Item 1. Business.
We
are an early stage blank check company recently formed as a Delaware corporation for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Throughout this Report we will refer to this as our initial business combination.
We
currently intend to concentrate our efforts on identifying businesses in the financial services industry with an equity value
of approximately $500 million to $2.0 billion, with particular emphasis on businesses that are providing or changing technology
for traditional financial services (“FinTech”), asset and wealth management, and specialty finance companies. We believe
the creation and delivery of financial services products for consumers and businesses will undergo the most dramatic change over
the next several years. There has been a rise in the level of sophistication and interconnectivity between innovative technology
and financial services providers, and we expect this trend to continue and accelerate. We believe that there are many potential
targets within the financial services space that could become attractive public companies. These potential targets exhibit a broad
range of business models and financial characteristics that range from very high growth innovative companies to more mature businesses
with established franchises, recurring revenues and strong cash flows.
We
are not, however, required to complete our initial business combination with a financial services business and, as a result, we
may pursue a business combination outside of that industry. We seek to acquire established businesses that we believe are fundamentally
sound but potentially in need of financial, operational, strategic or managerial redirection to maximize value. We may also look
at earlier stage companies that exhibit the potential to change the industries in which they participate and which will offer
the potential of sustained high levels of revenue and earnings growth.
Business
Strategy
We
currently intend to concentrate our efforts on identifying businesses in the financial services industry with an equity value
of approximately $500 million to $2.0 billion, with particular emphasis on businesses that offer a differentiated technology platform
and/or products for interfacing with the financial services sector, traditional asset managers which may be undergoing significant
change adapting to a world with more passive investing and algorithmic trading, wealth and alternative asset managers with unique
business strategies, and specialty finance companies which generally exhibit higher margins, higher growth rates, and less regulatory
burdens versus traditional banks. Over the past several years, there has been a rise in the level of sophistication and interconnectivity
between innovative technology and financial services providers, and we expect this trend to continue and accelerate. We believe
that there are many potential targets within the financial services/FinTech space that could become attractive public companies.
These potential targets exhibit a broad range of business models and financial characteristics that range from very high growth
innovative companies to more mature businesses with established franchises, recurring revenues and strong cash flows.
There
has been significant disruption and change in the delivery of financial services in recent years, including, among others:
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Retail
banking (mobile payments, Neo-Banks);
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Payments
for consumers and businesses;
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Wealth
management (robo advisors);
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Exchanges
and trading platforms;
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Big
data moving to the cloud, APIs, data security; and
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Digital
assets and blockchain technology.
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With
increased adoption of technology solutions by both consumers and businesses, we believe that the sector is poised for continued
growth in both overall market size and penetration. Key industry characteristics include long-term organic growth, attractive
competitive dynamics and further consolidation opportunities. Key business characteristics include high barriers to entry, low
risk of technological obsolescence and public market-ready scale. Key financial metrics include organic revenue growth, recurring
revenues and strong cash flow conversion.
We
do not limit our search to one segment of the financial services ecosystem, but are instead targeting a wide variety of companies
that deliver a solution or product to the financial services end-market. We believe that our extensive experience and demonstrated
success in advising and investing in businesses in this industry provides us with a unique set of capabilities that will be utilized
in generating stockholder returns.
We
seek to acquire established businesses that we believe are fundamentally sound but potentially in need of financial, operational,
strategic or managerial improvements to maximize value. We also look at earlier stage companies that exhibit the potential to
change the industries in which they participate and which offer the potential of sustained high levels of revenue growth. Consistent
with our industry focus, we target financial services businesses that have strong management teams, demonstrated organic growth,
and differentiated products or services. Opportunities range from high-growth, customer facing technologies in payments, lending
and digital assets to more mature, high-margin, stable businesses which may be engaged in lending, asset management, or providing
critical processing and support to established financial services firms.
We
believe that the wide networks of our management team and advisor deliver access to a broad spectrum of opportunities across the
financial services landscape. In addition to any potential business candidates we may identify on our own, we anticipate that
other target business candidates will be brought to our attention from various unaffiliated sources, including investment market
participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.
Members
of our management team and our advisor communicate with their networks of relationships to articulate the parameters for our search
for a target company and a potential business combination and are in the process of pursuing and reviewing potential opportunities.
Acquisition
Criteria
Consistent
with our business strategy, we have identified the following general criteria and guidelines that we believe are important in
evaluating prospective target businesses. We use these criteria and guidelines in evaluating acquisition opportunities, but we
may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
We expect that no individual criterion will entirely determine a decision to pursue a particular opportunity. We seek to acquire
companies that we believe:
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are
fundamentally sound companies that can enhance shareholder value through a combination with us, and offer an attractive risk-adjusted
return for our stockholders;
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have
strong, experienced management teams, or provide a platform to assemble an effective management team with a track record of driving
growth and profitability;
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are
at an inflection point, such as requiring additional management expertise, are able to innovate through new operational techniques,
or where we believe we can drive improved financial performance;
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can
benefit from the application and exploitation of financial service technologies;
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have
a history of, or potential for, strong, stable free cash flow generation, with predictable and recurring revenue streams;
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can
grow both organically and where we believe our ability to source proprietary opportunities and execute transactions will help
the business grow through additional acquisitions;
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have
a leading or niche market position and that demonstrate advantages when compared to their competitors, which may help to create
barriers to entry against new competitors;
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can
benefit from being a publicly traded company, with access to broader capital markets, to achieve the company’s growth strategy;
and
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exhibit
unrecognized value or other characteristics that we believe can be enhanced based on our analysis and due diligence review.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our
management team and advisors may deem relevant. In the event that we decide to enter into our initial business combination with
a target business that does not meet the above criteria and guidelines, we will disclose that the target business does not meet
the above criteria in our stockholder communications related to our initial business combination, which, as discussed in this
prospectus, would be in the form of proxy solicitation materials or tender offer documents that we would file with the U.S. Securities
and Exchange Commission.
We
may need to obtain additional financing either to complete our initial business combination or because we become obligated to
redeem a significant number of our public shares upon completion of our initial business combination. We intend to acquire a company
with an enterprise value significantly above the net proceeds of our initial public offering and the sale of the placement units.
Depending on the size of the transaction or the number of public shares we become obligated to redeem, we may potentially utilize
several additional financing sources, including but not limited to the issuance of additional securities to the sellers of a target
business, debt issued by banks or other lenders or the owners of the target, a private placement to raise additional funds, or
a combination of the foregoing. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial
business combination, if cash on hand is insufficient to meet our obligations or our working capital needs, we may need to obtain
additional financing.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
Our board of directors will make the determination as to the fair market value of our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able
to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if
it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects. If our securities are not listed on Nasdaq after our initial public offering,
we would not be required to satisfy the 80% requirement. However, we intend to satisfy the 80% requirement even if our securities
are not listed on Nasdaq at the time of our initial business combination.
We
anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which
our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses,
or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the
target business in order to meet certain objectives of the target management team or stockholders, or for other reasons. However,
we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50%
or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own
a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all
of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However,
as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business
combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than
100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s
80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value
test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial
business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Our
Business Combination Process
In
evaluating prospective business combinations, we have conducted and will continue to conduct a thorough due diligence review process
that encompasses, among other things, a review of historical and projected financial and operating data, meetings with management
and their advisors (if applicable), on-site inspection of facilities and assets, discussion with customers and suppliers, legal
reviews and other reviews as we deem appropriate. We also utilize the expertise of our management team and advisors in analyzing
financial services and FinTech companies, and evaluating operating projections, financial projections and determining the appropriate
return expectations given the risk profile of the target business.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions that our initial business combination is fair to our
company from a financial point of view.
