay certain expenses incurred in connection with the Business Combination with Microvast, and any remaining balance will be used for working capital and general corporate purposes, including funding for organic growth and potential acquisitions.

Q:     What happens if a substantial number of Public Stockholders vote in favor of the Business Combination Proposal and exercise their conversion rights?

A:     Pursuant to the Charter, all holders of Public Shares may vote in favor of the Business Combination and still exercise their conversion rights; provided that Tuscan may not consummate the Business Combination and either party is entitled to terminate the Merger Agreement if Tuscan would have less than $5,000,001 of net tangible assets upon consummation of the Business Combination. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of Public Stockholders is substantially reduced as a result of conversions of Public Shares. With fewer Public Shares and Public Stockholders, the trading market for the Common Stock following consummation of the Business Combination may be less liquid than the market for the Common Stock prior to the Business Combination and Tuscan may not be able to meet the listing standards for Nasdaq or another national securities exchange.

Q:     What happens if the Business Combination is not consummated?

A:     If the Business Combination is not consummated by July 31, 2021, either party may terminate the Merger Agreement. Further, if Tuscan is unable to consummate a business combination within the time period permitted by the Charter (which, as of the date of this proxy statement, is July 31, 2021), Tuscan must redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to an amount then held in the trust account less taxes payable.

Q:     When do you expect the Business Combination to be completed?

A:     It is currently anticipated that the Business Combination will be consummated promptly following the special meeting which is set for                     , 2021; however, such meeting could be adjourned. For a description of the conditions for the completion of the Business Combination, see the section titled “The Merger Agreement — Conditions to the Closing of the Business Combination.”

Q:     What do I need to do now?

A:     Tuscan urges you to carefully read and consider the information contained in this proxy statement, including the annexes, and to consider how the Business Combination will affect you as a stockholder and warrant holder of Tuscan. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.

Q:     How do I attend the special meeting?

A:     Due to health concerns stemming from the COVID-19 pandemic and to support the health and well-being of our stockholders, the special meeting will be held virtually. Any stockholder wishing to attend the special meeting must register in advance. To register for and attend the special meeting, please follow these instructions as applicable to the nature of your ownership of Common Stock:

•        Shares Held of Record.    If you are a record holder, and you wish to attend the virtual special meeting, go to https://www.cstproxy.com/tuscanholdingscorp/sm2021, enter the control number you received on your proxy card or notice of the meeting and click on the “Click here to preregister for the online meeting” link at the top of the page. Immediately prior to the start of the special meeting, you will need to log back into the meeting site using your control number. You must register before the meeting starts.

•        Shares Held in Street Name.    If you hold your shares in “street” name, which means your shares are held of record by a broker, bank or nominee, and you who wish to attend the virtual special meeting, you must obtain a legal proxy from the stockholder of record and e-mail a copy (a legible photograph is sufficient) of your proxy to proxy@continentalstock.com. Holders should contact their bank, broker or other nominee for instructions regarding obtaining a proxy. Holders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the special meeting. You will receive an e-mail prior to the meeting with a link and instructions for entering the special meeting. “Street” name holders should contact Continental Stock Transfer on or before           , 2021.

Stockholders will also have the option to listen to the special meeting by telephone by calling: +1-888-965-8995 (toll-free within the U.S. and Canada) or +1-415-655-0243 (outside of the U.S. and Canada, standard rates apply). The passcode for telephone access is 48091861#. You will not be able to vote or submit questions unless you register for and log in to the special meeting webcast as described above.

Q:     What vote is required to approve the proposals presented at the special meeting?

A:     The approval of the Business Combination Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “AGAINST” the Business Combination Proposal. Brokers are not entitled to vote on the Business Combination Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Business Combination Proposal. The Business Combination will not be consummated if Tuscan has less than $5,000,001 of net tangible assets upon consummation of the Business Combination, after taking into account holders of Public Shares that have properly demanded conversion of their Public Shares into cash. The Sponsor Group holds approximately 20.85% of the outstanding shares of Common Stock, none of which are Public Shares. Such shares, as well as any shares of Common Stock acquired in the open market by the Tuscan initial stockholders, are contractually obligated to be voted in favor of the proposals presented at the special meeting. Accordingly, only 10,343,313 Public Shares, constituting approximately 29.15% of the outstanding Common Stock, must be voted in favor of the Business Combination Proposal in order for the Business Combination Proposal to be approved.

The approval of the Charter Proposal will require the affirmative vote of the holders of a majority of the outstanding shares of Common Stock on the record date. Abstentions will have the same effect as a vote “AGAINST” the Charter Proposal. The Charter Proposal is considered a non-routine proposal, and, accordingly, brokers are not entitled to vote on those proposals without receiving voting instructions, and broker non-votes will have the same effect as a vote “AGAINST” such proposals.

The approval of each of the Advisory Charter Proposals will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “AGAINST” the Advisory Charter Proposals. The Advisory Charter Proposals are considered non-routine proposals, and, accordingly, brokers are not entitled to vote on those proposals without receiving voting instructions, and broker non-votes will have the same effect as a vote “AGAINST” such proposals.

The approval of the Nasdaq Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “AGAINST” the Nasdaq Proposal. Brokers are not entitled to vote on the Nasdaq Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Nasdaq Proposal.

The election of directors requires a plurality of the votes cast. “Plurality” means that the individuals who receive the largest number of votes cast “FOR” will be elected as directors (even if they receive less than a majority of the votes cast). Consequently, because this is an uncontested election, any director nominee who receives at least one vote “FOR” will be elected as a director. Abstentions will have no effect on the Director Election Proposal because an abstention is not a vote cast with respect to the proposal. Brokers are not entitled to vote on the Director Election Proposal absent voting instructions from the beneficial holder because the Director Election Proposal is considered “non-routine”. Consequently, broker non-votes will have no effect with respect to the Director Election Proposal.

The approval of the Incentive Plan Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “AGAINST” the Incentive Plan Proposal. Brokers are not entitled to vote on the Incentive Plan Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Incentive Plan Proposal.

The approval of the Adjournment Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “AGAINST” the Adjournment Proposal. Brokers are entitled to vote on the Adjournment Proposal absent voting instructions from the beneficial holder because the proposal is considered “routine”. Consequently, broker non-votes will have the same effect as a vote “AGAINST” the Adjournment Proposal.

Q:     How do I vote?

A:     If you are a holder of record of Common Stock on the record date, you may vote by virtually attending the special meeting and submitting a ballot via the live webcast or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope.

If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank, or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the virtual meeting, obtain a proxy from your broker, bank or nominee.

Q:     If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A:     Your broker, bank or nominee can vote your shares without receiving your instructions on “routine” proposals only. Your broker, bank or nominee cannot vote your shares with respect to “non-routine” proposals unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee.

The Adjournment Proposal is considered a routine proposal. Accordingly, your broker, bank or nominee may vote your shares with respect to such proposal without receiving voting instructions.

The Business Combination Proposal, the Charter Proposal, each of the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal, and the Incentive Plan Proposal are non-routine proposals. Accordingly, your broker, bank or nominee may not vote your shares with respect to these proposals unless you provide voting instructions.

Q:     What will happen if I abstain from voting or fail to vote at the special meeting?

A:     At the special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention will have no effect on the Director Election Proposal, while a failure to vote or abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal, the Charter Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal.

Q:     How will a broker non-vote impact the results of each proposal?

A:     Broker non-votes will count as a vote “AGAINST” the Charter Proposal, and the Adjournment Proposal, but will not have any effect on the outcome of the Business Combination Proposal, the Advisory Charter Proposals, the Nasdaq Proposal, the Director Election Proposal and the Incentive Plan Proposal.

Q:     How will the Sponsor Group vote?

A:     Concurrently with the execution of the Merger Agreement, the Sponsor Group entered into the Tuscan Support Agreement with Tuscan and Microvast, pursuant to which the Sponsor Group agreed to vote all shares of Common Stock held by them in favor of the Merger and each other proposal being submitted for the vote of Tuscan stockholders herein and abstain from exercising any conversion rights that they may have. The Sponsor Group holds approximately 20.85% of the outstanding shares of Common Stock, none of which are Public Shares.

Q:     May I change my vote after I have mailed my signed proxy card?

A:     Yes. Stockholders may send a later-dated, signed proxy card so that it is received by Tuscan’s transfer agent prior to the vote at the special meeting or virtually attend the special meeting and submitting a ballot via the live webcast. Stockholders also may revoke their proxy by sending a notice of revocation to Tuscan’s transfer agent, which must be received prior to the vote at the special meeting.

Q:     What happens if I fail to take any action with respect to the special meeting?

A:     If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and consummated, you will continue to be a stockholder and/or warrant holder of the Company. As a corollary, failure to deliver your stock certificate(s) to Tuscan’s transfer agent (either physically or electronically) no later than two business days prior to the special meeting means you will not have any right in connection with the Business Combination to exchange your shares for a pro rata share of the funds held in Tuscan’s trust account. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of the Company.

Q:     What should I do with my Tuscan stock and warrant certificates?

A:     Tuscan warrant holders and those stockholders who do not elect to have their Public Shares converted into the pro rata share of the trust account need not submit their certificates. Tuscan stockholders who exercise their conversion rights must deliver their stock certificates to Tuscan’s transfer agent (either physically or electronically) no later than two business days prior to the special meeting in order to properly demand such conversion rights.

Q:     What should I do if I receive more than one set of voting materials?

A:     Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your Tuscan shares.

Q:     Who can help answer my questions?

A:     If you have questions about the Business Combination or if you need additional copies of the proxy statement or the enclosed proxy card you should contact:

Tuscan Holdings Corp.
135 E. 57th Street, 18th Floor
New York, New York 10022
Telephone: (646) 948-7100

or

Advantage Proxy, Inc.

P.O. Box 13581

Des Moines, WA 98198

Attn: Karen Smith

Toll Free Telephone: (877) 870-8565

Main Telephone: (206) 870-8565

ksmith@advantageproxy.com

You may also obtain additional information about Tuscan from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.” If you are a holder of Public Shares and you intend to seek conversion of your shares, you will need to demand conversion of your shares by delivering your stock (either physically or electronically) to Tuscan’s transfer agent at the address below no later than two business days prior to the special meeting. If you have questions regarding the certification of your position or delivery of your stock, please contact:

Mr. Mark Zimkind
Continental Stock Transfer & Trust Company
1 State Street Plaza, 30th Floor
New York, New York 10004
E-mail: mzimkind@continentalstock.com

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our Microvast’s, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding Microvast’s industry and market sizes, future opportunities for Tuscan, Microvast and Microvast Holdings, Tuscan’s and Microvast’s estimated future results and the Business Combination, including the implied enterprise value, the expected transaction and ownership structure and the likelihood and ability of the parties to successfully consummate the Business Combination. Such forward-looking statements are based upon the current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond Tuscan’s control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.

In addition to factors previously disclosed in Tuscan’s reports filed with the SEC and those identified elsewhere in this proxy statement, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•        inability to complete the Business Combination or, if Tuscan does not complete the Business Combination, any other business combination;

•        the inability to complete the Business Combination due to the failure to meet the closing conditions to the Business Combination, including the inability to obtain approval of Tuscan’s stockholders, the inability to consummate the contemplated PIPE financing, the failure to achieve the minimum amount of cash available following any conversions by Tuscan stockholders, the failure to meet the Nasdaq listing standards in connection with the consummation of the Business Combination, or the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement;

•        costs related to the Business Combination;

•        a delay or failure to realize the expected benefits from the Business Combination;

•        risks related to disruption of management time from ongoing business operations due to the Business Combination;

•        the impact of the ongoing COVID-19 pandemic;

•        changes in the highly competitive market in which Microvast competes, including with respect to its competitive landscape, technology evolution or regulatory changes;

•        changes in the markets that Microvast targets;

•        risk that Microvast may not be able to execute its growth strategies or achieve profitability;

•        the risk that Microvast is unable to secure or protect its intellectual property;

•        the risk that Microvast’s customers or third-party suppliers are unable to meet their obligations fully or in a timely manner;

•        the risk that Microvast’s customers will adjust, cancel or suspend their orders for Microvast’s products;

•        the risk that Microvast will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all;

•        the risk of product liability or regulatory lawsuits or proceedings relating to Microvast’s products or services;

•        the risk that Microvast may not be able to develop and maintain effective internal controls;

•        the outcome of any legal proceedings that may be instituted against Tuscan, Microvast or any of their respective directors or officers following the announcement of the Business Combination;

•        risks of operations in the PRC; and

•        the failure to realize anticipated pro forma results and underlying assumptions, including with respect to estimated stockholder conversions and purchase price and other adjustments.

Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond Tuscan’s control. All information set forth herein speaks only as of the date hereof in the case of information about Tuscan and Microvast or the date of such information in the case of information from persons other than Tuscan or Microvast, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof except as may be required under applicable securities laws. Forecasts and estimates regarding Microvast’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Before a stockholder grants its proxy or instructs how its vote should be cast or vote on the Business Combination Proposal, Charter Proposal, Advisory Charter Proposals, Nasdaq Proposal, Director Election Proposal, Incentive Plan Proposal, or Adjournment Proposal, it should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this proxy statement may adversely affect Tuscan and/or Microvast.

COMPARATIVE PER SHARE DATA

The following table sets forth selected historical comparative share information for Tuscan and Microvast and unaudited pro forma condensed combined per share information of Microvast Holdings after giving effect to the Business Combination, assuming two conversion scenarios as follows:

•        Assuming No Conversions:    This presentation assumes that none of Tuscan’s stockholders exercise Conversion rights with respect to their Public Shares after the date of this proxy statement. The conversion of 13,290 Public Shares in May 2021 has been reflected in the pro forma adjustment.

•        Assuming Maximum Conversions:    This presentation assumes that stockholders holding 27,583,512 of Tuscan’s Public Shares exercise their Conversion rights and that such shares are converted into their pro rata share (approximately $10.05 per share) of the funds in the trust account. Furthermore, Tuscan will not convert shares of Class A stock in an amount that would result in Tuscan’s failure to have net tangible assets equaling or exceeding $5,000,001. This scenario assumes that 27,583,512 Public Shares are converted into an aggregate conversion payment of approximately $277.2 million based on approximately $282.3 million in the trust account and 27,596,802 Public Shares outstanding as of March 31, 2021, and the exclusion of 13,290 Public Shares which have been converted into cash of $0.1 million in May 2021.

The pro forma book value information reflects the Business Combination as if it had occurred on March 31, 2021. The weighted average shares outstanding and net earnings per share information reflect the Business Combination as if it had occurred on January 1, 2020. This information is only a summary and should be read together with the selected historical financial information included elsewhere in this proxy statement, and the historical financial statements of Tuscan and Microvast and related notes. The unaudited pro forma combined per share information of Tuscan and Microvast is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of Tuscan and Microvast would have been had the companies been combined during the periods presented.

____________

(1)      Book value per share = Total equity excluding mezzanine equity/shares outstanding

(2)      The equivalent pro forma basic and diluted per share data for Microvast is calculated by multiplying the combined pro forma per share data by the 160.3 Exchange Ratio.

(3)      Number of shares excluded from per share data because they were antidilutive (a) approximately 28.3 million shares of Tuscan common stock underlying the warrants sold in the Tuscan initial public offering and private placement and (b) approximately 56.8 million Microvast shares for unvested, and/or unexercised non-vested shares and stock options.

(4)      There is no Unaudited Pro Forma Condensed Combined Balance Sheet required for December 31, 2020, so no pro forma book value per share for December 31, 2020 is presented.

RISK FACTORS

Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement. The value of your investment in the Company following consummation of the Business Combination will be subject to the significant risks affecting the Company and the inherent risks of the industry in which it operates. You should carefully consider the risks and uncertainties described below and other information included in this proxy statement. If any of the events described below occur, the business and financial results of the Company could be adversely affected in a material way. This could cause the trading price of the Common Stock to decline, perhaps significantly, and you therefore may lose all or part of your investment.

Risks Related to Microvast’s Business

Microvast’s future growth depends upon the willingness of commercial vehicle and specialty vehicle operators and consumers to adopt electric vehicles.

Microvast’s growth is highly dependent upon the adoption of electric vehicles by commercial vehicle and specialty vehicle operators and consumers. If the markets for electric vehicles in the PRC, Europe or North America do not develop as Microvast expects or develop more slowly than it expects, Microvast’s business, prospects, financial condition and operating results will be harmed, because demand for its products and services will not increase as expected or may even be reduced. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, numerous competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

Other factors may influence the adoption of electric vehicles, including, but not limited to:

•        perceptions about electric vehicle quality, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles;

•        perceptions about electric vehicle quality, safety (in particular with respect to lithium-ion battery packs), design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles;

•        volatility in sales of electric vehicles;

•        perceptions about vehicle safety in general, in particular safety issues that may be attributed to the use of advanced technology, including vehicle electronics and regenerative braking systems;

•        negative perceptions of electric vehicles, such as that they are more expensive than non-electric vehicles and are only affordable with government subsidies or that they have failed to meet customer expectations;

•        the limited range over which electric vehicles may be driven on a single battery charge and the effects of weather on this range;

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

•        concerns about electric charging infrastructure availability and reliability, which could derail past and present efforts to promote electric vehicles as a practical solution to vehicles which require gasoline;

•        concerns about charging station standardizations, convenience and cost influencing consumers’ perceptions regarding the convenience of electric vehicle charging stations;

•        concerns of potential customers about the susceptibility of battery packs to damage from improper charging, as well as the lifespan of battery packs and the cost of their replacement;

•        concerns regarding comprehensive insurance coverage related to electric vehicles;

•        developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, which could adversely affect sales of electric vehicles;

•        the environmental consciousness of consumers;

•        the availability and volatility in the cost of natural gas, diesel, coal, oil, gasoline and other fuels relative to electricity, for example, the sharp reduction in prices for gasoline in 2020;

•        the availability of tax and other governmental incentives to purchase and operate electric vehicles or future regulation requiring increased use of nonpolluting vehicles;

•        concerns regarding the value and costs for upkeep of electric vehicles in the used car market;

•        the availability of enough skilled labor in after-sale services; and

•        macroeconomic factors.

In anticipation of an expected increase in the demand for electric vehicles in the next few years, Microvast has commercialized four types of ultra-fast charging lithium battery technologies (LpTO, LpCO, MpCO and HnCO). Microvast also intends to continue to invest in the research and development (“R&D”) of more ultra-fast charging lithium battery products and to expand the range of applications for such batteries. However, the markets Microvast has targeted, primarily those in the PRC, Europe and North America, may not achieve the level of growth it expects. If any market fails to achieve Microvast’s expected level of growth, it may have excess manufacturing capacity and may not be able to generate enough revenue to achieve or sustain its profitability.

Certain components of Microvast’s batteries pose safety risks that may cause accidents, which could lead to liability to Microvast, cause delays in manufacturing of its product and/or adversely affect market acceptance.

Microvast’s battery systems contain lithium-ion cells, which have been used for years in laptops and cell phones. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials. Highly publicized incidents of laptop computers and cell phones bursting into flames have focused consumer attention on the safety of these cells. Moreover, there have been numerous widely publicized reports of electric buses bursting into flames, particularly in the PRC. The events have also raised questions about the suitability of these lithium-ion cells for automotive applications. Microvast is aware of at least two incidents occurring in its customers’ vehicles. One incident resulting in a fire arose when an electric bus powered by Microvast’s battery was left on a disqualified charger overnight. The other incident resulting in a fire involved a bus that was driven through deep water in a flood for over an hour. Microvast has subjected its battery systems to various tests and damaging treatments such as baking, overcharging, crushing or puncturing to assess the response of its battery systems to deliberate and sometimes destructive abuse. However, there can be no assurance that a field failure of Microvast’s battery systems will not occur, which could damage the vehicle in which it is fitted or lead to personal injury or death and may subject Microvast to lawsuits. Moreover, any failure of a competitor’s battery system, especially those that use a high volume of cells similar to Microvast’s, may cause indirect adverse publicity for Microvast. Such adverse publicity would negatively affect Microvast’s brand and harm its business, prospects, financial condition and operating results.

As with any battery, Microvast’s lithium-based batteries can short circuit when not handled properly. Due to the high energy and power density of lithium-based batteries, a short circuit can cause rapid heat buildup. Under extreme circumstances, this could cause a fire. This is most likely to occur during the formation or testing phase of Microvast’s process. While Microvast incorporates safety procedures and specific safety testing in its battery testing facilities to minimize safety risks, Microvast cannot assure you that an accident in any part of its facilities where charged batteries are handled will not occur. Any such accident could result in injury to Microvast’s employees or damage to its facility and would require an internal investigation by its technical staff. Microvast’s general liability insurance may not be sufficient to cover potential liability that would result from such accidents. Any such injuries, damages or investigations could lead to liability to Microvast, cause delays in manufacturing of its product and/or adversely affect market acceptance which could adversely affect its operations and financial condition.

Microvast’s manufacturing process incorporates pulverized solids, which can be toxic to employees when allowed to become airborne in high concentrations. Microvast has incorporated safety controls and procedures into its manufacturing processes designed to maximize the safety of its employees and neighbors. Any related incident, including fire or personnel exposure to toxic substances, could result in significant manufacturing delays or claims for damages resulting from injuries, which could adversely affect Microvast’s operations and financial condition.

Microvast has a limited customer base and depends on a small number of customers for a significant portion of its revenues to date and this dependence is likely to continue.

Due to the nature of Microvast’s industry and its limited operating history, Microvast has a limited customer base and has depended on a small number of customers for a significant portion of its revenue. In the years ended December 31, 2018, 2019, 2020 and three months ended March 31, 2021, Microvast sold its electric battery products to 119, 221, 231 and 97 customers, respectively. Microvast’s top five customers accounted for approximately 45.8%, 42.7%, 31.4% and 53.1% of its revenues in the years ended December 31, 2018, 2019, 2020 and three months ended March 31, 2021, respectively. Microvast’s limited customer base and customer concentration could make it difficult to negotiate attractive prices for its products and could expose Microvast to the risk of substantial losses if a single dominant customer stops purchasing, or significantly reduces orders for, its products. Microvast expects that a limited number of customers will continue to contribute a significant portion of its sales in the near future. Microvast’s ability to maintain close relationships with these top customers is essential to the growth and profitability of its business. If Microvast fails to sell its products to one or more of these top customers in any particular period, or if a large customer purchases fewer of its products, defers orders or fails to place additional orders with Microvast, or if it fails to develop additional major customers, Microvast’s revenue could decline, and its results of operations could be adversely affected.

The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to end-users and original equipment manufacturers in the PRC and abroad could have a material adverse effect on Microvast’s business, financial condition, operating results and prospects.

Microvast believes that, currently, the availability of government subsidies and incentives available to end-users and original equipment manufacturers (“OEM”) is an important factor considered by its customers when purchasing its batteries for electric vehicles, and that its growth depends in part on the availability and amounts of these subsidies and incentives. Microvast’s sales volume decreased from approximately 497.9 megawatt hours (“MWh”) for the year ended December 31, 2018 to approximately 234.3 MWh for the year ended December 31, 2019. This decrease in sales volume was primarily attributable to a change in subsidy policies in the PRC in 2019 that resulted in delayed purchases by customers based in the PRC. Any further reduction or elimination of government and economic incentives or subsidies may result in the diminished competitiveness of the alternative fuel vehicle industry generally or electric vehicles that use Microvast’s batteries in particular.

Currently, government programs in the PRC and in Europe favor the purchase of electric vehicles, including through disincentives that discourage the use of gasoline-powered vehicles. If such government programs are reduced or eliminated, or the available benefits thereunder are exhausted earlier than anticipated, demand for electric vehicles may decrease and Microvast’s sales of electric battery products could be adversely affected. In addition, customers may delay taking delivery of Microvast’s battery products if they believe that certain electric vehicle incentives will be available at a later date, which may adversely affect its business, financial condition, operating results and prospects.

In connection with the audits of Microvast’s consolidated financial statements as of and for the years ended December 31, 2018, 2019 and 2020, Microvast and its independent registered public accounting firm identified two material weaknesses in its internal control over financial reporting. If Microvast fails to develop and maintain an effective system of internal control over financial reporting, it may be unable to accurately report its financial results or prevent fraud, and investor confidence and the market price of the Common Stock may be adversely impacted.

Prior to the Business Combination, Microvast was a private company with limited accounting personnel and other resources with which to address its internal control over financial reporting. In the course of auditing Microvast’s consolidated financial statements as of and for the years ended December 31, 2018, 2019 and 2020 in accordance with PCAOB auditing standards, Microvast and its independent registered public accounting firm

identified two material weaknesses and other control deficiencies in its internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, 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 the annual or interim financial statements will not be prevented or detected on a timely basis.

One material weakness that has been identified related to the insufficient financial reporting and accounting personnel with appropriate U.S. GAAP knowledge and SEC reporting requirements to properly address complex U.S. GAAP technical accounting issues and to prepare and review financial statements and related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC. The other material weakness that has been identified related to the lack of comprehensive accounting policies and procedures manual including comprehensive book closing procedures in accordance with U.S. GAAP. Either of these material weaknesses, if not timely remedied, may lead to significant misstatements in Microvast’s consolidated financial statements in the future. For example, such material weaknesses have resulted in not consolidating a variable interest entity of which Microvast was a primary beneficiary, which has been rectified by restatements of the consolidated balance sheets and statements of operations as of and for the years ended December 31, 2018 and 2019. Another example is that due to the lack of comprehensive book closing procedures, a cutoff error was rectified by restatement of the consolidated balance sheet and statement of operations as of and for the year ended December 31, 2019. In the future, Microvast may identify additional material weaknesses. In addition, if its independent registered public accounting firm attests to, and reports on, the management assessment of the effectiveness of its internal controls, its independent registered public accounting firm may disagree with its management’s assessment of the effectiveness of its internal controls.

Neither Microvast nor its independent registered public accounting firm undertook a comprehensive assessment of Microvast’s internal control for purposes of identifying and reporting material weakness and other control deficiencies in its internal control over financial reporting. Had Microvast performed a formal assessment of its internal control over financial reporting or had its independent registered public accounting firm performed an audit of its internal control over financial reporting, additional deficiencies may have been identified.

Following the identification of the material weakness, Microvast has taken measures and plans to continue to take measures to remediate these control deficiencies. See the section titled “Microvast’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Internal Control Over Financial Reporting.” However, the implementation of these measures may not fully address the material weaknesses in Microvast’s internal control over financial reporting, and Microvast cannot conclude that they have been fully remediated. Microvast’s failure to correct the material weakness or its failure to discover and address any other deficiencies could result in inaccuracies in its financial statements and impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis.

Following the Business Combination, Microvast Holdings will be a public company in the United States subject to the Sarbanes-Oxley Act. Section 404 of the Sarbanes-Oxley Act, or Section 404, will require that it include a report from management on its internal control over financial reporting in its annual report on Form 10-K beginning with its annual report for the fiscal year ending December 31, 2021. In addition, once Microvast Holdings ceases to be an “emerging growth company” as such term is defined in the JOBS Act, its independent registered public accounting firm must attest to and report on the effectiveness of its internal control over financial reporting. Microvast Holdings’ management may conclude that its internal control over financial reporting is not effective. Moreover, even if Microvast Holdings’ management concludes that its internal control over financial reporting is effective, its independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with its internal control over financial reporting or the level at which its controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from Microvast. In addition, after Microvast becomes a public company, its reporting obligations may place a significant strain on its management, operational and financial resources and systems for the foreseeable future. Microvast may be unable to timely complete its evaluation testing and any required remediation.

During the course of documenting and testing Microvast’s internal control procedures, in order to satisfy the requirements of Section 404, it may identify other or more material weaknesses or deficiencies in its internal control over financial reporting. In addition, if Microvast fails to maintain the adequacy of its internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, it may not be able to conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with

Section 404. Generally speaking, if Microvast fails to achieve and maintain an effective internal control environment, it could suffer material misstatements in its financial statements and fail to meet its reporting obligations, which would likely cause investors to lose confidence in its reported financial information. This could in turn limit Microvast Holdings’ access to capital markets, harm its results of operations and lead to a decline in the trading price of its stock. Additionally, ineffective internal control over financial reporting could expose Microvast Holdings to increased risk of fraud or misuse of corporate assets and subject it to potential delisting from the stock exchange on which it lists, regulatory investigations and civil or criminal sanctions. Microvast Holdings may also be required to restate its consolidated financial statements for prior periods.

Microvast’s limited operating history makes evaluating its business and future prospects difficult, and may increase the risk of your investment.

Microvast has a limited operating history on which investors can evaluate its business, operating results and prospects. To date, Microvast has derived its revenues principally from sales of its LpTO and LpCO battery systems, primarily for use in electric buses. Microvast’s LpTO battery system was first launched in 2009 and deployed into commercial operation the same year. Microvast’s revenues were $174.2 million, $76.4 million, $107.5 million and $14.9 million for the years ended December 31, 2018, 2019, 2020 and three months ended March 31, 2021, respectively. In line with Microvast’s Clean City Transit plan (the “CCT Plan”), it intends in the longer term to derive substantial revenues from the sales of its battery solutions to other business segments including electric taxis, electric passenger cars, commercial vehicles and others, but has limited operating history with respect to these markets, which limits Microvast’s ability to accurately forecast the take-up of its battery packs by such manufacturers. Microvast’s component manufacturing plans will also be available to outside sales, and may not be adopted or may take longer to adopt than anticipated. Microvast’s efforts to expand beyond its existing markets may never result in new products that achieve market acceptance, create additional revenue or become profitable and if this occurs, its financial results will be harmed.

Microvast has incurred losses in the operation of its business and anticipates that it will continue to incur losses in the future. Microvast may never achieve or sustain profitability.

Microvast incurred a net loss of approximately $33.6 million for the year ended December 31, 2020 and an accumulated deficit of approximately $384.6 million from its inception in 2006 through the year ended December 31, 2020. Microvast believes that it will continue to incur operating and net losses each quarter until at least the time it begins significant production of its higher energy cell products, which is not expected to occur until 2024, and may occur later.

Microvast expects the rate at which it will incur losses to be significantly higher in future periods as it, among other things, continues to incur significant expenses in connection with the design, development and manufacturing of its batteries; as it expands its R&D activities; invests in manufacturing capabilities; builds up inventories of components for its batteries; increases its sales and marketing activities; develops its distribution infrastructure; and increases its general and administrative functions to support its growing operations. Microvast may find that these efforts are more expensive than it currently anticipates or that these efforts may not result in revenues, which would further increase its losses.

Microvast may be unable to meet its future capital requirements, which could limit its ability to grow and have a material adverse effect on its financial position and results of operations.

The development, design, manufacture and sale of batteries is a capital-intensive business, which Microvast currently finances through various types of financings. As a result of the capital-intensive nature of Microvast’s business, it expects to sustain substantial operating expenses without generating sufficient revenues to cover expenditures for a number of years. Over time, Microvast expects that it will need to raise additional funds, including through entry into joint venture arrangements, through the issuance of equity, equity-related or debt securities or through obtaining credit from financial institutions to fund, together with Microvast’s principal sources of liquidity, ongoing costs such as R&D relating to its batteries, the construction of large factories, any significant unplanned or accelerated expenses, and new strategic investments. Microvast cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to stockholders, and its financial condition, results of operations, business and prospects could be materially and adversely affected.

Microvast’s forecasts and projections are based upon assumptions, analyses and internal estimates developed by Microvast’s management. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Microvast’s actual operating results may differ materially from those forecasted or projected.

Microvast’s forecasts and projections included in this proxy statement are subject to significant uncertainty and are based on assumptions, analyses and internal estimates developed by Microvast’s management, any or all of which may not prove to be correct or accurate. If these assumptions, analyses or estimates prove to be incorrect or inaccurate, Microvast’s actual operating results may differ materially from those forecasted or projected. Microvast’s forecasts and projections were not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information.

The unaudited financial projections were prepared solely for internal use to assist in the evaluation of the Business Combination. Such projections are inherently subjective in nature, though considered reasonable by the management of Microvast as of the date such projections were prepared, and are susceptible to interpretation and, accordingly, contemplated results may not be achieved. While presented with numerical specificity, the unaudited financial projections reflect numerous estimates and assumptions with respect to future industry performance under various industry scenarios as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the businesses of Microvast, all of which are difficult to predict and many of which are beyond the preparing parties’ control. Accordingly, there can be no assurance that the assumptions made in preparing any particular projection will prove accurate. There will be differences between actual and forecasted results, and the differences may be material. The risk that these uncertainties and contingencies could cause the assumptions to fail to be reflective of actual results is further increased due to the length of time over which these assumptions apply. In light of the foregoing factors and the uncertainties inherent in the unaudited financial projections, the Tuscan stockholders are cautioned not to place undue reliance on the unaudited financial projections and the inclusion of the unaudited financial projections in this proxy statement should not be regarded as a representation by any person that the results contained therein will be achieved.

The forecasts and projections in this proxy statement include forecasts and estimates relating to the expected size and growth of the markets in which Microvast operates or seeks to enter. Such markets may not develop or grow, or may develop and grow at a lower rate than expected, and even if these markets experience the forecasted growth described in this proxy statement, Microvast may not grow its business at similar rates, or at all. Microvast’s future growth is subject to many factors, including, among others, its ability to develop and commercialize its products and the market’s adoption of its products, both of which are subject to risks and uncertainties, many of which are beyond Microvast’s control. Accordingly, the forecasts and estimates of market size and growth described in this proxy statement should not be taken as indicative of Microvast’s future growth.

The unaudited financial projections of Microvast set forth in the forecasts included under “Proposal No. 1 — The Business Combination Proposal — Certain Unaudited Microvast Prospective Financial Information” were not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information. In the view of Microvast’s management, the financial projections were prepared on a reasonable basis, reflected the best estimates and judgments of Microvast, and presented, to the best of their knowledge and belief, the expected course of action and the expected future financial performance of Microvast at the time they were prepared and provided to Tuscan in connection with the evaluation of the Business Combination and were not updated since then. However, the financial projections are not fact. Further, none of the unaudited financial projections reflect any impact of the proposed transaction and have not been updated since the date of preparation.

