Overview
We are a blank check company incorporated
as a Delaware corporation in November 2017 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this
report as our initial business combination. We have generated no operating revenues to date and we will not generate operating
revenues until we consummate our initial business combination.
Since our initial public offering, we have
concentrated our search on companies in the financial services industry or businesses providing technological services to the
financial industry, commonly known as fintech businesses. We have employed a pro-active acquisition strategy focused on identifying
potential business combination targets within both the fintech and financial services industries that are fundamentally sound,
but where we believe we can be a catalyst to accelerating growth. Our acquisition strategy seeks to capitalize on the significant
financial services, financial technology, banking, M&A, operational expertise, and contacts of both our management team and
our board. Our management team’s ability to add value from both an operating and a financing perspective has been a key
driver of past performance and we believe will continue to be central to its differentiated acquisition strategy. We believe that
the long track record of our Executive Chairman in leading publicly traded companies, as well as the track records of the other
members of our management team, will be a key differentiator for potential combination targets. We also believe that the past
experiences of our management team and board in successfully building and scaling multiple businesses that grew into multi-billion
dollar companies is another key differentiator that will be viewed favorably by potential business combination targets. We believe
that our management team is a unique combination of investors and executive operators that are well positioned to identify acquisition
opportunities through their relationships in the fintech, financial services, and banking industries, with private equity and
venture capital firms, with management teams in the fintech, financial services, and banking industries, and with investment bankers
who we believe are likely to provide us with potential combination targets.
We believe the financial services industry
has experienced significant amount of changes over the last several years as new companies providing technology, software, and
digital platforms have entered the market. According to a report by KPMG, there was over $135 billion invested in global fintech
companies in 2019 alone. Fintech companies exist across many industries within financial services, including banking technology,
payment and financial transaction processing, capital markets, wealth management, insurance, and financial management systems.
We believe that fintech companies have proven
to be successful with multiple business models and strategic objectives. The objective of fintech companies can range from improving
the efficiency of traditional financial services companies, to introducing new products and creating new markets, to those focused
on disrupting traditional financial services companies with competitive products.
Our management team believes the financial
services industry is evolving at a rapid pace due to the entrance of technology focused service providers, and we believe that
there are attractive opportunities to acquire and merge with either rapidly growing fintech companies, or traditional financial
services companies that are at a strategic inflection point. Among the fintech businesses, we are intent on identifying companies
with disruptive technology that has allowed them to grow quickly and that we believe are positioned to sustain a robust growth
trajectory through the addition of new capital, access to public markets, operational or strategic expertise. Among the traditional
financial services companies, we are seeking combination targets that have new or evolving opportunities to respond to changes
in the market place through the addition of new capital, access to public markets, operational or strategic expertise.
Competitive Strengths
We believe that our management team is well
positioned to consummate an initial business combination due to its combination of operating and investing expertise. We believe
that the most likely business combination targets will be those companies at a strategic inflection point, for example, rapidly
growing companies stepping out from the control of private equity or venture capital owners, family owned businesses seeking some
liquidity, or business units being carved out from conglomerates. In these scenarios, and others, we believe the experience our
team brings in successfully scaling companies, especially those in the public markets, will be looked upon favorably by both the
target company as well as public shareholders.
We believe our competitive strengths to
be the following:
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Public Company Operating Expertise —
Our Executive Chairman, Mr. Sidhu, has a 26 year track record of market outperformance as chief executive officer of public
companies. Our collective management team, with over 50 cumulative years of experience as either chief executive officers
or directors of publicly traded companies, have the ability to shepherd targets through the “going public” process,
and to navigate the ongoing challenges of operating as a public company. We anticipate that one or more members of our management
team or board, would remain on the board of the company post business combination.
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Experience Scaling Companies — The majority of the potential acquisition targets we have evaluated were sub-billion
dollar companies. Given the challenges involved in scaling small and medium sized companies into billion dollar companies,
we believe the fact that multiple members of our management team have experience growing and scaling companies into multi-billion
dollar enterprises will be looked at positively by the management of the target company, as well as the sellers, who will
likely retain meaningful ownership post business combination. Specifically, as chief executive officer, Jay Sidhu grew Sovereign
Bank from a market cap of approximately $20 million to $12 billion. Again as chief executive officer, Mr. Sidhu grew Customers
Bank from a troubled bank with minimal equity value into an $11 billion dollar asset bank. Chad Hurley, co-founded YouTube
which he sold to Google for $1.65 billion, and remained as chief executive officer growing the company into one of the most
visited websites in the world. Additionally, as President at Thomson Reuters, Eric Frank led the integration of Thomson Financial
and Reuters Research & Asset Management, and was responsible for running the combined business which consisted of over
$2.3 billion in annual revenues.