Certain
of our officers and directors presently have fiduciary or contractual obligations to other entities pursuant to which such officer
and director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual
obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations
of our officers or directors will not materially affect our ability to complete our initial business combination. Our amended
and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any officer
or director unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer
of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another
legal obligation.
Our
officers have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities
registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, until we have entered into a definitive
agreement regarding our initial business combination or we have liquidated the trust account.
Members
of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much
of their time as they, in the exercise of their respective business judgement, deem necessary to our affairs until we have completed
our initial business combination. The amount of time that any member of our management team will devote in any time period will
vary based on whether a target business has been selected for our initial business combination and the current stage of the business
combination process. We do not have an employment agreement with any member of our management team.
Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
Our board of directors will make the determination as to the fair market value of our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able
to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if
it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As a public company, we offer
a target business an alternative to the traditional initial public offering through a merger or other business combination with
us. Following an initial business combination, we believe the target business would have greater access to capital and additional
means of creating management incentives that are better aligned with stockholders’ interests than it would as a private
company. A target business can further benefit by augmenting its profile among potential new customers and vendors and aid in
attracting talented employees. In a business combination transaction with us, the owners of the target business may, for example,
exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a new holding company)
or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific needs
of the sellers.
Although
there are various costs and obligations associated with being a public company, we believe target businesses will find this method
a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical
initial public offering process takes a significantly longer period of time than the typical business combination transaction
process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions,
marketing and road show efforts that may not be present to the same extent in connection with an initial business combination
with us.
Furthermore,
once a proposed initial business combination is completed, the target business will have effectively become public, whereas an
initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market
conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences. Following
an initial business combination, we believe the target business would then have greater access to capital and an additional means
of providing management incentives consistent with stockholders’ interests and the ability to use its shares as currency
for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new
customers and vendors and aid in attracting talented employees.
While
we believe that our structure and our management team’s and our advisors’ backgrounds make us an attractive business
partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history
and our ability to seek stockholder approval of any proposed initial business combination, negatively.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from
the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute
payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active
trading market for our securities and the prices of our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) (a) December 31, 2024, (b) the last day of the fiscal year in
which we have total annual gross revenue of at least $1.07 billion, or (c) the last day of the fiscal year in which we are deemed
to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds
$700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period.
Financial
Position
With
funds available in the trust account for an initial business combination in the amount of $250,702,417.99 (as of December 31,
2019), after payment of $9,350,000 of deferred underwriting fees, in each case before fees and expenses associated with our initial
business combination, we offer a target business a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage
ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination
of the foregoing, we have the flexibility to use the most efficient combination that allow us to tailor the consideration to be
paid to the target business to fit its needs and desires.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations until the consummation of our initial business combination.
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private
placement of the placement units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant
to backstop agreements we may enter into), shares issued to the owners of the target, debt issued to bank or other lenders or
the owners of the target, or a combination of the foregoing. We may seek to complete our initial business combination with a company
or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous
risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust
account are used for payment of the consideration in connection with our initial business combination or used for redemptions
of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working
capital.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of
our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather
than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with
the net proceeds of our initial public offering and the sale of the placement units, and may as a result be required to seek additional
financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would
expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of
an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents
disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek
stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately, or through loans in
connection with our initial business combination.
Sources
of Target Businesses
Target
business candidates are brought to our attention from various unaffiliated sources, including investment bankers and investment
professionals. Target businesses are brought to our attention by such unaffiliated sources as a result of being solicited by us
by calls or mailings. These sources may introduce us to target businesses in which they think we may be interested on an unsolicited
basis, since many of these sources will have read our public filings and know what types of businesses we are targeting. Our management
team and advisors, as well as our sponsor and their respective affiliates, also bring to our attention target business candidates
that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may
have, as well as attending trade shows or conventions. In addition, we may receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the business relationships of our management team, advisors,
our sponsor and their respective affiliates. We may engage the services of professional firms or other individuals that specialize
in business acquisitions in the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other
compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder,
only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be
available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines
is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which
case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any members
of our management team or advisors be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment
of a loan or other compensation by the company prior to, or in connection with any services rendered for any services they render
in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is).
We pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. We reimburse
our management team and advisors for any out-of-pocket expenses related to identifying, investigating and completing an initial
business combination. Some members of our management team may enter into employment or consulting agreements with the post-transaction
company following our initial business combination. The presence or absence of any such fees or arrangements will not be used
as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a target that is affiliated with our sponsor, officers or
directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor,
officers or directors. In the event we seek to complete our initial business combination with a target that is affiliated with
our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions that such an initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
If
any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such
business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers
and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties
to us.
Selection of a Target Business and Structuring of our Initial
Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of our initial business combination will be determined by our board of directors based upon one or more standards
generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of
comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If
our board of directors is not able to independently determine the fair market value of our initial business combination, we will
obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to
make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it
is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as
to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Subject to this requirement, our management has virtually unrestricted flexibility
in selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination
with another blank check company or a similar company with nominal operations.
In any
case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities
of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an
investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a
target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company
is what will be taken into account for purposes of Nasdaq’s 80% fair market value test.
To the
extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will
endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or
assess all significant risk factors.
In evaluating
a prospective business target, we have conducted and will continue to conduct a thorough due diligence review, which encompasses,
among other things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers,
inspection of facilities, as well as a review of financial and other information that will be made available to us.
The time
required to select and evaluate a target business and to structure and complete our initial business combination, and the costs
associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to
the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an
indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely
on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business
combination in a single industry. By completing our initial business combination with only a single entity, our lack of diversification
may:
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subject us to negative
economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular
industry in which we operate after our initial business combination, and
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cause us to depend
on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management
Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our
initial business combination with that business, our assessment of the target business’ management may not prove to be correct.
In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore,
the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty.
The determination as to whether any of the members of our management team will remain with the combined company will be made at
the time of our initial business combination. While it is possible that one or more of our officers and directors will remain associated
in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts
to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team
will have significant experience or knowledge relating to the operations of the particular target business.
We cannot
assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The
determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial
business combination.
Following
an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have
the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial
Business Combination
We may
conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder
approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business
or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we
may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction
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Whether Stockholder Approval is Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under
Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of
Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding;
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any of our directors,
officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have
a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more;
or
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the issuance or potential
issuance of common stock will result in our undergoing a change of control.
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Permitted Purchases of our Securities
If we
seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their
affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders,
directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law
and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when
they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by
Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer
subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under
the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such
rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of
the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust
account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination.
The purpose
of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase
the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be
to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for
approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public
“float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our
securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our sponsor,
officers, directors, advisors and/or their respective affiliates may identify the stockholders with whom our sponsor, officers,
directors, advisors or their respective affiliates may pursue privately negotiated purchases by either the stockholders contacting
us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection
with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter
into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election
to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not
such stockholder has already submitted a proxy with respect to our initial business combination. Our sponsor, officers, directors,
advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the
other federal securities laws.