The demand for batteries in the transportation and other markets depends on the attractiveness of fossil fuel alternatives. Extended periods of low oil prices could adversely affect demand for electric and hybrid electric vehicles.

Lower oil prices over extended periods of time may lower the perception in government and the private sector that cheaper, more readily available energy alternatives should be developed and produced and governments may eliminate or modify regulations or economic incentives related to fuel efficiency and alternate forms of energy. If oil prices remain at deflated levels for extended periods of time, the demand for hybrid and electric vehicles may decrease and the demand for Microvast’s batteries could be reduced, which would have a material adverse effect on its business.

In addition, alternatives to gasoline such as compressed natural gas and biofuels could impact the demand for electric vehicles if the distribution and costs of these alternative fuels become more attractive through innovation. Biodiesel for trucks and specialty vehicles could become more commonplace, which would directly compete with Microvast’s bus and specialty vehicle batteries, which may result in decreased demand for its product.

Microvast may not be able to maintain its competitive position if it faces intense competition from other battery manufacturers, many of which have significantly greater resources.

The market for batteries used in electric vehicles and light electric vehicles is intensely competitive and is characterized by frequent technological changes and evolving industry standards. Microvast expects competition to become more intense. Increased competition may result in declines in average selling prices, causing a decrease in gross profit margins. Microvast has faced and will continue to face competition from other manufacturers of lithium-ion batteries, as well as from companies engaged in the development of batteries incorporating new technologies. There are other competitors capable of manufacturing and delivering fast-charging battery systems that can charge as quickly as Microvast’s LpTO and LpCO power battery solutions and it cannot assure you that they will not also enter the markets that it is currently in or intending to enter. For example, certain battery manufacturers offer lithium-based battery solutions that can be fully charged with similar amount of time as Microvast’s battery solutions, but with much shorter life cycles compared to its solutions. Other major manufacturers of high-power lithium batteries currently include Panasonic, Samsung SDI, BYD Auto, Tianjin Lishen, Boston-Power, Wanxiang Group, Amperex Technology and LG Chem. In addition, Microvast expects vehicle manufacturers will enter the markets for its products and become its competitors. Potential customers may choose to do business with established vehicle manufacturers, because of their perception that vehicle manufacturers are more stable, have greater manufacturing capacity and capability to adapt battery products to their vehicles.

Many of these competitors have greater financial, personnel, technical, manufacturing, marketing, sales and other resources than Microvast does. As a result, these competitors may be in a stronger position to respond quickly to market opportunities, new or emerging technologies and evolving industry standards. Many of Microvast’s competitors are developing a variety of battery technologies, such as lithium polymer, silicon anode and solid-state batteries, which are expected to compete with its existing product lines. Other companies undertaking R&D activities of solid-polymer lithium-ion batteries have developed prototypes and are constructing commercial scale manufacturing facilities. It is possible that Microvast’s competitors will be able to introduce new products with more desirable features than Microvast’s and their new products will gain market acceptance. If Microvast’s competitors successfully do so, it may not be able to maintain its competitive position and its future success would be materially and adversely affected.

If Microvast is unable to anticipate customer preferences and successfully develop attractive products, it might not be able to maintain or increase its revenue and profitability.

Microvast’s success depends on its ability to identify and originate product trends as well as to anticipate and react to changing customer demands in a timely manner. If Microvast is unable to introduce new products or novel technologies in a timely manner or its new products or technologies are not accepted by customers, its competitors may introduce more attractive products, which could hurt its competitive position. Microvast’s new products might not receive customer acceptance if customer preferences shift to other products, and its future success depends in part on its ability to anticipate and respond to these changes. Failure to anticipate and respond in a timely manner to changing customer preferences could lead to, among other things, lower revenue and excess inventory levels.

As Microvast continually seeks to enhance its products, it may incur additional costs to incorporate new or revised features. Microvast might not be able to, or determine that it is not in its interests to, raise prices to compensate for these additional costs.

Developments in alternative technology may adversely affect the demand for Microvast’s 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 Microvast’s business, prospects, financial condition and operating results in ways that it may not currently anticipate. Existing and other battery technologies, fuels or sources of energy may emerge as customers’ preferred alternatives to Microvast’s battery products. Any

failure by Microvast to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay Microvast’s development and introduction of new and enhanced alternative products, which could result in decreased revenue and a loss of market share to its competitors.

Microvast’s R&D efforts may not be sufficient to adapt to changes in alternative fuel and electric vehicle technology. As technologies evolve, Microvast plans to upgrade or adapt its energy solutions with the latest technology, in particular lighter weight modules and packs, advanced cooling methods, and advanced battery chemistry, which may also negatively impact the adoption of its other products. However, Microvast may not compete effectively with alternative systems if it is not able to source and integrate the latest technology into its battery products.

Microvast mainly manufactures and markets lithium-based battery systems. If a viable substitute product or chemistry to lithium-based battery systems emerges and gains market acceptance, Microvast’s business, financial condition and results of operations will be materially and adversely affected. Furthermore, Microvast’s failure to keep up with rapid technological changes and evolving industry standards within the lithium-based battery market may cause its products to become obsolete and less marketable, resulting in loss of market share to its competitors.

Microvast mainly manufactures and markets lithium-based battery systems. As Microvast believes that the market for lithium-based batteries has good growth potential, it has focused its R&D activities on exploring new lithium chemistries and formulas to enhance its product quality and features while reducing cost. Some of Microvast’s competitors are conducting R&D on alternative battery technologies, such as fuel cells and super capacitors, and academic studies are ongoing as to the viability of sulphur and aluminum-based battery technologies. If any viable substitute products emerge and gain market acceptance because they have more enhanced features, more power, more attractive pricing, or better reliability, the market demand for Microvast’s products may decrease, and accordingly its business, financial condition and results of operations would be materially and adversely affected.

Furthermore, the lithium-based battery market is characterized by rapid technological changes and evolving industry standards, which are difficult to predict. This, coupled with the frequent introduction of new products and models, has shortened product life cycles and may render Microvast’s products obsolete or less marketable. For example, research on the electrochemical applications of carbon nanotechnology and other storage technologies is developing at a rapid pace, and many private and public companies and research institutions are actively engaged in the development of new battery technologies based on carbon nanotubes, nanostructured carbon materials and other non-carbon materials. If Microvast fails to adopt these new technologies, such technologies may, if successfully developed by its competitors, offer significant performance or price advantages compared with its technologies and its technology leadership and competitive strengths may be adversely affected.

Microvast’s ability to adapt to evolving industry standards and anticipate future standards will be a significant factor in maintaining and improving its competitive position and its prospects for growth. To achieve this goal, Microvast has invested and plan to continue investing significant financial resources in its R&D infrastructure. R&D activities, however, are inherently uncertain, and Microvast might encounter practical difficulties in commercializing its research results. Accordingly, Microvast’s significant investment in its R&D infrastructure may not lead to marketable products. On the other hand, Microvast’s competitors may improve their technologies or even achieve technological breakthroughs either as alternatives to lithium-based battery systems or improvements on existing lithium-based battery systems that would render Microvast’s products obsolete or less marketable. Therefore, Microvast’s failure to effectively keep up with rapid technological changes and evolving industry standards by introducing new and enhanced products may cause Microvast to lose its market share and to suffer a decrease in its revenue.

Microvast may be subject to declining average selling prices, which may harm its revenue and gross profits.

Microvast has experienced declines in the average selling prices of its battery systems, which decreased by 6.8% from $349.9 per kWh in 2018 to $326.2 per kWh in 2019, increased by 8.9% to $355.3 per kWh in 2020, and decreased by 28.1% to $255.4 per kWh in the three months ended March 31, 2021. As production of electric power battery systems scales up and technology continues to improve, Microvast expects the average selling prices of its power battery systems to decline over time. As a result, manufacturers of these electric products expect Microvast

to cut its costs and lower the price of its products. Microvast may have to reduce the price of its products in order to meet market demand due to market-driven downward pricing pressures in the future. Microvast’s revenue and profitability will suffer if it is unable to offset any declines in its average selling prices by developing new or enhanced products with higher selling prices or gross profit margins, increasing its sales volumes or reducing its manufacturing costs on a timely basis.

The battery efficiency of electric vehicles declines over time, which may negatively influence potential customers’ decisions whether to purchase an electric vehicle.

Over time vehicles using Microvast’s battery systems will see performance decline as the battery decays, particularly in the driving range. If this turns off potential customers of electric vehicles built using Microvast’s battery system, it could negatively impact its sales.

Microvast’s future depends on the needs and success of its customers, as well as the demand for its customers’ products or services.

The demand for Microvast’s battery products will ultimately depend on its end-market users. Decisions to purchase Microvast’s battery packs and modules may depend on the performance of the industries of its customers and if demand for output in those industries decreases, then the demand for its products may decrease as well. Demand in these industries is impacted by numerous factors, including, but not limited to, commodity prices, infrastructure spending, consumer spending, customer fleet replacement schedules, travel restrictions, fuel costs, energy demands, municipal spending and government mandates and incentives. Increases or decreases in these variables may significantly impact the demand for Microvast’s products. If Microvast is unable to predict demand accurately, it may be unable to meet its customers’ needs, resulting in the loss of potential sales, or it may produce excess products, resulting in increased inventories and overcapacity in its production facilities, increasing its unit production cost and decreasing its operating margins.

Further, Microvast’s customers’ inability to market and sell their products or services successfully, whether from lack of market acceptance or otherwise, could materially and adversely affect its business and prospects because such customers may not order new or additional products from Microvast. If Microvast cannot achieve the expected level of sales, it will not be able to make sufficient profits to offset the expenditures it has incurred to expand its production capacity, nor will it be able to grow its business. Accordingly, Microvast’s business, financial condition, results of operations and future success would be materially and adversely affected.

Microvast’s products might fail to qualify as “domestic origin” for purposes of “Buy America” requirements imposed on the recipients of U.S. Government grants.

Some of Microvast’s customers may be recipients of grants subject to regulations implemented by the U.S. Federal Transit Authority for purchases of rolling stock, including “Buy America” requirements codified at 49 C.F.R. Part 661. In some cases, Microvast’s customers must ensure that its products, when incorporated into rolling stock subject to “Buy America” requirements, qualify as “domestic origin” components or subcomponents. All of Microvast’s products are manufactured using parts or components that are imported from other countries. If Microvast’s products manufactured from imported parts or components fail to meet the regulatory thresholds to qualify as “domestic origin” under the applicable regulations, Microvast might be disqualified or otherwise precluded from supplying those products to customers that are subject to applicable “Buy America” requirements, or it might be liable to those customers for having failed to comply with certifications or representations that are products are “domestic origin,” each of which would likely adversely affect its business, prospects, financial condition and operating results.

Microvast may incur significant costs because of the warranties it supplies with its products and services.

With respect to Microvast’s battery products, it typically offers warranties against any defects due to product malfunction or workmanship for a period of five years from the date of purchase with the option to purchase additional warranty up to a maximum of 8 years. Microvast provides a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issues. There is no assurance that future warranty claims will be consistent with past history, and in the event Microvast experiences a significant increase in warranty claims, there is no assurance that its reserves will be sufficient. This could have a material adverse effect on Microvast’s business, financial condition and results of operations.

If Microvast cannot continue to develop and commercialize new products in a timely manner, and at favorable margins, it may not be able to compete effectively. Even if Microvast is able to develop new products, a change in its product, customer or geographic mix may cause its results of operations to differ substantially from its anticipated results in any particular period.

The battery industry has seen a fast pace of innovation in product life, product design and technology application. Microvast and its competitors have made, and continue to make, investments in R&D with the goal for further innovation. The successful development and introduction of new products face the uncertainty of customer acceptance and reaction from competitors, which could materially affect the sales of Microvast’s existing products. In addition, Microvast’s ability to develop new products and to sustain existing products is affected by whether it can:

•        develop and fund research and technological innovations;

•        receive and maintain necessary protections for its proprietary intellectual property rights;

•        obtain necessary governmental approvals and registrations;

•        comply with relevant governmental regulations; and

•        anticipate customer needs and preferences successfully.

The failure to develop and launch new products successfully could hinder the growth of Microvast’s business and any delay in the development or launch of a new product could also compromise its competitive position. If competitors introduce new or enhanced products that significantly outperform ours, or if they develop or apply manufacturing technology which permits them to manufacture at a significantly lower cost relative to ours, Microvast may be unable to compete successfully in the market segments affected by these changes.

Even if Microvast is able to develop new products, its manufacturing capability may not be equipped to engage in high volume manufacturing of such new products and its ability to commercialize these new products may be hindered. Microvast may be required to invest in upgrades or modifications to its existing manufacturing processes and its technical personnel may be required to expend significant time and resources in order to enable its existing manufacturing lines to produce its new products. Any such requirement to make such upgrades or modifications may be costly and affect Microvast’s ability to commercialize any new products, which may adversely affect its business, financial condition, operating results and prospects.

Even if Microvast is able to develop and commercialize new products, its overall profitability may not meet expectations if its products, customers or geographic mix are substantially different than anticipated. Microvast also may not effectively transition its components design and technology to achieve acceptable manufacturing yields using the technologies necessary to satisfy its customers’ product needs, or it may encounter quality problems with the battery systems it manufactures. If Microvast is unable to timely and cost-effectively develop components with leading technology and overall quality, its ability to sell its battery systems may be significantly diminished, which could materially and adversely affect its business and financial results.

In addition, as a result of Microvast’s vertical integration of components manufacturing, it makes more capital investments and carries a higher percentage of fixed costs than it would if it were not vertically integrated. If Microvast’s overall level of manufacturing decreases for any reason, and it is unable to reduce its fixed costs to match sales, its components manufacturing assets may face under-utilization that may impact its operating results. Microvast is therefore subject to additional risks related to overall asset utilization, including the need to operate at high levels of utilization to drive competitive costs and the need for assured supply of components that it does not manufacture itself. In addition, as a result of adverse labor rates or availability, Microvast may be required to increase investments in automation, which may cause its capital expenditures to increase. If Microvast does not adequately address the challenges related to its components manufacturing operations, Microvast’s ongoing operations could be disrupted, resulting in a decrease in its revenue or profit margins and negatively impacting its operating results.

Microvast may experience significant delays in the design, production and launch of its new products, which could harm its business, prospects, financial condition and operating results.

Microvast’s R&D team is continually looking to improve its battery systems. Any delay in the financing, design, production and launch of Microvast’s new products could materially damage its brand, business, prospects, financial condition and operating results. There are often delays in the design, production and commercial release of new products, and to the extent Microvast delays the launch of the items identified above, its growth prospects could be adversely affected as it may fail to grow its market share, to keep up with competing products or to satisfy customers’ demands or needs.

Microvast may not be able to substantially increase its manufacturing output in order to fulfill orders from its customers.

Microvast expects to expand its battery manufacturing capacity to meet the expected demand for its products. This expansion will impose significant added responsibilities on Microvast’s senior management and its resources, including financial resources and the need to identify, recruit, maintain, and integrate additional employees. Microvast’s proposed expansion will also expose it to greater overhead and support costs and other risks associated with the manufacture and commercialization of new products. Difficulties in effectively managing the budgeting, forecasting and other process control issues presented by such expansion could harm Microvast’s business, prospects, results of operations and financial condition. Even if Microvast succeeds in expanding its manufacturing capacity, it may not have enough demand for its products to justify the increased capacity. If there is persistent mismatch in the demand for Microvast’s products and its manufacturing capacity, its business, financial condition and results of operations could be adversely affected.

Microvast expects to use some of the proceeds from the Business Combination to expand its manufacturing facilities to increase its manufacturing output to meet increased demand for its products. However, Microvast’s ability to substantially increase its manufacturing output is subject to significant constraints and uncertainties, including:

•        delays by Microvast’s suppliers and equipment vendors and cost overruns as a result of a number of factors, many of which may be beyond its control, such as increases in raw material prices and problems with equipment vendors;

•        delays in government approval process or denial of required approvals by relevant government authorities;

•        diversion of significant management attention and other resources; and

•        failure to execute Microvast’s expansion plan effectively.

If Microvast is unable to increase its manufacturing output because of any of the risks described above, it may be unable to fulfill customer orders or achieve the growth it expects. Under Microvast’s supply agreements with its customers, it would typically be liable to pay a charge of between 0.001% and 0.5% of the total contract price per day for its delay in delivering products, as well as any resulting costs and expenses incurred by the customers. In addition, if Microvast is unable to fulfill customer orders, its reputation could be affected, and its customers could source battery systems from other companies. The combination of the foregoing could adversely affect Microvast’s business, financial condition and results of operations.

Microvast’s failure to cost-effectively manufacture its batteries in quantities which satisfy its customers’ demand and product specifications and their expectations for product quality and reliable delivery could damage its customer relationships and result in significant lost business opportunities for Microvast.

Microvast manufactures its products rather than relying upon third-party outsourcing. To be successful, Microvast must cost-effectively manufacture commercial quantities of its complex batteries that meet its customer specifications for quality and timely delivery. To facilitate the commercialization of Microvast’s products, it will need to further reduce its manufacturing costs, which Microvast intends to do by improving its manufacturing and development operations. Historically Microvast has manufactured its product in the PRC, but intends to perform more manufacturing in Europe and North America in the future. Microvast depends on the performance

of its manufacturing operations to manufacture and deliver its products to its customers. If Microvast is unable to manufacture products in commercial quantities on a timely and cost-effective basis, it could lose its customers and be unable to attract future customers.

Microvast may not be able to accurately plan its manufacturing based on its sales contracts, which may result in excess product inventory or product shortages.

Microvast typically has a short delivery window to deliver goods to its customers once an order has been placed. To meet short delivery deadlines, Microvast generally decides on its manufacturing level and timing, procurement, facility requirements, personnel needs, and other resources requirements based on an estimate taking into account forecasted demand, its past dealings with such customers, market conditions and other relevant factors. Microvast’s customers’ final purchase orders may not be consistent with its estimates. If the final purchase orders substantially differ from Microvast’s estimates, it may have excess product inventory or product shortages. Excess product inventory could result in unprofitable sales or write-offs as Microvast’s products are susceptible to obsolescence and price declines. Producing additional products to make up for any product shortages within a short time frame may be difficult, making Microvast unable to fulfill the purchase orders. In either case, Microvast’s results of operation maybe adversely affected.

Microvast relies on complex machinery for its operations and production involves a degree of risk and uncertainty in terms of operational performance and costs.

Both Microvast’s pilot manufacturing facilities and its large-scale manufacturing facility require large-scale machinery. Such machinery suffers unexpected malfunctions from time to time and will require repairs and spare parts to resume operations, which may not be available when needed. Unexpected malfunctions of Microvast’s production equipment may significantly affect the intended operational efficiency. While the manufacturing equipment field is maturing there are still significant changes and improvements occurring with respect to manufacturing devices. Such changes pose a risk that Microvast’s manufacturing line will become outdated faster than anticipated. Expenses to upgrade equipment to more cutting-edge designs may be necessary, raising costs.

New component materials developed through Microvast’s vertically integrated manufacturing process may require new, advanced equipment to produce. During the scale-up of new components it may be difficult to predict a number of cost and risk factors including material yields, operation times, environmental hazards, utility needs, optimal equipment design, and necessary maintenance cycles which could add time and cost risks. Once scaled, the process may be found economically unfeasible.

Operational problems with Microvast’s manufacturing equipment could result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated fluctuations in production. In addition, operational problems may result in environmental damage, administrative fines, increased insurance costs and potential legal liabilities. All of these operational problems could have a material adverse effect on Microvast’s business, results of operations, cash flows, financial condition or prospects.

Microvast’s battery packs rely on software and hardware that are highly technical, and if these systems contain errors, bugs or vulnerabilities, or if it is unsuccessful in addressing or mitigating technical limitations in its systems, its business could be adversely affected.

Microvast’s products rely on software and hardware, including software and hardware developed or maintained internally or by third parties, that are highly technical and complex and will require modification and updates over the life of a battery pack. In addition, certain of Microvast’s products depend on the ability of such software and hardware to store, retrieve, process and manage immense amounts of data. Microvast’s software and hardware may contain errors, bugs or vulnerabilities, and its systems are subject to certain technical limitations that may compromise its ability to meet the objectives. Some errors, bugs or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects or technical limitations may be found within Microvast’s software and hardware. Although Microvast attempts to remedy any issues that it observes in its products as effectively and rapidly as possible, such efforts may not be timely, may hamper production, or may not be to the satisfaction of Microvast’s

customers. If Microvast is unable to prevent or effectively remedy errors, bugs, vulnerabilities or defects in its software and hardware, it may suffer damage to its brand, loss of customers, loss of revenue or liability for damages, any of which could adversely affect its business and financial results.

Microvast relies on third parties to manufacture chargers and charging poles and to build charging stations that are necessary for using its products. Microvast’s ability to market its products depends on the establishment of charging station networks that meet the needs of its products. If any of the charging station networks are not compatible with Microvast’s products and technologies, Microvast’s sales could be adversely affected. The lack of a network or a compatible network could affect the implementation of Microvast’s strategy and adversely affect its business and its operating results.

Microvast designs, develops and manufactures electric power battery systems for electric vehicles. However, Microvast does not manufacture chargers or charging poles that are necessary for using its products. In addition, Microvast relies on third parties, such as city governments, utility providers and private investors, to build charging stations. A key part of Microvast’s CCT Plan that aims to introduce its battery systems to electric buses, then to taxis and finally to passenger cars is premised on establishing compatible charging station networks in urban areas that accommodate its technologies and products. If no charging station network is built in markets in which Microvast targets its products, there would be little demand for electric battery products in that area. Even if such a network were built, it might not be compatible with Microvast’s products, in which case the demand for its technologies and products in those markets would be limited, which could affect the implementation of its strategy and its business and its operating results may be adversely affected.

Further, existing charging station networks have not been established under a uniform standard and could diminish Microvast’s sales if any of the networks are not compatible with its products and technologies. In particular, Microvast’s products and technologies require charging stations that can provide high voltages compared to existing charging stations for ultra-fast charging to function. In order for Microvast’s fast-charging battery systems to become widely adopted in electric buses, electric taxis and electric passenger cars, a critical mass of compatible fast-charging stations must be installed and in operation in any given urban area that Microvast plans to enter. Establishing a network of fast-charging stations requires significant capital investment and government approvals. It also requires government regulators to believe that the merits of fast-charging stations support the costs of such construction. If a sufficient number of charging stations that accommodate Microvast’s products and technologies cannot be built up and be functional in a timely manner, it will be difficult for Microvast to retain its existing customers and to attract new customers. As a result, Microvast’s business, results of operations, financial condition and prospects may be materially and adversely affected.

The ultra-fast charging infrastructure created for electric city buses are presumed to be compatible with electric taxis and electric passenger vehicles installed with Microvast’s battery systems, which ensure that the voltage system, connector and control communications are compatible with the taxi or passenger vehicle battery system. As Microvast does not produce or own the charging stations, there can be no assurance that they would be made available to or continue to be compatible with taxis and passenger vehicles that are installed with Microvast’s batteries. If the charging stations are not made available or are no longer compatible, the implementation of Microvast’s strategy and its business and its operating results may be adversely affected.

If emerging standards in charging station networks are not compatible with Microvast’s current products or in-development products and technologies, Microvast may miss market opportunities and its financial performance will suffer. If other companies’ products and services, including industry-standard technologies or other new standards, emerge or become dominant in any of these areas, or differing standards emerge in global markets, demand for Microvast’s technology and products could diminish. As standards emerge, such as those in the PRC which include specifications for hardware, connecting equipment and service networks and standards for communication and inspection, compatibility of prior fast charging stations envisioned in Microvast’s CCT Plan could be made obsolete.

Microvast also incorporates materials manufactured by third parties into its products. If there are quality issues with respect to these third-party components included in Microvast’s battery systems, it may not discover the issue until after its products have been shipped and installed. In addition, Microvast may have little or no recourse against these third-party suppliers arising out of warranty claims made by Microvast’s customers. Microvast has determined

that certain “tabs” manufactured by a third-party and included in a batch of its batteries were defective and has, as a result of claims made by its customers, incurred warranty claims to date of approximately $5 million to cover this issue.

Microvast currently purchases certain key raw materials and components from third parties, some of which it only sources from one supplier or from a limited number of suppliers.

Microvast currently purchases certain key raw materials for its electrodes and a variety of other components from third parties, some of which it only sources from one supplier or from a limited number of suppliers. Microvast does not have any long-term contracts with suppliers of raw materials and components, and its current suppliers may be unable to satisfy its future requirements on a timely basis. Moreover, the price of purchased raw materials, components and assembled batteries could fluctuate significantly due to circumstances beyond Microvast’s control. If Microvast’s current suppliers are unable to satisfy its long-term requirements on a timely basis, it may be required to seek alternative sources for necessary materials and components, produce the raw materials or components in-house or redesign its proposed products to accommodate available substitutes or at reasonable cost. However, given Microvast’s current state of business, it may not be able to enter into the required manufacturing supply agreements with the battery manufacturers and component suppliers. If Microvast fails to secure a sufficient supply of key raw materials and components and it is unable to produce them in-house in a timely fashion, it would result in a significant delay in its manufacturing and shipments, which may cause Microvast to breach its sales contracts with its customers. Furthermore, failure to obtain sufficient supply of these raw materials and components or produce them in-house at a reasonable cost could also harm Microvast’s revenue and gross profit margins.

If Microvast is unable to integrate its products into vehicles manufactured by its OEM customers, its results of operations could be impaired.

Microvast cooperates with its OEM customers to integrate the design of its LpTO, LpCO, MpCO and HnCO products, and any future products, into commercial and specialty electric vehicles, such as electric buses, electric cars and electric taxis. Microvast’s battery systems are composed of modules assembled from battery cells that it manufactures. OEMs often require unique configurations or custom designs for battery systems. Microvast tailors the design of its battery systems to the electric vehicles manufactured by its OEM customers. This development process requires not only substantial lead time between the commencement of design efforts for customized battery systems and the commencement of volume shipments of the battery products to the customer, but also the cooperation and assistance of the OEMs in order to determine the requirements for each specific application. Technical problems may arise that affect the acceptance of Microvast’s product by the OEMs. If Microvast is unable to design and develop products that meet the OEMs’ requirements, it may lose opportunities to obtain purchase orders, and Microvast’s reputation may be damaged. In addition, Microvast may not receive adequate assistance from OEMs to successfully commercialize its products, which could impair its results of operations.

To the extent Microvast enters into strategic relationships, it will be dependent upon its partners.

Some of Microvast’s products are not intended for direct sale to end users and its business may require it to enter into strategic relationships with manufacturers of other power industry equipment that use batteries and other energy storage devices as important components of their finished products. The agreements governing any future strategic relationships may not provide Microvast with control over the strategic relationship activities and Microvast’s future partners, if any, could retain the right to terminate the strategic relationship at their option. Microvast’s future partners will have significant discretion in determining the efforts and level of resources that they dedicate to Microvast’s products and may be unwilling or unable to fulfill their obligations to Microvast. In addition, Microvast’s future partners may develop and commercialize, either alone or with others, products that are similar to or competitive with the products that it intends to produce.

Any failure to offer high-quality technical support services may adversely affect Microvast’s relationships with its customers and harm its financial results.

Microvast’s customers depend on its support organization to resolve any technical issues relating to its products. In addition, Microvast’s sales process is highly dependent on the quality of its products, its business reputation and on strong recommendations from its existing customers. Any failure to maintain high-quality and

highly-responsive technical support, or a market perception that Microvast does not maintain high-quality and highly-responsive support, could harm its reputation, adversely affect its ability to sell its products to existing and prospective customers, and harm its business, operating results and financial condition.

Microvast offers technical support services with its products and may be unable to respond quickly enough to accommodate short-term increases in demand for support services, particularly as Microvast increases the size of its customer base. Microvast also may be unable to modify the format of its support services to compete with changes in support services provided by competitors. It is difficult to predict demand for technical support services and if demand increases significantly, Microvast may be unable to provide satisfactory support services to its customers. Additionally, increased demand for these services, without corresponding revenue, could increase costs and adversely affect Microvast’s results of operations.

Under certain circumstances, Microvast’s customers can cancel or terminate their contracts.

Microvast has ongoing arrangements with its customers and target customers. Some of these arrangements are evidenced by non-binding letters of intent and memoranda of understanding, early stage agreements that are used for design and development purposes but will require renegotiation at later stages of development or production or master agreements that have yet to be implemented under separately negotiated statements of work, each of which could be terminated or may not materialize into next-stage contracts or long-term contract partnership arrangements. If these arrangements are terminated or if Microvast is unable to enter into next-stage contracts or long-term operational contracts, its business, prospects, financial condition and operating results may be materially adversely affected.

Microvast’s lengthy and variable sales cycle makes it difficult for it to accurately forecast its revenue and other operating results. As a result, Microvast expects its results of operation to fluctuate on a quarterly and annual basis, which could cause the stock price of Microvast Holdings to fluctuate or decline.

The sales cycle for Microvast’s products is lengthy, beginning from initial contact with a prospective customer to routine commercial utilization of its products, which makes it difficult for it to accurately forecast its revenue in a given period, and may cause its revenue and operating results to vary significantly from period to period. Some potential customers of Microvast’s products typically need to commit significant time and resources in evaluating the technology used in its products and their decision to purchase its products may be further limited by budgetary constraints, lack of funding and numerous rounds of internal review and approval, which are beyond Microvast’s control. Microvast spends substantial time and effort assisting potential customers in evaluating its products, including providing demonstrations and validation. Even after initial approval by appropriate decision makers, the negotiation and documentation processes for the actual adoption of Microvast’s products can be lengthy. As a result of these factors, based on Microvast’s experience to date, its sales cycle has varied and can sometimes be four years or longer. In addition, the revenue generated from sales of Microvast’s products may fluctuate from time to time due to market and general economic conditions. As a result, Microvast’s financial results may fluctuate on a quarterly basis which may adversely affect the price of Microvast Holdings’ stock.

Microvast experiences fluctuations in quarterly and annual operating results.

Microvast’s quarterly and annual operating results have fluctuated in the past and likely will fluctuate in the future. The demand for Microvast’s products is driven largely by the demand for the end-product applications that are powered by its products. Accordingly, the battery industry is affected by market conditions that are often outside Microvast’s control. Microvast’s results of operations may fluctuate significantly from period to period due to a number of factors, including general economic, industry and market conditions, capacity ramp up by competitors, industrywide technological changes, the loss of a key customer and the postponement, rescheduling or cancellation of large orders by a key customer. As a result of these factors and other risks discussed in this section, year-over-year comparisons should not be relied upon to predict Microvast’s future performance.

Microvast’s working capital requirements involve estimates based on demand expectations and may decrease or increase beyond those currently anticipated, which could adversely impact its operating results and financial condition.

In order to fulfill the product delivery requirements of Microvast’s customers, it plans for working capital needs in advance of customer orders. As a result, Microvast bases its funding and inventory decisions on estimates of future demand. If demand for Microvast’s products does not increase as quickly as it has estimated or drops

off sharply, Microvast’s inventory and expenses could rise, and its business and operating results could suffer. Alternatively, if Microvast experiences sales in excess of its estimates, Microvast’s working capital needs may be higher than those currently anticipated. Microvast’s ability to meet this excess customer demand depends on its ability to arrange for additional financing for any ongoing working capital shortages, since it is likely that cash flow from sales will lag behind these investment requirements.

Microvast’s business depends substantially on the continuing efforts of its senior executives and other key personnel, and its business may be severely disrupted if it lost their services.

Microvast’s future success heavily depends on the continued service of its senior executives and other key employees. In particular, Microvast relies on the expertise and experience of its Chairman, Chief Executive Officer, and President, Mr. Yang Wu, its Chief Financial Officer, Mr. Yanzhuan Zheng, and its Chief Technology Officer, Dr. Wenjuan Mattis. If one or more of Microvast’s other senior executives are unable or unwilling to continue to work for it in their present positions, Microvast may encounter similar problems, but on a compounded basis. Moreover, if any of Microvast’s current or former senior executives joins a competitor or forms a competing company, Microvast may lose customers, suppliers, know-how and key personnel. Each of Microvast’s executive officers has entered into an employment agreement with Microvast, which contains non-competition and confidentiality clauses. However, if any dispute arises between Microvast’s current or former executive officers and Microvast, it is hard to predict the extent to which any of these agreements could be enforced in different countries.

The success of Microvast’s business depends on its ability to attract, train and retain highly skilled employees and key personnel.

Because of the highly specialized, technical nature of Microvast’s business, it must attract, train and retain a sizable workforce comprising highly skilled employees and other key personnel. Since Microvast’s industry is characterized by high demand and intense competition for talent, Microvast may have to pay higher salaries and wages and provide greater benefits in order to attract and retain highly skilled employees or other key personnel that Microvast will need to achieve its strategic objectives. As Microvast is still a relatively young company and its business has grown rapidly, Microvast’s ability to train and integrate new employees into its operations may not meet the requirements of its growing business. Microvast’s failure to attract, train or retain highly skilled employees and other key personnel in numbers that are sufficient to satisfy its needs would materially and adversely affect its business. Staff that Microvast is unable to retain also pose a risk, since they can inform competitors of Microvast’s know-how and may lessen the technological advantages over Microvast’s competitors that it has developed.

Microvast’s management has limited experience in operating a public company.

Microvast’s executive officers have limited experience in the management of a publicly traded company. Microvast’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could significantly increase the amount of time they devote to these activities that result in less time being devoted to the management and growth of Microvast. Microvast may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for Microvast to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that Microvast will be required to expand its employee base and hire additional employees to support its operations as a public company which will increase its operating costs in future periods.

