EX-99.1

33 s117988_ex99-1.htm

EXHIBIT 99.1

Exhibit 99.1

CM Seven Star Announces Consummation of Business Combination with Renren Inc.’s Kaixin Auto Group

BEIJING,

May 01, 2019 (GLOBE NEWSWIRE) -- CM Seven Star Acquisition Corporation (“CM Seven Star”) (CMSS), a blank check company formed for the purpose of entering into a business combination with one or more businesses, and Renren Inc. (“Renren”) (RENN), which operates a used car business and SaaS business, today announced the successful consummation of the previously announced transaction contemplated by the share exchange agreement dated as of November 2, 2018 by and among CM Seven Star, Kaixin Auto Group (“Kaixin”) and Renren (the “Share Exchange Agreement”), and approved by CM Seven Star shareholders on April 29, 2019.

Upon the closing of the transactions contemplated in the Share Exchange Agreement in which CM Seven Star acquired 100% of the issued and outstanding securities of Kaixin, Renren received approximately 28.3 million ordinary shares of CM Seven Star, representing 71.7% of the total outstanding shares of CM Seven Star. An additional 4.7 million ordinary shares of CM Seven Star will be issued in exchange for currently outstanding options in Kaixin or reserved for issuance under the equity incentive plan of CM Seven Star. Additionally, 19.5 million earnout shares were issued in escrow. Approximately 20.4 million ordinary shares were redeemed in connection with the closing of the transaction. Kaixin has raised a total of $30.9 million from the business combination and related transactions, including $2.4 million that remains in the trust account established for the benefit of CM Seven Star’s public shareholders following the redemption and $28.5 million from convertible loans and a private placement.

Renren may be entitled to receive earnout shares as follows: (1) if the combined company’s gross revenue for the year ended December 31, 2019 is greater than or equal to RMB 5,000,000,000, Renren is entitled to receive 1,950,000 ordinary shares of CM Seven Star; (2) if the combined company’s adjusted EBITDA for the year ended December 31, 2019 is greater than or equal to RMB 150,000,000, Renren is entitled to receive 3,900,000 ordinary shares of CM Seven Star, increasing proportionally to 7,800,000 ordinary shares if Company’s adjusted EBITDA is greater than or equal to RMB 200,000,000; and (3) if the combined company’s adjusted EBITDA for the year ended December 31, 2020 is greater than or equal to RMB 340,000,000, Renren is entitled to receive 4,875,000 ordinary shares of CM Seven Star, increasing proportionally to 9,750,000 ordinary shares if the combined company’s adjusted EBITDA is greater than or equal to RMB 480,000,000.  Notwithstanding the revenue and adjusted EBITDA achieved by the combined company for any period, Renren will receive the 2019 earnout shares if the stock price of CM Seven Star is higher than $13.00 for any sixty days in any period of ninety consecutive trading days during an fifteen month period following the closing, and will receive the 2019 earnout shares and the 2020 earnout shares if the stock price of CM Seven Star is higher than $13.50 for any sixty days in any period of ninety consecutive trading days during a thirty month period following the closing.

CM Seven Star’s company name has been changed to Kaixin Auto Holdings and its ticker symbol on the Nasdaq stock exchange will change from “CMSS” to “KXIN” effective at the start of trading on May 2, 2019.  No action is needed from current CM Seven Star shareholders in relation to the ticker symbol change. The new CUSIP is G5223X100.

Kaixin will continue to be led by its current management team with Joseph Chen as Chairman of the Board of Directors, Ji Chen as Chief Executive Officer and Thomas Ren as Chief Financial Officer. Kaixin will remain headquartered in Beijing, China.

Sing Wang, Chief Executive Officer of CM Seven Star, said, “Kaixin’s leadership has done a terrific job creating one of the leading premium segment nationwide used car dealership networks offering value-added and after-sales services in China. The evolution of the automobile market sales cycle in China is ripe for the value-added benefits that Kaixin’s differentiated model delivers.  We are excited about the ways this transaction will leverage Kaixin’s dealership network platform to bring exciting growth and solid shareholder value.”

Joseph Chen, Chairman of Kaixin and Chairman & Chief Executive Officer of Renren Inc., added, “We are delighted to achieve this milestone and welcome our new shareholder partners. Sing and his team have been exceptional partners throughout this process. We have a solid foundation in place and look forward to further scaling our operations to bring our proven market solutions to even more dealerships in China in this new chapter of growth.”

EarlyBirdCapital, Inc. acted as exclusive financial and capital markets advisor to CM Seven Star. Loeb & Loeb LLP acte