Any purchases
by our sponsor, officers, directors, advisors and/or their respective affiliates who are affiliated purchasers under Rule 10b-18
under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which
is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors, advisors and/or their respective affiliates will not make purchases of common stock if the purchases would violate Section
9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange
Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion
of our Initial Business Combination
We will
provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest
earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then
outstanding public shares, subject to the limitations described herein. The amount in the trust account as of December 31, 2019
is approximately $10.02 per public share. The per-share amount we will distribute to investors who properly redeem their shares
will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with
respect to any founder shares and placement shares and any public shares held by them in connection with the completion of our
initial business combination.
Manner of Conducting Redemptions
We will
provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial
business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed
initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety
of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder
approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would
not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where
we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would
require stockholder approval. If we structure an initial business combination with a target company in a manner that requires stockholder
approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination.
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval
is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal
reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we are required to comply with such rules.
If a stockholder
vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to
our amended and restated certificate of incorporation:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain substantially the same financial and
other information about the initial business combination and the redemption rights as is required under Regulation 14A of the
Exchange Act, which regulates the solicitation of proxies.
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Upon the
public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with
Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a
tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the
event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering
more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement
that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001
either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees
and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however,
stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder
approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies,
and not pursuant to the tender offer rules, and
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file proxy materials
with the SEC.
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In the
event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we
seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common
stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present
in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all
outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward
this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares
and placement shares and any public shares purchased after our initial public offering (including in open market and privately
negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our
outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once
a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares and placement shares, we would
need only 9,042,501, or 36.2%, of the 25,000,000 public shares sold in our initial public offering to be voted in favor of an initial
business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved. We
intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting,
if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and
the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our amended
and restated certificate of incorporation provides that we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target
or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention
of cash to satisfy other conditions in accordance with the terms of the proposed initial business combination. In the event the
aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for
redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares,
and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial
Business Combination if we Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking
redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer
to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believe this restriction
will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to
purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision,
a public stockholder holding an aggregate of 15% or more of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current
market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares
sold in our initial public offering without our prior consent, we believe we will limit the ability of a small group of stockholders
to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial
business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of
cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
Tendering Stock Certificates in Connection with Redemption
Rights
We may
require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to either tender their certificates to our transfer agent up to two business days prior to the vote
on the proposal to approve the initial business combination, or to deliver their shares to the transfer agent electronically using
the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The proxy materials
that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether
we are requiring public stockholders to satisfy such delivery requirements, which will include the requirement that a beneficial
holder must identify itself in order to validly redeem its shares. Accordingly, a public stockholder would have up to two days
prior to the vote on the initial business combination to tender its shares if it wishes to seek to exercise its redemption rights.
Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced 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 $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we
require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising
redemption rights regardless of the timing of when such delivery must be effectuated.
Any request
to redeem such shares, once made, may be withdrawn at any time up to the date of the stockholder meeting. Furthermore, if a holder
of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior
to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the
certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares
electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our
initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our
initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination
with a different target until November 5, 2021.
Redemption of Public Shares and Liquidation if no Initial
Business Combination
Our amended
and restated certificate of incorporation provides that we will have until November 5, 2021 to complete our initial business
combination. If we are unable to complete our initial business combination by November 5, 2021, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii)
above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail
to complete our initial business combination by November 5, 2021.
Our sponsor,
officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the trust account with respect to any founder shares and placement shares held by them if we fail to complete
our initial business combination by November 5, 2021. However, if our sponsor, officers or directors acquire public shares in or
after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such
public shares if we fail to complete our initial business combination by November 5, 2021.
Our sponsor,
officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended
and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
by November 5, 2021 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes
divided by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after such
redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial
business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public
shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment
or the related redemption of our public shares at such time.
We expect
that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be
funded from amounts remaining out of the approximately $1,578,075 of proceeds held outside the trust account (as of December 31,
2019), although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest
being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient
to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest
accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the
trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we
were to expend all of the net proceeds of our initial public offering and the sale of the placement units, other than the proceeds
deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00.
Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision
for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before
we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure
you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although
we have sought and will continue to seek to have all vendors, service providers, prospective target businesses or other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements
or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but
not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging
the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including
the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute
a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to
be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. WithumSmith+Brown, PC, our independent registered public accounting firm,
and Barclays Capital Inc. and Cantor Fitzgerald & Co., the underwriters of our initial public offering, will not execute agreements
with us waiving such claims to the monies held in the trust account.
In addition,
there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising
out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products
sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar
agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00
per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the
trust account, if less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that
such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all
rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under
our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities
Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified
whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets
are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None
of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and
prospective target businesses.
In the
event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust
assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable
to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for
such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.00
per public share.
We seek
to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to
have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also
not be liable as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities,
including liabilities under the Securities Act. We have access to up to approximately $1,578,075 from the proceeds of our initial
public offering held outside the trust account (as of December 31, 2019) with which to pay any such potential claims (including
costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000).
In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders
who received funds from our trust account could be liable for claims made by creditors.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination by November 5, 2021 may be considered a liquidating
distribution under Delaware law. Delaware law provides that if a corporation complies with certain procedures set forth in Section
280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period
during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject
any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any
liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata
share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the
third anniversary of the dissolution.
Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our initial business combination by November 5, 2021, is not considered a liquidating distribution
under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings
that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the
statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three
years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination by November
5, 2021, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously
released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right
to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible
following by November 5, 2021 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could
potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend well beyond the third anniversary of such date.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at
such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations
are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained
in our underwriting agreement, we have sought and will continue to seek to have all vendors, service providers, prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of
any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us
are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is
remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not
reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date
of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest
withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial public offering
against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to
be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party
claims.
If we
file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in
the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the
claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust
account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a
bankruptcy petition or an involuntary bankruptcy petition is filed against us that 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 some or all amounts received by
our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or
may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against
us for these reasons.
Our public
stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of
our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote
to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation
to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination by November 5, 2021 or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete
our business combination by November 5, 2021, subject to applicable law.
In no other circumstances
will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval
in connection with our initial business combination, a stockholder’s voting in connection with the initial business combination
alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account.
Such stockholder must have also exercised its redemption rights as described above. These provisions of our amended and restated
certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with
a stockholder vote.
Competition
In identifying,
evaluating and selecting a target business for our initial business combination, we have encountered and may continue to encounter
intense competition from other entities having a business objective similar to ours, including other blank check companies, private
equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Many of these entities
are well established and have extensive experience identifying and effecting business combinations directly or through affiliates.
Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to
acquire larger target businesses is limited by our available financial resources. This inherent limitation gives others an advantage
in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection with our
public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination
and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target
businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Employees
We currently
have two officers. These individuals are not obligated to devote any specific number of hours to our matters but they devote as
much of their time as they deem necessary, in the exercise of their respective business judgement, to our affairs and intend to
continue doing so until we have completed our initial business combination. The amount of time they devote in any time period will
vary based on whether a target business has been selected for our initial business combination and the stage of the initial business
combination process we are in. We do not intend to have any full time employees prior to the completion of our initial business
combination. We do not have an employment agreement with any member of our management team.
Periodic Reporting and Financial Information
Our units,
Class A common stock and warrants are registered under the Exchange Act and have reporting obligations, including the requirement
that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, this
Report contains financial statements audited and reported on by our independent registered public accountants.