Microvast may acquire or invest in other companies or technologies, which could divert its management’s attention, result in dilution to Microvast Holdings’ stockholders and otherwise disrupt its operations and adversely affect its business.

Microvast may selectively acquire or invest in other companies or technologies that it believes could complement or expand its platform, enhance its technical capabilities or otherwise offer growth opportunities. However, acquisitions are complex, costly and time-consuming processes and involve numerous risks. The pursuit of potential acquisitions may divert the attention of management and cause Microvast to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated. Acquisitions

also could result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect Microvast’s operating results and financial condition. If Microvast acquires additional businesses, it may not be able to integrate the acquired personnel, operations and technologies successfully or effectively manage the combined business following the acquisition. Microvast also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

•        inability or difficulty integrating and benefiting from acquired technologies, services or clients in a profitable manner;

•        unanticipated costs or liabilities associated with the acquisition;

•        difficulty integrating the accounting systems, operations and personnel of the acquired business;

•        adverse effects to Microvast’s existing business relationships with business partners and clients as a result of the acquisition;

•        assuming potential liabilities of an acquired company;

•        possibility of overpaying for acquisitions, particularly those with significant intangibles and those assets that derive value using novel tools or are involved in niche markets;

•        difficulty in acquiring suitable businesses, including challenges in predicting the value an acquisition will ultimately contribute to Microvast’s business;

•        the potential loss of key employees of the acquired business; and

•        use of substantial portions of Microvast’s available cash to consummate the acquisition.

Any of the above difficulties could adversely affect Microvast’s ability to maintain relationships with clients, partners, suppliers and associates or Microvast’s ability to achieve the anticipated benefits of the acquisition, or could reduce its earnings or otherwise adversely affect its business and financial results.

In addition, a significant portion of the purchase price of companies Microvast acquires may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if Microvast’s acquisitions do not yield expected returns, it may be required to take charges to its operating results based on this impairment assessment process, which could adversely affect its results of operations.

Microvast has expanded its presence in markets other than its main manufacturing site in PRC and may continue to do so, including acquiring foreign companies or otherwise, which could expose Microvast to business risks not encountered in the PRC, including risks associated with the marketing, distribution and sale of Microvast’s products internationally, that could limit the effectiveness of its growth strategy and cause its operating results to suffer.

For the years ended December 31, 2018, 2019, 2020 and the three month ended March 31, 2021, Microvast derived 16.1%, 35.4%, 38.5% and 28.8%, respectively, of its sales from outside the PRC. Microvast currently has one wholly owned subsidiary in the United Kingdom and has made sales to the United Kingdom, Belgium, Germany and Turkey. As a result, Microvast is subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions. Microvast may in the future seek to expand its presence in markets other than the PRC, including making acquisitions that help Microvast access new markets. Operating in new markets requires significant resources and management’s attention. Furthermore, expansion into new markets requires Microvast to make significant expenditures, including the establishment of local operating entities, hiring of local employees and establishing facilities in advance of generating any revenue. Any efforts to expand into new markets might not be successful in creating demand for Microvast’s products outside of the PRC or in effectively selling its products in the markets it enters. In addition, conducting operations in new markets, including the marketing, distribution and sale of Microvast’s products, subjects Microvast to new or unfavorable regulatory, economic and political risks that Microvast has not generally faced in the PRC market. These risks include:

•        localization of the marketing and deployment of Microvast’s products;

•        lack of familiarity with, and burdens of, complying with foreign laws, legal and commercial standards, regulatory requirements, export requirements, tariffs and other barriers, including laws related to employment or labor;

•        conforming Microvast’s products to various international regulatory and safety requirements where Microvast’s products are sold, or homologation;

•        difficulty in establishing, staffing and managing foreign operations;

•        difficulties attracting customers in new jurisdictions;

•        difficulty in engaging and retaining distributors that are knowledgeable about, and can function effectively, in overseas markets;

•        management, communication and integration problems resulting from cultural or language differences and geographic dispersion;

•        different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;

•        increased costs associated with maintaining marketing efforts in various countries;

•        new and different sources of competition;

•        increased financial accounting and reporting burdens and complexities;

•        diversion of Microvast’s management’s attention and resources to explore, negotiate, or close acquisitions and to integrate, staff and manage geographically remote operations and employees;

•        sufficiency of qualified labor pools in various international markets;

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

•        changes in global currency systems or fluctuations in exchange rates that may increase the volatility of or adversely affect Microvast’s foreign-based revenue;

•        Microvast’s ability to enforce its contractual rights;

•        compliance with the anti-corruption laws, economic sanction laws and regulations, export controls and other laws and regulations regarding international business operations;

•        foreign government trade restrictions, customs regulations, tariffs and price or exchange controls;

•        preferences of foreign nations for domestically produced products;

•        uncertain political and economic climates; and

•        inability to obtain, maintain or enforce intellectual property rights in some countries.

These factors may cause Microvast’s costs of doing business in markets other than the PRC to exceed its comparable costs incurred in the PRC market. Any negative impact from Microvast’s business efforts in new markets could adversely affect its business, operating results and financial condition as a whole.

Additionally, as Microvast has expanded into new markets, Microvast has faced challenges with ensuring that its charging equipment works successfully with the charging infrastructure in such markets, including United Kingdom and Germany. If customers experience problems with the way Microvast’s charging equipment works with the local charging infrastructure, or Microvast is unable to adapt its equipment to resolve such problems, then the viability and acceptance of its vehicles in such markets could be materially and adversely affected. If Microvast fails to successfully address these risks, its business, prospects, operating results and financial condition could be materially harmed.

Microvast’s planned expansion into new applications and markets poses additional risks which could adversely affect its business, financial condition and results of operations.

To date Microvast has focused its business on the sale of its LpTO and LpCO battery systems, primarily for use in electric buses. However, Microvast intends to expand into new applications and expand its customer demographic in order to further grow its business. The lithium-based battery market is highly competitive and there can be no assurance that use of Microvast’s products for these new applications will gain market acceptance.

In addition, Microvast is expanding its sales in the United States and Europe and is seeking to further expand its presence in Asia as its businesses in those regions continues to grow. However, these markets are less tested for Microvast’s products and Microvast faces risks in expanding the business to these markets, which include differences in regulatory requirements for product testing, intellectual property protection (including patents and trademarks), tax incentive policy, legal systems and rules, marketing costs, fluctuations in currency exchange rates and changes in political and economic conditions. If Microvast cannot successfully expand into these markets as it planned, Microvast’s strategic goal will be impacted and its prospects will be materially and adversely affected.

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

Microvast intends to continue to make investments to support its business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance its products, improve its operating infrastructure or acquire complementary businesses and technologies. Microvast’s capital requirements will depend on many factors, including, but not limited to:

•        technological advancements;

•        market acceptance of Microvast’s products and product enhancements, and the overall level of sales of Microvast’s products;

•        R&D expenses;

•        Microvast’s relationships with its customers and suppliers;

•        Microvast’s ability to control costs;

•        sales and marketing expenses;

•        enhancements to Microvast’s infrastructure and systems and any capital improvements to its facilities;

•        Microvast’s ability to maintain existing manufacturing equipment;

•        potential acquisitions of businesses and product lines; and

•        general economic conditions, including the effects of international conflicts and their impact on the automotive industry in particular.

Accordingly, Microvast may need to engage in equity or debt financings to secure additional funds. If Microvast raises additional funds through future issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution, and any new equity securities it issues could have rights, preferences and privileges superior to those of holders of its common stock. Any debt financing that it may secure in the future could involve restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for Microvast to obtain additional capital and to pursue business opportunities, including potential acquisitions. Microvast may not be able to obtain additional financing on terms favorable to it, if at all. If Microvast is unable to obtain adequate financing or financing on terms satisfactory to it when Microvast requires it, Microvast’s ability to continue to support its business growth and to respond to business challenges could be significantly impaired, and its business may be adversely affected.

Microvast may be subject to financial and reputational risks due to product recalls and product liability claims, and Microvast could face substantial liabilities which exceed its resources.

Lithium-based battery systems for use in electric vehicles are inherently complex and subject to failure, accidents or other malfunctions. Accordingly, Microvast may be exposed to product recalls and product liability claims. The risk of product recalls and product liability claims, and associated adverse publicity, is inherent in the development, manufacturing and sale of Microvast’s products. Microvast’s products and the products of third parties in which Microvast’s products are a component are becoming increasingly sophisticated and complicated as advancements in technologies occur, and as demand increases for lighter and more powerful rechargeable batteries. At the same time, product quality and liability issues present significant risks. Product quality and liability issues may affect not only Microvast’s own products but also the third-party products in which Microvast’s battery products are a component. Microvast’s efforts and the efforts of its development partners to maintain product quality may not be successful, which may result in Microvast incurring expenses in connection with, for example, product recalls and product liability claims, and adversely impact Microvast’s brand image and reputation as a producer of high-quality products. Any product recall or product liability claims seeking significant monetary damages could have a material adverse effect on Microvast’s business and financial condition. A product recall or product liability claim could generate substantial negative publicity about Microvast’s products and business, interfere with its manufacturing plans and product delivery obligations as it seeks to replace, or repair affected products, and inhibit or prevent commercialization of other future product candidates.

Microvast’s operations expose it to litigation, environmental and other legal compliance risks.

Microvast is subject to a variety of litigation, environmental, health and safety 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, government contracts, health and safety liabilities, environmental matters and compliance with U.S. and foreign laws, competition laws and laws governing improper business practices. Microvast or one of its business units could be charged with wrongdoing as a result of such matters. If convicted or found liable, Microvast could be subject to significant fines, penalties, repayments or other damages (in certain cases, treble damages). As a business with international reach, Microvast is subject to complex laws and regulations in jurisdictions in which it operates, including the United States, the PRC, European Union and the United Kingdom. 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 Microvast conducts its operations and structures its investments and could limit its ability to enforce its rights. See the section titled “Business — Legal Proceedings.”

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 Microvast to additional costs and restrictions, including increased energy and raw materials costs, and could increase environmental compliance expenditures.

Microvast may fail to comply with certain health and production safety laws and regulations governing hazardous materials.

In the sourcing of Microvast’s products throughout the world, Microvast processes, stores, disposes of and otherwise uses large amounts of hazardous materials. As a result, Microvast is subject to extensive and evolving health and production safety laws and regulations governing, among other things: the health of Microvast’s 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, Microvast may be ordered to rectify a noncompliance within a stipulated deadline; and if Microvast fails to do so, it may be ordered to cease operations. From time to time Microvast has had instances of alleged or actual noncompliance that may result in the imposition of fines, penalties and required corrective actions. For instance, Microvast is required under PRC law to design and build occupational disease prevention facilities concurrently with the construction of Microvast’s manufacturing facilities, where hazardous elements which adversely affect the health of Microvast’s employees are generated or used. Microvast’s ongoing

compliance with health and safety laws, regulations and permits could require Microvast to incur significant expenses, limit Microvast’s ability to modify or expand its 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 Microvast due to the presence of, or exposure to, hazardous substances used, stored or disposed of by Microvast or contained in Microvast’s products.

As components of electric vehicles, Microvast’s products as installed in the products of its customers are subject to motor vehicle standards and the failure of the vehicles to satisfy such mandated safety standards could have a material adverse effect on the demand for Microvast’s products, its business and its operating results.

Microvast’s products are used as components in electric vehicles. All vehicles sold must comply with applicable international, federal, and state motor vehicle safety standards, which vary by national and other jurisdictions. In the United States, vehicles that meet or exceed all federally mandated safety standards are certified under federal regulations. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving federal certification. Failure by Microvast’s vehicle manufacturing customers to satisfy motor vehicle standards could have a material adverse effect on Microvast’s business and operating results.

Moreover, Microvast may incur its own significant costs in complying with these regulations. Regulations related to the electric vehicle industry and alternative energy are currently evolving and Microvast faces risks associated with changes to these regulations.

To the extent the laws become more stringent or otherwise change, Microvast’s components or the vehicles into which they are incorporated may not comply with applicable international, federal, state or local laws, which would have an adverse effect on Microvast’s business. Compliance with changing regulations could be burdensome, time consuming, and expensive. To the extent compliance with new regulations is cost prohibitive, Microvast’s business, prospects, financial condition and operating results would be adversely affected.

Internationally, there may be laws in jurisdictions Microvast has not yet entered or laws of which Microvast is unaware in jurisdictions it has entered that may restrict its sales or other business practices. Even for those jurisdictions Microvast has analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with Microvast or its customer’s ability to sell products could have a negative and material impact on Microvast’s business, prospects, financial condition and results of operations.

Compliance with environmental regulations can be expensive, and Microvast’s failure to comply with these regulations may result in monetary damages and fines, adverse publicity and a material adverse effect on its business.

As a manufacturer, Microvast is 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 Microvast’s batteries. Microvast also uses, generates and discharges other toxic, volatile and hazardous chemicals and wastes in its research, development and manufacturing activities. At Microvast’s primary manufacturing site, under the PRC environmental regulations, Microvast is required to maintain the pollutant emission levels at each of its facilities within the levels prescribed by the relevant governmental authorities and obtain a pollution discharge permit for its water and air emissions. Microvast is also required to design and build environmental treatment facilities concurrently with the construction of its manufacturing facilities, where waste air, waste water and waste solids Microvast generates can be treated in accordance with the relevant requirements. In addition, certain laws and regulations require enterprises like Microvast 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 Microvast fails 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 Microvast to cease operations if Microvast fails to comply with their requirements. In particular, any breach by Microvast in connection with requirements relating to the handling of hazardous wastes may subject Microvast to monetary damages and fines. In addition, if any third party suffers any loss as a result of Microvast’s pollutant emission practices, Microvast’s improper handling of hazardous wastes or Microvast’s noncompliance with environmental regulations, such third parties may seek damages from Microvast. Microvast cannot assure you that it will be able to comply with all

Microvast could be subject to additional tax liabilities.

Microvast is subject to federal, state and local taxes in the United States and are also subject to tax in certain foreign jurisdictions. Significant judgment is required in evaluating Microvast’s tax positions and its worldwide provision for taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain. In addition, Microvast’s tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, by Microvast’s earnings being lower than anticipated in jurisdictions where Microvast has lower statutory rates and higher than anticipated in jurisdictions where it has higher statutory rates, by changes in foreign currency exchange rates, or by changes in the valuation of its deferred tax assets and liabilities. Microvast may be audited in various jurisdictions, and such jurisdictions may assess additional taxes against Microvast. Although Microvast believes its tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different from Microvast’s historical tax provisions and accruals, which could have a material adverse effect on Microvast’s operating results or cash flows in the period or periods for which a determination is made.

Microvast’s international operations subject it to potentially adverse tax consequences.

Microvast generally conducts its international operations through wholly owned subsidiaries, branches and representative offices and reports its taxable income in various jurisdictions worldwide based upon its business operations in those jurisdictions. Microvast’s intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant taxing authorities may disagree with Microvast’s determinations as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and Microvast’s position was not sustained, Microvast could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of Microvast’s operations. Microvast believes that its financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard.

According to the Enterprise Income Tax Law of the PRC (the “EIT Law”) and the Regulation on Implementing the EIT Law, related party transactions must be conducted on an arm’s-length basis. Such transactions between related parties may be subject to audit or scrutiny by the PRC tax authorities within 10 years after the taxable year when the transactions are conducted. If the relevant PRC tax authorities determine that the related party transactions occurred in PRC have not been conducted on an arm’s-length basis, they may adjust the taxable income of Microvast’s PRC subsidiary through a transfer pricing adjustment and impose additional taxes (together with applicable interest) on Microvast’s PRC subsidiary, as well as penalties for under-reporting of taxable income.

The uncertainty in global economic conditions could negatively affect Microvast’s operating results.

Microvast’s operating results are directly affected by the general global economic conditions of the industries in which its major customer groups operate. Microvast’s business segments are highly dependent on the economic and market conditions in each of the geographic areas in which it operates. The uncertainty in global economic conditions varies by geographic segment and can result in substantial volatility in global credit markets. Credit volatility could impact Microvast’s working capital for manufacturing, or result in cost changes or interruptions to suppliers whose components Microvast relies upon if it is unable to access the needed credit for its operations. These conditions affect Microvast’s business by reducing prices that its customers may be able or willing to pay for its products or by reducing the demand for its products, which could in turn negatively impact Microvast’s sales and result in a material adverse effect on its business, cash flow, results of operations and financial condition.

Microvast faces risks related to health epidemics, including the COVID-19 pandemic, which could have a material adverse effect on its business and results of operations.

Microvast faces various risks related to public health issues, including epidemics, pandemics, and other outbreaks, including the pandemic of respiratory illness caused by a novel coronavirus known as COVID-19. 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. The spread of COVID-19 has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, and has led to a global decrease in vehicle sales in markets around the world.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders, and business shutdowns. These measures may adversely impact Microvast’s employees and operations and the operations of its customers, suppliers, vendors and business partners, and may negatively impact its sales and marketing activities, the construction schedule of manufacturing plants, and the production schedule of its battery systems. For example, Microvast’s manufacturing site in PRC was ordered closed in February 2020 for approximately one month due to COVID-19, and as a result, production and development plans were delayed. In addition, various aspects of Microvast’s business and manufacturing plant, cannot be conducted remotely. These measures by government authorities may remain in place for a significant period of time and they are likely to continue to adversely affect Microvast’s manufacturing and building plans, sales and marketing activities, business and results of operations.

The spread of COVID-19 has caused Microvast to modify its business practices (including employee travel, recommending that all non-essential personnel in the United States work from home and cancellation or reduction of physical participation in sales activities, meetings, events and conferences), and Microvast may take further actions as may be required by government authorities or that Microvast determines are in the best interests of its employees, customers, suppliers, vendors and business partners. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities. If significant portions of Microvast’s workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, Microvast’s operations will be impacted.

The extent to which the COVID-19 pandemic impacts Microvast’s business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, 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. The COVID-19 pandemic could limit the ability of Microvast’s customers, suppliers, vendors and business partners to perform, including third party suppliers’ ability to provide components and materials used in Microvast’s products. Microvast may also experience an increase in the cost of raw materials used in its commercial production. Even after the COVID-19 pandemic has subsided, Microvast may continue to experience an adverse impact to its business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could have a material adverse effect on the demand for Microvast’s customers products. Under difficult economic conditions, potential customers may seek to reduce spending by forgoing electric vehicles for other traditional options. Decreased demand for Microvast’s electric vehicles, could negatively affect its business.

There are no comparable recent events which 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 and subject to change. Microvast does not yet know the full extent of COVID-19’s impact on its business, its operations, or the global economy as a whole. However, the effects could have a material impact on Microvast’s results of operations, and it will continue to monitor the situation closely.

Microvast’s facilities or operations could be damaged or adversely affected as a result of natural disasters and other catastrophic events.

Microvast’s facilities or operations could be adversely affected by events outside of Microvast’s control, such as natural disasters, wars, health epidemics such as the ongoing COVID-19 pandemic, and other calamities. Microvast cannot assure you that any backup systems will be adequate to protect Microvast from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect Microvast’s ability to provide services.

Microvast’s batteries and its website, systems, and data it maintains may be subject to intentional disruption, other security incidents, or alleged violations of laws, regulations, or other obligations relating to data handling that could result in liability and adversely impact Microvast’s reputation and future sales.

Microvast expects to face significant challenges with respect to information security and maintaining the security and integrity of its systems and other systems used in its business, as well as with respect to the data stored on or processed by these systems. Advances in technology, an increased level of sophistication, and an increased level of expertise of hackers, new discoveries in the field of cryptography or others can result in a compromise or breach of the systems used in Microvast’s business or of security measures used in Microvast’s business to protect confidential information, personal information, and other data.

The availability and effectiveness of Microvast’s batteries, and Microvast’s ability to conduct its business and operations, depend on the continued operation of information technology and communications systems, some of which it has yet to develop or otherwise obtain the ability to use. Systems used in Microvast’s 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 incidents as a result of non-technical issues, including intentional or inadvertent acts or omissions by employees, service providers, or others. Microvast anticipates using outsourced service providers to help provide certain services, and any such outsourced service providers face similar security and system disruption risks as Microvast. Some of the systems used in Microvast’s business will not be fully redundant, and Microvast’s disaster recovery planning cannot account for all eventualities. Any data security incidents or other disruptions to any data centers or other systems used in Microvast’s business could result in lengthy interruptions in its service.

Social media platforms present risks and challenges that could cause damage to Microvast’s brand and reputation, and which could subject it to liability, penalties and other restrictive sanctions.

Social media platforms present risks and challenges that could cause damage to Microvast’s brand and reputation, and which could subject Microvast to liability, penalties and other restrictive sanctions. Microvast has adopted internal policies and procedures regarding social media, which may not be effective in preventing the inappropriate use of social media platforms, including blogs, social media websites and other forms of Internet-based communications. These platforms allow individuals access to a broad audience of consumers, investors and other interested persons. The considerable expansion in the use of social media over recent years has increased the volume and speed at which negative publicity arising from these events can be generated and spread, and Microvast may be unable to timely respond to, correct any inaccuracies in, or adequately address negative perceptions arising from such media coverage. The use of such platforms by Microvast’s officers and other employees and former employees has had and could in the future increase Microvast’s costs, cause damage to Microvast’s brand and reputation, result in the disclosure of confidential information, lead to litigation or subject Microvast to regulatory inquiries, penalties and other restrictive sanctions and adverse consequences if the SEC, the Department of Justice, or any other government agency were to pursue legal action in the future. In addition, negative or inaccurate posts or comments about Microvast on social media platforms could damage Microvast’s reputation, brand image and goodwill, and Microvast could lose the confidence of its customers and partners, regardless of whether such information is true and regardless of any number of measures Microvast may take to address them.

Risks Related to Microvast’s Intellectual Property

Microvast relies substantially on unpatented proprietary technologies.

Microvast’s success depends in part on its ability to protect its proprietary trade secrets, confidential information and know-how, technology, trademarks and other intellectual property and intellectual property rights. To do so, Microvast relies generally on copyright, trademark and trade secret laws, confidentiality and invention assignment agreements with employees and third parties, and other agreements with consultants, vendors and clients. Specifically, Microvast relies substantially on unpatented proprietary technology. A significant number of Microvast’s material proprietary technologies are know-how or trade secrets. For example, Microvast’s proprietary polyvinylidene fluoride separator that allows for faster charge rates is unpatented. To protect Microvast’s trade secrets, know-how and other proprietary information, it requires employees, consultants, advisors and collaborators to enter into confidentiality agreements. Microvast cannot assure you that these agreements will provide meaningful

protection for Microvast’s trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how or other proprietary information. There can be no assurance that employees, consultants, vendors and clients have executed such agreements or have not breached or will not breach their agreements with Microvast, that Microvast will have adequate remedies for any breach, or that its trade secrets will not otherwise become known or independently developed by competitors. Despite the protections Microvast does place on its intellectual property, a third party could, without authorization, copy or otherwise obtain and use its products or technology, or develop similar technology. The theft or unauthorized use or publication of Microvast’s trade secrets and other confidential business information could reduce the differentiation of its products and harm its business, the value of its investment in development or business acquisitions could be reduced and third parties might make claims against Microvast related to losses of their confidential or proprietary information. Any of the foregoing could materially and adversely affect Microvast’s business.

Further, it is possible that others will independently develop the same or similar technology or otherwise obtain access to Microvast’s unpatented technology, and in such cases, Microvast may not be able to assert any trade secret rights against such parties. Costly and time-consuming litigations could be necessary to enforce and determine the scope of Microvast’s trade secret rights and related confidentiality and nondisclosure provisions. If Microvast fails to obtain or maintain trade secret protection, or if Microvast’s competitors obtain Microvast’s trade secrets or independently develop technology similar to Microvast’s or competing technologies, Microvast’s competitive business position could be materially and adversely affected. In addition, some courts inside and outside the United States may be less willing or unwilling to protect trade secrets and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases.

Microvast’s success depends on its ability to obtain, maintain and protect its intellectual property rights.

Microvast relies on its trademarks, service marks, trade names and brand names to distinguish its products from the products of its competitors, and has registered or applied to register many of these trademarks. Microvast’s trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks, and Microvast cannot assure you that its trademark applications will be approved. During trademark registration proceedings, Microvast may receive rejections. Although Microvast is given an opportunity to respond to those rejections, it may be unable to overcome such rejections. In addition, in the U.S. Patent and Trademark Office and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against Microvast’s trademarks, and its trademarks may not survive such proceedings. In the event that Microvast’s trademarks are successfully challenged, Microvast could be forced to rebrand its products, which could result in loss of brand recognition and could require Microvast to devote resources towards advertising and marketing new brands. Further, Microvast cannot assure you that competitors will not infringe its trademarks or that Microvast will have adequate resources to enforce its trademarks and trade names, which it needs to build name recognition among potential partners or customers in its markets of interest. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding Microvast’s ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of Microvast’s registered or unregistered trademarks or trade names. Over the long term, if Microvast is unable to establish name recognition based on its trademarks and trade names, then Microvast may not be able to compete effectively and its business may be adversely affected.

Microvast also relies, in part, on its ability to obtain and maintain patent protection for its proprietary products and processes. The process of applying for and obtaining a patent is expensive and time consuming, and Microvast may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or Microvast financially may not be able to protect its proprietary rights at all. Despite Microvast’s efforts to protect its proprietary rights, unauthorized parties may be able to obtain and use information that Microvast regards as proprietary. In addition, the issuance of a patent does not ensure that it is valid or enforceable, so even if Microvast obtains patents, they may not be valid or enforceable against third parties. In addition, the issuance of a patent does not give Microvast the right to practice the patented invention. Third parties may have blocking patents that could prevent Microvast from marketing Microvast’s own products and practicing its own technology. Alternatively, third parties may seek approval to market their own products similar to or otherwise competitive with Microvast’s products. In these circumstances, Microvast may need to defend and/or assert its patents, including by filing lawsuits alleging patent infringement.

In any of these types of proceedings, a court or agency with jurisdiction may find Microvast’s patents invalid and/or unenforceable. Even if Microvast has valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve Microvast’s business objectives. Some of Microvast’s patents and patent applications may be co-owned with third parties. If Microvast is unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including Microvast’s competitors, and Microvast’s competitors could market competing products and technology. In addition, Microvast may need the cooperation of any such co-owners of Microvast’s patents in order to enforce such patents against third parties, and such cooperation may not be provided to Microvast. Any of the foregoing could have a material adverse effect on Microvast’s competitive position, business, financial conditions, results of operations, and prospects.

Issued patents may be challenged, narrowed, invalidated or circumvented. The legal systems of certain countries do not favor the aggressive enforcement of patents, and the laws of non-U.S. countries may not allow Microvast to protect its inventions with patents to the same extent as the laws of the United States and Europe. Because patent applications in the United States, Europe and many other non-U.S. jurisdictions are typically not published until 18 months after filing, or in some cases not at all, and because publications of discoveries in scientific literature lag behind actual discoveries, Microvast cannot be certain that it was the first to make the inventions claimed in its issued patents or pending patent applications, or that Microvast was the first to file for protection of the inventions set forth in its patents or patent applications. As a result, Microvast may not be able to obtain or maintain protection for certain inventions. Therefore, the enforceability and scope of Microvast’s patents in the United States, Europe, and the PRC and in other non-U.S. countries cannot be predicted with certainty and, as a result, any patents that Microvast owns may not provide sufficient protection against competitors. Microvast may not be able to obtain or maintain patent protection from its pending patent applications, from those it may file in the future, or from those it may license from third parties. Moreover, even if Microvast is able to obtain patent protection, such patent protection may be of insufficient scope to achieve its business objectives.

In some instances, Microvast may have legal grounds to enforce its rights related to its patented technology, but may elect not to do so because of the cost of litigation or the limited value in enforcing its patent rights.

Microvast may not be able to protect its intellectual property rights in the PRC.

The validity, enforceability and scope of protection available under the relevant intellectual property laws in the PRC are uncertain and still evolving. Implementation and enforcement of PRC intellectual property-related laws have historically been deficient and ineffective. Accordingly, the protection of intellectual property rights in the PRC may not be as effective as in the U.S. or other developed countries. There can be no assurance that Microvast’s intellectual property rights will not be challenged by third parties or found by a governmental authority to be invalid or unenforceable. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive, and Microvast may need to resort to litigation to enforce or defend patents issued to Microvast or its other intellectual property rights or to determine the enforceability, scope and validity of Microvast’s proprietary rights or those of others. Such litigation and an adverse determination in any such litigation, if any, could result in substantial costs, loss of Microvast’s proprietary rights, and diversion of resources and management’s attention.

Microvast could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.

In recent years, there has been significant litigation in the United States, Europe and the PRC involving patents and other intellectual property rights. Companies in the battery industry are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and Microvast’s competitors and other third parties may hold patents or have pending patent applications which could be related to Microvast’s business. For example, Microvast is aware of third-party patents and patent applications (if issued) that may be construed to cover one or more of Microvast’s products or technologies. If these patents or patent applications (if issued) are asserted against Microvast and Microvast is found to infringe any of these patents, and is unsuccessful in demonstrating that such patents are invalid or unenforceable, then Microvast could be required to pay substantial monetary damages or cease further development or commercialization of one or more of its products or technologies. Although Microvast generally conducts a freedom to operate search and review with respect to its products and technologies, Microvast cannot guarantee that its search and review is complete and thorough, nor can Microvast be sure that it has identified each and every patent and pending application in the United States

and abroad that is relevant or necessary to the commercialization of its products or use of its technology. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that Microvast’s products or technologies may infringe. In addition, third parties may obtain patents in the future and claim that use of Microvast’s technologies infringes upon these patents. These risks have been amplified by the increase in third parties, which Microvast refer to as non-practicing entities, whose primary business is to assert infringement claims or make royalty demands. It is difficult to proceed with certainty in a rapidly evolving technological environment in which there may be patent applications pending related to Microvast’s technologies, many of which are confidential when filed. Microvast relies substantially on unpatented proprietary technology, which may make it more difficult to protect and enforce its intellectual property rights. Microvast cannot assure you that it will have meaningful protection for its trade secrets, know-how or other intellectual property and proprietary information in the event of any unauthorized use, misappropriation, or disclosure, which could have a material adverse impact on its business.

Third parties may infringe, misappropriate or otherwise violate Microvast’s intellectual property or proprietary rights or Microvast may be required to defend against claims of infringement, misappropriation or other violations of the intellectual property or proprietary rights of a third party. To counter infringement or unauthorized use claims or to defend against such claims can be expensive and time consuming. If Microvast is party to an intellectual property-related proceeding and even if such proceeding is resolved in Microvast’s favor, litigation or other legal proceedings relating to intellectual property claims may cause Microvast to incur significant expenses, and could distract Microvast’s technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of Microvast Holdings’ stock. Such litigation or proceedings could substantially increase Microvast’s operating losses and reduce the resources available for development activities or any future sales, manufacturing, marketing or distribution activities. Microvast may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Moreover, many of Microvast’s current and potential competitors may dedicate substantially greater resources than Microvast can to the protection and enforcement of intellectual property rights, especially patents. Incurring significant expenses and distracting Microvast’s personnel for an intellectual property-related proceeding could have a material adverse effect on Microvast’s business, financial condition, results of operations and prospects.

Microvast may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to Microvast, could cause Microvast loss of significant rights and inability to continue providing its existing product offerings.

Microvast’s success also depends largely on its ability to use and develop its technology and know-how without infringing the intellectual property rights of third parties. The validity and scope of claims relating to lithium-ion battery technology patents involve complex scientific, legal and factual questions and analysis and, therefore, may be highly uncertain, expensive and time-consuming. Microvast may receive in the future notices that claim Microvast or its clients using Microvast’s products have misappropriated or misused other parties’ intellectual property rights, particularly as the number of competitors in Microvast’s market grows and the functionality of products among competitors overlaps. If Microvast is sued by a third party that claims that Microvast’s technology infringes its rights, the litigation, whether or not successful, could be extremely costly to defend, divert Microvast’s management’s time, attention, and resources, damage its reputation and brand and substantially harm its business. Further, in some instances, Microvast’s agreements with its clients include indemnification provisions under which it agrees to indemnify such parties for losses suffered or incurred in connection with third party claims for intellectual property infringement. The results of any intellectual property litigation to which Microvast might become a party, or for which Microvast is required to provide indemnification, may also require Microvast to do one or more of the following:

•        cease offering or using technologies that incorporate the challenged intellectual property;

•        make substantial payments for legal fees, settlement payments or other costs or damages to the party claiming infringement, misappropriation or other violation of intellectual property rights;

•        obtain a license to sell or use the relevant technology, which may not be available on reasonable terms or at all; or

•        redesign technology to avoid infringement, which may not be feasible.

Microvast’s failure to develop non-infringing technologies or license the intellectual property or the proprietary rights on a timely basis would harm Microvast’s business, possibly materially. Protracted litigation could result in Microvast’s customers, or potential customers, deferring or limiting their purchase or use of Microvast’s products until resolution of such litigation. Parties making the infringement claim may also obtain an injunction that can prevent Microvast from selling its products or using technology that contains the allegedly infringing contents. If Microvast were to discover that its products violate third-party proprietary rights, there can be no assurance that Microvast would be able to continue offering its products on commercially reasonable terms, or at all, to redesign its technology to avoid infringement or to avoid or settle litigation regarding alleged infringement without substantial expense and damage awards. Any intellectual property litigation or proceeding could have a material adverse effect on Microvast’s business, results of operation and financial condition.

Microvast may have difficulties transferring and communicating technology globally, especially if communications and visa processes between the PRC and other countries worsen.

In different parts of the world the technology platforms that are used to facilitate communication between staff are different, or in some cases banned. For example, the PRC has banned a number of technology apps, and the United States has recently discussed banning the communication platform WeChat. As the options for communication becomes restricted, it may become difficult to efficiently coordinate complex manufacturing supply chains in a global setting, causing delays or missed income opportunities.

