Item 1.01 Entry into a Material definitive Agreement.





The Merger Agreement

On January 27, 2022, Mountain Crest Acquisition Corp. III, a Delaware corporation ("MCAE" or "Parent"), entered into that certain Agreement and Plan of Merger (as may be amended, supplemented or otherwise modified from time to time, the "Merger Agreement"), by and among MCAE, Etao International Group, a Cayman Islands corporation (the "Company"), and Wensheng Liu, in his capacity as the Company Shareholders' Representative (the "Shareholders' Representative"), pursuant to which, among other things, (1) the Parent will merge with and into a to be formed Cayman Islands company ("Purchaser"), with the Purchaser being the surviving corporation in the merger (the "Redomestication Merger") and (2) the Company will merge with and into a to be formed Cayman Islands company named ("Merger Sub"), with the Company as the surviving corporation in the merger (the "Acquisition Merger"), and, after giving effect to the Acquisition Merger, the Company being a wholly owned subsidiary of Purchaser and the Purchaser will change its name to Etao International Co., Ltd. (collectively, the "Business Combination"). Following the Business Combination, Purchaser expects to trade on the New York Stock Exchange.

Based upon the execution of the Merger Agreement, the period of time for MCAE to complete a business combination under its certificate of incorporation is extended for a period of 6 months from May 20, 2022 to November 20, 2022.





Consideration

In consideration of the Acquisition Merger, Purchaser will issue 250,000,000 ordinary shares at a per share price of US$10.00 as agreed by the parties to the shareholders of the Company in exchange for 100% of the issued and outstanding ordinary shares of the Company.





The Closing

MCAE and the Company have agreed that the closing of the Business Combination (the "Closing") shall occur no later than May 31 2022 (the "Outside Date"). The Outside Date may be extended upon the written agreement of MCAE and the Company.

Representations and Warranties

In the Merger Agreement, the Company makes certain representations and warranties (with certain exceptions set forth in the disclosure schedule to the Merger Agreement) relating to, among other things: (a) proper corporate existence and power of the Company and its subsidiaries (together, the "Company Parties") and similar corporate matters; (b) authorization, execution, delivery and enforceability of the Merger Agreement and other transaction documents; (c) capital structure; (d) no need for governmental authorization for the execution, delivery or performance of the Merger Agreement and additional agreements thereto (the "Additional Agreements"); (e) no violations; (f) financial statements and liabilities; (g) absence of changes; (h) compliance with laws and permits; (i) litigation and government orders; (j) taxes; (k) employee benefits; (l) employee matters; (m) intellectual property; (n) IT systems; (o) material contracts; (p) real property; (q) insurance; (r) data protection and cybersecurity; (s) fees to brokers and finders; (t) sufficiency of assets; (u) affiliate transactions; (v) banking relationships; (w) no other representations or warranties.





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In the Merger Agreement, MCAE, on its behalf and also on behalf of Purchaser and Merger Sub when formed (together, the "Parent Parties") make certain representations and warranties relating to, among other things: (a) organization and qualification; (b) authorization, execution, delivery and enforceability of the Merger Agreement and other transaction documents; (c) SEC reports and financial statements; (d) governmental filings and consents; (e) no violations; (f) no prior operations; (g) valid issuance of Parent common stock; (h) litigation; (i) fees to brokers and finders; (j) redomestication intended tax treatment; and (k) no other representations or warranties.

Conduct Prior to Closing; Covenants Pending Closing

The Company and the Parent Parties have agreed to operate their respective business in the ordinary course, consistent with past practices, prior to the closing of the transactions (with certain exceptions) and not to take certain specified actions without the prior written consent of the other party.

The Merger Agreement also contains customary closing covenants.