We will
provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these
financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances,
and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial
statement requirements may limit the pool of potential targets we may conduct an initial business combination with because some
targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules
and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target
business identified by us as a potential business combination candidate will have financial statements prepared in accordance with
GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements
outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business.
While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will
be required to evaluate our internal control procedures for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company,
will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
We have filed a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the
Exchange Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention
of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation
of our initial business combination.
We will
remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following November 5, 2021, (b)
in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million
as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during
the prior three-year period.
Item 1A. Risk Factors.
You
should carefully consider the following risk factors and all the other information contained in this Report, including the financial
statements. If any of the following risks occur, our business, financial condition or results of operations may be materially and
adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect
to us and our business.
We are a recently formed early stage company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are
a recently formed early stage company with no operating results. Because we lack an operating history, you have no basis upon which
to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target
businesses. We may be unable to complete our initial business combination. If we fail to complete our initial business combination,
we will never generate any operating revenues.
Our public stockholders may not be afforded an opportunity
to vote on our proposed initial business combination, which means we may complete our initial business combination even if a majority
of our public stockholders do not support such a combination.
We may
choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination would
require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder
vote for business or other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval
of a proposed initial business combination or will allow stockholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the
terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business
combination even if holders of a majority of our public shares do not approve of the initial business combination we complete.
If we seek stockholder approval of our initial business
combination, our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our
public stockholders vote.
Pursuant to the letter agreement, our sponsor,
officers and directors have agreed to vote their founder shares and placement shares, as well as any public shares purchased after
our initial public offering (including in open market and privately negotiated transactions), in favor of our initial business
combination. As a result, in addition to our initial stockholders’ founder shares and placement shares, we would need only
9,042,501, or 36.2%, of the 25,000,000 public shares sold in our initial public offering to be voted in favor of an initial business
combination (assuming all outstanding shares are voted) in order to have our initial business combination approved. Our initial
stockholders own shares representing approximately 21.7% of our outstanding shares of common stock. Accordingly, if we seek
stockholder approval of our initial business combination after approval of our board, the agreement by our initial stockholders
to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder
approval for such initial business combination.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the initial business combination.
Since
our board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may
not have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote. Accordingly,
if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business
combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days)
set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their
shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into an initial business combination with a target.
We may
seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would
not be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination.
Furthermore, we will only redeem our public shares so long as (after such redemption) our net tangible assets will be at least
$5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’
fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if
accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater
amount necessary to satisfy a closing condition, each as described above, we would not proceed with such redemption and the related
business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks
and, thus, may be reluctant to enter into an initial business combination with us.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure.
At the
time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their
redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that
will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the
trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a
portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger
number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve
a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing
may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution
would increase to the extent that the anti-dilution provision of the Class B common stock result in the issuance of Class A shares
on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our business combination. The above
considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital
structure. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares
that are redeemed in connection with an initial business combination. The per-share amount we will distribute to stockholders who
properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions,
the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our
initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open
market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating an initial business combination
and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for
our stockholders.
Any potential
target business with which we enter into negotiations concerning an initial business combination will be aware that we must complete
our initial business combination by November 5, 2021. Consequently, such target business may obtain leverage over us in negotiating
an initial business combination, knowing that if we do not complete our initial business combination with that particular target
business, we may be unable to complete our initial business combination with any target business. This risk will increase as we
get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into
our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our amended
and restated certificate of incorporation provides that we must complete our initial business combination by November 5, 2021.
We may not be able to find a suitable target business and complete our initial business combination by such date. If we have not
completed our initial business combination by such date, we will: (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds
held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and
(iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our
board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may
only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive
less than $10.00 per share on the redemption of their shares.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19)
outbreak.
In December
2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout
China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the
outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31,
2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid
the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the
outbreak as a “pandemic”. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target
business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may
be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have
meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will
depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning
the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19
or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination,
or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely
affected."
If we seek stockholder approval of our initial business
combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or warrants from public
stockholders, which may influence a vote on a proposed initial business combination and reduce the public “float” of
our Class A common stock.
If we
seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase
shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or
following the completion of our initial business combination, although they are under no obligation to do so. However, they have
no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for
any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.
Such a
purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no
longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor,
directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior
elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial business combination
and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy a closing
condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing
of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such
purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters
submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities
may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such
reporting requirements.
In addition,
if such purchases are made, the public “float” of our Class A common stock or public warrants and the number of beneficial
holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading
of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to
redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will
comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business
combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as
applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender
offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination
will describe the various procedures that must be complied with in order to validly tender or redeem public shares, which will
include the requirement that a beneficial holder must identify itself. For example, we may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders,
or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute
proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply
with these or any other procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from
the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell
your public shares or warrants, potentially at a loss.
Our public
stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of
an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly
elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted in
connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or
timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination by November 5, 2021 or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our public shares if we
are unable to complete an initial business combination by November 5, 2021, subject to applicable law and as further described
herein. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders
of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate
your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our securities
are currently listed on Nasdaq. However, we cannot assure you that our securities will continue to be, listed on Nasdaq in the
future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our initial
business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum
amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public
holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with
Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order
to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be
at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be
required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market
value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements
at that time.
If Nasdaq
delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange,
we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:
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a limited availability
of market quotations for our securities;
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reduced liquidity
for our securities;
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a determination that
our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount
of news and analyst coverage; and
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a decreased ability
to issue additional securities or obtain additional financing in the future.
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The National
Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale
of certain securities, which are referred to as “covered securities.” Because our units, Class A common stock and warrants
are listed on Nasdaq, our units, Class A common stock and warrants are covered securities. Although the states are preempted from
regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion
of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities
in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities
issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies
unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies
in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be
subject to regulation in each state in which we offer our securities, including in connection with our initial business combination.
You will not be entitled to protections normally afforded
to investors of some other blank check companies.
Since the net proceeds of our initial public
offering and the sale of the placement units are intended to be used to complete an initial business combination with a target
business that has not been identified, we may be deemed to be a “blank check” company under the United States securities
laws. However, because we have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to
protect investors in blank check companies, such as Rule 419. Accordingly, investors are not afforded the benefits or protections
of those rules. Among other things, this means we may have a longer period of time to complete our business combination then do
companies subject to Rule 419. If our initial public offering were subject to Rule 419, that rule would prohibit the release of
any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us
in connection with our completion of an initial business combination.
If we seek stockholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders
are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess
of 15% of our Class A common stock.
If we
seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a
public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to an aggregate of 15% or more of the shares sold in our initial public offering without our prior consent,
which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote
all of their shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess
Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue
to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open
market transactions, potentially at a loss.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are
unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on
our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We have
encountered and expect to continue to encounter intense competition from other entities having a business objective similar to
ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other
entities competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established
and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more industry
knowledge than we do, and our financial resources are relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public
offering and the sale of the placement units, our ability to compete with respect to the acquisition of certain target businesses
that are sizable is limited by our available financial resources. This inherent competitive limitation gives others an advantage
in pursuing the acquisition of certain target businesses. Furthermore, because we are obligated to pay cash for the shares of Class
A common stock which our public stockholders redeem in connection with our initial business combination, target companies will
be aware that this may reduce the resources available to us for our initial business combination. This may place us at a competitive
disadvantage in successfully negotiating an initial business combination. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If the net proceeds of our initial public offering and
the sale of the placement units not being held in the trust account are insufficient to allow us to operate until November 5, 2021,
we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.00 per
share, or less than such amount in certain circumstances, and our warrants will expire worthless.