In addition, as most of Microvast’s historical business is located in PRC, visa’s being issued for staff to be trained in the PRC, or vice versa, may be restricted or denied, limiting Microvast’s ability to train and pass along proprietary information efficiently. In some cases, the software used may need to be different, which makes it difficult to share certain engineering documents and resources between global subsidiaries. Delays due to inefficiencies in communication and file sharing may impact decision making, lead to errors, and affect Microvast’s ability to maximize profit.

Risks Related to Doing Business in the European Union

Microvast is legally obligated to take back used batteries from clients and the cost of doing so may differ materially from Microvast’s estimates.

According to the Directive 2013/56/EU, which amended the Directive 2006/66/EC and which has been implemented in Germany with the German Battery Act (Batteriegesetz), Microvast is obligated, in several countries, to take back and recycle or otherwise safely dispose of all batteries it directly sells as producer free of charge for its clients. Microvast will begin selling batteries and battery systems in 2021 as a direct producer in the European market. As Microvast’s batteries have an expected life-span of approximately ten years, Microvast expects the next tranche of end-of-life batteries to be returned to Microvast in 2031 at the latest, a cycle which Microvast expects to be ongoing. In order to address the financial and other risks associated with battery exchange, Microvast has decided to either exchange batteries itself or to sell them to partners such as Umicore following their second ten-year life cycle. Microvast estimates that roughly half of the batteries it has sold will be refurbished and resold while the remaining batteries are expected to be recycled or reutilized for other purposes.

Changes in regulatory policies and customer practices could have a material adverse effect on Microvast’s business and operations.

New European regulations that will likely be in place by 2025 will push local (European) battery cell production and “green” energy usage for battery production. Battery passports may be introduced. These topics are already under discussion at the European Union level.

OEM customer requirements for locally produced battery cells are starting to come into force. This will lead to increased competitiveness in the European market, as all major cell manufacturers will be localized with European cell production (e.g. CATL, LG, S-Volt, Samsung SDI and Northvolt).

Risks Related to Doing Business in the PRC

Any future revocation of approvals or any future failure to obtain approvals applicable to Microvast’s business or any adverse changes in foreign investment policies of the PRC government may have a material adverse impact on Microvast’s business, financial condition and results of operations.

PRC regulations relating to foreign ownership in the power battery manufacturing industry, including the manufacturing of Microvast’s current main products, as set out in the Catalogue for the Guidance of Foreign Investment Industries, or the Catalogue, have been revised periodically over the past decade. When Microvast established its PRC subsidiary as a wholly foreign owned enterprise, or a WFOE, in December 2006, the then applicable Catalogue did not set forth any restrictions over foreign ownership of companies engaged in the manufacturing of power batteries. In the revised Catalogue effective as of 2007, only Sino-foreign equity joint ventures were permitted to engage in the manufacturing of power batteries (nickel-metal hydride or lithium-ion) which are used in vehicle electronic systems, but the manufacturing of high-tech green batteries, such as power nickel-metal hydride batteries, nickel-zinc batteries and lithium-ion batteries, remained free of foreign ownership restrictions. In 2008, Microvast’s PRC subsidiary changed its business scope to include the research, development, manufacturing and relevant follow-up servicing of electricity-storing systems (including lithium-ion batteries), which Microvast believes are classified as high-tech green batteries, and the change of business scope was approved by the relevant authority. Under the Catalogue effective as of 2012 and the Catalogue effective as of 2015, foreign ownership in the manufacturing of high energy power batteries (energy density 2:110 watt hours per kilogram (“Wh/kg”), cycle life 2:2,000 times) shall not exceed 50%. Microvast’s PRC subsidiary’s business falls under such restricted category in such Catalogue effective as of 2012 and 2015, although no such category existed when Microvast’s PRC subsidiary was approved to engage in such business in 2008. In 2012, after the 50% foreign ownership limit was first introduced into the Catalogue, and again in 2015, Microvast increased the registered capital of its PRC subsidiary which required the approval of the relevant regulator. In both instances, the regulator did not enforce the 50% foreign ownership limit under the Catalogue effective as of 2012 and 2015.

In the revised Catalogue effective as of 2017, foreign ownership restrictions over the manufacturing of power batteries were lifted. In 2018, the Chinese legislature issued the Special Administrative Measures for Access of Foreign Investment (Negative List) to replace the Catalogue. Under the new Negative List regime, any industry that is not on the Negative List is free from foreign ownership restrictions. The most updated version of the Negative List is the Negative List (2020 Version), under which there are no foreign ownership restrictions over the manufacturing of power batteries. Therefore, the current business scope of Microvast’s PRC subsidiary and its shareholding structure are in compliance with the current Chinese foreign investment laws and regulations. However, Microvast cannot rule out that the historic irregularity may give rise to any risk on part of Microvast’s PRC subsidiary.

Changes in the economic and political policies of the PRC government could have a material adverse effect on Microvast’s business and operations.

All of Microvast’s operations and manufacturing and most of its customers are in the PRC. Accordingly, Microvast’s results of operations, financial condition and prospects are significantly dependent on economic and political developments in the PRC. The PRC’s economy differs from the economies of developed countries in many aspects, including the level of development, growth rate and degree of government control over foreign exchange and allocation of resources. While the PRC’s economy has experienced significant growth in the past 30 years, the growth has been uneven across different regions and periods and among various economic sectors in the PRC. Microvast cannot assure you that the PRC’s economy will continue to grow, or that if there is growth, such growth will be steady and uniform, or that if there is a slowdown, such slowdown will not have a negative effect on its business and results of operations.

The PRC government exercises significant control over the PRC’s economic growth through the allocation of resources, control over payment of foreign currency-denominated obligations, implementation of monetary policy, and preferential treatment of particular industries or companies. Certain measures adopted by the PRC government may restrict loans to certain industries, such as changes in the statutory deposit reserve ratio and lending guidelines for commercial banks by the People’s Bank of China (the “PBOC”). These current and future government actions could materially affect Microvast’s liquidity, access to capital, and ability to operate Microvast’s business.

The global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The PRC government has implemented various measures to encourage

economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy but may also have a negative effect on Microvast. Microvast’s financial condition and results of operation could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to Microvast. In addition, any stimulus measures designed to boost the Chinese economy, may contribute to higher inflation, which could adversely affect Microvast’s results of operations and financial condition.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and Microvast.

Historically, Microvast has conducted substantially all of its business through its PRC subsidiary, though Microvast expects other global regions to become a main part of its business in the coming years. Microvast’s PRC subsidiary is generally subject to laws and regulations applicable to foreign investments in the PRC and, in particular, laws applicable to FIEs. The PRC legal system is a civil law system based on written statutes, and prior court decisions may be cited for reference, but have limited precedential value. Since the late 1970s, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in the PRC. However, since the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties for you and Microvast. Moreover, there can be no assurance that the PRC government will not amend or revise existing laws, rules or regulations, or promulgate new laws, rules or regulations, in a manner which materially and adversely affects Microvast’s business, results of operations or financial condition. For example, the PRC government may require additional approvals, licenses or permits for Microvast’s business and operations, or impose stricter requirements or conditions for the maintenance or renewal of approvals, licenses or permits required for Microvast’s business and operations. Any loss of or failure to obtain, maintain or renew Microvast’s approvals, licenses or permits could disrupt Microvast’s operations or subject Microvast to fines or penalties imposed by the PRC government.

The Foreign Investment Law came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in the PRC, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The Foreign Investment Law embodies an expected PRC regulatory trend of rationalizing the foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. The Foreign Investment Law, together with its implementation rules and ancillary regulations, may materially impact Microvast’s shareholding structure, corporate governance practice and increase Microvast’s compliance costs, for example through the imposition of stringent ad hoc and periodic information reporting requirements.

The PRC government exerts substantial influence over the manner in which Microvast must conduct its business activities.

The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Microvast’s ability to operate in the PRC may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, production safety, land use rights, property, and other matters. In addition, the central or local governments of the jurisdictions in which Microvast operates may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on Microvast’s part to ensure its compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in the PRC or particular regions thereof and could require Microvast to divest itself of any interest Microvast then holds in Chinese properties or joint ventures.

PRC regulations of loans to PRC entities and direct investment in PRC entities by offshore holding companies may delay or prevent Microvast from using the proceeds of the Business Combination to make loans or additional capital contributions to Microvast’s PRC subsidiary.

Microvast may transfer funds to its PRC subsidiary or finance its PRC subsidiary by means of shareholder loans or capital contributions upon completion of the Business Combination. Any loans from Microvast to its PRC subsidiary, which is a foreign-invested enterprise, cannot exceed statutory limits determined by (1) the formula under the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing issued by PBOC; or (2) the difference between the investment amount and the registered capital of such subsidiary (if applicable), and shall be registered with the State Administration of Foreign Exchange (the “SAFE”), or its local counterparts. Any capital contributions Microvast makes to its PRC subsidiary are subject to the approval by or filing and registration with Administration for Market Regulation (the “AMR”), the Ministry of Commerce of PRC (the “MOFCOM”), the National Development and Reform Commission of PRC (the “NDRC”) and SAFE, or their local counterparts. Microvast may not be able to obtain these government registrations or approvals on a timely basis, if at all. If Microvast fails to receive such registrations or approvals, Microvast’s ability to provide loans or capital contributions to its PRC subsidiary in a timely manner may be negatively affected, which could materially and adversely affect Microvast’s liquidity and its ability to fund and expand its business.

Microvast may rely on dividends and other distributions on equity paid by its subsidiaries for its cash needs.

Microvast is a holding company, and it conducts all of its operations through its subsidiaries. There are statutory and regulatory limitations on the payment of dividends by certain of Microvast’s subsidiaries to Microvast. If Microvast’s subsidiaries are unable to make dividend payments to Microvast and sufficient cash or liquidity is not otherwise available, Microvast may not be able to make principal and interest payments on its outstanding debt or repurchase shares of its common stock. In particular, Microvast may rely on dividends and other distributions on equity paid by its PRC subsidiary for its cash needs, including the funds necessary to pay dividends and other cash distributions to its stockholders, to service any debt it may incur and to pay its operating expenses. Current regulations in the PRC permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. According to the PRC corporate law, Microvast’s PRC subsidiary is required to set aside at least 10% of its after-tax profit based on the PRC accounting standards and regulations each year to its statutory surplus reserve, until the balance in the reserve reaches 50% of the registered capital of Microvast’s PRC subsidiary. Funds in the reserve are not distributable to Microvast in forms of cash dividends, loans or advances. In addition, if Microvast’s PRC subsidiary incurs debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to Microvast, which in turn will adversely affect Microvast’s available cash. Any limitations on the ability of Microvast’s PRC subsidiary to transfer funds to Microvast could materially and adversely limit Microvast’s ability to grow, make investments or acquisitions that could be beneficial to its business and otherwise fund and conduct its business.

In addition, under the EIT Law, dividends payable by a FIE to any of its foreign non-resident enterprise investors shall be subject to a 10% withholding tax, unless such foreign non-resident enterprise investor’s jurisdiction of incorporation has signed a tax treaty or arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income with the PRC that provides for a reduced rate of withholding tax on dividends.

Discontinuation of preferential tax treatments Microvast currently enjoys or other unfavorable changes in tax law could result in additional compliance obligations and costs.

Microvast’s PRC subsidiary is qualified as a high and new technology enterprise under PRC law. As a result, Microvast’s PRC subsidiary enjoys a preferential PRC enterprise income tax rate of 15%. The high and new technology enterprise qualification is reassessed by the relevant authorities every three years. The discontinuation of the preferential tax treatment Microvast enjoys could materially and adversely affect Microvast’s results of operations. See the section titled “Microvast’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Components of Results of Operations — Income Tax Expense.”

Microvast’s PRC subsidiary may not continue to receive government subsidies.

Microvast’s PRC subsidiary has historically received subsidies from the PRC government for technology innovation and expansion of manufacturing capacity. Government subsidies are granted in connection with government’s efforts to promote the development of the local economy and other policies. Some local government subsidies may also be challenged by higher level government authorities. Therefore, government subsidies may be modified or terminated at the sole discretion of the relevant governmental authorities. Since the PRC laws, regulations and policies with respect to subsidies are developing and may change, Microvast cannot assure you that such government subsidies will continue. In the event that Microvast’s PRC subsidiary ceases to receive any government subsidies, any subsidy is reduced, or any of Microvast’s past subsidies are challenged, Microvast’s business, results of operations and financial condition may be adversely affected.

Restrictions on currency exchange may limit Microvast’s ability to receive and use its sales revenue effectively.

The majority of Microvast’s sales will be settled in Renminbi (“RMB”), Euros and U.S. dollars, and any future restrictions on currency exchanges may limit Microvast’s ability to use revenue generated in RMB to fund any future business activities outside the PRC or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign- invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in the PRC authorized to conduct foreign exchange business. In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to various degrees of governmental approval or regulation in the PRC, and companies may be required to open and maintain separate foreign exchange accounts for capital account items.

The PRC government has issued several rules and regulations to lift the restriction on foreign currency for capital account items. For instance, on June 9, 2016, SAFE issued a circular entitled the Notice of the State Administration of Foreign Exchange on Reforming and Regulating the Policies for the Administration of Foreign Exchange Settlement under the Capital Account, under which, foreign exchange received by PRC companies under the capital account and RMB capital converted therefrom may be used for expenditure under current accounts within their respective business scope as well as expenditure under the capital account permitted by laws and regulations, subject to the following restrictions that the funds shall not be: (1) directly or indirectly, used for expenditures beyond the business scope of the companies or prohibited by the laws and regulations; (2) directly or indirectly, used for securities investment or financial products other than banks’ financial products with principal guaranteed, unless otherwise provided for by any law or regulation; (3) used to grant loans to non-affiliated enterprises, except those circumstances expressly permitted in the business scope; (4) used to build or purchase the real estate not for self-use (except real estate enterprises).

On October 23, 2019, SAFE issued a circular entitled the Notice by the State Administration of Foreign Exchange of Further Facilitating Cross-border Trade and Investment, under which, non-investing FIEs are permitted to legally make domestic equity investments with their capital funds provided that the current Negative List is not violated, and domestic investment projects are real and legitimate.

As it is uncertain how the SAFE regulations will be interpreted or implemented, Microvast cannot predict how these regulations will affect its business operations or future strategy, including the remittance of dividends and foreign currency-denominated borrowings, which may adversely affect its results of operations and financial condition.

If currency exchange rates fluctuate substantially in the future, Microvast’s financial results, which are reported in U.S. dollars, and the value of Microvast Holdings’ securities could be adversely affected.

The value of the Microvast Holdings’ securities will be indirectly affected by the foreign exchange rate between the U.S. dollar and RMB and between those currencies and other currencies in which Microvast’s sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect Microvast’s financial results reported in U.S. dollar terms without giving effect to any underlying change in Microvast’s business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend of Microvast Holdings issues that will be exchanged into U.S. dollars, as well as earnings from, and the value of, any U.S. dollar-denominated investments Microvast makes in the future.

Since July 2005, the RMB has no longer been pegged to the U.S. dollar. However, the PBOC regularly intervenes in the foreign exchange market to limit fluctuations in RMB exchange rates and achieve policy goals. Following the removal of the U.S. dollar peg, the RMB appreciated more than 20% against the U.S. dollar over the following three years. From July 2008 to June 2010, the RMB traded within a narrow range against the U.S. dollar. Since June 2010 the RMB further depreciated against the U.S. dollar, from approximately RMB 6.83 per U.S. dollar as of June 1, 2010 to approximately RMB 7.15 per U.S. dollar as of September 29, 2019. However, the RMB has since depreciated against the U.S. dollar to approximately RMB 6.53 per U.S. dollar as of December 31, 2020. It is difficult to predict how RMB exchange rates may change going forward.

Very limited hedging transactions are available in the PRC to reduce Microvast’s exposure to exchange rate fluctuations. To date, Microvast has not entered into any hedging transactions. While Microvast may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and Microvast may not be able to successfully hedge its exposure at all. In addition, Microvast’s foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict Microvast’s ability to convert RMB into foreign currencies. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

Failure to comply with PRC foreign exchange regulations relating to the investment in offshore special purpose companies by PRC residents may subject Microvast’s PRC resident stockholders to personal liability, limit Microvast’s ability to acquire PRC companies or to inject capital into Microvast’s PRC subsidiary, limit Microvast’s PRC subsidiary’s ability to distribute profits to Microvast or otherwise materially adversely affect Microvast.

On July 14, 2014, SAFE issued the Circular on Relevant Issues Relating to Domestic Residents’ Investment and Financing and Round-trip Investment through Special Purpose Vehicles, or Circular 37, which replaced the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Financing and Round-trip Investment through Special Purpose Vehicles, or Circular 75, promulgated by SAFE on October 21, 2005. Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in Circular 37 as a “special purpose vehicle.” Circular 37 further requires an amendment to the registration in the event of any changes with respect to the basic information of the special purpose vehicle, such as changes in a PRC resident individual shareholder, name or operation period; or any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material events.

Microvast has requested PRC residents who it knows hold direct or indirect interest in Microvast to make the necessary applications, filings and amendments as required under Circular 37 and other related rules. Xiang Li, Diaokun Xiao, Xiaoping Zhou and Guoyou Deng have completed required registrations with Circular 75 in relation to their holding of interest in Microvast and are preparing to make amendments in connection with Microvast’s financing and restructuring. However, Microvast cannot assure you that the amendments in connection with Microvast’s financing restructuring will be duly and timely completed with the local SAFE branch. In addition, Microvast may not be informed of the identities of all the PRC residents holding direct or indirect interest in Microvast, and Microvast cannot provide any assurance that these PRC residents will comply with Microvast’s request to make or obtain any applicable registrations or comply with other requirements under Circular 37 or other related rules. The failure or inability of Microvast’s PRC resident shareholders to comply with the registration procedures set forth in these regulations may in practice, subject Microvast to fines and legal sanction, restrict Microvast’s cross-border investment activities, prevent repatriating Microvast’s profits and dividends to Microvast’s PRC resident shareholders, limit the ability of Microvast’s wholly foreign- owned subsidiaries in the PRC to distribute dividends and the proceeds from any reduction in capital, share transfer or subsidiaries. Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under PRC law for circumventing applicable foreign exchange restrictions. As a result, Microvast’s business operations and its ability to distribute profits to you could be materially and adversely affected.

Failure to comply with PRC regulations relating to the offshore investment by Microvast’s PRC enterprise stockholders or Microvast’s PRC subsidiary may restrict Microvast’s PRC subsidiary to continue operating its offshore subsidiary or otherwise materially adversely affect Microvast.

Under the current PRC laws, PRC enterprises investing in offshore projects, including both greenfield projects and mergers and acquisitions, should obtain an offshore investment certificate from MOFCOM and complete

the foreign exchange registration with SAFE before remittance of any investment amount offshore. In addition, in accordance with the Administrative Measures on the Approval and Filing of Offshore Investment Projects promulgated by the NDRC, on April 8, 2014 and amended on December 27, 2014, offshore investment projects locating at sensitive area or country or involving sensitive industries are subject to NDRC prior approval, and if the Chinese party’s investment amount is $2 billion or above, the NDRC shall issue an examination and approval opinion and submit it to the State Council for approval. All other offshore investment projects should be subject to NDRC filing prior to their execution. The above requirements apply to the establishment of Microvast’s U.K. subsidiary and Microvast’s Singapore subsidiary by Microvast’s PRC subsidiary in 2014 and 2017 respectively and, the investment by Microvast’s PRC enterprise stockholders in Microvast in September 2015. Microvast’s PRC subsidiary and its PRC enterprise stockholders had each procured the relevant offshore investment certificates from local MOFCOM and foreign exchange registration from SAFE, except for the establishment of its Singapore subsidiary by its PRC subsidiary. In addition, none of them had completed the required filing with the relevant NDRC. Based on discussions with Zhejiang NDRC, Microvast’s understanding is that, in practice, NDRC filings are not required for establishment of Microvast’s U.K. subsidiary by Microvast’s PRC subsidiary and investment by Microvast’s PRC enterprise stockholders in Microvast. So far, Microvast’s PRC subsidiary has not made any capital injection to its Singapore subsidiary and its Singapore subsidiary has not run any business. However, Microvast cannot assure you that the provincial Zhejiang NDRC or the NDRC will not order Microvast’s PRC subsidiary or Microvast’s PRC enterprise stockholders to take corrective actions in the future, neither can Microvast make any guarantee that its PRC subsidiary or its PRC enterprise stockholders will be able to conduct such corrective actions in time, or at all. If Microvast’s PRC subsidiary or its PRC enterprise stockholders fail to conduct the corrective actions required by NDRC, Microvast’s equity investment in and operation of the U.K. subsidiary and the Singapore subsidiary may be adversely affected, and Microvast’s PRC subsidiary and PRC enterprise stockholders may be subject to penalties and fines. The capability of Microvast’s PRC subsidiary to conduct further overseas investment may also be negatively affected. In addition, failure to register the establishment of Microvast’s Singapore subsidiary by its PRC subsidiary with SAFE will affect its PRC subsidiary’s ability to receive any dividends distributed by its Singapore subsidiary.

Failure to comply with PRC regulations regarding the registration requirements for stock ownership plans or stock option plans may subject PRC plan participants or Microvast to fines and other legal or administrative sanctions.

Under SAFE regulations, PRC residents who participate in an employee stock ownership plan or stock option plan in an overseas publicly listed company are required to register with SAFE or its local branch and complete certain other procedures. Participants of a stock incentive plan who are PRC residents must retain a qualified PRC agent, which could be a PRC subsidiary of such overseas publicly listed company, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of these participants. Such participants must also retain an overseas entrusted institution to handle matters in connection with their exercise or sale of stock options. In addition, the PRC agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agent or the overseas entrusted institution or other material changes.

Microvast and its PRC resident employees who participate in Microvast’s share incentive plans will be subject to these regulations when Microvast Holdings becomes publicly listed in the United States. If Microvast or its PRC resident option grantees fail to comply with these regulations, Microvast or its PRC resident option grantees may be subject to fines and other legal or administrative sanctions.

In addition, the State Administration for Taxation has issued certain circulars concerning employee share options or non-vested shares. Under these circulars, the employees working in the PRC who exercise share options or are granted non-vested shares will be subject to PRC individual income tax. The PRC subsidiaries of such overseas listed companies have obligations to file documents related to employee share options or non-vested shares with relevant tax authorities. When a withholding agent withholds taxes or an individual files a tax return, such withholding agent or the individual shall submit to the competent tax authority information with respect to, among other things, the type of equity they have accepted or transferred, their subscription of shares of stock, names of the people under the incentive plan, taxable income and taxes payable. If any of Microvast’s employees fail to pay or the withholding agent fails to withhold the income taxes payable by its employees according to relevant laws and regulations, Microvast’s PRC subsidiary may face sanctions imposed by the tax authorities or other PRC government authorities.

The M&A Rule establishes more complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for Microvast to pursue growth through acquisitions in the PRC.

On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, promulgated the Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rule, which became effective on September 8, 2006 and was amended on June 22, 2009. The M&A Rule establishes additional procedures and requirements that could make some acquisitions of Chinese companies by foreign investors more time-consuming and complex, including in some situations, requiring approval of MOFCOM when a foreign investor takes control of a Chinese domestic enterprise. Since January 1, 2020, the Foreign Investment Law and its implementation rules have come into force. Consequently, as a matter of PRC law, no approval by or filing with the MOFCOM will be required for the offshore investors’ investment in a Chinese domestic enterprise whose industry falls out of the Negative List. However, since the M&A Rule has not been formally abolished yet, it remains uncertain in practice as to whether the M&A Rule still applies. In addition, in recent years, the PRC government authorities have heightened their scrutiny over acquisition transactions by imposing anti-trust review and national security review, which may greatly complicate the transaction process if these reviews are triggered. In the future, Microvast may grow its business in part by acquiring complementary businesses; however, the above rules may affect Microvast’s ability to expand its business or maintain its market share.

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in the PRC based upon U.S. laws, including the federal securities laws or other foreign laws against Microvast or its management.

Most of Microvast’s current operations are conducted in the PRC. Moreover, some of Microvast’s current directors and officers are nationals or residents of the PRC. All or a substantial portion of the assets of these persons are located outside the United States and in the PRC. As a result, it may not be possible to effect service of process within the United States or elsewhere outside the PRC upon these persons. In addition, uncertainty exists as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts obtained against Microvast or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in the PRC against Microvast or such persons predicated upon the securities laws of the United States or any state thereof.

The audit reports included in this proxy statement are prepared by an auditor that is not inspected by the Public Company Accounting Oversight Board and, as such, you are deprived of the benefits of such inspection. In addition, various legislative and regulatory developments related to U.S.-listed PRC-based companies due to lack of PCAOB inspection and other developments may have a material adverse impact on Microvast’s listing and trading in the U.S. and the trading prices of the Common Stock.

Microvast’s independent registered public accounting firm that will issue the audit reports included in its annual reports filed with the SEC, as auditors of companies that are traded publicly in the United States and a firm registered with the U.S. Public Company Accounting Oversight Board (the “PCAOB”), is required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Because Microvast has substantial operations within the PRC and the PCAOB is currently unable to conduct inspections of the work of Microvast’s independent registered public accounting firm as it relates to those operations without the approval of the PRC authorities, Microvast’s independent registered public accounting firm is not currently inspected by the PCAOB. This lack of PCAOB inspections in the PRC prevents the PCAOB from regularly evaluating Microvast’s independent registered public accounting firm’s audits and its quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

On May 24, 2013, PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the China Securities Regulatory Commission (the “CSRC”), and the Ministry of Finance (the “MOF”), which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations in the United States and the PRC. On inspection, it appears that the PCAOB continues to be in discussions with the PRC regulators, CSRC and the MOF to permit joint inspections in the PRC of audit firms that are registered with PCAOB in relation to the audit of the PRC companies

that trade on U.S. exchanges. On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in the PRC. The joint statement reflects a heightened interest in this issue. On April 21, 2020, the SEC and the PCAOB issued another joint statement reiterating the greater risk that disclosures will be insufficient in many emerging markets, including the PRC, compared to those made by U.S. domestic companies. In discussing the specific issues related to the greater risk, the statement again highlights the PCAOB’s inability to inspect audit work paper and practices of accounting firms in the PRC, with respect to their audit work of U.S. reporting companies. However, it remains unclear what further actions the SEC and PCAOB will take and its impact on the PRC companies listed in the U.S.

On June 4, 2020, the U.S. President issued a memorandum ordering the President’s Working Group on Financial Markets (the “PWG”) to submit a report to the President within 60 days of the memorandum that includes recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB on Chinese companies listed on U.S. stock exchanges and their audit firms, in an effort to protect investors in the U.S. On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, or “Non-Cooperating Jurisdictions” (NCJs), the PWG recommends enhanced listing standards on U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, PCAOB access to work papers of the principal audit firm for the audit of the listed company. Companies unable to satisfy this standard as a result of governmental restrictions on access to audit work papers and practices in NCJs may satisfy this standard by providing a co-audit from an audit firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. The report permits the new listing standards to provide for a transition period until January 1, 2022 for listed companies. If Microvast fails to meet the new listing standards before the deadline specified thereunder due to factors beyond its control, it could face possible de-listing from the NASDAQ, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively terminate, the Common Stock’s trading in the United States. There were recent media reports about the SEC’s proposed rulemaking in this regard. It is uncertain whether the PWG recommendations will be adopted, in whole or in part, and the impact of any new rule on Microvast cannot be estimated at this time.

Inspections of other firms that the PCAOB has conducted outside the PRC have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of the PCAOB to conduct inspections of auditors in the PRC makes it more difficult to evaluate the effectiveness of Microvast’s auditor’s audit procedures or quality control procedures as compared to auditors outside of the PRC that are subject to PCAOB inspections. Investors may lose confidence in Microvast’s reported financial information and procedures and the quality of its financial statements.

As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular the PRC’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the U.S. Congress that would require the SEC to maintain a list of issuers for which PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. The Ensuring Quality Information and Transparency for Abroad-Based Listings on Microvast’s Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for these issuers and, beginning in 2025, the delisting from U.S. national securities exchanges such as the New York Stock Exchange of issuers included on the SEC’s list for three consecutive years. On May 20, 2020, the U.S. Senate passed S. 945, the Holding Foreign Companies Accountable Act, or the HFCAA. The HFCAA was approved by the U.S. House of Representatives on December 2, 2020. The HFCAA was signed into law by the president of the United States on December 18, 2020. In essence, the HFCAA requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021. The enactment of Act and any additional rulemaking efforts to increase U.S. regulatory access to audit information in the PRC could cause investor uncertainty for affected SEC registrants, including Microvast, the market price of the Common Stock could be materially adversely affected, and Microvast Holdings could be delisted if it is unable to meet the PCAOB inspection requirement in time.

If additional remedial measures are imposed on the Big Four PRC-based accounting firms, including Microvast’s independent registered public accounting firm, in the administrative proceedings brought by the SEC alleging the firms’ failure to meet specific criteria set by the SEC, with respect to requests for the production of documents, Microvast could be unable to timely file future financial statements in compliance with the requirements of the Securities Exchange Act of 1934.

Starting in 2011, the PRC affiliates of the “big four” accounting firms, including Microvast’s independent registered public accounting firm, were affected by a conflict between U.S. and PRC law. Specifically, for certain U.S. listed companies operating and audited in mainland China, the SEC and the PCAOB sought to obtain from the PRC firms access to their audit work papers and related documents. The firms were, however, advised and directed that under PRC law they could not respond directly to the U.S. regulators on those requests, and that requests by foreign regulators for access to such papers in the PRC had to be channeled through the CSRC.

In late 2012, this impasse led the SEC to commence administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act against the PRC affiliates of the “big four” accounting firms, including Microvast’s independent registered public accounting firm. A first instance trial of the proceedings in July 2013 in the SEC’s internal administrative court resulted in an adverse judgment against the PRC accounting firms. The administrative law judge proposed penalties on the firms including a temporary suspension of their right to practice before the SEC, although that proposed penalty did not take effect pending review by the Commissioners of the SEC. On February 6, 2015, before a review by the Commissioner had taken place, the PRC accounting firms reached a settlement with the SEC whereby the proceedings were stayed. Under the settlement, the SEC accepts that future requests by the SEC for the production of documents would normally be made to the CSRC. The PRC accounting firms would receive matching Section 106 of the Sarbanes-Oxley Act, and would be required to abide by a detailed set of procedures with respect to such requests, which in substance would require them to facilitate production via the CSRC. If they fail to meet specified criteria, the SEC retains authority to impose a variety of additional remedial measures on the firms depending on the nature of the failure. Remedies for any future noncompliance could include, as appropriate, an automatic six-month bar on a single firm’s performance of certain audit work, commencement of a new proceeding against a firm, or, in extreme cases, the resumption of the current proceeding against all four firms. If additional remedial measures are imposed on the PRC affiliates of the “big four” accounting firms, including Microvast’s independent registered public accounting firm, in administrative proceedings brought by the SEC alleging the firms’ failure to meet specific criteria set by the SEC with respect to requests for the production of documents, Microvast could be unable to timely file future financial statements in compliance with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, companies listed in the United States with major operations in the PRC may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. Moreover, any negative news about any such future proceedings against these audit firms may cause investor uncertainty regarding PRC-based, United States-listed companies, and the market price of the Common Stock may be adversely affected.

If Microvast’s independent registered public accounting firm were denied, even temporarily, the ability to practice before the SEC and Microvast was unable to timely find another registered public accounting firm to audit and issue an opinion on Microvast’s financial statements, Microvast’s financial statements could be determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to the delisting of the Common Stock from the NASDAQ or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of the Common Stock in the United States.

Under the EIT Law, Microvast may be classified as a “resident enterprise” of the PRC. Such classification will likely result in unfavorable tax consequences to Microvast and its non-PRC stockholders.

Under the EIT Law, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The Regulations on Implementing the EIT Law defines de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

The State Administration of Taxation has issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, with retrospective effect from January 1, 2008, or the Notice, further interpreting the application of the EIT Law and its implementation to a non-Chinese enterprise or group controlled by onshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (1) its senior management in charge of daily operations reside or perform their duties mainly in the PRC; (2) its financial or personnel decisions are made or approved by bodies or persons in the PRC; (3) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in the PRC; and (4) at least half of its directors with voting rights or senior management often resident in the PRC. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders. However, detailed measures regarding the imposition of tax on non-domestically incorporated resident enterprises are unavailable. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

Microvast believes that it is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that Microvast and any of its subsidiaries outside of the PRC is a “PRC resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, Microvast may be subject to the enterprise income tax at a rate of 25% on Microvast’s worldwide taxable income as well as PRC enterprise income tax reporting obligations. Second, although under the EIT Law and its implementing rules dividends paid to Microvast from its PRC subsidiary would qualify as “tax-exempt income,” Microvast cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, if Microvast is determined to be a “PRC resident enterprise,” it is possible that a 10% withholding tax may be imposed on dividends Microvast pays to its non-PRC stockholders (other non-resident individual investors) and with respect to gains derived by Microvast’s non-PRC stockholders from transferring Microvast’s shares, while Microvast’s non-resident individual investors may be subject to a PRC individual income tax rate of 20%, unless otherwise provided by any tax treaties or similar arrangements. Microvast is actively monitoring the possibility of “PRC resident enterprise” treatment for the 2021 tax year and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

The heightened scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on Microvast’s business operations, its acquisition or restructuring strategy or the value of your investment in Microvast.

