Company: MCHB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001518715-25-000083
Chunk: 9

Company: Mechanics Bancorp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 4
Chunk 9
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 pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger. Additionally, if the Merger Agreement is terminated, the market price of the Company’s common stock could decline, including to the extent that the current market prices reflect a market presumption that the Merger will be completed. The Company or Mechanics Bank could also be subject to litigation related to any failure to complete the Merger, including litigation seeking to force the Company and/or Mechanics Bank to perform their respective obligations under the Merger Agreement. If the Merger Agreement is terminated under certain circumstances, the Company may be required to pay a termination fee of $10 million to Mechanics Bank.  

In addition, the Company has incurred and will incur substantial expenses in connection with the completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of preparing, filing, printing and mailing the proxy statement/prospectus/consent solicitation statement, and all filing and other fees paid in connection with the Merger. If the Merger is not completed, the Company would have to pay these expenses without realizing the expected benefits of the Merger. Any of the foregoing, or other risks arising in connection with the failure of or delay in consummating the Merger, including the diversion of management’s attention from pursuing other opportunities and the constraints in the Merger Agreement on the ability to make significant changes to the Company’s ongoing business during the pendency of the Merger, could have a material adverse effect on the Company’s businesses, financial conditions and results of operations.

Additionally, the Company’s business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Merger, without realizing any of the anticipated benefits of completing the Merger. If the Merger Agreement is terminated and the Company’s board of directors seeks another merger or business combination, the 

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Company’s shareholders cannot be certain that the Company will be able to find a party willing to engage in a transaction on more attractive terms than the proposed Merger.

Issuance of shares of common stock to Mechanics Bank shareholders in connection with the Merger may adversely affect the market price of the Company’s common stock.

The Merger is structured as a reverse merger whereby the existing shareholders of Mechanics Bank will receive common stock in the Company in exchange for their Mechanics Bank shares. Upon completion of the Merger, the Company will be renamed Mechanics Bancorp and remain a publicly traded company and the Company will issue approximately