The funds
available to us outside of the trust account may not be sufficient to allow us to operate until November 5, 2021, assuming that
our initial business combination is not completed during that time. We believe that the funds available to us outside of the trust
account will be sufficient to allow us to operate until November 5, 2021; however, we cannot assure you that our estimate is accurate.
Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with
our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping”
around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed
initial business combination, although we do not have any current intention to do so. If we entered into a letter of intent or
merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit
such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct
due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If the net proceeds of our initial public offering and
the sale of the placement units not being held in the trust account are insufficient, it could limit the amount available to fund
our search for a target business or businesses and complete our initial business combination and we will depend on loans from our
sponsor or management team to fund our search for an initial business combination, to pay our taxes and to complete our initial
business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of the
net proceeds of our initial public offering and the sale of the placement units, only approximately $1,578,075 (as of December
31, 2019) is available to us outside the trust account to fund our working capital requirements. If we are required to seek additional
capital, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to
liquidate. None of our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds
to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released
to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into units, at a price
of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The units would be identical
to the placement units. Prior to the completion of our initial business combination, we do not expect to seek loans from parties
other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and
provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans,
we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because
we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently,
our public stockholders may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption
of their shares.
Subsequent to the completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant
negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all
of your investment.
Even if
we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface
all material issues that may be present inside a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will
not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations,
or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies
certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary
risk analysis. Although these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we
report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges
of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing
debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial business combination.
Accordingly, any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction
in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able
to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary
duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation
or tender offer materials, as applicable, relating to the initial business combination constituted an actionable material misstatement
or omission.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share.
Our placing
of funds in the trust account may not protect those funds from third-party claims against us. Although we seek to have all vendors,
service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to
a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it
and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third
party’s engagement would be significantly more beneficial to us than any alternative. WithumSmith+Brown, PC, our independent
registered public accounting firm, and the underwriters of the offering, did not execute agreements with us waiving such claims
to the monies held in the trust account.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any
reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors. Pursuant to a letter agreement, our sponsor has agreed that
it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective
target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination
agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual
amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per
share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any
claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust
account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of
our initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked
our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore,
we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to
our public stockholders.
In the
event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per
share held in the trust account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions
in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts
that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the
trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy indemnification
claims of our directors and executive officers.
We have
agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have
agreed, and any persons who may become officers or directors prior to the initial business combination will agree, to waive any
right, title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust
account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we
have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to
indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for
breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against
our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore,
a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against
our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.
If, after
we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that 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 our stockholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before
distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our
stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received
by our stockholders in connection with our liquidation may be reduced.
If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we
are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the
nature of our investments; and
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restrictions on the
issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition,
we may have imposed upon us burdensome requirements, including:
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registration as an
investment company;
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adoption of a specific
form of corporate structure; and
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reporting, record
keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In order
not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must
ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities
do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40%
of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to
identify and complete an initial business combination and thereafter to operate the post-transaction business or assets for the
long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy
unrelated businesses or assets or to be a passive investor.
We do
not believe that our principal activities subject us to the Investment Company Act. To this end, the proceeds held in the trust
account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the
trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds
to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than
on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment
company” within the meaning of the Investment Company Act. The trust account is intended as a holding place for funds pending
the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly
submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the
substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100%
of our public shares if we do not complete our initial business combination by November 5, 2021 or (B) with respect to any
other provision relating to stockholders’ rights or pre-initial business combination activity; or (iii) absent an initial
business combination by November 5, 2021, our return of the funds held in the trust account to our public stockholders as part
of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to
the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory
burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial
business combination or may result in our liquidation. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire
worthless.
Changes in laws or regulations, or a failure to comply
with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business
combination and results of operations.
We are
subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with
certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our initial business combination and results of operations.
Our stockholders may be held liable for claims by third
parties against us to the extent of distributions received by them upon redemption of their shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination by November 5, 2021 may be considered a liquidating
distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and
an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or
the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible by November 5, 2021 in
the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at
such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company,
and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would
be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies
with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the
lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third
anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon
the redemption of our public shares in the event we do not complete our initial business combination by November 5, 2021 is not
considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially
due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then
pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until
after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.
In accordance
with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after
our first fiscal year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold
an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is
made by written consent in lieu of such a meeting.
We may not hold an annual
meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not
be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold
an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting
an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We have not registered the shares of Class A common stock
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt
from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may
have no value and expire worthless.
We have
not registered the shares of Class A common stock issuable upon exercise of the warrants issued in our initial public offering
under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have
agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination,
we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the
shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same
to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating
to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the
provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise
which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable
upon exercise of the warrants issued in our initial public offering are not registered under the Securities Act, we will be required
to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless
basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the
shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
from registration is available. Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable
upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination,
warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed
to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section
3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the
shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash
settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register
or qualify the shares underlying the warrants issued in our initial public offering under applicable state securities laws and
there is no exemption available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified
or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such
warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units
will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the
warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise
of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect
such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue
sky laws of the state of residence in those states in which the warrants were offered by us in our initial public offering. However,
there may be instances in which holders of our public warrants may be unable to exercise such public warrants but holders of our
placement warrants may be able to exercise such placement warrants.
If you exercise your public warrants on a “cashless
basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants
for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First,
if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective
by the 60th business day after the closing of our initial business combination, warrantholders may, until such time
as there is an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the
Securities Act or another exemption. Second, if a registration statement covering the Class A common stock issuable upon exercise
of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant
holders may, until such time as there is an effective registration statement and during any period when we shall have failed to
maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9)
of the Securities Act, provided that such exemption is available; if that exemption, or another exemption, is not available, holders
will not be able to exercise their warrants on a cashless basis. Third, if we call the public warrants for redemption, our management
will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise
on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of shares of Class
A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying
the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (as
defined in the next sentence) by (y) the fair market value. The “fair market value” is the average reported last sale
price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice
of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants
for cash.
The grant of registration rights to our initial stockholders
may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect
the market price of our Class A common stock.
Pursuant
to an agreement entered into concurrently with our initial public offering, our initial stockholders and their permitted transferees
can demand that we register the placement warrants, the shares of Class A common stock issuable upon exercise of the placement
warrants, the shares of Class A common stock issuable upon conversion of the founder shares, the shares of Class A common
stock included in the placement units and holders of unit that may be issued upon conversion of working capital loans may demand
that we register such Class A common stock, warrants or the Class A common stock issuable upon exercise of such units and warrants.
We will bear the cost of registering these securities. The registration and availability of such a significant number of securities
for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence
of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the
stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our
initial stockholders or holders of working capital loans or their respective permitted transferees are registered.