The State Administration of Taxation has promulgated several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Circular of State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfers by Non-resident Enterprises on December 10, 2009 with retroactive effect from January 1, 2008, or SAT Circular 698, the Notice of State Administration of Taxation on Certain Issues Concerning the Administration of Enterprise Income Tax of Non-resident Enterprises on March 28, 2011, or SAT Circular 24, and the Notice of the State Administration of Taxation on Certain Enterprise Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises on February 3, 2015, or SAT Circular 7. For example, SAT Circular 7 provides that if a non-PRC resident enterprise indirectly transfers so-called PRC Taxable Properties, referring to properties of an establishment or a place of business in the PRC, real estate properties in the PRC and equity investments in a PRC tax resident enterprise, by disposition of the equity interests in an overseas non-public holding company without a reasonable commercial purpose and resulting in the avoidance of PRC enterprise income tax, such transfer will be re-characterized as a direct transfer of the PRC Taxable Properties and gains derived from such transfer may be subject to PRC withholding tax at a rate of up to 10%. SAT Circular 7 has listed several factors to be taken into consideration by the tax authorities in determining if an indirect transfer has a reasonable commercial purpose. However, despite these factors, an indirect transfer satisfying all the following criteria will be deemed to lack reasonable commercial purpose and be taxable under the PRC laws: (1) 75% or more of the equity value of the overseas enterprise being transferred is derived directly or indirectly from PRC Taxable Properties; (2) at any time during the one year period before the indirect transfer, 90% or more of the asset value of the overseas enterprise

(excluding cash) is comprised directly or indirectly of investments in the PRC, or 90% or more of its income is derived directly or indirectly from the PRC; (3) the functions performed and risks assumed by the overseas enterprise and any of its subsidiaries that directly or indirectly hold the PRC Taxable Properties are limited and are insufficient to prove their economic substance; and (4) the foreign tax payable on the gain derived from the indirect transfer of the PRC Taxable Properties is lower than the potential Chinese tax on the direct transfer of those assets. Notwithstanding the previous sentence, the indirect transfers falling into the scope of a safe harbor under SAT Circular 7 may not be subject to PRC tax. Safe harbors in SAT Circular 7 include qualified group restructurings, public market trades and tax treaty exemptions.

Under SAT Circular 7 and other PRC tax regulations, in case of an indirect transfer, entities or individuals obligated to pay the transfer price to the transferor shall be the withholding agent and are required to withhold the PRC tax from the transfer price. If the withholding agents fail to do so, the transferor is required to report to and pay the PRC tax to the PRC tax authorities. If neither party complies with the tax payment or withholding obligations under SAT Circular 7, the tax authority may impose penalties such as late payment interest on the transferor. In addition, the tax authority may also hold the withholding agents liable and impose a penalty. The penalty imposed on the withholding agents may be reduced or waived if the withholding agents have submitted the relevant materials in connection with the indirect transfer to the PRC tax authorities in accordance with SAT Circular 7.

Although the rules and notices discussed above have been promulgated for years, there is a lack of clear statutory interpretation for their implementation. As a result, there is no assurance that the tax authorities will not apply SAT Circular 24 and SAT Circular 7 to Microvast’s restructuring. Consequently, Microvast and its existing non-PRC resident investors may be at risk of being taxed, or subject to penalties under these rules and notices and may be required to expend valuable resources to comply with or to establish that Microvast should not be taxed under these rules and notices, which may have a material adverse effect on Microvast’s financial condition and results of operations or those non-PRC resident investors’ investments in Microvast.

Microvast may be exposed to liabilities under the Foreign Corrupt Practices Act, U.K. Bribery Act, Chinese and other anti-corruption laws, and any determination that Microvast violated these laws could have a material adverse effect on Microvast’s business.

Microvast is subject to the Foreign Corrupt Practices Act, or FCPA, U.K. Bribery Act and other applicable anti-corruption laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. Microvast has operations, has agreements with third parties, and makes most of its sales in the PRC. Since most of the end users and OEM bus manufacturers are state-owned companies in the PRC, substantially most of Microvast’s interactions with its end users and customers are with “government officials,” as such term is defined in the FCPA. The PRC also strictly prohibits bribery of government officials. Microvast’s activities in the PRC create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, or distributors of its subsidiaries, even though they may not always be subject to its control. Microvast has implemented safeguards that seek to discourage and prevent these practices by its employees. However, Microvast’s existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of its subsidiaries may engage in conduct for which Microvast might be held responsible. Violations of the FCPA, the U.K. Bribery Act, or Chinese or other anti-corruption laws may result in severe criminal or civil sanctions, and Microvast may be subject to other liabilities in addition to adverse publicity, which could negatively affect Microvast’s business, operating results and financial condition. In addition, the U.S. government may seek to hold Microvast’s subsidiaries liable for successor liability FCPA violations committed by companies in which Microvast invests or that it acquires.

The implementation of the new PRC employment contract law and increases in the labor costs in the PRC may hurt Microvast’s business and profitability.

The PRC adopted the new Labor Contract Law on June 29, 2007, which became effective on January 1, 2008 and was amended on December 28, 2012. The Labor Contract Law and related rules and regulations impose more stringent requirements on employers with regard to, among others, minimum wages, severance payment and non-fixed-term employment contracts, and establish time limits for probation periods, as well as the duration and the times that an employee can be placed on a fixed-term employment contract. Due to the lack of clarity with respect to implementation of the Labor Contract Law and its implementation rules and regulations and potential penalties

and fines, it is uncertain how they will impact Microvast’s current employment policies and practices. In particular, compliance with the Labor Contract Law and its implementation rules and regulations may increase Microvast’s operating expenses. In the event that Microvast decides to terminate some of its employees or otherwise change its employment or labor practices, the Labor Contract Law and its implementation rules and regulations may also limit Microvast’s ability to effect those changes in a manner that it believes to be cost-effective or desirable, and could result in a material decrease in Microvast’s profitability.

Labor costs in the PRC may also be subject to high levels of wage inflation, as it is common for companies to offer high salaries to lure skilled staff away from established manufacturers. Thus, Microvast may need to pay higher wages to keep current, or hire new, skilled staff.

Microvast’s failure to adequately contribute the statutory employee benefit plans may expose Microvast to potential penalties.

Companies operating in the PRC are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of Microvast’s employees up to a maximum amount specified by the local government from time to time at locations where Microvast operates its businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in the PRC given the different levels of economic development in different locations. If Microvast is subject to late fees or fines in relation to the underpaid employee benefits, or such noncompliance, Microvast’s financial condition and results of operations may be adversely affected.

If Microvast becomes directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, Microvast may have to expend significant resources to investigate and resolve the matter which could harm its business operations, stock price and reputation and could result in a loss of your investment in Microvast Holdings’ stock, especially if such matter cannot be addressed and resolved favorably.

Recently, there have been cases where U.S. public companies that have substantially all of their operations in the PRC have been the subject of intense scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny, criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external investigations into the allegations. It is not clear what effect this sector-wide scrutiny, criticism and negative publicity will have on Microvast, Microvast’s business and Microvast Holdings’ stock price. If Microvast becomes the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, Microvast will have to expend significant resources to investigate such allegations and/or defend Microvast. This situation will be costly and time consuming and distract Microvast’s management from growing its business. If such allegations are not proven to be groundless, Microvast and its business operations will be adversely affected and your investment in Microvast Holdings’ stock could be rendered worthless.

In addition, the United States government has recently been highly critical of U.S. listed Chinese companies, in some cases working to bar them from U.S. markets or stock exchanges. So far, these allegations are mainly centered on communication companies, or companies with suspected ties to the Chinese military. While Microvast believes these concerns don’t apply to it, future allegations or regulations might negatively impact Microvast.

Risks Related to the Business Combination

Tuscan may not have sufficient funds to consummate the Business Combination.

As of March 31, 2021, Tuscan had $44,096 in cash available to it outside the trust account to fund its working capital requirements. If Tuscan is required to seek additional capital, it would need to borrow funds from its initial stockholders, management team or other third parties to operate or may be forced to liquidate. Neither Tuscan’s initial stockholders, members of its management team, nor any of their affiliates are under any obligation to advance

funds to Tuscan in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to Tuscan upon completion of the Business Combination. If Tuscan is unable to consummate the Business Combination because it does not have sufficient funds available, Tuscan will be forced to cease operations and liquidate the trust account. If Tuscan liquidates the trust account, it is anticipated that Public Stockholders would receive approximately $        per Public Share. Tuscan’s Warrants would expire worthless.

Tuscan’s Sponsor controls a substantial interest in us and thus may influence certain actions requiring a stockholder vote.

Tuscan’s Sponsor owns approximately 21% of its issued and outstanding shares of Common Stock. Tuscan’s Sponsor, officers, directors, initial stockholders or their affiliates could determine in the future to make purchases of our securities in the open market or in private transactions, to the extent permitted by law, in order to influence the vote or magnitude of the number of shareholders seeking to tender their shares to us. In connection with any vote for a proposed business combination, our initial stockholders, as well as all of our officers and directors, have agreed to vote the shares of common stock owned by them immediately before our initial public offering as well as any shares of common stock acquired in the initial public offering or in the aftermarket in favor of such proposed business combination.

Tuscan’s board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our Sponsor, because of its ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the consummation of a business combination.

If Tuscan’s stockholders fail to properly demand conversion rights, they will not be entitled to convert their shares of Common Stock into a pro rata portion of the trust account.

Tuscan stockholders holding Public Shares may demand that Tuscan convert their shares into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Business Combination. To demand conversion rights, Tuscan stockholders must deliver their shares (either physically or electronically using the DWAC System) to Tuscan’s transfer agent no later than two business days prior to the special meeting. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Tuscan’s transfer agent will need to act to facilitate this request. It is Tuscan’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because Tuscan does not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While Tuscan has been advised that it takes a short time to deliver shares through the DWAC System, it cannot assure you of this fact. Accordingly, if it takes longer than Tuscan anticipates for stockholders to deliver their shares, stockholders who wish to convert may be unable to meet the deadline for exercising their conversion rights. Any Tuscan stockholder who fails to properly demand conversion rights by delivering his, her, or its stock will not be entitled to convert his, her, or its shares into a pro rata portion of the trust account for conversion of his shares. See the section entitled “Special meeting of Stockholders — Conversion Rights” for the procedures to be followed if you wish to convert your shares to cash.

Tuscan will not have any right to make damage claims against Microvast or its stockholders for the breach of any representation, warranty or covenant made by Microvast in the Merger Agreement.

The Merger Agreement provides that all of the representations, warranties and covenants of the parties contained therein shall not survive the Closing, except for certain fraud claims and those covenants contained therein that by their terms apply or are to be performed in whole or in part after the closing. Further, Tuscan agreed to waive any claims it may have against Microvast or its stockholders or any of their respective directors, managers, officers, or affiliates relating to the operation of Microvast or its subsidiaries or their respective businesses or relating to the Merger Agreement or any related agreement, to the fullest extent permitted by law. Accordingly, there are no remedies available to Tuscan with respect to any breach of the representations, warranties, covenants or agreements of Microvast to the Merger Agreement after the closing, and, as a result, Tuscan will have no remedy available to it if the Business Combination is consummated and it is later revealed that there was a breach of any of the representations, warranties and covenants made by Microvast at the time of the Business Combination (except, in limited instances, for certain fraud claims those covenants contained therein that by their terms apply or are to be performed in whole or in part after the closing).

Tuscan’s securities may be delisted prior to the consummation of the Business Combination.

On January 6, 2021, Tuscan received a notice from the Listing Qualifications Department of The Nasdaq Stock Market stating that Tuscan failed to hold an special meeting of stockholders within 12 months after its fiscal year ended December 31, 2019, as required by Nasdaq Listing Rule 5620(a). In accordance with Nasdaq Listing Rule 5810(c)(2)(G), Tuscan submitted a plan to regain compliance on February 4, 2021, and Nasdaq approved the plan and granted Tuscan an extension until June 29, 2021, to regain compliance. On March 25, 2021, Tuscan filed a definitive proxy statement seeking approval from its stockholders to amend Tuscan’s charter to extend the date by which Tuscan is required to complete its initial business combination from April 30, 2021 to July 31, 2021 and to hold an annual meeting for the election of directors in accordance with Nasdaq listing rules, and on April 28, 2021, Tuscan held the annual meeting.

There can be no assurance that Tuscan’s securities will remain listed on Nasdaq. If Tuscan’s securities are delisted from Nasdaq, Tuscan would have to wait an extensive period of time before it would be able to seek listing on Nasdaq due to Nasdaq’s reverse merger rules. Accordingly, Tuscan may not be able to satisfy the condition to closing in the Merger Agreement which requires Tuscan to seek approval to list the Common Stock on Nasdaq following completion of the Business Combination. If such condition is not waived by Microvast, the Merger may not be consummated.

Tuscan’s securities may not be listed on a national securities exchange after the Business Combination, which could limit investors’ ability to make transactions in Tuscan’s securities and subject Tuscan to additional trading restrictions.

Tuscan intends to apply to have its securities post- Business Combination listed on the Nasdaq Capital Market. Tuscan will be required to meet the initial listing requirements to be listed, including having a minimum number of Public Stockholders. Tuscan may not be able to meet those initial listing requirements. Even if Tuscan’s securities are so listed, Tuscan may be unable to maintain the listing of its securities in the future. If Tuscan fails to meet the initial listing requirements and Nasdaq does not list its securities and the related closing condition is waived by the parties, Tuscan could face significant material adverse consequences, including:

•        a limited availability of market quotations for its securities;

•        a limited amount of news and analyst coverage for Tuscan; and

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

Although publicly traded, the trading market in Common Stock may become substantially less liquid than the average trading market for a stock quoted on the Nasdaq Stock Market following the consummation of the Business Combination, and this low trading volume may adversely affect the price of Common Stock.

Common Stock trades on the Nasdaq Capital Market. Because Public Stockholders have the option to convert their shares to cash in connection with the Business Combination, the trading volume of Common Stock may substantially decrease compared to other companies listed on Nasdaq. Limited trading volume will subject Common Stock to greater price volatility and may make it difficult for you to sell your shares of Common Stock at a price that is attractive to you, and Tuscan may not be able to meet the listing standards for Nasdaq.

Tuscan may issue additional shares of Common Stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of Common Stock.

Upon consummation of the Business Combination, Tuscan will have Tuscan Warrants outstanding to purchase up to an aggregate of 28,287,000 shares of Common Stock. Following the consummation of the Business Combination, Tuscan may also issue additional shares of Common Stock or other equity securities of equal or senior rank in the future for any reason or in connection with, among other things, future acquisitions, the redemption of outstanding Tuscan Warrants, or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.

Tuscan’s issuance of additional shares of Common Stock or other equity securities of equal or senior rank would have the following effects:

•        Tuscan’s existing stockholders’ proportionate ownership interest in Tuscan will decrease;

•        the amount of cash available per share, including for payment of dividends in the future, may decrease;

•        the relative voting strength of each previously outstanding share of Common Stock may be diminished; and

•        the market price of Common Stock may decline.

Future resales of the Common Stock issued in connection with the Merger may cause the market price of Tuscan’s securities to drop significantly, even if Microvast’s business is doing well.

Under the Merger Agreement, the Microvast stockholders will receive their pro rata portion of an aggregate of 210,000,000 shares of Common Stock and could receive up to an additional 20,000,000 shares of Common Stock if certain earnout conditions are achieved.

Pursuant to the Merger Agreement, the Sponsor Group and certain Microvast Holders will enter into the Registration Rights and Lock-Up Agreement, providing for certain lock-up periods with respect to the shareholders party thereto Under the Registration Rights and Lock-Up Agreement, the stockholders party thereto will be entitled to certain demand and piggyback registration rights with respect to the resale of the shares owned by them. See the section titled “The Merger Agreement — Additional Agreements.”

In addition, Tuscan will issue an aggregate of 6,736,111 shares of Common Stock upon the Bridge Notes Conversion and 48,250,000 shares of Common Stock in the PIPE Financing. Upon expiration of the applicable lock-up periods and upon the effectiveness of any registration statement Tuscan files pursuant to the above-referenced Registration Rights and Lock-Up Agreement, in a registered offering of securities pursuant to the Securities Act, or otherwise in accordance with Rule 144 under the Securities Act, the Sponsor Group, the PIPE Investors and Microvast stockholders may sell large amounts of Common Stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in Tuscan’s stock price or putting significant downward pressure on the price of Tuscan’s stock.

The Tuscan board of directors did not obtain a third-party fairness opinion in determining whether or not to proceed with the Business Combination.

Tuscan’s board of directors did not obtain a third-party fairness opinion in connection with their determination to approve the Business Combination. In analyzing the Business Combination, Tuscan’s board concluded that the Business Combination was fair to and in the best interest of Tuscan and its stockholders. The lack of a third-party fairness opinion may lead an increased number of stockholders to vote against the proposed Business Combination or demand Conversion of their shares for cash, which could potentially impact Tuscan’s ability to consummate the Business Combination or adversely affect Tuscan’s liquidity following the consummation of the Business Combination.

Tuscan’s current directors and executive officers and their affiliates own shares of Common Stock and Private Units that will be worthless if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination with Microvast.

Tuscan’s officers and directors and/or their affiliates beneficially own Founder Shares and Private Units that they purchased prior to, or simultaneously with, Tuscan’s initial public offering. Tuscan’s executive officers, directors and their affiliates have no Conversion rights with respect to their Founder Shares and their Private Units will expire worthless in the event the Business Combination with Microvast or another target is not effected in the required time period. These financial interests may have influenced the decision of Tuscan’s directors and officers to approve the Business Combination with Microvast and to continue to pursue such Business Combination. In considering the recommendations of Tuscan’s board of directors to vote for the Business Combination Proposal and other proposals, its stockholders should consider these interests. See the section titled “The Business Combination Proposal — Interests of Tuscan’s Directors and Officers and Others in the Business Combination.”

The Sponsor, an entity affiliated with Stephen Vogel, is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event the Business Combination is not consummated. Such liability may have influenced management’s decision to pursue the Business Combination with Microvast and the board’s decision to approve it.

If the Business Combination or another business combination are not consummated by Tuscan within the required time period, the Sponsor, an entity affiliated with Stephen Vogel, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Tuscan for services rendered or contracted for or products sold to Tuscan, but only if such a vendor or target business has not executed a waiver agreement. If Tuscan consummates a business combination, on the other hand, Tuscan will be liable for all such claims. Neither Tuscan nor the Sponsor has any reason to believe that the Sponsor will not be able to fulfill its indemnity obligations to Tuscan.

These obligations of the Sponsor may have influenced management to pursue the Business Combination with Microvast or Tuscan’s board of director’s decision to approve the Business Combination. In considering the recommendations of Tuscan’s board of directors to vote for the Business Combination Proposal and other proposals, Tuscan’s stockholders should consider these interests. See the section titled “The Business Combination Proposal — Interests of Tuscan’s Directors and Officers and Others in the Business Combination.”

Tuscan’s directors may decide not to enforce the indemnification obligations of the Sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to Public Stockholders.

If proceeds in the trust account are reduced below $10.00 per Public Share and the Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, Tuscan’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While Tuscan currently expects that its independent directors would take legal action on Tuscan’s behalf against the Sponsor to enforce its indemnification obligations to Tuscan, it is possible that Tuscan’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If Tuscan’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to Public Stockholders may be reduced below $10.00 per share.

The exercise of Tuscan’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in Tuscan’s stockholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require Tuscan to agree to amend the Merger Agreement, to consent to certain actions taken by Microvast or to waive rights that Tuscan is entitled to under the Merger Agreement. Such events could arise because of changes in the course of Microvast’s business, a request by Microvast to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on Microvast’s business and would entitle Tuscan to terminate the Merger Agreement. In any of such circumstances, it would be at Tuscan’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for Tuscan and what he or they may believe is best for himself, herself, or themselves in determining whether or not to take the requested action. As of the date of this proxy statement, Tuscan does not believe there will be any changes or waivers that Tuscan’s directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, Tuscan will circulate a new or amended proxy statement and resolicit Tuscan’s stockholders if changes to the terms of the transaction that would have a material impact on its stockholders or represent a fundamental change in the proposals being voted upon.

If Tuscan is unable to complete the Business Combination with Microvast or another business combination by July 31, 2021 or such later date as may be approved by Tuscan’s stockholders, Tuscan will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Tuscan and, as a result, the proceeds held in the trust account could be reduced and the per-share liquidation price received by stockholders could be less than approximately $        per share.

Under the terms of the Charter, Tuscan must complete the Business Combination with Microvast or another business combination by July 31, 2021 (which was extended from April 30, 2021 by vote of Tuscan’s stockholders) or Tuscan must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Tuscan. Although Tuscan has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the trust account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the trust account could be subject to claims which could take priority over those of Public Stockholders. If Tuscan is unable to complete a business combination within the required time period, the Sponsor has agreed that it will be liable to Tuscan if and to the extent any claims by a vendor for services rendered or products sold to it, or a prospective target business with which it has discussed entering into a transaction agreement, reduces the amount of funds in the trust account to below $10.00 per Public Share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under Tuscan’s indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. Furthermore, the Sponsor will not be personally liable to Public Stockholders and instead will only have liability to Tuscan. Tuscan has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and, therefore, the Sponsor may not be able to satisfy those obligations. Tuscan has not asked the Sponsor to reserve for such eventuality. Therefore, the per-share distribution from the trust account in such a situation may be less than the approximately $        estimated to be in the trust as of two business days prior to the special meeting date, due to such claims.

Additionally, if Tuscan is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if Tuscan otherwise enters compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, Tuscan may not be able to return to Public Stockholders the estimated $        per Public Share.

In the event that the Business Combination with Microvast is not approved, Public Stockholders who tendered their shares for conversion may be unable to sell their shares when they wish.

If the Business Combination is not consummated, Tuscan will promptly return the certificates of Public Shares to Public Stockholders who sought to convert their shares into cash in connection with the Business Combination. Accordingly, investors who attempted to convert their shares in such a circumstance may be unable to sell their securities after the failed acquisition until Tuscan has returned their securities to them. The market price for Common Stock may decline during this time and you may not be able to sell your shares when you wish to, even while other stockholders that did not seek conversion may be able to sell their shares.

Tuscan’s stockholders may be held liable for claims by third parties against Tuscan to the extent of distributions received by them.

If Tuscan is unable to complete the Business Combination with Microvast or another business combination within the required time period, Tuscan will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any interest released to Tuscan

to pay Tuscan’s franchise and income taxes, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (3) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of (2) and (3) above) to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Tuscan cannot assure you that it will properly assess all claims that may be potentially brought against Tuscan. As such, Tuscan’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Tuscan cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by Tuscan.

If Tuscan is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Tuscan’s stockholders. Furthermore, because Tuscan intends to distribute the proceeds held in the trust account to Public Stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its Public Stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, Tuscan’s board of directors may be viewed as having breached their fiduciary duties to its creditors and/or may have acted in bad faith, and thereby exposing itself and Tuscan to claims of punitive damages, by paying Public Stockholders from the trust account prior to addressing the claims of creditors. Tuscan cannot assure you that claims will not be brought against it for these reasons.

Activities taken by existing Tuscan stockholders to increase the likelihood of approval of the Business Combination Proposal and other proposals could have a depressive effect on the trading price of Tuscan’s stock.

At any time prior to the special meeting, during a period when they are not then aware of any material non-public information regarding Tuscan or its securities, Tuscan’s initial stockholders, officers, directors, Microvast, the Microvast stockholders, officers, and directors, and/or their respective affiliates may purchase Tuscan shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Common Stock or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirements that the holders of a majority of the then outstanding shares of Common Stock present and entitled to vote at the meeting to approve the Business Combination Proposal vote in its favor and that Tuscan have at least $5,000,001 of net tangible assets upon consummation of the Business Combination, after taking into account holders of Public Shares demanding conversion of their Public Shares into cash where it appears that such requirements would otherwise not be met. Entering into any such arrangements may result in the completion of the business combination that may not otherwise have been possible. Additionally, such arrangements may have a depressive effect on the trading price of Common Stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.

The Business Combination may be completed even though material adverse effects may result from the announcement of the Business Combination, industry-wide changes and other causes.

In general, either Tuscan or Microvast can refuse to complete the Business Combination if there is a material adverse effect affecting the other party between the signing date of the Merger Agreement and the planned closing. However, certain types of changes do not permit either party to refuse to complete the Business Combination, even if such change could be said to have a material adverse effect on Microvast or Tuscan, including the following events (except, in some cases, where the change has a disproportionate effect on a party):

•        any change affecting generally the industries or markets in which Microvast and its subsidiaries operate, including in any change in the financial markets, credit markets or capital markets in the United States or any other country or region in the world;

•        acts of God, including pandemics (including the COVID-19 virus or any mutation thereof) and the actions of governmental authorities in response thereto, including any COVID-19 measures;

•        any change in national or international political or social conditions, including the engagement by the United States or any other country or group in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States or any other country, or any of their respective territories, possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States or any other country or group;

•        any change in U.S. GAAP (or the interpretation thereof); and

•        any change in law, rules, regulations, orders, or other binding directives issued by any governmental authority (or the interpretation thereof).

Furthermore, Tuscan or Microvast may waive the occurrence of a material adverse effect affecting the other party. If a material adverse effect occurs and the parties still complete the Business Combination, Tuscan’s stock price may suffer.

The Business Combination may be completed even if a majority of the Public Shares are voted against the Business Combination Proposal.

As previously indicated herein, holders of the Sponsor Group have agreed to vote all shares of Common Stock held by them in favor of the Merger and all other proposals being presented by Tuscan at the special meeting. Accordingly, only 10,343,313 Public Shares, constituting approximately 29.15% of the outstanding Common Stock, or 37.5% of the Public Shares, must be voted in favor of the Business Combination Proposal in order for the Business Combination Proposal to be approved.

Delays in completing the Business Combination may substantially reduce the expected benefits of the Business Combination.

Satisfying the conditions to, and completion of, the Business Combination may take longer than, and could cost more than, Tuscan expects. Any delay in completing or any additional conditions imposed in order to complete the Business Combination may materially adversely affect the benefits that Tuscan expects to achieve from the acquisition of Microvast’s business.

Tuscan is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make the Common Stock less attractive to investors.

Tuscan is an “emerging growth company” as defined in the JOBS Act. As an emerging growth company, Tuscan is only required to provide two years of audited financial statements and only two years of related selected financial data and management discussion and analysis of financial condition and results of operations disclosure. In addition, Tuscan is not required to obtain auditor attestation of its reporting on internal control over financial reporting, has reduced disclosure obligations regarding executive compensation and is not required to hold non-binding advisory votes on executive compensation. In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of these accounting standards until they would otherwise apply to private companies. Tuscan has elected to take advantage of such extended transition period. Tuscan cannot predict whether investors will find the Common Stock to be less attractive as a result of its reliance on these exemptions. If some investors find the Common Stock to be less attractive as a result, there may be a less active trading market for the Common Stock and the price of the Common Stock may be more volatile.

Tuscan will remain an emerging growth company until the earliest of: (1) the end of the fiscal year in which Tuscan has total annual gross revenue of $1.07 billion; (2) the last day of Tuscan’s fiscal year following the fifth anniversary of the date on which Tuscan consummated its initial public offering (or December 31, 2024); (3) the date on which Tuscan issues more than $1.0 billion in non-convertible debt during the preceding three-year period; or (4) the end of the fiscal year in which the market value of the Common Stock held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter.

Further, there is no guarantee that the exemptions available to Tuscan under the JOBS Act will result in significant savings. To the extent that Tuscan chooses not to use exemptions from various reporting requirements under the JOBS Act, it will incur additional compliance costs, which may impact Tuscan’s financial condition.

The Proposed Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with Tuscan or its directors, officers, employees or stockholders.

The Proposed Charter will provide that unless Microvast Holdings consents in writing to the selection of an alternative forum, (i) any derivative action or proceeding brought on behalf of Microvast Holdings, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee or stockholder of Microvast Holdings to it or its stockholders, (iii) any action asserting a claim (A) arising pursuant to any provision of the DGCL, the Proposed Charter or the bylaws or (B) as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware or (iv) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by applicable law, be solely and exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have jurisdiction, any state or federal court located in the State of Delaware with jurisdiction. The forum provision further provides that the federal district courts of the United States of America shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for the resolution of any action asserting claims arising under the Securities Act. This forum selection provision does not apply to any action asserting claims arising under the Exchange Act or the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of Tuscan’s capital stock shall be deemed to have notice of and consented to the forum provisions in the Proposed Charter.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Tuscan or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the Proposed Charter to be inapplicable or unenforceable in an action, Tuscan may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results and financial condition.

Upon the Closing, the rights of stockholders of Microvast Holdings arising under the Proposed Charter and Proposed Bylaws will differ from and may be less favorable than the rights of stockholders of Tuscan arising under the Charter and current Tuscan bylaws.

Upon the Closing, the rights of stockholders of Microvast Holdings will arise under the DGCL as well as the Proposed Charter and Proposed Bylaws. These new organizational documents contain provisions that differ in some respects from the Charter and Tuscan bylaws currently in effect, and, therefore, some rights of stockholders of Microvast Holdings could differ from and be less favorable than the rights that Tuscan stockholders currently possess.

The forms of the Proposed Charter and Proposed Bylaws are attached hereto as Annex B-1 and B-2, respectively, and Tuscan urges you to read them in their entirety.

The Proposed Charter and Proposed Bylaws will contain certain provisions that limit the ability of stockholders to take certain actions and could delay, discourage or prevent takeover attempts that stockholders may consider favorable.

The Proposed Charter and Proposed Bylaws that will be in effect upon the Closing differ from the Charter and Tuscan bylaws currently in effect. Among other differences, the Proposed Charter and Proposed Bylaws contain provisions that could have the effect of rendering more difficult, discouraging, delaying or preventing a takeover attempt that may be beneficial to the stockholders of Microvast Holdings but that is deemed undesirable by Wu and therefore depress the trading price of Microvast Holdings’ common stock. These provisions could also make

it difficult for stockholders of Microvast Holdings to take certain actions, including electing directors who are not nominated by Wu or the Sponsor or amending the Proposed Charter. The Proposed Charter and Proposed Bylaws will provide for, among other things:

•        the ability of the Board to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

•        the limitation of the liability of, and the indemnification of, the Company’s directors and officers;

•        the number of directors on the Board shall be determined by resolution of the Board, provided that any increase or decrease in the number of directors shall require the affirmative vote of the directors nominated by Wu as provided in the Stockholders Agreement;

•        the requirement that any Board vacancies occurring by reason of the death, resignation or removal of any director nominated by Wu or the Sponsor must be filled by the stockholder who was entitled to nominate such director to the Board;

•        the requirement that committees of the Board shall consist of the number of directors nominated by Wu that is proportionate to the number of directors on the Board nominated by Wu;

•        the prohibition of stockholder action by written consent for any action that is required or permitted to be taken at an annual or special stockholders meeting;

•        the ability to call for a special meeting of stockholders shall only be available to (i) the Board, (ii) the chairman of the Board and (iii) Wu, so long as Wu beneficially owns at least 10% of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election of directors, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

•        the limitation that directors on the Board may only be removed for a cause and only upon the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election of directors, voting together as a single class;

•        the election that Microvast Holdings not be governed by Section 203 of the DGCL, which would prohibit Microvast Holdings from taking certain actions involving an “interested stockholder” for a certain period of time;

•        the requirement that any amendment to the Proposed Charter shall be approved by (i) the holders of 75% of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election of directors, so long as Wu beneficially owns at least 10% of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election directors, or (ii) the holders of a majority of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election of directors, if Wu ceases to beneficially own at least 10% of the total voting power of all the then outstanding shares of stock of Microvast Holdings entitled to vote generally in the election directors; and

•        the ability of the Board to amend the Proposed Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Proposed Bylaws to facilitate an unsolicited takeover attempt.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or management.

Any provision of the Proposed Charter or Proposed Bylaws that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of Microvast Holdings’ capital stock and could also affect the price that some investors are willing to pay for Microvast Holdings’ common stock.

cause Microvast Holdings to lose visibility in the financial markets, which could cause the price or trading volume of the securities to decline. Moreover, if one or more of the analysts who cover Microvast Holdings downgrades the Common Stock, or if Microvast Holdings’ reporting results do not meet their expectations, the market price of Common Stock could decline.

The issuance of additional shares of Common Stock or convertible securities could make it difficult for another company to acquire Microvast Holdings, may dilute your ownership and could adversely affect the stock price.

Following the proposed Business Combination, Microvast Holdings intends to file a registration statement with the SEC on Form S-8 providing for the registration of shares of Common Stock issued or reserved for issuance under the Incentive Plan. Subject to the satisfaction of vesting conditions and the expiration of lockup agreements, shares registered under the registration statement on Form S-8 will be available for resale immediately in the public market without restriction. From time to time in the future, Microvast Holdings may also issue additional shares of Common Stock or securities convertible into Common Stock pursuant to a variety of transactions, including acquisitions. The issuance by Microvast Holdings of additional shares of Common Stock or securities convertible into Common Stock would dilute your ownership of Microvast Holdings and the sale of a significant amount of such shares in the public market could adversely affect prevailing market prices of Common Stock.

In the future, Microvast Holdings expects to obtain financing or to further increase its capital resources by issuing additional shares of our capital stock or offering debt or other equity securities, including senior or subordinated notes, debt securities convertible into equity, or shares of preferred stock. Issuing additional shares of our capital stock, other equity securities, or securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of Common Stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of Common Stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. As a result, holders of Common Stock bear the risk that our future offerings may reduce the market price of Common Stock and dilute their percentage ownership. See “Description of Capital Stock of Microvast Holdings.”

Risks Related to the Restatement

The Private Warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”). The SEC Statement advises, among other things, that certain adjustments generally present in SPAC warrants preclude such warrants from being accounted for as equity. As a result of the SEC Statement, we reevaluated the accounting treatment of the Private Warrants and determined to classify the Private Warrants as liabilities measured at fair value, with changes in fair value recognized in the statement of operations in the period of change.

As a result, included on Tuscan’s balance sheet as of March 31, 2021 and December 31, 2020 and 2019 is a derivative liability related to embedded features contained within the Private Warrants. Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, Tuscan’s financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of Tuscan’s control. Due to the recurring fair value measurement, Tuscan expects that it will recognize non-cash gains or losses on the Private Warrants each reporting period and that the amount of such gains or losses could be material.