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Expertise in Regulated Industries —
Many of the potential acquisition targets we have considered operate within a closely regulated industry. We believe that
the expertise within our management team around closely regulated financial industries will be advantageous when evaluating
certain acquisition targets. Raj Date, a Director, previously served as Deputy Director of the Consumer Financial Protection
Bureau, and on the senior staff committee of the Financial Stability Oversight Council and as a statutory deputy to the FDIC
Board. Additionally, Jay Sidhu, our Executive Chairman, has over 25 years of experience leading companies that operate within
closely regulated financial industries.
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Broad Sector Focused Expertise —
Our management team brings deep expertise in a wide range of sub-sectors within our target industries. We believe that our
diverse range of expertise increases our chances of identifying a business combination target where we have the expertise
to appropriately diligence the investment and to provide value post business combination. Specifically, members of our management
team have experience operating, investing or serving on boards of companies in the following sub-sectors: payment processing,
loyalty/rewards, mobile payments, banking, lending, alternative lending, bank technology, regulatory technology, compliance
management, risk management, financial data & analytics and blockchain.
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Investment Expertise — Our management
team has extensive experience in identifying, evaluating, structuring, acquiring, and investing in privately held companies.
Collectively, the members of our management team alone have been involved with or led over 50+ acquisitions.
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Extensive Deal Sourcing Network —
We also believe that our management team, along with our board, is well positioned to source acquisition opportunities through
proprietary relationships with the founders, C-suite executives and board members of banking, financial services and fintech
companies, relationships with private equity and venture capital firms, and through investment bankers who we believe are
likely to provide us with potential combination targets.
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Flexible Structure — With a public
market for our common stock and $175 million in trust, we have flexibility to be able to offer a target business a variety
of options in structuring a transaction and funding future growth. Flexibility in using our capital stock, debt, cash or a
mixture of the foregoing, allows us to work with a target company to accommodate their needs.
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Public Company Status — We believe
our status as a public company will make us an attractive transaction partner to prospective target businesses. As a public
company, we believe the target business would benefit from greater access to capital to fund future growth initiatives, further
means of creating incentive and compensation plans for management that are closely aligned with shareholder’s interests,
and increased recognition and awareness potentially benefitting sales and recruiting.
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Business Strategy
Since our initial public offering we have
employed a pro-active acquisition strategy focused on identifying potential business combination targets within both the financial
services and fintech industries that can benefit from a merger with our company. Our acquisition strategy seeks to capitalize
on the significant financial services, financial technology, banking, M&A, and operational expertise and contacts of both
our management team and our board. Prior to our initial public offering, our officers and directors did not have experience with
publicly traded blank check companies or special purpose acquisition companies. In addition, our executive officers may have conflicts
of interest with other entities which they owe fiduciary or contractual obligations with respect to initial business combination
opportunities.
Business Combination Criteria
Consistent with our current business strategy,
we have identified the following general criteria that we have and intend to continue to utilize in evaluating candidates for
our initial business combination. While we have and intend to continue to utilize these criteria in evaluating business combination
opportunities, we expect that no individual criterion will entirely determine a decision to pursue a particular opportunity. Further,
any particular initial business combination opportunity that we ultimately determine to pursue may not meet one or more of these
criteria.
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Enterprise Value. We have attempted
to identify one or more acquisition targets that have a combined enterprise value of at least $400 million and up to $1.25
billion.
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Post-Acquisition Growth. We have
attempted to identify one or more companies that we believe will either experience continued substantial organic growth post
acquisition or present the opportunities for add-on acquisitions through identification of multiple actionable target companies.
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Strong Management Team. We have
attempted to identify companies with strong and experienced public-ready management teams. Specifically, we will look for
management teams that have a proven track record of driving revenue and value creation for their shareholders.
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Leadership Position. We have attempted
to identify one or more companies that have a leadership position in their industry or a defensible niche within a target
market as a result of differentiated technology or other competitive advantages.
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Favorable Industry Trends. We have
attempted to identify one or more companies competing in an industry that enjoys favorable growth prospects and competitive
dynamics. Specifically, industries that are projected to have sustained growth while also enjoying diverse supplier and customers
bases, and high barriers to entry.
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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 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 private placement warrants. 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 to
bank 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
NYSE 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 is not able to independently
determine the fair market value of a target business or businesses, we will obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire, or
an independent accounting firm 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 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 NYSE’s 80% of fair market value test. If the initial business
combination involves more than one target business, the 80% of 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 deemed
appropriate. We also utilized our expertise’s expertise analyzing 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, directors or their affiliates. In the event
that we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers, directors
or their affiliates, we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire, or
an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Certain of our officers and directors presently
has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which
such officer or director is or will be required to present a business combination opportunity. Accordingly, if any such 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, 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 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 sponsor, officers and directors have
agreed not to participate in the formation of, or 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 failed to complete our initial business
combination by May 28, 2020.