Because we are not limited to evaluating a target business
in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
We will
seek to complete an initial business combination with companies in the technology industry but may also pursue other business combination
opportunities, except that we are not, under our amended and restated certificate of incorporation, permitted to effectuate our
initial business combination with another blank check company or similar company with nominal operations. There is currently no
basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash
flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable
business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers, directors and advisors will endeavor
to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess
all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks
may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact
a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors
than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who
choose to remain stockholders following our initial business combination could suffer a reduction in the value of their securities.
Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the
reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they
are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as
applicable, relating to the business combination contained an actionable material misstatement or material omission.
Past performance by our management team and advisors may
not be indicative of future performance of an investment in us.
Past performance
by our management team and advisor is not a guarantee either (i) of success with respect to any business combination we may consummate
or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical
record of our management team’s or advisor’s performance as indicative of our future performance of an investment in
the company or the returns the company will, or is likely to, generate going forward. Additionally, in the course of their respective
careers, members of our management team have been involved in businesses and deals that were unsuccessful. Other than Shami Patel,
our advisor, none of our officers and directors have any experience with blank check companies or special purpose acquisition companies.
In addition, our sponsor is a newly formed entity formed for the sole purpose of holding securities of our company with no operation
or historical record.
We may seek business combination opportunities in industries
or sectors which may or may not be outside of our management’s area of expertise.
Although are focusing on identifying companies
in the financial services industry broadly, but with particular emphasis on businesses that are providing or changing technology
for traditional financial services, specialty finance companies, and asset management companies, we will consider an initial business
combination outside of our management’s area of expertise if an initial business combination candidate is presented to us
and we determine that such candidate offers an attractive business combination opportunity for our company or we are unable to
identify a suitable candidate in this sector after having expanded a reasonable amount of time and effort in an attempt to do so.
Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot
assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment
in our securities will not ultimately prove to be less favorable to investors in our initial public offering than a direct investment,
if an opportunity were available, in an initial business combination candidate. In the event we elect to pursue a business combination
outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its
evaluation or operation, and the information contained in this Report regarding the areas of our management’s expertise would
not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately
ascertain or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following
our initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have
a remedy for such reduction in value.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with
a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business
with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial
business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful
as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective
business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may
exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that
requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is
required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for
us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our
public stockholders may receive less than $10.00 per share on the redemption of their shares.
We may seek business combination opportunities with a financially
unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile
revenues, cash flows or earnings or difficulty in retaining key personnel.
To the
extent we complete our initial business combination with a financially unstable business or an entity lacking an established record
of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine.
These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers,
directors and advisors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly
ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore,
some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks
will adversely impact a target business.
We are not required to obtain a fairness opinion and consequently,
you may have no assurance from an independent source that the price we are paying for the business is fair to our company from
a financial point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm
or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from
a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination. However,
our stockholders may not be provided with a copy of such opinion, nor will they be able to rely on such opinion.
We may issue additional common stock or preferred stock
to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated
certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended
and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value
$0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock,
par value $0.0001 per share. There are 61,502,500 and 3,750,000 authorized but unissued shares of Class A common stock and Class
B common stock, respectively, available for issuance, which amount takes into account the shares of Class A common stock reserved
for issuance upon exercise of outstanding warrants but not the shares of Class A common stock issuable upon conversion of Class
B common stock. There are currently no shares of preferred stock issued and outstanding. Shares of Class B common stock are convertible
into shares of our Class A common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including
in certain circumstances in which we issue Class A common stock or equity-linked securities related to our initial business combination.
We may
issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-initial
business combination activity). We may also issue shares of Class A common stock upon conversion of the Class B common stock at
a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained
in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation provides,
among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would
entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These
provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate
of incorporation, may be amended with the approval of our stockholders. However, our executive officers and directors have agreed,
pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation
(A) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination
or to redeem 100% of our public shares if we do not complete our initial business combination by November 5, 2021 or (B) with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our
public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest
shall be net of taxes payable), divided by the number of then outstanding public shares.
The issuance
of additional shares of common or preferred stock:
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may significantly
dilute the equity interest of investors in our initial public offering;
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may subordinate the
rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change
of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability
to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and
directors; and
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may adversely affect
prevailing market prices for our units, Class A common stock and/or warrants.
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Resources could be wasted in researching business combinations
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
The investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments requires substantial management time and attention and substantial costs for accountants, attorneys, consultants and
others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may
fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event
will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join
us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability
to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with
the target business in senior management or advisory positions following our initial business combination, it is likely that some
or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we
employ after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to
have to expend time and resources helping them become familiar with such requirements. In addition, the officers and directors
of an initial business combination candidate may resign upon completion of our initial business combination. The departure of an
initial business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an initial business combination candidate’s key personnel upon the completion of our initial business
combination cannot be ascertained at this time. Although we contemplate that certain members of an initial business combination
candidate’s management team will remain associated with the initial business combination candidate following our initial
business combination, it is possible that members of the management of an initial business combination candidate will not wish
to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
We are dependent upon our executive officers, directors
and advisor and their departure could adversely affect our ability to operate.
Our operations
are dependent upon a relatively small group of individuals and, in particular, our executive officers, directors and advisor. We
believe that our success depends on the continued service of our executive officers, directors and advisor, at least until we have
completed our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of, any
of our directors, executive officers or advisor. The unexpected loss of the services of one or more of our directors, executive
officers or advisor could have a detrimental effect on us.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key
personnel may be able to remain with the company after the completion of our initial business combination only if they are able
to negotiate employment or consulting agreements in connection with the initial business combination. Such negotiations would take
place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receive
compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the
initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying
and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of
our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any
potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion
of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory
positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our
initial business combination.
We may have a limited ability to assess the management
of a prospective target business and, as a result, it may effect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact
the value of our stockholders’ investment in us.
When evaluating
the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target
business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to
manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the value
of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Our officers and directors allocate their time to other
businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict
of interest could have a negative impact on our ability to complete our initial business combination.
Our officers
and directors are not required to, and do not, commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between our operations and our search for an initial business combination and their other businesses.
We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers
is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated
to contribute any specific number of hours per week to our affairs. Our independent directors may also serve as officers or board
members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial
amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our
affairs which may have a negative impact on our ability to complete our initial business combination.
Certain of our officers and directors are now, and all
of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity should be presented.
Until
we consummate our initial business combination, we will continue to engage in the business of identifying and combining with one
or more businesses. Our officers and directors are, and may in the future become, affiliated with entities (such as operating companies
or investment vehicles) that are engaged in a similar business, although our officers may not become an officer or director of
any other special purpose acquisition companies with a class of securities registered under the Exchange Act until we have entered
into a definitive agreement regarding our initial business combination or we have liquidated the trust account.
Our officers
and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities
to which they owe certain fiduciary or contractual duties.
Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These
conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as
a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would
otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us
without violating another legal obligation.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have
not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect
pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party
or have an interest. In fact, we may enter into an initial business combination with a target business that is affiliated with
our sponsor, our directors or officers, although we do not intend to do so. We do not have a policy that expressly prohibits any
such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons
or entities may have a conflict between their interests and ours.
We may engage in an initial business combination with one
or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors, advisors
or existing holders which may raise potential conflicts of interest.