Advisory Charter Proposals. Brokers are not entitled to vote on the Advisory Charter Proposals absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Advisory Charter Proposals.

•        Nasdaq Proposal — The approval of the Nasdaq Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “against” the Nasdaq Proposal. Brokers are not entitled to vote on the Nasdaq Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Nasdaq Proposal.

•        Director Election Proposal — The election of directors requires a plurality of the votes cast. “Plurality” means that the individuals who receive the largest number of votes cast “FOR” will be elected as directors (even if they receive less than a majority of the votes cast). Consequently, because this is an uncontested election, any director nominee who receives at least one vote “FOR” will be elected as a director. Abstentions will have no effect on the Director Election Proposal because an abstention is not a vote cast with respect to the proposal. Brokers are not entitled to vote on the Director Election Proposal absent voting instructions from the beneficial holder because the Director Election Proposal is considered “non-routine”. Consequently, broker non-votes will have no effect with respect to the Director Election Proposal.

•        Incentive Plan Proposal — The approval of the Incentive Plan Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “against” the Incentive Plan Proposal. Brokers are not entitled to vote on the Incentive Plan Proposal absent voting instructions from the beneficial holder and, consequently, broker non-votes will have no effect on the Incentive Plan Proposal.

•        Adjournment Proposal — The approval of the Adjournment Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Abstentions will have the same effect as a vote “against” the Adjournment Proposal. Brokers are entitled to vote on the Adjournment Proposal absent voting instructions from the beneficial holder because the proposal is considered “routine”. Consequently, broker non-votes will have the same effect as a vote “against” the Adjournment Proposal.

The Sponsor Group holds approximately 20.85% of the outstanding shares of Common Stock, none of which are Public Shares. Such shares, as well as any shares of Common Stock acquired in the open market by the Tuscan initial stockholders, are contractually obligated to be voted in favor of the proposals presented at the special meeting. Accordingly, only 10,343,313 Public Shares, constituting approximately 29.15% of the outstanding shares of Common Stock, must be voted in favor of the Business Combination Proposal in order for the Business Combination Proposal to be approved.

Under the Merger Agreement, the approval of each of the Business Combination Proposal, the Charter Proposal, and the Nasdaq Proposal is a condition to the consummation of the Business Combination.

Voting Your Shares

Each share of Common Stock that you own in your name entitles you to one vote. Your proxy card shows the number of shares of Common Stock that you own. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker to ensure that votes related to the shares you beneficially own are properly counted.

•        By Mail.    You may vote by proxy by completing the enclosed proxy card and returning it in the postage-paid return envelope. If you vote by proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted “FOR” all of the proposals in accordance with the recommendation of the Tuscan board of directors. Proxy cards received after a matter has been voted upon at the special meeting will not be counted.

•        At the Virtual Meeting.    You may virtually attend the special meeting and vote by submitting the ballot via the live webcast. See “Questions and Answers about the Proposals — How do I attend the virtual meeting?” for more information.

If you hold your Common Stock in “street name,” you should follow the instructions sent to you by your bank, broker or other nominee in order to vote your shares. If you wish to vote shares held in “street name” in person at the special meeting, you must contact their bank, broker or other nominee and request a document called a “legal proxy.” Requesting a legal proxy will automatically cancel any voting directions previously given to such bank, broker or other nominee.

If you do not give instructions to such bank, broker or other nominee, such bank, broker or other nominee can vote your Common Stock with respect to “discretionary” items but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the rules of the Nasdaq for which your broker or other agent may vote shares held in “street name” in the absence of your voting instructions. On non-discretionary items for which you do not give your broker or other agent instructions, your broker will not be able to vote (“broker non-vote”). It is anticipated that all proposals other than the adjournment proposal will be non-discretionary items.

You may receive more than one set of voting materials. For example, if you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. If you hold your shares in “street name” in more than one brokerage account, you will receive voting materials for each brokerage account in which you hold shares. Please complete, sign, date and return each proxy card you receive and provide instructions on how to vote your shares with respect to each brokerage account for which you receive proxy materials, in order to be sure, you cast a vote with respect to all of your shares of Common Stock.

Revoking Your Proxy

If you are a stockholder and you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        you may notify Stephen Vogel, Tuscan’s Chairman and Chief Executive Officer, in writing before the special meeting that you have revoked your proxy; or

•        you may attend the virtual meeting, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you are a stockholder and have any questions about how to vote or direct a vote in respect of your shares of Common Stock, you may call Advantage Proxy, Inc., Tuscan’s proxy solicitor at (877) 870-8565.

Conversion Rights

Holders of Public Shares may seek to convert their shares, regardless of whether they vote for or against the Business Combination Proposal and regardless of whether they hold their shares on the record date. Holders of Public Shares will be entitled to receive cash for these shares if they deliver their shares to Tuscan’s transfer agent no later than two business days prior to the special meeting. If the Business Combination is not completed, these shares will not be converted into cash. If a holder of Public Shares properly demands conversion, Tuscan will convert each Public Share into a full pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the Business Combination (which is anticipated to be approximately $             per share).

Tuscan’s Sponsor Group will not have conversion rights with respect to the Common Stock held by them.

Tuscan requires Public Stockholders, whether they are a record holder or hold their shares in “street name,” to either tender their certificates to Tuscan’s transfer agent or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, no later than two business days prior to the special meeting. There is a nominal cost associated with this tendering

process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker a nominal amount and it would be up to the broker whether or not to pass this cost on to the converting holder.

Any request to convert such shares once made, may be withdrawn at any time up to the vote on the Business Combination. Furthermore, if a holder of a Public Share delivered his certificate in connection with an election of their conversion and subsequently decides prior to the vote on the Business Combination not to elect to exercise such rights, he may simply request that the transfer agent return the certificate (physically or electronically).

If the Business Combination is not approved or completed for any reason, then Public Stockholders who elected to exercise their conversion rights would not be entitled to convert their shares for the applicable pro rata share of the trust account. In such case, Tuscan will promptly return any shares delivered by public holders.

Tuscan will not be able to consummate the Business Combination if it would have less than $5,000,001 of net tangible assets upon consummation of the Business Combination.

The closing price of Common Stock on the record date was $            . It is anticipated that the cash held in the trust account two business days prior to the consummation of the Business Combination will be approximately $             (approximately $             per Public Share). Prior to exercising conversion rights, stockholders should verify the market price of Common Stock as they may receive higher proceeds from the sale of their Common Stock in the public market than from exercising their conversion rights if the market price per share is higher than the conversion price. Tuscan cannot assure its stockholders that they will be able to sell their shares of Common Stock in the open market, even if the market price per share is higher than the conversion price stated above, as there may not be sufficient liquidity in its securities when its stockholders wish to sell their shares.

If a holder of Public Shares exercises its conversion rights, then it will be exchanging its shares of Common Stock for cash and will no longer own those shares.

Appraisal Rights

Neither stockholders nor warrant holders of Tuscan have appraisal rights in connection the Business Combination under the DGCL.

Proxy Solicitation Costs

Tuscan is soliciting proxies on behalf of its board of directors. This solicitation is being made by mail but also may be made by telephone or in person. Tuscan and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Tuscan will bear the cost of the solicitation.

Tuscan has hired Advantage Proxy, Inc. to assist in the proxy solicitation process. Tuscan will pay that firm a fee of $25,000 plus disbursements. Such fee will be paid with non-trust account funds.

Tuscan will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Tuscan will reimburse them for their reasonable expenses.

Sponsor Group

As of the record date, the Sponsor Group beneficially owned and was entitled to vote an aggregate of 7,458,589 shares of Common Stock. The shares of Common Stock held by the Sponsor Group constitute approximately 20.8% of the outstanding shares of Common Stock as of the record date. The Sponsor Group has agreed to vote all shares of Common Stock owned by them in favor of all of the proposals being presented at the special meeting. Accordingly, only 10,343,313 Public Shares, constituting approximately 29.15% of the outstanding shares of Common Stock, must be voted in favor of the Business Combination Proposal in order for the Business Combination Proposal to be approved.

The shares of Common Stock held by the Sponsor Group have no conversion rights in the event a business combination is not effected in the required time period and will be worthless if no business combination is effected by Tuscan. In connection with the initial public offering, the Founder Shares were placed into escrow. Subject to

certain limited exceptions, these shares will not be transferred, assigned, sold or released from escrow (subject to certain limited exceptions) (1) with respect to 50% of such shares, for a period ending on the earlier of the one-year anniversary of the date of the consummation of Tuscan’s initial business combination and the date on which the closing price of the Common Stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period following the consummation of our initial business combination and (2) with respect to the remaining 50% of such shares, for a period ending on the one-year anniversary of the date of the consummation of Tuscan’s initial business combination, or earlier if, subsequent to the initial business combination, Tuscan consummates a liquidation, merger, stock exchange or other similar transaction which results in all of Tuscan’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property. The limited exceptions include transfers, assignments or sales (1) to the Sponsor Group or the Sponsor Group’s officers, directors, consultants or their affiliates, (2) to an entity’s members upon its liquidation, (3) to relatives and trusts for estate planning purposes, (4) by virtue of the laws of descent and distribution upon death, (5) pursuant to a qualified domestic relations order, (6) to Tuscan for no value for cancellation in connection with the consummation of the initial business combination, or (7) in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased, in each case (except for clause (7) or with Tuscan’s prior consent) where the transferee agrees to the terms of the Escrow Agreement and to be bound by these transfer restrictions.

Additionally, at any time prior to the special meeting, during a period when they are not then aware of any material non-public information regarding Tuscan or its securities, the Tuscan initial stockholders, officers, directors and Microvast and the Microvast stockholders, officers, and directors and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or they may enter into transactions with such investors and others to provide them with incentives to acquire shares of Common Stock or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfaction of the requirement that the holders of a majority of the then outstanding shares of Common Stock present and entitled to vote at the meeting to approve the Business Combination Proposal vote in its favor or to decrease the number of Public Shares that were being converted to cash. While the nature of any such incentives has not been determined as of the date of this proxy statement, they might include, without limitation, arrangements to protect such investors or holders against potential loss in value of their shares, including the granting of put options and the transfer to such investors or holders of shares or rights owned by the Tuscan initial stockholders for nominal value.

Entering into any such arrangements may have a depressive effect on the trading price of Common Stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the special meeting.

If such transactions are effected, the consequence could be to cause the Business Combination to be approved in circumstances where such approval could not otherwise be obtained. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Business Combination Proposal and other proposals and would likely increase the chances that such proposals would be approved.

As of the date of this proxy statement, there have been no such discussions and no agreements to such effect have been entered into with any such investor or holder. Tuscan will file a Current Report on Form 8-K to disclose arrangements entered into or significant purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or the conversion threshold. Any such report will include descriptions of any arrangements entered into or significant purchases by any of the aforementioned persons.

THE BUSINESS COMBINATION PROPOSAL

The discussion in this proxy statement of the Business Combination and the principal terms of the Merger Agreement is subject to, and is qualified in its entirety by reference to, the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to this proxy statement.

Structure of the Business Combination

Subject to the terms and conditions of the Merger Agreement, all of the equity interests of Microvast issued and outstanding as of immediately prior to the Merger will be converted into an aggregate of 210,000,000 Closing Shares. The Business Combination will result in Tuscan acquiring the Microvast business.

Following the Closing, the stockholders of Microvast will have the ability to earn an additional 20,000,000 Earn-Out Shares if the daily volume weighted average price of the Common Stock, as reported by Bloomberg Financial L.P. using the AQR function, is greater than or equal to $18.00 for any twenty (20) trading days within a thirty (30) trading day period (or a change of control of Tuscan occurs that results in the holders of Common Stock receiving a per share price equal to or in excess of $18.00), during the period commencing on the date of Closing and ending on the third anniversary of the date of Closing. The number of Earn-Out Shares and the price per share is subject to adjustment to reflect the effect of any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Common Stock.

Projected Post-Merger Ownership of Tuscan

Immediately following the Closing, the current Microvast Holders will hold approximately 69.9% of the issued and outstanding Common Stock and the current stockholders of Tuscan will hold approximately 9.2% of the issued and outstanding Common Stock, which pro forma ownership (1) assumes no Public Stockholder exercises its conversion rights in connection with the Business Combination, and (2) reflects the issuance of an aggregate of 48,250,000 shares of Common Stock in the PIPE Financing but does not include the effect of any other financing of Tuscan. If the maximum number of Public Shares are converted into cash such that Microvast does not have the right to terminate the Merger Agreement as described herein (i.e., Tuscan has at least $5,000,001 of net tangible assets upon consummation of the Business Combination), such percentages will be approximately 77.0% and 0.0%, respectively.

Additional Agreements

See the section titled “The Merger Agreement — Additional Agreements.”

Headquarters; Trading Symbols

After completion of the Business Combination:

•        the corporate headquarters and principal executive offices of Tuscan will be those of Microvast, located at 12603 Southwest Freeway, Suite 210, Stafford, Texas 77477 and its telephone number at that address will be (281) 491-9505; and

•        if the parties’ application for listing is approved, Common Stock and Tuscan Warrants will be traded on Nasdaq under the symbols MVST and MVSTW, respectively.

Background of the Business Combination

Tuscan is a blank check company that was incorporated in Delaware on November 5, 2018, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with one or more businesses or entities. While Tuscan’s initial strategy was to acquire a business in the cannabis industry, it began to focus its efforts outside of the cannabis industry when it became difficult to acquire cannabis-related companies at attractive valuations. The Business Combination was the result of an extensive search for a potential transaction utilizing the global network and investing and operating experience of our management team and

the Tuscan board of directors. The terms of the Business Combination were the result of extensive arm’s-length negotiations between Tuscan’s management team, in consultation with its board of directors and financial and legal advisors, the Sponsor, and representatives of Microvast, in consultation with Microvast’s financial and legal advisors.

Microvast’s management team and the Microvast Board, together with its financial and legal advisors, reviewed and evaluated potential strategic opportunities and alternatives with a view to enhancing stockholder value. Such opportunities and alternatives included, among other things, capital markets transactions and possible acquisitions.

The following is a brief description of the background of these negotiations, the Merger and related Business Combination. The following does not purport to catalogue every conversation among representatives of Tuscan, Microvast and other parties.

On March 7, 2019, Tuscan completed its initial public offering of 27,600,000 Tuscan Units, which included the full exercise by the underwriters of their over-allotment option. Each Tuscan Unit consists of one share of Common Stock and one Tuscan Warrant, with each Tuscan Warrant entitling the holder to purchase one share of Common Stock at an initial exercise price of $11.50 per share. The Tuscan Units were sold at an offering price of $10.00 per unit, generating gross proceeds of $276,000,000. Simultaneous with the consummation of the initial public offering, Tuscan consummated the private placement of the Private Units at a price of $10.00 per unit, generating gross proceeds of $6,870,000. The Private Units are identical to the Tuscan Units sold in the initial public offering, except that the warrants underlying the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Since the initial public offering, Tuscan’s activity has been limited to the evaluation of business combination candidates.

Prior to the consummation of its initial public offering, neither Tuscan, nor anyone on its behalf, contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to a transaction with Tuscan.

Tuscan’s efforts to identify a prospective target business were not limited to a particular industry or geographic region. Although Tuscan’s initial strategy was to acquire a business in the cannabis industry, it began to focus its efforts outside of the cannabis industry when it became difficult to acquire cannabis-related companies at attractive valuations. Tuscan’s management considered a variety of factors in evaluating prospective target businesses, including, but not limited to, the following:

•        financial condition and results of operation;

•        growth potential;

•        brand recognition and potential;

•        experience and skill of management and availability of additional personnel;

•        capital requirements;

•        competitive position;

•        barriers to entry;

•        stage of development of the products, processes or services;

•        existing distribution and potential for expansion;

•        degree of current or potential market acceptance of the products, processes or services;

•        proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;

•        impact of regulation on the business;

•        regulatory environment of the industry;

•        costs associated with effecting the business combination;

•        industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and

•        macro competitive dynamics in the industry within which the target company competes.

After Tuscan’s initial public offering, Tuscan’s officers and directors commenced an active search for prospective businesses or assets to acquire in an initial business combination. Representatives of Tuscan were contacted by, and representatives of Tuscan contacted, numerous individuals, financial advisors and other entities who offered to present ideas for business combination opportunities. Tuscan’s officers and directors and their affiliates also brought to Tuscan’s attention target business candidates.

During that period, Tuscan’s officers:

•        developed a list of more than 150 potential acquisition candidates;

•        entered into non-disclosure agreements with approximately 75 target companies;

•        had in person, telephonic or email discussions with approximately 65 of those companies, of which approximately 15 were actively pursued (including Microvast) by engaging in significant due diligence and detailed discussions directly with the senior executives and/or stockholders; and

•        submitted indications of interest or letters of intent to 8 acquisition candidates (including Microvast).

During this period, Tuscan had at least 15 meetings with its board of directors to discuss potential targets.

The potential targets that Tuscan actively pursued covered a variety of industries, including cannabis-related companies, electric vehicle technology solutions, additive manufacturing technology, consumer apparel, electrification solutions, artificial intelligence, e-commerce platforms and business intelligence. Tuscan’s due diligence on potential targets included reviews of the target business’s management, stockholders, business model, valuation, balance sheet and historical and projected financials, in each case to the extent made available, among other diligence reviews. The decision to pursue a business combination with Microvast over other potential targets included, but was not limited to, one or more of the following reasons:

•        a difference in valuation expectations between Tuscan and the senior executives or stockholders of the other potential targets;

•        the decision by the potential targets to pursue alternative strategic transactions or to postpone their review of strategic alternatives;

•        the maturity of the business of the potential target companies, the companies’ financial performance and other factors identified during Tuscan’s due diligence review and the presence of other potential business combination opportunities that more closely met Tuscan’s criteria and guidelines, including Microvast;

•        the level of engagement by, and advanced negotiations and discussions with, Microvast as compared to other potential targets where engagement was more limited, and negotiations and discussions did not progress as rapidly;

•        Microvast’s willingness to enter into the non-binding letter of intent and the mutual exclusivity agreement discussed below on terms that Microvast’s directors and officers believed were attractive; and

•        Tuscan’s and its board of directors’ belief, based on their preliminary evaluation and the terms of the non-binding letter of intent, that Microvast was the most attractive potential business combination target that met its key criteria in a target.

Tuscan decided to pursue a combination with Microvast because it determined that Microvast represented a compelling opportunity based upon Microvast’s financial profile, with significant historical revenues, its projected growth and profitability as well as the professional backgrounds of its founders.

At this time and during the following weeks, Tuscan continued to pursue alternative business combination targets and engaged in significant discussions with senior management and bankers from other companies. These meetings included detailed management presentations on potential acquisition targets.

During the third week of August, Microvast was proposed as a potential business combination through a representative of InterPrivate, a private investment firm in Tuscan’s network of private equity and venture investors. At that time, Microvast was exploring the possibility of going public through a merger with a SPAC in a process lead by its financial advisors, Barclays Capital Inc. (“Barclays”) and Houlihan Lokey Capital, Inc. (“Houlihan Lokey”), in connection with a possible initial public offering. In connection with that process, representatives of Tuscan participated in a management presentation by Microvast and its financial advisors. Following this meeting, Tuscan decided to continue its evaluation of Microvast, and on September 4, 2020, Tuscan and Microvast entered into a non-disclosure agreement pursuant to which Tuscan was granted access to a confidential data room containing due diligence materials and a financial model.

Concurrently with these discussions, Tuscan conducted meetings with multiple external law firms to evaluate their capabilities in areas relevant to Microvast’s business and transactions of the nature under discussion. Following these meetings, Tuscan appointed Greenberg Traurig, P.A. (“Greenberg”) as its legal counsel.

During the first two weeks of September, Tuscan continued its review of the due diligence materials, including a full financial model, contained in the data room. Also, during this period, representatives of Microvast and Tuscan conducted a meeting to discuss the possibility of a transaction as well as further due diligence matters, including an investment presentation provided by Microvast in advance of the meeting and to discuss Microvast’s financial model and business strategy in further detail. Following the meeting, representatives of Tuscan began populating an internal data room with additional due diligence materials to facilitate review by members of its investment team, its board of directors and its advisors.

During the week of September 14, Tuscan and its advisors began working on a draft term sheet for the transaction. Also, during this week, Tuscan contacted representatives of Morgan Stanley & Co. LLC (“Morgan Stanley”) regarding engaging the firm as Tuscan’s financial advisor to provide financial advice on a potential transaction with Microvast as well as advice on the industry generally and the potential reception that a combination with Microvast would have in the public markets.

During this period, advisors to Tuscan submitted a draft exclusivity letter and non-binding indication of interest, which included an obligation of each of Tuscan and Microvast to negotiate exclusively with each other regarding a potential transaction for an initial 20-day period and included a proposed pre-transaction value of $2.4 billion. The initial enterprise valuation reflected in this initial non-binding indication of interest was consistent with Tuscan management’s evaluation of the business, which was based on management’s analysis of the projected revenue and EBITDA to be generated by the business, as projected by Microvast’s management, comparable companies in analogous markets and the business plan and other materials provided by Microvast’s management. The value of this opening non-binding proposal implied a discount to the projections provided by Microvast’s management, but Tuscan management determined that it would be the starting point for further negotiations. During this period, the parties and their advisers discussed multiple drafts of the letter of intent in which they exchanged proposals on terms including the pre-transaction equity value, the minimum cash condition, lockup restrictions and a framework for and the timing of Tuscan seeking the consent of its shareholders to extend its deadline to consummate a business combination.

On September 21, 2020, Microvast provided a markup of the letter of intent which proposed, among other things, (i) to subject two-thirds of the founder shares owned by the sponsor to an earnout provision, of which half would vest at a $18.00 price level and the other half would vest at a $25.00 price level, (ii) to replace the management earnout provision with a long term incentive plan to be mutually agreed, (iii) to increase the minimum cash condition from $100 million to $360 million and (iv) to provide certain governance rights to Mr. Wu that would require supermajority approval of certain changes to the continuing public company’s certificate of incorporation to be mutually agreed, among others. The revised letter of intent also included Microvast’s agreement to subject the shares held by Mr. Wu to a lockup provision such that 75% of his shares would not be transferable until two years after the closing and the balance would not be transferable until one year from closing unless the continuing public company’s stock price achieved a $15.00 price level in exchange for the Tuscan sponsor agreeing to lock up half of the founder shares for one year from closing unless a $15.00 price level is achieved and the remaining shares to a lockup of 18 months.

On September 23, 2020, Tuscan returned a revised version of the letter of intent that proposed to subject the sponsor’s founder shares to an earnout pursuant to a formula that depended upon the ultimate pre-transaction equity value ascribed to Microvast. Specifically, Tuscan proposed to subject 25% of the founder shares to an earn out if the equity value was $1.8 billion or higher such that half of such shares would vest at a $12.00 price level and the other

half would vest at a $15.00 price level. In addition, Tuscan proposed to agree to forfeit a portion of its founder shares if the equity value were to be less than $1.8 billion in proportion to the percentage difference between $2.4 billion and the equity value of Microvast ultimately agreed by the parties.

During this period, representatives of Tuscan had multiple conversations and e-mail exchanges with representatives of Microvast and Barclays to discuss valuation and certain other considerations with respect to a potential business combination transaction involving Tuscan and Microvast. Such considerations included, among other things, process considerations applicable to transactions with special purpose acquisition companies (for example, typical due diligence process and investor outreach), public company readiness, the timing for completion of Microvast’s audited financial statements and deal certainty in light of tightening conditions in the PIPE market and Tuscan’s public stockholders needing to consent to an extension of the deadline to complete a business combination and their conversion rights with respect to a business combination transaction. During these discussions, Microvast in consultation with Barclays proposed reducing the pre-transaction valuation to $2.1 billion, primarily due to more challenging market conditions in the PIPE markets.

On September 24, 2020 the parties executed an exclusivity letter, which included a non-binding indication of interest as an exhibit thereto and an obligation of each of Tuscan and Microvast to negotiate exclusively with each other regarding a potential transaction for a period from September 24, 2020 to October 13, 2020, which date was automatically extended to December 31, 2020 pursuant to the terms thereof and then extended by agreement of the parties for successive periods unless earlier terminated by either party. The indication of interest attached as an exhibit to the exclusivity letter contemplated a business combination between Tuscan and Microvast for aggregate consideration based on a pre-transaction equity value ascribed to Microvast of $2.1 billion.

During the week of October 1, 2020, Tuscan held discussions with Morgan Stanley regarding the feasibility of executing a pre-closing “PIPE” to support the potential transaction as well as the possibility of Tuscan engaging Morgan Stanley to serve as its financial advisor in connection with a potential transaction. These discussions ultimately led to Tuscan and Morgan Stanley entering into an engagement letter on October 9, 2020 pursuant to which Morgan Stanley agreed to serve as Tuscan’s financial advisor in connection with the potential transaction in exchange for the payment of a fixed fee contingent upon the successful consummation of a business combination transaction.

On October 9, 2020, Microvast held a meeting with representatives of Morgan Stanley and Tuscan at which Microvast gave a presentation regarding its current and planned business and its views regarding a potential business combination transaction. After the meeting, Tuscan met with representatives of Morgan Stanley to continue their discussions regarding valuation metrics and the potential receptivity of the public markets to a transaction with Microvast.

On October 26, 2020, Tuscan and its advisors hosted a virtual kick-off meeting to organize the overall business combination process, introduce members of the business and legal teams, discuss Tuscan’s process for extending its deadline to consummate a transaction and organize the approach for completing legal, accounting and business due diligence.

Over the next several weeks, Tuscan, together with its advisors, continued its legal, financial and business due diligence on Microvast, including calls regarding accounting and auditing matters with Morgan Stanley, Tuscan’s counsel and Microvast’s auditor during the second half of October and technical due diligence meetings in October and November with Tuscan’s technical advisors, Morgan Stanley, Barclays, Houlihan Lokey and representatives of Microvast. Between November and January, representatives of Tuscan, including its directors and officers, conducted further due diligence with respect to Microvast and, over the same period, Tuscan’s external advisors conducted due diligence with respect to Microvast.

Throughout October and November, Tuscan and Microvast, including their financial advisors, continued work on tentative private placement roadshow materials. During this period representatives of Tuscan, its advisors and Microvast held telephonic conferences and virtual meetings to discuss many commercial and legal elements of Microvast’s business to assist Tuscan and its advisors in developing a financial model of the company.

Microvast’s counsel, Shearman & Sterling LLP (“Shearman”), delivered an initial draft Merger Agreement to Tuscan and Greenberg on November 12, 2020.

Shearman and Greenberg held numerous conference calls and exchanged drafts of the Merger Agreement and related agreements during the following weeks and until the Merger Agreement was executed on February 1, 2021.

On December 3, 2020, Tuscan received stockholder approval to extend the date by which it must complete an initial business combination from December 7, 2020 to April 30, 2021. In connection with such extension, holders of 3,198 Public Shares exercised their right to convert their shares into cash at a conversion price of approximately $10.22 per share, for an aggregate conversion amount of $32,684. Additionally, on May 10, 2021, at a reconvened annual meeting of stockholders initially convened on April 28, 2021, Tuscan received stockholder approval to further extend the date by which it must complete a business combination from April 30, 2021 to July 31, 2021. In connection with such extension, holders of an aggregate of 13,290 Public Shares exercised their right to convert their shares into cash.

Over the following week, Tuscan, Microvast, Greenberg and Shearman had numerous conference calls to discuss and finalize the transactions contemplated by the Merger Agreement and related agreements.

Following preliminary discussions with Tuscan, Greenberg and Shearman regarding a potential proposal for the MPS Investors in late December, on December 30, 2020, Microvast and its PRC legal counsel had a conference call with certain MPS Investors to discuss potential terms of the MPS Transactions. Microvast, its PRC legal counsel and Shearman continued such discussions with MPS Investors, and subsequent update discussions with Tuscan and Greenberg, during the first two weeks of January 2021. On January 21, 2021, Microvast delivered an initial draft of the Framework Agreement to the MPS Investors and Tuscan. From January 21, 2021 through the end of January, the parties to the Framework Agreement had numerous conference calls to discuss and finalize the terms of the MPS Transactions contemplated by the Framework Agreement and related agreements.

During the second and third weeks of January 2021, representatives of Morgan Stanley and EarlyBird Capital, on behalf of Tuscan, in consultation with representatives of Microvast, began contacting a limited number of potential PIPE investors, each of whom agreed to maintain the confidentiality of the information received pursuant to customary non-disclosure agreements, to discuss Microvast, the proposed business combination and the PIPE Financing and to determine such investors’ potential interest in participating in the PIPE Financing. During this period, representatives of Tuscan, Microvast, InterPrivate, Morgan Stanley and EarlyBird Capital participated in various virtual meetings with prospective participants in the PIPE Financing. In addition, after a draft form of the subscription agreement had been provided to the prospective PIPE investors, the terms of the forms of subscription agreements, including with respect to certain conditions to closing and the registration rights set forth in the form, among other terms and conditions, were further negotiated between the representatives of Greenberg, Shearman and Davis Polk, counsel to Morgan Stanley, on behalf of their respective clients, and on behalf of the PIPE investors by their respective advisors, and multiple drafts of the subscription agreements were exchanged.

During the PIPE process, Microvast and Tuscan discussed the impact on valuation of possible positive developments in Microvast’s business, including the possibility of additional contingent consideration in the form of the issuance of an additional 20.0 million shares subject to an earn out provision. Microvast and Tuscan ultimately agreed that such contingent consideration was warranted in order to reward existing sellers should Microvast’s business momentum accelerate, and agreed to issue such additional shares subject to a vesting price of $18.00.

On January 21, 2021, Tuscan’s board of directors, with representatives of the board’s independent counsel from Loeb & Loeb LLP present, and Tuscan’s management met with representatives of Morgan Stanley to discuss valuation parameters, including the methodology used and the other considerations and assumptions underlying such valuation. Tuscan management’s pre-transaction valuation of Microvast was based on analysis of the revenue and EBITDA of Microvast, the business plan and other materials provided by Microvast’s management, and analysis of comparable companies and business segments in analogous markets, including QuantumScape and Romeo Power, as well as zero emissions vehicle technology companies: Ballard Power Systems Inc., Plug Power Inc., Tesla Inc., NIO Inc., Contemporary Amperex Technology Limited, Proterra Inc. and Nikola Inc. and their implied public trading market valuations set forth below under the caption “— Microvast’s Board of Directors’ Reasons for the Approval of the Business Combination.”

On January 22, 2021, Tuscan’s board of directors, with representatives of Greenberg present, met via Zoom meeting to discuss the transaction, including a detailed discussion of the latest draft of the Merger Agreement and the related transaction documents and the legal due diligence conducted to date. The board of directors reviewed the proposed terms of the Merger Agreement and other related transaction agreements that were being negotiated with Microvast and its representatives. Feedback from the Tuscan board of directors was solicited by Tuscan management who also responded to questions from members of Tuscan’s board of directors during the subsequent discussion of the directors. Process matters relating to ongoing due diligence review of Microvast and its business operations, the drafting of the definitive transaction documentation, and expected timelines to signing, were also discussed.

On January 25, 2021, Tuscan’s board of directors, with representatives of Greenberg present, met via Zoom meeting and Greenberg provided the board of directors with a presentation on its fiduciary duties in connection with approval of the transactions and the Merger Agreement and related transaction documents.

On January 29, 2021, Tuscan’s board of directors, with representatives of Greenberg present, met via Zoom to discuss the transaction, receive a detailed update with respect to the Merger Agreement and the related transaction documents that had been negotiated with Microvast and its representatives and to receive a further update on legal due diligence. The board of directors then discussed other factors including those described below under the caption “— Microvast’s Board of Directors’ Reasons for the Approval of the Business Combination.” At the end of the meeting, the Merger Agreement and related documents and agreements were unanimously approved by Tuscan’s board of directors, subject to final negotiations and modifications, and the board determined to recommend the approval of the Merger Agreement to Tuscan’s stockholders.

The Merger Agreement and related documents and agreements were executed prior to market open on February 2, 2021, at which time Tuscan and Microvast issued a joint press release announcing the execution of the Merger Agreement and Tuscan filed with the SEC a Current Report on Form 8-K announcing the execution of the Merger Agreement.

In order to have more time to complete the Business Combination, on May 10, 2021, at a reconvened annual meeting of stockholders initially convened on April 28, 2021, Tuscan received stockholder approval to further extend the date by which it must complete an initial business combination from April 30, 2021 to July 31, 2021.

The parties have continued and expect to continue regular discussions in connection with, and to facilitate, the consummation of the Business Combination.

Tuscan’s Board of Directors’ Reasons for Approval of the Business Combination

As described under “— Background of the Business Combination” above, Tuscan’s board of directors, in evaluating the Business Combination, consulted with Tuscan’s management and financial and legal advisors. In reaching its unanimous decision to approve the Merger Agreement and the transactions contemplated by the Merger Agreement, Tuscan’s board of directors considered a range of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the combination, Tuscan’s board of directors did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. Tuscan’s board of directors viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

This explanation of Tuscan’s reasons for the combination and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the section titled “Cautionary Note Regarding Forward-Looking Statements.”

Before reaching its decision, the Tuscan board of directors reviewed the results of the due diligence conducted by our management, which included:

•        extensive meetings and calls with Morgan Stanley and Microvast’s management to understand and analyze Microvast’s business and to understand Microvast’s final financial models and forecasts;

•        consultation with industry experts regarding (i) the market for lithium ion batteries; (ii) the potential differentiation between Microvast’s battery technologies and similar industry categories; and (iii) the competitive landscape in the electric vehicle battery industry;

•        consultation with Tuscan’s legal and financial advisors;

•        review of Microvast’s material contracts and financial, tax, legal, accounting, environmental, and intellectual property due diligence

•        review of Microvast’s financial statements;

•        research on comparable public companies;

•        research on comparable transactions; and

•        reviews of certain projections provided by Microvast.