Conditions to Closing



General Conditions to Closing

Consummation of the Merger Agreement and the transactions herein is conditioned on, among other things, (i) no provisions of any applicable law and no order prohibiting or preventing the consummation of the closing; (ii) Company shareholder approval; (iii) parent shareholder approval; (iv) regulatory and governmental approvals, including if applicable, the expiration or termination of any waiting periods under the HSR Act; (v) as of the closing date the Parent shall have at least $5,000,001 in net tangible assets; (vi) the SEC having declared the registration statement with respect to the Business Combination effective.

Company's Conditions to Closing

The obligations of the Company to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above, are conditioned upon each of the following, among other things:





?   the Parent complying with all of obligations under the Merger Agreement in
    all material respects;




?   the representations and warranties of the Parent being true on and as of the
    date of the Merger Agreement and the closing date of the transactions except
    as would not be expected to have a material adverse effect;

? the covenants of the Parent have been performed or complied with; and

? approval of Parent's initial listing application with the NYSE.






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Parent Parties' Conditions to Closing

The obligations of the Parent Parties to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above in the first paragraph of this section, are conditioned upon each of the following, among other things:





?   the representations and warranties of the Company being true on and as of the
    date of the Merger Agreement and the closing date of the transactions except
    as would not be expected to have a material adverse effect;

? the covenants of the Company have been performed or complied with;

? there having been no material adverse effect to the Company;

? the Company shall have received the requisite shareholder approval;

? the Parent Parties having received copies of all governmental approvals, and

no such governmental approval shall have been revoked.

? the Parent Parties having received a copy of each of the Ancillary Agreements

to which the Company is a party, duly executed by the Company and in full

force and effect, as well as a copy of each of the Additional Agreements duly

executed by all required parties thereto, other than Parent or the Company.

? the aggregate cash proceeds available to the Parent Parties from a private

placement or other financing to be consummated simultaneously with the . . .

Item 3.02 Unregistered Sales of Equity Securities

The disclosure set forth above under the heading "PIPE Subscription Agreements" in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein. The PIPE Securities will not be registered under the Securities Act of 1933, as amended (the "Securities Act") in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

Item 7.01 Regulation FD Disclosure

On January 28, 2022 MCAE and the Company issued a press release announcing the execution of the Business Combination Agreement. Attached hereto as Exhibit 99.1 and incorporated into this Item 7.01 by reference is the copy of the press release.

Attached hereto as Exhibit 99.2 and incorporated into this Item 7.01 by reference is the investor presentation that will be used by the parties in making presentations with respect to the Business Combination.

The information in this Item 7.01 (including Exhibits 99.1 and 99.2) is being furnished and shall not be deemed to be filed for purposes of Section 18 of the Exchange Act , or otherwise be subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.





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                               IMPORTANT NOTICES

Important Notice Regarding Forward-Looking Statements

This Current Report on Form 8-K contains certain "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended. Statements that are not historical facts, including statements about the pending transactions described above, and the parties' perspectives and expectations, are forward-looking statements. Such statements include, but are not limited to, statements regarding the proposed transaction, including the anticipated initial enterprise value and post-closing equity value, the benefits of the proposed transaction, integration plans, expected synergies and revenue opportunities, anticipated future financial and operating performance and results, including estimates for growth, the expected management and governance of the combined company, and the expected timing of the transactions. The words "expect," "believe," "estimate," "intend," "plan" and similar expressions indicate forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, assumptions (including assumptions about general economic, market, industry and operational factors), known or unknown, which could cause the actual results to vary materially from those indicated or anticipated.

The forward-looking statements are based on the current expectations of the management of MCAE and the Company, as applicable, and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements including: risks related to the Company's businesses and strategies; the ability to complete the proposed business combination due to the failure to obtain approval from MCAE's stockholders or satisfy other closing conditions in the definitive merger agreement; the amount of any redemptions by existing holders of MCAE's common stock; the ability to recognize the anticipated benefits of the business combination; other risks and uncertainties included under the header "Risk Factors" in the Registration Statement to be filed by Mountain Crest III, in the final prospectus of Mountain Crest III for its initial public offering dated May 17, 2021; and in Mountain Crest III's other filings with the SEC.Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements relate only to the date they were made, and MCAE, the Company and their subsidiaries undertake no obligation to update forward-looking statements to reflect events or circumstances after the date they were made except as required by law or applicable regulation.