In light
of the involvement of our sponsor, and our existing or future officers, directors and advisors with other entities, we may decide
to acquire one or more businesses affiliated with our sponsor, officers, directors or advisors. Our directors also serve as officers
and board members for other entities. Such entities may compete with us for business combination opportunities. Despite our agreement
to obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions, regarding the fairness to our stockholders from a financial point of view of an initial business combination with one
or more businesses affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist
and, as a result, the terms of the initial business combination may not be as advantageous to our public stockholders as they would
be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their
entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
In August
2019, our sponsor purchased an aggregate of 5,750,000 founder shares for an aggregate purchase price of $25,000, or approximately
$0.004 per share. On October 31, 2019, we effected a 1.1 for 1 stock dividend for each share of Class B common stock outstanding,
resulting in our sponsor holding an aggregate of 6,325,000 founder shares (up to 825,000 shares of which are subject to forfeiture
depending on the extent to which the underwriters’ over-allotment option is exercised). Because the underwriters of our initial
public offering did not exercise their over-allotment option in full, 75,000 of such shares were forfeited in November 2019. The
founder shares will be worthless if we do not complete an initial business combination. Our sponsor purchased an aggregate of 665,000
placement units at a price of $10.00 per unit for an aggregate purchase price of $6,650,000. Each placement unit consists of one
share of Class A common stock and one-half of one warrant. Each whole warrant is exercisable to purchase one whole share of common
stock at $11.50 per share. These securities will also be worthless if we do not complete an initial business combination.
Holders of founder shares have agreed (A) to vote such shares owned by them in favor of any proposed initial business combination
and (B) not to redeem any founder shares and placement shares in connection with a stockholder vote to approve a proposed initial
business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The
personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target
business combination, completing an initial business combination and influencing the operation of the business following the initial
business combination.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
We may
choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness
unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in
the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account.
Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default and foreclosure
on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our
obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants
that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment
of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to
obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing
while the debt security is outstanding;
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our inability to
pay dividends on our common stock;
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using a substantial
portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our
common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate
purposes;
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limitations on our
flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability
to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
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limitations on our
ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution
of our strategy; and
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other disadvantages
compared to our competitors who have less debt.
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We may only be able to complete one business combination
with the proceeds of our initial public offering and the sale of the placement units, which will cause us to be solely dependent
on a single business which may have a limited number of services and limited operating activities. This lack of diversification
may negatively impact our operating results and profitability.
Of the
net proceeds from our initial public offering and the sale of the placement units, $250,567,358 is available as of December 31,
2019 to complete our initial business combination and pay related fees and expenses (which includes $9,350,000 for the payment
of deferred underwriting commissions).
We may
effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to effectuate our initial business combination with more than one target business
because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro
forma financial statements with the SEC that present operating results and the financial condition of several target businesses
as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our
lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be
able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities
which may have the resources to complete several business combinations in different industries or different areas of a single industry.
In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly, the prospects
for our success may be:
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solely dependent
upon the performance of a single business, property or asset, or
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dependent upon the
development or market acceptance of a single or limited number of products, processes or services.
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This lack
of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial
adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we
determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. We do not, however, intend
to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination
with a private company about which little information is available, which may result in an initial business combination with a
company that is not as profitable as we suspected, if at all.
In pursuing
our initial business combination strategy, we may seek to effectuate our initial business combination with a privately held company.
Very little public information generally exists about private companies, and we could be required to make our decision on whether
to pursue a potential initial business combination on the basis of limited information, which may result in an initial business
combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a
target business after our initial business combination.
We may
structure an initial business combination so that the post-transaction company in which our public stockholders own shares will
own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment
Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50%
or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own
a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the initial
business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class
A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest
in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately
prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction.
In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining
a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management
will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete an initial business combination with which a
substantial majority of our stockholders do not agree.
Our amended
and restated certificate of incorporation does not provide a specified maximum redemption threshold, except we will only redeem
our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior
to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (such
that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our
initial business combination even if a substantial majority of our public stockholders do not agree with the transaction and have
redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in
connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements
to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration
we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash
available to us, we will not complete the initial business combination or redeem any shares, all shares of Class A common stock
submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including
their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation
or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders
may not support.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments,
including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased
redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our amended
and restated certificate of incorporation will require the approval of holders of 65% of our common stock, and amending our warrant
agreement will require a vote of holders of at least a majority of the public warrants (which may include public warrants acquired
by our sponsor or its affiliates in our initial public offering or thereafter in the open market). In addition, our amended and
restated certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public
shares for cash if we propose an amendment to our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination by November 5, 2021, or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity.
To the
extent any such amendments would be deemed to fundamentally change the nature of any securities offered through this registration
statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we
will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in
order to effectuate our initial business combination.
The provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account such
that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may
be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other
blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the
trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation
provides that any of its provisions related to pre-initial business combination activity (including the requirement to deposit
proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts
except in specified circumstances, and to provide redemption rights to public stockholders as described herein and including to
permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or
liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock entitled to
vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be
amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated
certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon,
subject to applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities that can
vote on amendments to our amended and restated certificate of incorporation. Our initial stockholders, who collectively beneficially
own approximately 21.7 % of our common stock, will participate in any vote to amend our amended and restated certificate of incorporation
and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the
provisions of our amended and restated certificate of incorporation which govern our pre-initial business combination behavior
more easily than some other blank check companies, and this may increase our ability to complete an initial business combination
with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate
of incorporation.
Our sponsor,
officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended
and restated certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
by November 5, 2021 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that
we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries
of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors
for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder
derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We intend
to target businesses larger than we could acquire with the net proceeds of our initial public offering and the sale of the placement
units. As a result, we may be required to seek additional financing to complete such proposed initial business combination. We
cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure
the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the
amount of additional financing we may be required to obtain could increase as a result of future growth capital needs for any particular
transaction, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash
a significant number of shares from stockholders who elect redemption in connection with our initial business combination and/or
the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are unable to
complete our initial business combination, our public stockholders may receive only approximately $10.00 per share plus any pro
rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes on the liquidation
of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete
our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure
to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
None of our officers, directors, advisors or stockholders is required to provide any financing to us in connection with or after
our initial business combination. If we are unable to complete our initial business combination, our public stockholders may only
receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
Our initial stockholders may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial
stockholders own shares representing approximately 21.7 % of our issued and outstanding shares of common stock (including the placement
shares). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that
you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate
transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated
transactions, this would increase their control. Factors that would be considered in making such additional purchases would include
consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were
elected by our initial stockholders, is divided into three classes, each of which generally serves for a term of three years with
only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors
prior to the completion of our initial business combination, in which case all of the current directors will continue in office
until at least the completion of the initial business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because
of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will
continue to exert control at least until the completion of our initial business combination.
Our initial stockholders will receive additional shares
of Class A common stock if we issue shares to consummate an initial business combination.
The founder
shares will automatically convert into Class A common stock at the time of our initial business combination on a one-for-one basis,
subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities
convertible or exercisable for Class A common stock, are issued or deemed issued in excess of the amounts offered in our initial
public offering and related to the closing of the initial business combination, the ratio at which founder shares shall convert
into Class A common stock will be adjusted so that the number of Class A common stock issuable upon conversion of all founder shares
will equal, in the aggregate, on an as-converted basis, 20% of the total number of all outstanding shares of common stock upon
completion of the initial business combination, excluding the placement shares and any shares or equity-linked securities issued,
or to be issued, to any seller in the business combination and any private placement-equivalent warrants issued to our sponsor
or its affiliates upon conversion of loans made to us. Additionally, the aforementioned adjustment will not take into account any
shares of Class A common stock redeemed in connection with the business combination. Accordingly, the holders of the founder shares
could receive additional shares of Class A common stock even if the additional shares of Class A common stock, or equity-linked
securities convertible or exercisable for Class A common stock, are issued or deemed issued solely to replace those shares that
were redeemed in connection with the business combination. The foregoing may make it more difficult and expensive for us to consummate
an initial business combination.