In approving the combination, Tuscan’s board of directors did not obtain a fairness opinion. The officers and directors of Tuscan have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with experience and sector expertise of Morgan Stanley, enabled them to make the necessary analyses and determinations regarding the Business Combination.

Tuscan’s management also considered a comparable company analysis to assess the potential value that the public markets would likely ascribe to Microvast, and this analysis was presented to Tuscan’s board of directors. These companies were selected by Tuscan and its financial advisor as publicly traded companies having businesses that were considered, in certain respects, to be similar to the Microvast’s business.

Tuscan looked at several categories of potentially comparable companies, including electric vehicle companies (car, truck and bus) and electric vehicle battery companies to assess the potential value that the public markets would likely ascribe to Microvast, and this analysis was presented to Tuscan’s board. These companies were selected by Tuscan and its financial advisor as publicly traded companies having businesses that were considered, in certain respects, to be similar to the combined company’s business.

These companies included QuantumScape and Romeo Power, as well as zero emissions vehicle technology companies: Ballard Power Systems Inc., Plug Power Inc., Tesla Inc., NIO Inc., Contemporary Amperex Technology Limited, Proterra Inc. and Nikola Inc.

Management presented to Tuscan’s board of directors the aggregate value divided by revenue and EBITDA of each of the selected companies. The metric “aggregate value” is the terminology used by Tuscan’s financial advisor to represent enterprise value and was determined by subtracting a company’s net debt from its equity value. Estimates were based on publicly available consensus research analysts’ estimates from Capital IQ as of January 19, 2021 and other publicly available information.

____________

*        Not meaningful.

For 2025, the median projected Aggregate Value/Revenue of the zero emission vehicle technology companies identified was five times Microvast’s projected Aggregate Value/Revenue multiple, and the median projected Aggregate Value/EBITDA multiple of such companies was approximately 9.9 times Microvast’s projected Aggregate Value/EBITDA multiple for that year.

Although none of the selected companies reviewed in this analysis were directly comparable to Microvast, the companies had one or more similar operating and financial characteristics as Microvast. Tuscan’s board of directors considered this analysis and viewed Microvast to be favorable compared to such other companies.

Tuscan’s board of directors considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the transactions contemplated thereby, including, but not limited to, the following:

•        Battery Technologies Superior to Alternatives.    Tuscan’s management and its board of directors believe that Microvast’s battery technologies outperform its competitors on battery life, charging times, safety and total cost of ownership, which will enable future growth;

•        Broad, Proprietary Intellectual Property Portfolio.    Tuscan’s management and board of directors considered Microvast’s intellectual property portfolio, including its more than 300 patents that cover all four major battery components and are exclusively owned;

•        Field-Proven Technologies.    Tuscan’s management and its board of directors considered that Microvast’s technology has been deployed in nearly 30,000 vehicles with a multi-year track record;

•        Vertical Integration.    Tuscan’s management and its board of directors considered Microvast’s vertically integrated manufacturing process for its battery solutions that it believes is unique in the industry;

•        Large and Growing Market Opportunity.    Tuscan’s management and its board of directors considered Microvast’s current and projected market opportunity;

•        Potential Opportunities in New Applications.    Tuscan’s management and its board of directors believe that there are significant growth opportunities for Microvast’s technology in other applications including passenger vehicles, energy storage solutions and consumer electronics;

•        Strategic Customer and Research Partnerships.    Tuscan’s management and its board of directors considered Microvast’s customer partnerships with industry leaders, including FPT Industrial, Oshkosh Corporation and a leading German luxury sports car company, among others, as well as research and development partnerships with BMW, the United States Council for Automotive Research and Argonne National Laboratory.

•        Financial Condition.    Tuscan’s board of directors also considered factors such as Microvast’s outlook, pipeline, financial plan and capital structure, as well as valuations and trading of publicly traded companies and valuations of precedent combination and combination targets in similar and adjacent sectors as well as projected financial data supplied by Microvast (see “— Certain Unaudited Microvast Prospective Financial Information”);

•        Due Diligence.    Tuscan’s management conducted due diligence examinations of Microvast and discussions with Microvast’s management and Tuscan’s financial and legal advisors concerning Tuscan’s due diligence examination of Microvast;

•        Experienced Management Team.    Tuscan’s management and its board of directors believe that Microvast has a strong management team experienced in battery technologies, which is expected to remain with Microvast Holdings to seek to execute Microvast’s strategic and growth goals;

•        Other Alternatives.    Tuscan’s board of directors believes, after a thorough review of other business combination opportunities reasonably available to Tuscan, that the proposed Business Combination represents the best available business combination opportunity for Tuscan based upon the process utilized to evaluate and assess other potential combination targets, and Tuscan’s board of directors’ belief that such process has not presented a better available alternative; and

•        Negotiated Transaction.    The financial and other terms of the Merger Agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Tuscan and Microvast.

In the course of its deliberations, Tuscan’s board of directors considered a variety of uncertainties, risks and other potentially negative reasons relevant to the Business Combination, including the below:

•        The risk that Microvast may not be able to execute on its business plan or achieve or sustain profitability.

•        The risk that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected time frame and the significant fees, expenses and time and effort of management associated with completing the Business Combination.

•        The risk that the Business Combination might not be consummated or completed in a timely manner or that the closing might not occur despite our best efforts, including by reason of a failure to obtain the approval of our stockholders, litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin the consummation of the Business Combination.

•        Competition in the electric vehicle battery market is intense and, as a result, Microvast may fail to attract and retain users, which may negatively impact Microvast’s operations and growth prospects.

•        Economic downturns and political and market conditions beyond Microvast’s control, including a reduction in consumer discretionary spending and potential economic effects of COVID-19, could adversely affect its business, financial condition, results of operations and prospects.

•        Microvast’s projections, including for revenues, growth and profitability, are subject to significant risks, assumptions, estimates and uncertainties and Microvast’s operating results may vary, which may make future results difficult to predict with certainty.

•        Microvast’s growth prospects may suffer if it is unable to develop successful product offerings, if it fails to pursue additional product offerings or if it loses any of its key executives or other key employees. In addition, if Microvast fails to make optimal investment decisions in its product offerings and technology platform, it may not attract and retain key users and its revenue and results of operations may be adversely affected.

•        Public Stockholders will experience dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination and the PIPE Financing, and having a minority share position may reduce the influence that Tuscan’s current stockholders have on the management of Microvast Holdings.

•        Microvast may be subject to litigation in the operation of its business and Microvast’s insurance may not provide adequate levels of coverage against any claims. An adverse outcome in one or more legal proceedings or inadequate insurance coverage could adversely affect Microvast’s business.

•        The requirements of being a public company, including compliance with the SEC’s requirements regarding internal controls over financial reporting, may strain Microvast’s resources and divert management’s attention, and the increases in legal, accounting and compliance expenses that will result from the Business Combination may be greater than Microvast anticipates.

•        Tuscan’s board of directors did not obtain an opinion from any independent investment banking or accounting firm that the consideration Tuscan would pay to acquire Microvast is fair to Tuscan or its stockholders from a financial point of view. In addition, Tuscan’s board of directors considered the limits of the due diligence performed by Tuscan’s management and outside advisors and the inherent risk that even a thorough review may not uncover all potential risks of the business. Accordingly, Tuscan’s board of directors may be incorrect in its assessment of the Business Combination;

•        The interests of Tuscan’s board of directors and officers in the Business Combination (see “— Interests of Tuscan’s Directors and Officers in the Business Combination”); and

•        Other Risks Factors.    Various other risk factors associated with the business of Microvast, as described in the section titled “Risk Factors” appearing elsewhere in this proxy statement.

After considering the foregoing potentially negative and potentially positive reasons, Tuscan’s board of directors concluded, in its business judgment, that the potentially positive reasons relating to the Business Combination and the other related transactions outweighed the potentially negative reasons. The Tuscan board of directors recognized that there can be no assurance about future results, including results considered or expected as disclosed in the foregoing discussion.

The above discussion of the material factors considered by Tuscan’s board of directors sets for the principal factors it considered but is not intended to be exhaustive.

Certain Unaudited Microvast Prospective Financial Information

Microvast does not as a matter of course make public projections as to future revenues, performance, financial condition or other results. However, Microvast’s management prepared and provided to the Microvast Board, Microvast’s financial advisors and Tuscan certain internal, unaudited prospective financial information in connection with the evaluation of the Business Combination. The accompanying summary unaudited financial projections of Microvast were not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in the view of Microvast’s management, was prepared on a reasonable basis, reflects

the best estimates and judgments, and presents, to the best of Microvast management’s knowledge and belief, the expected course of action and the expected future financial performance of Microvast at the time they were prepared and provided to Tuscan in connection with the evaluation of the Business Combination and were not updated since then. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement are cautioned not to place undue reliance on the prospective financial information. The inclusion of the below information should not be regarded as an indication that Microvast or any other recipient of this information considered — or now considers — it to be necessarily predictive of actual future results.

The unaudited prospective financial information is subjective in many respects. As a result, there can be no assurance that the prospective results will be realized or that actual results will not be significantly higher or lower than forecasted. Since the unaudited prospective financial information covers multiple years, that information by its nature becomes less predictive with each successive year.

None of Tuscan’s or Microvast’s independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information. The reports of the independent registered public accounting firms included in this proxy statement relate to the historical financial information of Tuscan and Microvast, respectively. Such reports do not extend to the unaudited financial projections and should not be read to do so.

The unaudited prospective financial information was prepared solely for internal use to assist in the evaluation of the Business Combination. The assumptions and estimates underlying the prospective financial information are inherently subjective in nature, though considered reasonable by the management of Microvast, as of the date such projections were prepared, and are susceptible to interpretation and, accordingly, contemplated results may not be achieved. While presented with numerical specificity, the unaudited financial projections reflect numerous estimates and assumptions with respect to future industry performance under various industry scenarios as well as assumptions for competition, general business, economic, market and financial conditions and matters specific to the businesses of Tuscan and Microvast, all of which are difficult to predict and many of which are beyond the preparing parties’ control including, among other things, the matters described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” The most fundamental assumptions on which Microvast’s management based its internal forecasts were the size and growth rate of the anticipated total addressable market (“TAM”) for electric vehicle penetration in the key markets for commercial vehicle sales (i.e., U.S., Europe, the PRC, Japan and South Korea), which is expected to grow from approximately 1.5% of the total units sold in 2020 to approximately 8.5% by 2025. Based on this estimate, the growth in commercial vehicles is expected to increase the demand for battery capacity from 10 gigawatt hours (“GWh”) in 2020 to 97 GWh in 2025. In addition, TAM for the adjacent market for passenger vehicles, energy storage solutions and electronics is projected to grow to $45 billion by 2025. The forecast for Microvast’s commercial vehicle market between 2021 and 2025 was based on identifiable pipelines and order book. Accordingly, there can be no assurance that the assumptions made in preparing any particular projection will prove accurate. There will be differences between actual and forecasted results, and the differences may be material. The risk that these uncertainties and contingencies could cause the assumptions to fail to be reflective of actual results is further increased due to the length of time over which these assumptions apply. While the Tuscan board of directors used the following projections as a tool in evaluating the Business Combination, they did so with a thorough understanding of the foregoing limitations. In light of the foregoing factors and the uncertainties inherent in the unaudited financial projections, the Tuscan stockholders are cautioned not to place undue reliance on the unaudited financial projections and the inclusion of the unaudited financial projections in this proxy statement should not be regarded as a representation by any person that the results contained therein will be achieved.

Microvast does not generally publish its business plans and strategies or make external disclosures of its anticipated financial position or results of operations. Accordingly, Microvast does not intend to update or otherwise revise the prospective financial information to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, Microvast does not intend to update or revise the prospective financial information to reflect changes in general economic or industry conditions.

See “Risk Factors” for a discussion of various factors that could materially affect Microvast’s financial condition, results of operations, business, prospects and securities.

The unaudited financial projections are not included in this proxy statement in order to induce any Tuscan stockholders to vote in favor of any of the Proposals at the special meeting.

EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LAWS, MICROVAST DOES NOT INTEND TO MAKE PUBLICLY AVAILABLE ANY UPDATE OR OTHER REVISION TO THE PROSPECTIVE FINANCIAL INFORMATION. THE PROSPECTIVE FINANCIAL INFORMATION DOES NOT TAKE INTO ACCOUNT ANY CIRCUMSTANCES OR EVENTS OCCURRING AFTER THE DATE THAT INFORMATION WAS PREPARED. READERS OF THIS PROXY STATEMENT ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE UNAUDITED PROSPECTIVE FINANCIAL INFORMATION SET FORTH BELOW. NONE OF MICROVAST, TUSCAN OR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, ADVISORS OR OTHER REPRESENTATIVES HAS MADE OR MAKES ANY REPRESENTATION TO ANY MICROVAST STOCKHOLDER, TUSCAN STOCKHOLDER OR ANY OTHER PERSON REGARDING ULTIMATE PERFORMANCE COMPARED TO THE INFORMATION CONTAINED IN THE PROSPECTIVE FINANCIAL INFORMATION OR THAT FINANCIAL AND OPERATING RESULTS WILL BE ACHIEVED.

Certain of the measures included in the unaudited financial projections are non-GAAP financial measures, as noted below. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by Microvast are not reported by all of their competitors and may not be comparable to similarly titled amounts used by other companies. The SEC rules which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure do not apply to non-GAAP financial measures provided to a board of directors or a financial advisor in connection with a proposed business combination such as the Business Combination if the disclosure is included in a document such as this proxy statement. We encourage you to review the financial statements of Microvast included in this proxy statement, as well as the financial information in the sections titled “Selected Historical Financial Information—Microvast” and “Unaudited Pro Forma Condensed Combined Financial Statements” in this proxy statement and to not rely on any single financial measure.

Except as required by federal securities laws, Microvast does not intend to update or otherwise revise the unaudited financial projections to reflect circumstances existing after the date they were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such unaudited financial projections are no longer appropriate.

Microvast Projections

Total Revenue by Segment
(Amounts in thousands of dollars)

____________

(1)      Includes 5% of passenger vehicle sales

2020 Forecasted to 2025 Forecasted compound annual growth rate (“CAGR”) of 87%

Forecasted Revenue-Commercial Vehicles
(Amounts in thousands of dollars)

____________

(1)      Contracted revenue represents business where a contract or sales agreement is in place, which primarily includes envisioned deliveries, while not compulsory, under a framework agreement.

Contracted revenue represents approximately 25% of 2021 through 2025 forecasted revenue. Multiple additional contracts expected-dialog ongoing with OEM customers. EBITDA is calculated as earnings before interest, income tax, depreciation and amortization.

EBITDA by Segment
(Amounts in thousands of dollars)

____________

(1)      Includes 5% of passenger vehicle sales

2023 Forecasted-2025 Forecasted Revenue CAGR forecasted at 64%

2023 Forecasted-2025 Forecasted Average Gross Margin forecasted at 28%

2023 Forecasted-2025 Forecasted Average EBITDA Margin forecasted at 20%

(Aggregate Value of $2.4 billion based on $3.0 billion post-money equity value and net debt of ($601,000))

Aggregate Value/Revenue
(Amounts in thousands of dollars)

Aggregate Value/EBITDA
(Amounts in thousands of dollars)

Satisfaction of 80% Test

It is a requirement under the Charter that any business acquired by Tuscan have a fair market value equal to at least 80% of the balance of the funds in the trust account (exclusive of taxes payable) at the time of the execution of a definitive agreement for an initial business combination. Based on the financial analysis of Microvast generally used to approve the Business Combination described herein, the Tuscan board of directors determined that this requirement was met. The Tuscan board of directors determined that consideration being paid in the Business Combination, which amount was negotiated at arms-length, was fair to and in the best interests of Tuscan and its stockholders and appropriately reflected Tuscan’s value. In reaching this determination, the Tuscan board of directors concluded that it was appropriate to base such valuation on qualitative factors such as management strength and depth, competitive positioning, diversification and business model as well as quantitative factors such as Microvast’s historical operating performance and its potential for future growth in revenues and profits. Tuscan’s board of directors believed that the financial skills and background of its members qualified it to conclude that the acquisition of Microvast met this requirement. In addition, Tuscan’s board of directors considered the financial analysis reviewed by Tuscan’s management.

Interests of Tuscan’s Directors, Officers and Others in the Business Combination

When you consider the recommendation of Tuscan’s board of directors in favor of approval of the Business Combination Proposal, you should keep in mind that Tuscan’s initial stockholders, including its directors and executive officers, have interests in such proposal that may be different from, or in addition to, your interests as a stockholder. These interests include, among other things:

•        If the Business Combination or another business combination is not consummated by July 31, 2021 (which was further extended from April 30, 2021 by vote of Tuscan’s stockholders) or such later date as approved by Tuscan’s stockholders, Tuscan will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares for cash and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event:

•        the 6,810,000 shares of Common Stock beneficially held by the Sponsor, a company affiliated with Stephen Vogel, Tuscan’s Chief Executive Officer, and an additional 90,000 shares of Common Stock acquired by the Sponsor, of which 30,000 shares have been allocated to each of the three current independent directors of Tuscan (a portion of which are subject to forfeiture pursuant to the Escrow Agreement), all of which were acquired for an aggregate purchase price of approximately $25,000, will be worthless (as the holders have waived liquidation rights with respect to such shares), as will the 558,589 shares of Common Stock and 558,589 Private Warrants underlying the Private Units that were acquired by the Sponsor simultaneously with the initial public offering for an aggregate purchase price of approximately $5.6 million. Such shares of Common Stock and Private Warrants had an aggregate market value of approximately $         million and $         million, respectively, based on the last sale price of $         and $         of the Common Stock and Tuscan Warrants, respectively, on Nasdaq on         , 2021

•        the economic interests in the Sponsor held by Tuscan’s directors and officers, each of whom is a member of the Sponsor, which gives them an interest in the securities of Tuscan held by the Sponsor, and which interests would also become worthless if Tuscan does not complete a business combination within the applicable time period, include the following:

•        Ms. Butte, an independent director of Tuscan, made an investment in the equity of the Sponsor in the amount of $25,000, which gives Ms. Butte an interest in 2,500 Private Units and 2,500 additional shares of Common Stock held by the Sponsor, which Private Units would have a market value of approximately $         and which additional shares of Common Stock would have a value of approximately $        , based on the last sale price of $         and $         of the Tuscan Units and Common Stock, respectively, on Nasdaq on         , 2021;

•        Mr. Selig, an independent director of Tuscan, made an investment in the equity of the Sponsor in the amount of $100,000, which gives Mr. Selig an interest in 10,000 Private Units and 10,000 additional shares of Common Stock held by the Sponsor, and Mr. Selig has an interest in an additional 125,000 shares of Common Stock held by the Sponsor, which Private Units would have a market value of approximately $         and which additional shares of Common Stock (totaling 135,000 shares) would have a market value of approximately $        , each based on the last sale price of $         and $         of the Tuscan Units and Common Stock, respectively, on Nasdaq on         , 2021;

•        Mr. Rieger, an independent director of Tuscan, made an investment in the equity of the Sponsor in the amount of $250,000, which gives Mr. Rieger an interest in 25,000 Private Units and 25,000 additional shares of Common Stock held by the Sponsor, which Private Units would have a market value of approximately $         and which additional shares would have a market value of approximately $        , based on the last sale price of $         and $         of the Tuscan Units and Common Stock, respectively, on Nasdaq on         , 2021;

•        Ms. Epstein, the President, Chief Financial Officer and a director of Tuscan, made an investment in the equity of the Sponsor in the amount of $100,000, which gives Ms. Epstein an interest in 10,000 Private Units and 10,000 additional shares of Common Stock held by the Sponsor, and Ms. Epstein is entitled to receive an additional 400,000 shares of Common

Stock held by the Sponsor, which Private Units would have a market value of approximately $         and which additional shares of Common Stock (totaling 410,000 shares) would have a market value of approximately $        , each based on the last sale price of $         and $         of the Tuscan Units and Common Stock, respectively, on Nasdaq on         , 2021;

•        Stephen Vogel is expected to be a director of Microvast Holdings following the Business Combination. As such, in the future he may receive cash fees, stock options or stock awards that the Board determines to pay to its directors.

•        In connection with Tuscan’s initial public offering, the Sponsor has agreed that it will be liable under certain circumstances to ensure that the proceeds in the trust account are not reduced by certain claims of target businesses or vendors or other entities that are owed money by Tuscan for services rendered or contracted for or products sold to Tuscan. If Tuscan is unable to complete a business combination within the required time period, the Sponsor will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Tuscan for services rendered or contracted for or products sold to Tuscan, but only if such a vendor or target business has not executed such a waiver.

•        Affiliates of InterPrivate, an advisor to the Sponsor, have subscribed to purchase 6,500,000 shares of Common Stock pursuant to the PIPE for an aggregate purchase price of $65 million, which shares have a market value of $            , based on the last sale price of the Common Stock on Nasdaq on            , 2021. Such subscriptions will be made on the same terms as all other investors in the PIPE. In addition, Mr. Vogel and the Sponsor entered into an agreement with InterPrivate pursuant to which InterPrivate would advise Tuscan with respect to Tuscan’s evaluation of business combination transactions and Tuscan and InterPrivate entered into an indemnification agreement pursuant to which Tuscan would indemnify InterPrivate and its affiliates in connection with InterPrivate’s performance of those services. Pursuant to the agreement, the Sponsor granted an affiliate of InterPrivate a profits interest attributable to the securities of Tuscan held by the Sponsor, subject to the consummation of the Business Combination. Under the terms of the grant, in exchange for its services to the Sponsor, an affiliate of InterPrivate would be entitled to profits distributions totaling approximately $         based on the last sale price of the Common Stock and Warrants on Nasdaq on         , 2021.

•        If Tuscan is unable to complete a business combination within the required time period, it will pay the costs of any subsequent liquidation from its remaining assets outside of the trust account. If such funds are insufficient, the Sponsor has agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment for such expenses.

•        If a business combination is not completed, Tuscan’s board of directors may not receive reimbursement of approximately $         for any out-of-pocket expenses incurred by them on Tuscan’s behalf incident to identifying, investigating and consummating a business combination to the extent such expenses exceed that portion of the trust account that is not required to be retained in the trust account.

•        All rights specified in the Charter relating to the right of officers and directors to be indemnified by Tuscan, and of Tuscan’s officers and directors to be exculpated from monetary liability with respect to prior acts or omissions, will continue after a business combination. If the Business Combination is not approved and Tuscan liquidates, Tuscan will not be able to perform its obligations to its officers and directors under those provisions.

•        The Sponsor or its affiliates may loan money to Tuscan through the closing of the Business Combination. Such loans are payable, without interest, at the closing of the Business Combination; provided however that at the Sponsor’s option, up to $1,500,000 may be converted into up to 150,000 Private Units. The 150,000 shares of Common Stock and Private Warrants underlying such Private Units had an aggregate market value of approximately $         and $        , respectively based on the last sale price of $         and $         of the Common Stock and Tuscan Warrants, respectively, on Nasdaq on         , 2021. If the Business Combination is not consummated, these loans will not be repaid.

Material U.S. Federal Income Tax Consequences of the Business Combination

The following is a discussion of the material U.S. federal income tax consequences for (i) holders of Common Stock that elect to have their Common Stock converted into cash if the Merger is completed, and (ii) stockholders of Microvast who exchange their shares of stock in Microvast for Common Stock in the Merger. This discussion addresses only those holders that hold their common stock or warrants as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment).

This discussion does not address all U.S. federal income tax consequences that may be relevant to your particular circumstances, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to holders subject to special rules, including, without limitation:

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

•        persons subject to the alternative minimum tax;

•        persons holding Common Stock or Microvast stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated transaction;

•        banks, insurance companies and other financial institutions;

•        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;

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

•        tax-exempt organizations or governmental organizations;

•        U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

•        regulated investment companies (RICs) or real estate investment trusts (REITs);

•        tax-qualified retirement plans; and

•        “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.

If you are a partnership (or other pass-through entity) for U.S. federal income tax purposes, the tax treatment of your partners (or other owners) will generally depend on the status of the partners, the activities of the partnership and certain determinations made at the partner level. Accordingly, partnerships (or other pass-through entities) and the partners (or other owners) in such partnerships (or such other pass-through entities) should consult their own tax advisors regarding the U.S. federal income tax consequences to them relating to the matters discussed below.

For purposes of this discussion, a “U.S. holder” is a beneficial owner of shares of Common Stock or Microvast stock, as the case may be, who or that is, for U.S. federal income tax purposes:

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

•        a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) 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

•        an entity treated as a trust that (1) 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) or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Also, for purposes of this discussion, a “Non-U.S. holder” is any beneficial owner of Common Stock or Microvast stock, as the case may be, who or that is neither a U.S. holder nor an entity classified as a partnership for U.S. federal income tax purposes.

The following does not purport to be a complete analysis of all potential tax effects stemming from the completion of the Merger that are associated with certain conversions of Common Stock. 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, Treasury regulations promulgated thereunder, judicial decisions and published rulings and administrative pronouncements of the Internal Revenue Service (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 holders to which this section applies and could affect the accuracy of the statements herein. Tuscan has not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance that the IRS or a court will not take a contrary position to that regarding tax consequences discussed below.

THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS 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 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.

U.S. Federal Income Tax Considerations of the Conversion to the Holders of Common Stock

Holders of Common Stock who do not exercise their conversion rights will not be selling, exchanging, or otherwise transferring their Common Stock as described in this section. Tuscan did not obtain a tax opinion regarding the U.S. federal income tax consequences of the Merger, including the conversion of Common Stock.

U.S. Holders

Conversion of Common Stock.    In the event that a U.S. holder’s Common Stock is converted pursuant to the conversion provisions described in the section titled “Special Meeting of Stockholders — Conversion Rights,” the treatment of the transaction for U.S. federal income tax purposes will depend on whether the conversion qualifies as a sale of the Common Stock under Section 302 of the Code. If the conversion qualifies as a sale of the Common Stock, the U.S. holder will be treated as described under “— U.S. Holders — Gain or Loss on Conversion Treated as a Sale of Common Stock” below. If the conversion does not qualify as a sale of the Common Stock, the U.S. holder will be treated as receiving a corporate distribution with the tax consequences described below under “— U.S. Holders — Taxation of Conversion Treated as a Distribution.”

Whether a conversion qualifies for sale treatment will depend largely on whether the U.S. holder owns any Common Stock following the conversion (including any stock treated as constructively owned by the U.S. holder as a result of owning warrants or by attribution from certain related individuals and entities), and if so, the total number of shares of Common Stock held by the U.S. holder both before and after the conversion (including any stock constructively treated as owned by the U.S. holder as a result of owning warrants or by attribution from certain related individuals and entities) relative to all of shares of Common Stock outstanding both before and after the conversion. The conversion of Common Stock generally will be treated as a sale of the Common Stock (rather than as a corporate distribution) if the conversion (i) is “substantially disproportionate” with respect to the U.S. holder, (ii) results in a “complete termination” of the U.S. holder’s interest in Tuscan or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more fully below.

In determining whether any of the foregoing tests are satisfied, a U.S. holder takes into account not only shares of Common Stock actually owned by the U.S. holder, but also shares of Common Stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder, as well as any stock that the U.S. holder has a right to acquire by exercise of an option, which would generally include Common Stock that could be acquired pursuant to the exercise of the warrants. Moreover, any Common Stock that a U.S. holder directly or constructively acquires pursuant to the Merger generally should be included in determining the U.S. federal income tax treatment of the conversion.

In order to meet the substantially disproportionate test, the percentage of Tuscan’s outstanding voting stock actually and constructively owned by the U.S. holder immediately following the conversion of Common Stock must, among other requirements, be less than 80% of the percentage of Tuscan’s outstanding voting stock actually and constructively owned by such U.S. holder immediately before the conversion (taking into account both conversions by other holders of Common Stock and the shares of Common Stock to be issued pursuant to the Merger). There will be a complete termination of a U.S. holder’s interest if either (i) all of the shares of Tuscan’s capital stock actually and constructively owned by the U.S. holder are converted or (ii) all of the shares of Tuscan’s capital stock actually owned by the U.S. holder are converted, the U.S. holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other stock. The conversion of Common Stock will not be essentially equivalent to a dividend if a U.S. holder’s conversion results in a “meaningful reduction” of the U.S. holder’s proportionate interest in Tuscan. Whether the conversion will result in a meaningful reduction in a U.S. holder’s proportionate interest in Tuscan will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult with its own tax advisors as to the tax consequences of a conversion.

If none of the foregoing tests are satisfied, then the conversion will be treated as a corporate distribution, and the tax effects will be as described under “— U.S. Holders — Taxation of Conversion Treated as a Distribution” below. After the application of those rules, any remaining tax basis of the U.S. holder in the converted Common Stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.

Gain or Loss on Conversion Treated as a Sale of Common Stock.    If the conversion qualifies as a sale of Common Stock, a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized in the conversion and the U.S. holder’s adjusted tax basis in its disposed of Common Stock. The amount realized is the sum of the amount of cash and the fair market value of any property received and a U.S. holder’s adjusted tax basis in its Common Stock generally will equal the U.S. holder’s acquisition cost less any prior distributions paid to such U.S. holder that were treated as a return of capital for U.S. federal income tax purposes.

Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the Common Stock so disposed of exceeds one year. It is unclear, however, whether the conversion rights with respect to the Common Stock may suspend the running of the applicable holding period for this purpose. Long-term capital gains recognized by non-corporate U.S. holders will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to limitations.

Taxation of Conversion Treated as a Distribution.    If the conversion does not qualify as a sale of Common Stock, a U.S. holder will generally be treated as receiving a distribution. Such distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.

Distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in Common Stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Common Stock as described under “— U.S. Holders — Gain or Loss on Conversion Treated as a Sale of Common Stock” above.

Dividends (including constructive dividends paid pursuant to a conversion of Common Stock) Tuscan pays to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends (including constructive dividends paid pursuant to a conversion of Common Stock) treated as investment income for purposes of investment interest deduction limitations), and provided that certain holding period requirements are met, dividends Tuscan pays to a non-corporate U.S. holder generally will constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the conversion rights with respect to the Common Stock described in this proxy statement/prospectus/consent solicitation statement may prevent a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be.

shares of Common Stock received in the Merger would equal their fair market value at the time of the closing of the Merger, and the U.S. holder’s holding period of such shares of Common Stock would commence the day after the closing of the Merger.

Non-U.S. Holders

The U.S. federal income tax consequences of the Merger for Non-U.S. holders of Microvast stock will generally be the same as for U.S. holders except as noted below.

Non-U.S. holders will not be subject to U.S. federal income tax on any gain recognized as a result of the Merger (i.e., if the Merger does not qualify as a reorganization under Section 368(a) of the Code and is a taxable transaction) unless:

•        the gain is effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. holder maintains a permanent establishment in the United States to which such gain is attributable);

•        the Non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the Merger and certain other requirements are met; or

•        Microvast is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the Merger or the period that the Non-U.S. holder held Microvast stock.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates. A Non-U.S. holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. holder (even though the individual is not considered a resident of the United States) provided that the Non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.

If the third bullet point above applied to a Non-U.S. holder, any gain recognized by such holder with respect to such holder’s Microvast stock as a result of the Merger would be subject to tax at generally applicable U.S. federal income tax rates and a U.S. federal withholding tax could apply. However, Microvast believes that it is not, and has not been at any time since its formation, a United States real property holding corporation and neither Microvast nor Tuscan expects to be a United States real property holding corporation immediately after the Merger is completed.

Anticipated Accounting Treatment

The Business Combination will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, Tuscan will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Microvast comprising the ongoing operations of Microvast Holdings, Microvast senior management comprising the senior management of Microvast Holdings, and that the former owners and management of Microvast will have control of the Board after the Business Combination. In accordance with guidance applicable to these circumstances, the Business Combination will be considered to be a capital transaction in substance. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Microvast issuing shares for the net assets of Tuscan, accompanied by a recapitalization. The net assets of Tuscan will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Closing will be those of Microvast.

Regulatory Matters

The Business Combination is not subject to any additional federal or state regulatory requirement or approval, except for the filing of required notifications and the expiration or termination of the required waiting periods under the HSR Act and filings with the applicable state offices necessary to effectuate the Merger. Tuscan and Microvast

filed their respective Notification and Report Forms under the HSR Act with the Antitrust Division and the Federal Trade Commission on February 12, 2021. The 30-day waiting period with respect to the Business Combination expired at 11:59 p.m. Eastern Time on March 14, 2021.

Required Vote

The approval of the Business Combination Proposal will require the affirmative vote of the holders of a majority of the then outstanding shares of Common Stock present in person (which would include presence at a virtual meeting) or represented by proxy at the special meeting and entitled to vote thereat. Additionally, the Business Combination will not be consummated if Tuscan would have less than $5,000,001 of net tangible assets upon consummation of the Business Combination.

The approval of the Business Combination Proposal is a condition to the consummation of the Business Combination. If the Business Combination Proposal is not approved, the other Proposals (except an Adjournment Proposal, as described below) will not be presented to the stockholders for a vote.

As of the date of this proxy statement, Tuscan does not believe there will be any changes or waivers that Tuscan’s directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, Tuscan will circulate a new or amended proxy statement and resolicit Tuscan’s stockholders if changes to the terms of the transaction that would have a material impact on its stockholders or represent a fundamental change in the proposals being voted upon.

Pursuant to the Sponsor Agreement, the Sponsor Group is required to vote their shares of Common Stock in favor of the Business Combination Proposal. The Sponsor Group holds approximately 20.85% of the outstanding shares of Common Stock. Accordingly, only 10,343,313 Public Shares, constituting approximately 29.15% of the outstanding shares of Common Stock, must be voted in favor of the Business Combination Proposal in order for the Business Combination Proposal to be approved.