Additional Information and Where to Find It

In connection with the transaction described herein, MCAE and and/or its subsidiaries will file relevant materials with the Securities and Exchange Commission (the "SEC"), including the Registration Statement on Form S-4 or Form F-4 and a proxy statement (the "Registration Statement"). The Registration Statement will include a proxy statement to be distributed to holders of MCAE's common stock in connection with MCAE's solicitation of proxies for the vote by MCAE shareholders with respect to the proposed transaction and other matters as described in the Registration Statement, as well as the prospectus relating to the offer of securities to be issued to the Company's stockholders in connection with the proposed business combination. After the Registration Statement has been filed and declared effective, MCAE will mail a definitive proxy statement, when available, to its stockholders. Investors and security holders and other interested parties are urged to read the Registration Statement, any amendments thereto and any other documents filed with the SEC carefully and in their entirety when they become available because they will contain important information about MCAE, the Company and the proposed business combination. Additionally, MCAE will file other relevant materials with the SEC in connection with the business combination. Copies of these documents may be obtained free of charge at the SEC's web site at www.sec.gov. Securityholders of Mountain Crest III are urged to read the Registration Statement and the other relevant materials when they become available before making any voting decision with respect to the proposed business combination because they will contain important information. The Registration Statement and proxy statement, once available, may also be obtained without charge at the SEC's website at www.sec.gov or by writing to MCAE at 311 West 43rd Street, 12th Floor, New York, NY 10036. INVESTORS AND SECURITY HOLDERS OF MCAE ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTIONS THAT MCAE WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MCAE, THE COMPANY AND THE TRANSACTIONS..





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Participants in Solicitation

MCAE, the Companyand their respective directors and executive officers may be deemed participants in the solicitation of proxies with respect to the proposed business combination under the rules of the SEC. Securityholders may obtain more detailed information regarding the names, affiliations, and interests of certain of MCAE's executive officers and directors in the solicitation by reading MCAE's Registration Statement and other relevant materials filed with the SEC in connection with the proposed business combination when they become available. Information about MCAE's directors and executive officers and their ownership of MCAE common stock is set forth in MCAE's prospectus related to its initial public offering dated May 17, 2021, as modified or supplemented by any Form 3 or Form 4 filed with the SEC since the date of that filing. Other information regarding the interests of MCAE's participants in the proxy solicitation, which in some cases, may be different than those of their stockholders generally, will be set forth in the Registration Statement relating to the proposed business combination when it becomes available. These documents can be obtained free of charge at the SEC's web site at www.sec.gov.

The Company and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of MCAE in connection with the proposed business combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed business combination will be included in the Registration Statement for the proposed business combination.





No Offer or Solicitation

This Current Report on Form 8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the transactions described above and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of MCAE or the Company, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.

Item 9.01. Financial Statements and Exhibits.





Exhibit No.   Description
  2.1*          Merger Agreement dated January 27, 2022 by and between Mountain
              Crest Acquisition Corp. III, ETAO International Group, and Wensheng
              Liu, in his capacity as the Company Shareholders' Representative
  10.1          Form of PIPE Subscription Agreement
  10.2          Form of Support Agreement, by and among Mountain Crest Acquisition
              Corp. III, ETAO International Group, and certain holders of ETAO
              International Group's ordinary shares
  10.3          Form of Lock-Up Agreement
  10.4          Form of Amended and Restated Registration Rights Agreement
  99.1          Press Release dated January 28, 2022
  99.2          Investor Presentation
104           Cover Page Interactive Data File (embedded within the Inline XBRL
              document)




*   Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of
    Regulation S-K. The registrant hereby undertakes to furnish copies of any of
    the omitted schedules and exhibits upon request by the U.S. Securities and
    Exchange Commission.




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