Our Management Team
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 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 believe our management team’s operating
and transaction experience and relationships with companies will provide us with a substantial number of potential business combination
targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate
relationships in various industries in connection with financial and banking investing. This network has grown through the activities
of our management team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing
sources and target management teams and the experience of our management team in executing transactions under varying economic
and financial market conditions. However, past performance of our management team 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 identify a suitable candidate for our initial
business combination. You should not rely on the historical performance record our management team as indicative of our future
performance.
Status as a Public Company
We believe our structure will make 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 shares of our Class A common stock (or shares of a new holding company) or for a combination of shares of our 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 become 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 backgrounds will 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) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial
public offering, (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 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 for an initial business
combination, currently (as of December 31, 2019) in the amount of $175.4 million (including deferred underwriting commissions),
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 will allow us to tailor the consideration to be paid to the target business to fit its needs and desires.
Significant Activities Since Inception
On August 28, 2018, the Company consummated
its IPO of 15,000,000 units (the “Initial Units”). Each Unit consists of one share of Class A common stock of the
Company, $0.0001 par value per share (“Class A Common Stock”), and one warrant of the Company (“Public Warrant”),
with each warrant entitling the holder to purchase one share of Class A Common Stock at $11.50 per share. The Units were sold
at an offering price of $10.00 per Unit, generating gross proceeds of $150,000,000. The Company granted the underwriters in the
IPO a 45-day option to purchase up to 2,250,000 additional Units to cover over-allotments, if any (the “Over-Allotment Units”).
On September 21, 2018, the underwriters exercised the option in part and purchased an aggregate of 1,928,889 Over-Allotment Units,
which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $19,288,890.
Simultaneously with the consummation of
the IPO, the Company consummated the private placement (“Private Placement”) of an aggregate of 6,560,000 warrants
(“Placement Warrants”) at a price of $1.00 per Placement Warrant, generating total proceeds of $6,560,000. On September
21, 2018, in connection with the sale of Over-Allotment Units, the Company consummated a private sale of an additional 385,778
Private Placement Warrants to the Sponsor, generating gross proceeds of $385,778.
A total of $170,981,779, (or $10.10 per
Unit) comprised of $164,036,001 of the proceeds from the IPO (including the Over-Allotment Units) and $6,945,778 of the proceeds
of the sale of the Private Placement Warrants, was placed in a U.S.-based trust account, maintained by Continental Stock Transfer&
Trust Company, acting as trustee.
Our Units began trading on August 24, 2018
on the NYSE under the symbol MFAC.U. Commencing on September 21, 2018, the securities comprising the units began separate trading.
The units, common stock, and warrants are trading on the NYSE under the symbols “MFAC.U,” “MFAC” and “MFAC.W,”
respectively.
Effecting Our Initial Business Combination
We are not presently engaged in, and we
will not engage in, any operations until we consummate our initial business combination. We intend to effectuate our initial business
combination using cash from the proceeds of our initial public offering, the private placement of the private placement warrants,
the proceeds of the sale of our shares in connection with our initial business combination, shares issued to the owners of the
target, debt issued to banks 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, the purchase of other companies or working capital purposes.
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 private placement warrants, 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 have been and
will continue to be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or
mailings. These sources may also 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 officers
and directors, as well as our sponsor and their affiliates, may 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 expect to 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 officers and directors and
our sponsor and their affiliates. We may engage these entities or other individuals that specialize in business acquisitions,
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 of our existing officers or directors, or any entity
with which our sponsor or officers are affiliated, 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). None of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive
any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated
initial business combination.