Recommendation of the Tuscan Board of Directors

THE TUSCAN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE TUSCAN STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE BUSINESS COMBINATION PROPOSAL.

an annual meeting of stockholders to be held on April 28, 2021 to further extend the date by which it must complete a business combination to July 31, 2021. On May 10, 2021, at a reconvened annual meeting of stockholders initially convened on April 28, 2021, Tuscan received stockholder approval to further extend the date by which it must complete an initial business combination from April 30, 2021 to July 31, 2021.

Microvast Stockholder Approval

Pursuant to the Merger Agreement, promptly, and in any event within 24 hours, following the execution of the Merger Agreement, Microvast is required to obtain the approval of its stockholders with respect to the Merger Agreement and the Transactions by irrevocable written consent. Such written consent containing the requisite approval of the Microvast stockholders was delivered on February 1, 2021.

Stock Exchange Listing

Under the terms of the Merger Agreement, Tuscan has agreed to use its commercially reasonable efforts to (i) cause the shares of Common Stock to be issued in connection with the Merger, the Bridge Note Conversion and the PIPE Financing to be approved for listing on Nasdaq as of the Closing and (ii) maintain the listing of the Common Stock on Nasdaq prior to the Closing.

No Solicitation; Change in Recommendation

Under the terms of the Merger Agreement, Microvast and Tuscan have each agreed not to directly or indirectly, (i) solicit, assist, initiate or facilitate the making, submission or announcement of, or intentionally encourage, any inquiries with respect to, or the making of, any Acquisition Proposal, (ii) furnish any non-public information regarding such party or its affiliates or their respective businesses, operations, assets, liabilities, financial condition, prospects or employees to any person or group (other than a party to the Merger Agreement or its respective representatives) in connection with or in response to any Acquisition Proposal (or any inquiry with respect thereto), (iii) engage or participate in discussions or negotiations with any person or group with respect to, or that could reasonably be expected to lead to, an Acquisition Proposal, (iv) approve, endorse or recommend in writing, or publicly propose to approve, endorse or recommend, any Acquisition Proposal, (v) negotiate, approve, endorse, recommend, execute or enter into any letter of intent, agreement in principle, memorandum of understanding, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other similar arrangement or agreement related to any Acquisition Proposal (or any proposal, offer or indication of interest that could reasonably be expected to lead to an Acquisition Proposal), (vi) amend, release any third person from, or waive any provision of, any confidentiality or standstill agreement to which such party is a party, or (vii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Acquisition Proposal.

Microvast and Tuscan have each agreed to notify the others as reasonably promptly as practicable (and in any event within 48 hours) in writing of the receipt by such party or any of its representatives of (i) any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations regarding or constituting any Acquisition Proposal or any bona fide inquiries, proposals or offers, requests for information or requests for discussions or negotiations that could reasonably be expected to result in an Acquisition Proposal, and (ii) any request for non-public information relating to such party or its affiliates, specifying in each case, the material terms and conditions thereof (including a copy thereof if in writing or a written summary thereof if oral) and the identity of the party making such inquiry, proposal, offer or request for information. Each party has agreed to keep the others promptly informed of the status of any such inquiries, proposals, offers or requests for information, including by providing a copy (if in writing) of any material modifications to the financial or other terms and conditions of any such inquiry, proposal or offer. Each party has also agreed to, and will cause its representatives to, immediately cease and terminate any solicitations, discussions or negotiations with any person with respect to any Acquisition Proposal.

Notwithstanding the restrictions set forth above, the Merger Agreement provides that, prior to the receipt of the requisite approval of the Microvast stockholders (which approval was obtained on February 1, 2021), the Microvast Board may participate in negotiations or discussions with any third party that has made (and not withdrawn) a bona fide, unsolicited Acquisition Proposal in writing that the Microvast Board reasonably believes in good faith, after consultation with outside legal counsel, constitutes or would reasonably be expected to result in a Superior Proposal (as defined below), and thereafter furnish to such third party non-public information related to Microvast pursuant to a confidentiality agreement.

Except as described below, Microvast has agreed that neither the Microvast Board nor any committee thereof shall (i)(A) fail to make, change, withdraw, withhold, amend, modify or qualify, or publicly propose to make, change, withdraw, withhold, amend, modify or qualify, in a manner adverse to Tuscan or Merger Sub, the Microvast Board’s recommendation or (B) adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend to the Microvast stockholders any Acquisition Proposal or Superior Proposal, (ii) make any public statement inconsistent with the Microvast Board’s recommendation, (iii) resolve or agree to take any of the foregoing actions (any of the foregoing, an “Adverse Recommendation Change”), or (iv) authorize, cause or permit Microvast or any of its subsidiaries or any of their respective representatives to enter into any Acquisition Agreement. Notwithstanding the foregoing, at any time prior to the receipt of the requisite approval of the Microvast stockholders (which approval was obtained on February 1, 2021), but not after, the Microvast Board may make an Adverse Recommendation Change or cause Microvast to terminate the Merger Agreement to enter into (or permit any of its subsidiaries to enter into) an acquisition agreement with respect to an Acquisition Proposal only if the Microvast Board has reasonably determined in good faith, after consultation with its outside financial advisor and legal counsel, that (i) the failure to take such action would reasonably be expected to be inconsistent with the Microvast Board’s fiduciary duties under applicable law and (ii) that such Acquisition Proposal constitutes a Superior Proposal. Prior to taking such action, (A) Microvast must promptly notify Tuscan, in writing, at least three business days (the “Microvast Notice Period”) before making an Adverse Recommendation Change or entering into such an acquisition agreement, of its intention to take such action with respect to a Superior Proposal, which notice shall (1) state expressly that Microvast has received an Acquisition Proposal that the Microvast Board intends to declare a Superior Proposal and that the Microvast Board intends to make an Adverse Recommendation Change and/or Microvast intends to enter into such an acquisition agreement and (2) include a copy of the most current version of the proposed agreement relating to such Superior Proposal (which version shall be updated on a prompt basis, but in each case redacted as necessary to exclude the identity of the third party making such Superior Proposal), and a description of any financing commitments relating thereto; (B) Microvast shall, and shall cause its subsidiaries to, and shall cause its and its subsidiaries’ representatives to, during the Microvast Notice Period, negotiate with Tuscan in good faith in respect of adjustments to the terms and conditions of the Merger Agreement such that such proposal would cease to constitute a Superior Proposal, if Tuscan, in its discretion, proposes to make such adjustments (it being agreed that in the event that, after commencement of the Microvast Notice Period, there is any material revision to the terms of a Superior Proposal, including any revision in price, the Microvast Notice Period shall be extended, if applicable, to ensure that at least three business days remains in the Microvast Notice Period subsequent to the time Microvast notifies Tuscan of any such material revision (it being understood that there may be multiple extensions)); and (C) following the end of such Microvast Notice Period (as extended pursuant to the preceding clause (B)) the Microvast Board determines in good faith, after consulting with its outside financial advisor and legal counsel, that such Acquisition Proposal continues to constitute a Superior Proposal after taking into account any adjustments made by Tuscan during the Microvast Notice Period to the terms and conditions of the Merger Agreement. Prior to taking such action, Microvast shall have complied in all material respects with its obligations under the non-solicitation provisions of the Merger Agreement and if the Microvast Board terminates the Merger Agreement to enter into an acquisition agreement with respect to such a Superior Proposal, Microvast pays to Tuscan the Termination Fee (as defined below) due under the Merger Agreement.

•        “Acquisition Proposal” means any inquiry, proposal or offer, or any indication of interest in making an offer or proposal, from any person or group at any time relating to an Alternative Transaction.

•        “Alternative Transaction” means (A) with respect to Microvast and its subsidiaries, a transaction (other than the Business Combination) concerning the direct or indirect sale or other disposition of (1) 10% or more of the business or assets of Microvast and its subsidiaries, taken as a whole, or (2) any Equity Interests or interests in the profits of Microvast or any of its subsidiaries, in any case, whether such transaction takes the form of a sale of shares or other equity interests, assets, merger, consolidation, issuance of debt securities, joint venture or partnership, or otherwise and (B) with respect to Tuscan, a transaction (other than the Business Combination) concerning a business combination.

•        “Superior Proposal” means a bona fide, written Acquisition Proposal, not solicited, received, initiated or facilitated in violation of the non-solicitation provisions of the Merger Agreement, involving (a) assets that generate more than 50% of the consolidated total revenues of Microvast and its subsidiaries, taken as a whole, (b) assets that constitute more than 50% of the consolidated total assets of Microvast and its

subsidiaries, taken as a whole, or (c) more than 50% of the total voting power of the equity securities of Microvast, in each case, that the Microvast Board (after consultation with outside legal counsel) reasonably determines, in good faith, would, if consummated, result in a transaction that is more favorable to Microvast than the transactions contemplated by the Merger Agreement after taking into account all such factors and matters deemed relevant in good faith by the Microvast Board, including legal, financial (including the financing terms of any such proposal), regulatory, timing or other aspects of such proposal and the transactions contemplated thereby after taking into account any changes to the terms of the Merger Agreement irrevocably offered in writing by Tuscan in response to such Superior Proposal pursuant to the terms of the Merger Agreement.

Representations and Warranties

The Merger Agreement contains customary representations and warranties of Microvast, Tuscan and Merger Sub relating to, among other things, their ability to enter into the Merger Agreement and their outstanding capitalization. These representations and warranties are subject to materiality, knowledge and other similar qualifications in many respects are modified by the disclosure schedules and expire at the Effective Time. These representations and warranties have been made solely for the benefit of the other parties to the Merger Agreement.

Conduct of Business Pending the Merger

Microvast has agreed that, prior to the Effective Time or earlier termination of the Merger Agreement, it will conduct its business in the ordinary course of business and in material compliance with applicable law. Microvast has also agreed to, in each case in all material respects, use its commercially reasonable efforts to maintain and preserve intact its business and organization, retain its officers and employees and maintain and preserve its relationships with its officers and employees, suppliers, vendors, licensors, governmental authorities, creditors and others having business relations with Microvast or its subsidiaries.

In addition to the general covenants above, Microvast has agreed that prior to the Effective Time or earlier termination of the Merger Agreement, subject to specified exceptions, Microvast and its subsidiaries will not, without the written consent of Tuscan (which may not be unreasonably withheld, conditioned or delayed):

•        change or amend its organizational documents;

•        issue, deliver, transfer, assign or sell, or authorize or propose the issuance, delivery, transfer, assignment or sale of, any shares of any class of its capital stock or other equity interests or authorize or propose any change in its equity capitalization or capital structure, or enter into any contract with respect to the voting of its equity interests;

•        authorize the issuance of any other equity interest in respect of, in lieu of or in substitution for any of its equity interests or other securities or purchase, redeem or otherwise acquire or retire for value any of the equity interests, in each case other than the issuance of Microvast’s common stock upon exercise of options or restricted stock units granted prior to the date of the Merger Agreement;

•        declare or pay any distribution in respect of its equity interests or authorize the issuance of any other equity interests in respect of, in lieu of or in substitution for any of its equity interests or other securities, or reclassify, combine, split, subdivide, purchase, redeem or otherwise acquire or retire for value any of its equity interests, in each case other than in respect of existing options or restricted stock units or pursuant to Microvast’s existing shareholders agreement, the Bridge Notes or the Convertible Loan Agreement;

•        (i) sell, assign, lease, sublease, exclusively license, exclusively sublicense, pledge or otherwise transfer or dispose of or grant any option or exclusive rights in, to or under, any material assets (including material intellectual property) or (ii) merge or consolidate, or agree to merge or consolidate, with or into any other person;

•        (i) acquire (including by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof in an amount in excess of $5,000,000 in the aggregate, (ii) make or agree to make any capital expenditures in excess of $2,500,000 in the aggregate, (iii) make a loan or advance to or investment in any third party, or

(iv) incur any indebtedness for borrowed money in excess of $2,500,000 in the aggregate or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in any of its assets;

•        (i) except in the ordinary course of business, enter into any material contract or (ii) amend, modify, terminate (excluding any expiration in accordance with its terms) or waive any material right under any material contract;

•        (i) increase the compensation or benefits payable to any current or former director, officer, employee or consultant, other than (A) health and welfare plan renewals in the ordinary course of business or (B) increases in base salary or wage of employees in the ordinary course of business; (ii) pay or promise to pay any bonus to any such current or former director, officer, employee or consultant, other than the payment of bonuses in the ordinary course of business for a completed fiscal year; (iii) take any action to accelerate or commit to accelerate the funding, payment, or vesting of any compensation or benefits to any current or former director, officer, employee or consultant; (iv) hire or otherwise enter into any employment or consulting agreement or arrangement with any person (other than to fill a vacancy in the ordinary course of business) or terminate (other than for cause) any current or former director, officer, employee or consultant provider whose annual base salary or wage would exceed $150,000; or (v) enter into any new, or materially amend any existing, employment or severance or termination agreement with any current or former director, officer, employee or consultant whose annual base salary or wage would exceed $150,000;

•        adopt, amend or terminate any material benefit plan or benefit arrangement except as may be required by applicable law;

•        intentionally permit any material intellectual property to lapse or to be abandoned, invalidated, dedicated to the public, or disclaimed, or otherwise become unenforceable or fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every material intellectual property;

•        enter into, amend, or terminate (other than terminations in accordance with their terms) any contract with any related party, or waive any material right in connection therewith;

•        make any change in accounting methods, principles, practices or procedures, except to the extent required to comply with GAAP;

•        make or rescind any material election relating to taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy with a governmental authority relating to a material amount of taxes, file any materially amended tax return or claim for refund of a material amount of taxes, or make any material change to a method of accounting for tax purposes, in each case except as required by applicable law or in compliance with GAAP;

•        adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

•        settle, compromise, release or waive its rights under any claim or litigation, other than for (i) cash in an amount less than $250,000, (ii) routine collection and settlement matters, or (iii) in connection with ordinary course commercial matters; provided that no such settlement, compromise, release or waiver shall (x) include any admission of wrongdoing by Microvast or any of its subsidiaries, or (y) obligate or require it to take, or refrain from taking, any action; or

•        authorize or agree (in writing or otherwise) to take any of the actions described above.

Tuscan has agreed that, prior to the Effective Time or earlier termination of the Merger Agreement, it and Merger Sub will conduct their respective businesses in the ordinary course of business and in material compliance with applicable law. Tuscan has also agreed that it and Merger Sub will, in each case in all material respects, use their commercially reasonable efforts to maintain and preserve intact their respective businesses and organizations,

retain their respective officers and employees and maintain and preserve their relationships with their officers and employees, suppliers, vendors, licensors, governmental authorities, creditors and others having business relations with any such person.

In addition to the general covenants above, Tuscan has agreed that prior to the Effective Time or earlier termination of the Merger Agreement, subject to specified exceptions, Tuscan and Merger Sub will not, without the written consent of Microvast (which may not be unreasonably withheld, conditioned or delayed):

•        change or amend any of their respective organizational documents;

•        other than pursuant to the PIPE Financing, issue, deliver or sell, or authorize or propose the issuance, delivery or sale of any equity interest or authorize or propose any change in the equity capitalization or capital structure or enter into any contract with respect to the voting of its equity interests;

•        declare or pay any distribution in respect of its equity interests or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any of its securities, or purchase, redeem or otherwise acquire or retire for value any of its securities except for Conversions from the trust account that are required pursuant to the Charter;

•        (i) sell, assign, lease, sublease, exclusively license, exclusively sublicense, pledge or otherwise transfer or dispose of or grant any option or exclusive rights in, to or under, any material assets (including material intellectual property) or (ii) merge or consolidate, or agree to merge or consolidate, with or into any other person;

•        (i) acquire (including by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof, (ii) make or agree to make any capital expenditures, (iii) make a loan or advance to or investment in any third party, or (iv) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or intentionally grant any security interest in any of its assets, other than working capital loans made by the Sponsor necessary to finance Tuscan’s ordinary course administrative costs and expenses and Tuscan’s transaction expenses;

•        (i) except in the ordinary course of business, enter into any material contracts or (ii) amend, modify, terminate (excluding any expiration in accordance with its terms) or waive any material right under any material contracts;

•        hire any new employees, consultants or advisors or enter into any new employment, consulting or advisor agreements;

•        enter into, amend, or terminate (other than terminations in accordance with their terms) any contract with any related party, or waive any material right in connection therewith (other than working capital loans made by the Sponsor);

•        adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

•        make any change in accounting methods, principles or practices, except to the extent required to comply with GAAP;

•        make or rescind any material election relating to taxes, settle any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy with a governmental authority relating to a material amount of taxes, file any materially amended tax return or claim for refund of a material amount of taxes, or make any material change to a method of accounting for tax purposes, in each case except as required by applicable law or in compliance with GAAP;

•        amend, waive or otherwise change the Trust Agreement in any manner adverse to Tuscan; or

•        authorize or agree (in writing or otherwise) to take any of the actions described above.

Conditions to Closing

General Conditions

Under the terms of the Merger Agreement, the consummation of the Business Combination is conditioned upon, among other things:

•        No law being in effect that prohibits, makes illegal, enjoins or prevents the consummation of the Business Combination;

•        All waiting periods under the HSR Act having expired or terminated;

•        The requisite approval of the Microvast stockholders having been obtained (which approval was obtained on February 1, 2021);

•        The Tuscan stockholders having approved the Business Combination Proposal, the Nasdaq Proposal and the Charter Proposal; and

•        The Framework Agreement continuing to be in full force and effect.

Microvast’s Conditions to Closing

The obligations of Microvast to consummate the Business Combination is also conditioned upon, among other things:

•        The representations of Tuscan and Merger Sub being accurate (subject to certain bring-down standards);

•        The agreements and covenants of Tuscan and Merger Sub required by the Merger Agreement to be performed prior to the Effective Time having been performed in all material respects;

•        No material adverse effect with respect to Tuscan having occurred between the date of the Merger Agreement and the Closing that is continuing;

•        The Common Stock to be issued in the Merger and in the PIPE Financing having been approved for listing on Nasdaq;

•        Tuscan’s existing directors, other than Stephen Vogel, resigning, effective as of the Closing;

•        Tuscan’s existing officers resigning, effective as of the Closing;

•        All conditions to the funding of the PIPE Financing having been satisfied or waived;

•        The stockholders of Tuscan having approved the Business Combination Proposal, the Charter Proposal, the Nasdaq Proposal, the Director Election Proposal and the Incentive Plan Proposal at the special meeting;

•        After giving effect to the exercise of Conversion rights by Public Stockholders of outstanding Public Shares in connection with the Business Combination, the amount of funds available to Tuscan, whether inside or outside of the trust account, plus the gross proceeds received from the PIPE Financing, being at least $250,000,000;

•        Tuscan and the Sponsor Group executing the Registration Rights Agreement;

•        Tuscan and the Sponsor Group executing the Stockholders Agreement;

•        The execution of certain documents contemplated by the Framework Agreement (which documents have been executed as of February 1, 2021); and

•        Tuscan issuing to the MVST SPV 17,253,182 shares of Common Stock, which represents the MPS Minority Holders’ share of the Closing Transaction Consideration.

Tuscan’s and Merger Sub’s Conditions to Closing

The obligations of Tuscan and Merger Sub to consummate the Business Combination is also conditioned upon, among other things:

•        The representations of Microvast being accurate (subject to certain bring-down standards);

•        The agreements and covenants of Microvast required by the Merger Agreement to be performed prior to the Effective Time having been performed in all material respects;

•        No material adverse effect with respect to Microvast having occurred between the date of the Merger Agreement and the Closing that is continuing;

•        The Microvast Holders and the MPS Investors executing the Registration Rights Agreement;

•        The Microvast Holders and the MPS Investors executing the Stockholders Agreement;

•        The execution of certain documents contemplated by the Framework Agreement (which documents have been executed as of February 1, 2021); and

•        Microvast and the Microvast Holders that are party to Microvast’s existing shareholders agreement having terminated such agreement.

Termination

The Merger Agreement may be terminated prior to the Closing, as follows:

•        by mutual written consent of Tuscan and Microvast;

•        by either Tuscan or Microvast if the Transactions are not consummated on or before July 31, 2021 (or May 1, 2021 if the deadline by which Tuscan must consummate a business combination is not extended), subject to certain limitations;

•        by either Tuscan or Microvast if any applicable governmental authority shall have issued a final and non-appealable order, decree or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Transactions;

•        by either Tuscan or Microvast if Tuscan’s stockholders fail to approve the Proposals (other than the Advisory Proposals);

•        by Tuscan if Microvast shall have failed to deliver the requisite approval of the Microvast stockholders within 24 hours after the execution of the Merger Agreement;

•        by Microvast if Tuscan shall have failed to deliver the consent of Tuscan as sole stockholder of Merger Sub within 24 hours after the execution of the Merger Agreement;

•        by either Tuscan or Microvast upon certain material breaches of the other party;

•        by Tuscan if, prior to obtaining the requisite stockholder approval, the Microvast Board makes an Adverse Recommendation Change; or

•        by Microvast at any time prior to receipt of the Microvast stockholder approval in order to enter into a definitive agreement with respect to a Superior Proposal (as defined herein), if the Microvast Board determines in good faith, in consultation with its outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties under applicable law.

On February 1, 2021, the requisite approval of the Microvast stockholders was obtained, and the consent of Tuscan as sole stockholder of Merger Sub was delivered to Microvast.

Effect of Termination

If the Merger Agreement is terminated, the Merger Agreement will become void, and there will be no liability under the Merger Agreement on the part of any party thereto, except as set forth in the Merger Agreement or in the case of termination subsequent to a willful material breach of the Merger Agreement by a party thereto.

Termination Fee

Microvast will pay a termination fee in the amount of $63,000,000 (the “Termination Fee”), in the event that:

•        ((i) The Merger Agreement is terminated (x) by Microvast or Tuscan, if the Closing does not occur prior to July 31, 2021 (or May 1, 2021 if the deadline by which Tuscan must consummate a business combination is not extended), (y) by Tuscan if (1) Microvast fails to deliver the requisite stockholder approval to Tuscan within 24 hours after the execution of the Merger Agreement (which approval was delivered on February 1, 2021), or (2) there has been a breach of, or (in the case of representations and warranties) inaccuracy in, any representation, warranty, covenant or agreement of Microvast set forth in the Merger Agreement; (ii) a bona fide Acquisition Proposal has been made, proposed or otherwise communicated to Microvast in writing after the date of the Merger Agreement; and (iii) within six months of the date the Merger Agreement is terminated, Microvast enters into a definitive agreement with respect to such Acquisition Proposal; or

•        The Merger Agreement is terminated (x) by Tuscan if the Microvast Board or a committee thereof, prior to obtaining the requisite approval of the Microvast stockholders, makes an Adverse Recommendation Change or (y) by Microvast, if at any time prior to receiving the requisite stockholder approval, Microvast enters into an acquisition agreement with respect to a Superior Proposal. The requisite approval of the Microvast stockholders was obtained on February 1, 2021.

Additional Agreements

Framework Agreement

Contemporaneously with the execution of the Merger Agreement, Tuscan, Microvast, MVST SPV, MPS, the MPS Investors and certain other parties entered into the Framework Agreement, pursuant to which such parties agreed to, among other things, enter into certain agreements and effect certain transactions in connection with the Business Combination. The purpose of the Framework Agreement is to, among other things, (1) provide the MPS Investors with the same economic benefits they would have had if each of them had participated directly in the Business Combination as stockholders of Microvast as of immediately prior to the effective time of the Business Combination, (2) effect the discharge of all of the obligations of MPS and Microvast to the MPS CL Investors in respect of the Convertible Loan Agreement and (3) acquire all of the outstanding equity interests in MPS held by the MPS Minority Investors, so that, following the consummation of the transactions contemplated by the Framework Agreement (collectively, the “MPS Transactions”), MPS will become a wholly-owned subsidiary of Microvast. The Framework Agreement provides that:

(a)     the MPS Transactions are subject to and conditioned upon the Closing;

(b)    in connection with the MPS Transactions, upon the Closing, the MPS CL Investors will waive certain rights with respect to the Convertible Loans held by them, and the MPS Minority Investors will waive any voting or economic rights they may have in any MPS equity held by them;

(c)     with respect to the MPS Minority Investors, (1) upon the Closing, Tuscan will issue 17,253,182 shares of Common Stock to MVST SPV, which represent the number of shares that would otherwise have been issued to the MPS Minority Investors in the Business Combination had the MPS Minority Investors been direct stockholders of Microvast, and (2) following the Closing and the expiration of a six-month lock-up period, Tuscan and MVST SPV will cause such shares to be sold and will use the net proceeds from such sales to acquire all of the MPS equity held by the MPS Minority Investors; and

(d)     with respect to the MPS CL Investors, (1) upon the Closing, Tuscan will issue, in the aggregate, 6,719,845 shares of Common Stock (the “CL Shares”) to the CL Affiliates pursuant to subscription agreements entered into with each such CL Affiliate in exchange for promissory notes secured by the CL Shares in an aggregate amount equal to MPS’ outstanding obligations to the MPS CL Investors under the Convertible Loans, which represent the number of shares that would otherwise have been issued to the MPS CL Investors in the Business Combination had the MPS CL Investors been direct stockholders of Microvast, and (2) subject to the MPS CL Investors obtaining certain regulatory

approvals, MPS will repay the outstanding Convertible Loans and the CL Affiliates will repay to the Company the promissory notes used to subscribe for the CL Shares, resulting in MPS’s and Microvast’s obligations under the Convertible Loans being fully discharged. If such regulatory approvals are not obtained within a certain period of time following the Closing, then (A) the Convertible Loans will be converted into MPS equity, (B) following the expiration of a six-month lock-up period, the CL Affiliates will sell the CL Shares and use the net proceeds from such sales to purchase the MPS equity held by the MPS CL Investors, and (C) following such purchase, the Company will acquire the CL Affiliates for a nominal purchase price so that, following such transactions, all of the MPS equity that was issued upon conversion of the Convertible Loans will be held by the Company.

CL Subscription Agreements

In connection with MPS Transactions, and concurrently with the execution of the Merger Agreement, Tuscan has entered into subscription agreements (each, a “CL Subscription Agreement”) with each of the CL Affiliates pursuant to which such CL Affiliates have agreed to purchase an aggregate of 6,719,845 CL Shares in a private placement for promissory notes with an aggregate principal amount equal to the total outstanding amount of the Convertible Loans (the “CL Private Placement”). The CL Shares issued pursuant to the CL Private Placement will be used by MPS in connection with the MPS Transactions to (1) discharge all of the obligations of MPS and Microvast to the MPS CL Investors with respect to the Convertible Loans and (2) acquire all of the outstanding equity interests in MPS held by the MPS Investors.

Each CL Subscription Agreement will terminate with no further force and effect upon the earliest to occur of: (1) such date and time as the Merger Agreement is terminated in accordance with its terms; (2) the mutual written agreement of the parties to such CL Subscription Agreement; (3) the failure of any of the conditions to closing set forth in such CL Subscription Agreement to be satisfied on or prior to the Closing; and (4) the election of each CL Affiliate that is a party to a CL Subscription Agreement, if the consummation of the transactions contemplated by such CL Subscription Agreement has not occurred by the Termination Date. As of the date hereof, it is not contemplated that the CL Shares to be issued pursuant to the CL Subscription Agreements will be registered under the Securities Act until after the Closing. At the Closing, the CL Affiliates will enter into the Registration Rights and Lock-Up Agreement that will provide such CL Affiliates with certain registration rights and bind them to a six-month lock-up.

Tuscan Support Agreement

In connection with the Business Combination and concurrently with the execution of the Merger Agreement, the Sponsor Group, Tuscan and Microvast entered into the Tuscan Support Agreement, pursuant to which each member of the Sponsor Group agreed to vote all shares of Common Stock held by such member in favor of the Business Combination and each other proposal being submitted for the vote of Tuscan stockholders herein and abstain from exercising any conversion rights that they may have in connection with the Business Combination. The Sponsor has agreed that if Tuscan’s transaction expenses exceed $46,000,000 (collectively, the “Tuscan Expense Cap”), then, the Sponsor shall either (1) pay any such amount in excess of the Tuscan Expense Cap to Tuscan in cash or (2) forfeit to Tuscan (for no consideration) such number of shares of Common Stock (valued at $10.00 per share) that would, in the aggregate, have a value equal to such amount in excess of the Tuscan Expense Cap. In addition, the Sponsor agreed to amend the Escrow Agreement to reflect that, among other things, an aggregate of 1,687,500 shares of Common Stock currently held by it would be subject to forfeiture unless the sale price of Common Stock equals or exceeds certain specified trading prices for any 20 trading days within any 30-trading day period prior to the fifth anniversary of the Closing.

Stockholders Agreement

At the Closing of the Business Combination, Microvast Holdings, Wu and the Sponsor will enter into the Stockholders Agreement, which provides that immediately following the Closing, the Board shall consist of: (i) Wu, who will be the initial Chairman of the Board (who will also be the Chief Executive Officer of Microvast Holdings); (ii) Yanzhuan (Leon) Zheng (who will also be the Chief Financial Officer of Microvast Holdings); (iii) Stanley Whittingham; (iv) Arthur Wong; (v) Craig Webster; (vi) Stephen Vogel; and (vii) Ying Wei. The Stockholders Agreement will also provide that immediately following the Closing, the certificate of incorporation shall provide that (a) the number of directors which shall constitute the Board shall be fixed by and in the manner

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Defined terms included below have the same meaning as terms defined and included elsewhere in this proxy statement.

Introduction

Tuscan is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of Microvast becoming a wholly-owned subsidiary of Tuscan as a result of Merger Sub, a wholly-owned subsidiary of Tuscan, merging with and into Microvast, and Microvast surviving the merger as a wholly owned subsidiary of Tuscan. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

In connection with the Business Combination, (1) Tuscan will issue 48,250,000 shares of Common Stock to certain investors for $482,500,000, (2) Tuscan will issue 6,736,111 shares of Common Stock upon conversion of an aggregate of $57,500,000 outstanding Bridge Notes pursuant to the Bridge Note Conversion, (3) Merger Sub will merge with and into Microvast with Microvast as the surviving corporation of the Merger, (4) all of the outstanding equity interests in Microvast will be converted into 210,000,000 shares of Common Stock, (5) each of the 27,583,512 shares of publicly held Common Stock that was outstanding prior to the Merger will remain outstanding unless the holders thereof elect to convert such shares into cash in connection with the Business Combination, and (6) the 558,589 Tuscan Units and 6,900,000 shares of Common Stock owned by the Sponsor and the 128,411 Tuscan Units and 300,000 shares of Common Stock held by EarlyBirdCapital will remain outstanding. In addition, if, during the 3-year period following the closing of the Merger, the Common Stock trades above $18.00 per share, 20,000,000 Earn-Out Shares will be issued to the former equity holders of Microvast. The following unaudited pro forma condensed combined financial statements of Tuscan presents the combination of the financial information of Tuscan and Microvast, adjusted to give effect to the Business Combination including:

•        the reverse recapitalization between Microvast and Tuscan, whereby no goodwill or other intangible assets are recorded, in accordance with GAAP; and

•        the consummation of the Business Combination.

The following unaudited pro forma condensed combined balance sheet as of March 31, 2021 assumes that the Business Combination occurred on March 31, 2021. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 and for the three months ended March 31, 2021 present pro forma effect to the Business Combination as if they have been completed on January 1, 2020. The unaudited pro forma combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what Microvast Holdings’ financial condition or results of operations would have been had the acquisition occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of Microvast Holdings. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The historical audited financial information of Microvast was derived from the audited consolidated financial statements of Microvast as of and for the three years ended December 31, 2020, included elsewhere in this proxy statement. The historical unaudited financial information of Microvast was derived from the unaudited condensed consolidated financial statements of Microvast as of and for the three months ending March 31, 2021, included elsewhere in this proxy statement. This information should be read together with Tuscan’s and Microvast’s audited financial statements and related notes, the sections titled “Tuscan’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Microvast’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement.

Under both the no Conversion and maximum Conversion scenarios, the Business Combination will be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Former Microvast equity holders will control Microvast before and after the Business Combination. As there is no change in control, Microvast has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•        Former Microvast equity holders will have a majority of the voting power of Microvast Holdings under both the no Conversion and maximum Conversion scenarios;

•        Former Microvast equity holders will have the ability to nominate and represent majority of the Board;

•        Microvast’s former management will comprise all of the management and executive positions of Microvast Holdings.

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

Description of the Business Combination

On February 1, 2021, Tuscan entered into the Merger Agreement. The consideration to be paid in connection with the Business Combination will consist of shares of Common Stock. At the closing of the Merger Agreement, a series of transactions will occur, including the following: (1) Tuscan will issue 48,250,000 shares of Common Stock to certain investors for $482,500,000; (2) Tuscan will issue 6,736,111 shares of Common Stock upon conversion of an aggregate of $57,500,000 outstanding Bridge Notes pursuant to the Bridge Note Conversion; (3) Merger Sub will merge with and into Microvast with Microvast as the surviving corporation of the Merger; (4) all of the outstanding equity interests in Microvast will be converted into 210,000,000 shares of Common Stock; (5) each of the 27,583,512 shares of publicly held Common Stock that was outstanding prior to the Merger will remain outstanding unless the holders thereof elect to convert such shares into cash in connection with the Business Combination; and (6) the 558,589 Tuscan Units and 6,900,000 shares of Common Stock owned by the Sponsor and the 128,411 Tuscan Units and 300,000 shares of Common Stock held by EarlyBirdCapital will remain outstanding. In addition, if, during the 3-year period following the closing of the Merger, the Common Stock trades above $18.00 per share, or there is a change of control in which equity holders receive $18.00 or more per share, 20,000,000 Earn-Out Shares will be issued to the former equity holders of Microvast. Since the Business Combination is accounted for as a reverse capitalization and the Earn-Out Shares are indexed to Microvast Holding’s equity, the Earn-Out Shares meet the criteria for equity classification and are accounted for as such in the pro forma financial statements.