We may amend the terms of the warrants in a manner that
may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number
of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are in registered form under a
warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any
change that adversely affects the interests of the registered holders of public warrants (which may include public warrants acquired
by our sponsor or its affiliates in our initial public offering or thereafter in the open market). Accordingly, we may amend the
terms of the public warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants
approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least a majority
of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase
the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number
of shares of our Class A common stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have
the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price
of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share
(as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within
a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on
which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable
by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not
exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or
qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state
of residence in those states in which the warrants were offered by us in our initial public offering. Redemption of the outstanding
warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous
for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants
or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely
to be substantially less than the market value of your warrants. None of the placement warrants will be redeemable by us so long
as they are held by the sponsor or its permitted transferees.
Our warrants and founder shares may have an adverse effect
on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We issued
warrants to purchase 12,500,000 shares of our Class A common stock as part of the units offered in our initial public offering
and, simultaneously with the closing of our initial public offering, we issued in a placement warrants to purchase an aggregate
of 332,500 shares of Class A common stock at $11.50 per share. Our initial stockholders currently own an aggregate of 6,250,000
founder shares. The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment
as set forth herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be convertible
into units, at a price of $10.00 per unit at the option of the lender, upon consummation of our initial business combination. The
units would be identical to the placement units. To the extent we issue shares of Class A common stock to effectuate an initial
business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon
exercise of these warrants and conversion rights could make us a less attractive business combination vehicle to a target business.
Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of
the shares of Class A common stock issued to complete the initial business combination. Therefore, our warrants and founder shares
may make it more difficult to effectuate an initial business combination or increase the cost of acquiring the target business.
The placement
warrants included in the placement units are identical to the warrants sold as part of the units in our initial public offering
except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii)
they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions,
be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination and (iii)
they may be exercised by the holders on a cashless basis.
A provision of our warrant agreement may make it more difficult
for use to consummate an initial business combination.
Unlike
some other blank check companies, if
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(i)
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we issue additional
shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our
initial business combination at a Newly Issued Price of less than $9.20 per share;
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(ii)
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the aggregate gross
proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding
of our initial business combination on the date of the consummation of our initial business combination (net of redemptions),
and
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(iii)
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the Market Value
is below $9.20 per share,
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then the
exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price,
and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the
Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with
a target business.
The requirements of being a public company may strain our
resources and divert management’s attention.
As a public
company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes
Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other
applicable securities rules and regulations. Compliance with these rules and regulations increase our legal and financial compliance
costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly
after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act requires, among other things, that we maintain
effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required,
improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant
resources and management oversight may be required. As a result, management’s attention may be diverted from other business
concerns, which could adversely affect our business and operating results. We may need to hire more employees in the future or
engage outside consultants to comply with these requirements, which will increase our costs and expenses
A market for our securities may not develop, which would
adversely affect the liquidity and price of our securities.
The price
of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions.
Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be
unable to sell your securities unless a market can be established and sustained.
Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal
proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender
offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles
generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International
Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to
be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial
statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide
such financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial
business combination within the prescribed time frame.
We are an emerging growth company and a smaller reporting
company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies and smaller reporting companies, this could make our securities less attractive to investors and may
make it more difficult to compare our performance with other public companies.
We are
an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds
$700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following
December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our
securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading
prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We
have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has
different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard
at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accountant standards used.
Additionally,
we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may
take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial
statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our
common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30th, or (2) our annual revenues
exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds
$700 million as of the prior June 30th. To the extent we take advantage of such reduced disclosure obligations,
it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual
Report on Form 10-K for the year ending December 31, 2020. Only in the event we are deemed to be a large accelerated filer or an
accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be
required to comply with the independent registered public accounting firm attestation requirement on our internal control over
financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our
initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal
controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase
the time and costs necessary to complete any such business combination.
Provisions in our amended and restated certificate of incorporation
and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for
our Class A common stock and could entrench management.
Our amended
and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders
may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board
of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more
difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our
securities.
We are
also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions
may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
Our amended and restated certificate of incorporation requires,
to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other
employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in
the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to
service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors,
officers, other employees or stockholders.
Our amended
and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in
our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar
actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action
(A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the
jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of
Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other
than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action
arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware
shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital
stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.
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 us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect
to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the
rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision contained in our amended
and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated
with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Our amended
and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent
permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce
any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision
will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal
courts have exclusive jurisdiction.
Cyber incidents or attacks directed at us could result
in information theft, data corruption, operational disruption and/or financial loss.
We depend
on digital technologies, including information systems, infrastructure and cloud applications and services, including those of
third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.
If we effect our initial business combination with a company
with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively
impact our operations.
If we
effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to any special considerations or risks associated with companies operating in an international setting, including any
of the following:
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higher costs and
difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements
of overseas markets;
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rules and regulations
regarding currency redemption;
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complex corporate
withholding taxes on individuals;
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laws governing the
manner in which future business combinations may be effected;
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tariffs and trade
barriers;
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regulations related
to customs and import/export matters;
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longer payment cycles
and challenges in collecting accounts receivable;
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tax issues, including
but not limited to tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations
and exchange controls;
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cultural and language
differences;
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employment regulations;
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crime, strikes, riots,
civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of
political relations with the United States; and
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government appropriations
of assets.
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We may
not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely
impact our results of operations and financial condition.
We may face risks related to businesses in the financial
services industry or businesses providing technology services to the financial industry.
Business
combinations with businesses in the financial services industry or businesses providing technology services to the financial industry
may involve special considerations and risks. If we complete our initial business combination with a businesses in the financial
services industry or businesses providing technology services to the financial industry, we will be subject to the following risks,
any of which could be detrimental to us and the business we acquire:
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If the company or
business we acquire provides products or services which relate to the facilitation of financial transactions, such as funds or
securities settlement system, and such product or service fails or is compromised, we may be subject to claims from both the firms
to whom we provide our products and services and the clients they serve;
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If we are unable
to keep pace with evolving technology and changes in the financial services industry, our revenues and future prospects may decline;
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Our ability to provide
financial technology products and services to customers may be reduced or eliminated by regulatory changes;
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Any business or company
we acquire could be vulnerable to cyberattack or theft of individual identities or personal data;
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Difficulties with
any products or services we provide could damage our reputation and business;
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A failure to comply
with privacy regulations could adversely affect relations with customers and have a negative impact on business;
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We may not be able
to protect our intellectual property and we may be subject to infringement claims.
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Any of
the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses are not limited to businesses in the financial services industry or businesses providing technology
services to the financial industry. Accordingly, if we acquire a target business in another industry, these risks will likely not
affect us and we will be subject to other risks attendant with the specific industry in which we operate or target business which
we acquire, none of which can be presently ascertained.