We have agreed to reimburse our sponsor
for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our
officers and directors 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, directors or their affiliates or making the
initial business combination through a joint venture or other form of shared ownership with our sponsor, officers, directors or
their affiliates. In the event that we seek to complete our initial business combination with a target that is affiliated with
our sponsor, officers, directors or their affiliates, we, or a committee of independent directors, would obtain an opinion from
an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company
we are seeking to acquire, or an independent accounting firm 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
NYSE 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 is not
able to independently determine the fair market value of a target business or businesses, we will obtain an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking
to acquire, or an independent accounting firm 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
will have virtually unrestricted flexibility in identifying and 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 NYSE’s 80% of fair market value test. There is no basis for investors in our initial public offering to evaluate
the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
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 expect to conduct a thorough due diligence review, which may encompass, 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 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 NYSE’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
security holders (as defined by the NYSE rules) has a 5% or greater interest, directly or indirectly, in the target business
or assets to be acquired and if the number of shares of common stock to be issued, or if the number of shares of common stock
into which the securities may be convertible or exercisable, exceeds either (a) 1% of the number of shares of common
stock or 1% of the voting power outstanding before the issuance in the case of any of our directors and officers or (b) 5%
of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the case of any substantial
security holders; 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 NYSE 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 and/or
their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their 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 and/or their 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 and/or their 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 franchise and income 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, was $10.36
per public share before deducting dissolution expenses. 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 Chardan. 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 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 NYSE 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 requires 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 NYSE, we will be 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 that 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
may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 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 any public shares purchased during
or 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, we would need only 6,348,334, or 37.5%, of the 16,928,889 public shares sold in
our initial public offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted
and our officers and directors do not purchase any units in our initial public offering) 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 in no event will we redeem our public shares in an amount that would cause our net tangible assets
to be less than $5,000,001 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 more than
an aggregate of 15% 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 a Tender
Offer or 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 prior to the date set forth in the tender offer documents or proxy materials 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 using The Depository Trust
Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials,
as applicable, 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. Accordingly, a public stockholder would have
from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the
vote on the initial business combination if we distribute proxy materials, as applicable, 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 set forth in the tender offer materials or the date of the stockholder meeting
set forth in our proxy materials, as applicable. 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
May 28, 2020.
Redemption of Public Shares and Liquidation if no Initial
Business Combination
Our amended and restated certificate of
incorporation provides that we will have until May 28, 2020 to complete our initial business combination. If we are unable to
complete our initial business combination within such 21-month period, 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 franchise and income 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 each case 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 within the 21-month time period.
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 held by them if we fail to complete our initial business combination before May
28, 2020. 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 within the allotted 21-month time period.
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 redeem 100% of our public shares if we do not complete
our initial business combination before May 28, 2020 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 franchise and income taxes divided by the number of then outstanding public shares. However, we may
not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 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 to use the amounts held outside
the trust account ($482,665 as of December 31, 2019) to pay for all costs and expenses associated with implementing our plan of
dissolution, as well as payments to any creditors, 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 franchise and
income 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
franchise and income 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 private placement warrants, 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 $10.10. 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 $10.10.
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 been seeking 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 Chardan, the representative of the underwriters of the 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) $10.10 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 $10.10
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 and our sponsor’s only assets are securities of our company.
Therefore, we believe it is highly unlikely 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) $10.10 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 $10.10 per public share.
We have been seeking and will continue to
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 amounts held outside of the trust account ($482,665 as of December
31, 2019), 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) but these amounts may be spent on expenses incurred as a result of being
a public company or due diligence expenses on prospective business combination candidates. 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 before May 28, 2020 may be considered a liquidating distribution under Delaware
law. If the 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 before May 28, 2020, 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 before May 28, 2020, 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 franchise and income 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 each case 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 our 21st
month 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 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. As described above, pursuant to the obligation contained in our underwriting
agreement, we will 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) $10.10 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 $10.10 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 redeem 100% of our
public shares if we do not complete our initial business combination before May 28, 2020 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 before May 28, 2020, 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 may 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 will be 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 three (3) officers. Other
than our President, none of our officers or directors is required to commit his or her full time to our affairs prior to the completion
of our initial business combination and other than our President, these individuals 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 deem necessary to our affairs until we have completed
our initial business combination. The amount of time they will 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.
Periodic Reporting and Financial Information
We have registered our units, Class A common
stock and warrants 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, our annual reports will contain 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 are required to evaluate our
internal control procedures over financial reporting for the fiscal year ended December 31, 2019 as required by the
Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or are no longer an emerging growth
company and are an accelerated filer 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 over financial reporting 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 the fifth anniversary of the completion of our initial
public offering, (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.
You should carefully consider all of
the risks described below, together with the other information contained in this report, including the financial statements, before
making a decision to invest in our units. If any of the following risks occur, our business, financial condition or operating
results 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.
We are a blank check company with limited operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a blank check company with limited
operating results. Because we lack significant operating history, you have little 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 though
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. Please see the section of this report entitled
“Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional
information.
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, as well as any public shares purchased during or 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, we would need only 6,348,334, or 37.5%, of the 16,928,889
public shares sold in our initial public offering to be voted in favor of an initial business combination (assuming all outstanding
shares are voted and our officers and directors do not purchase any public shares) in order to have our initial business combination
approved. Our initial stockholders will own shares representing 20% of our outstanding shares of common stock as of the date of
this report. Accordingly, if we seek stockholder approval of our initial business combination, 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.
You may not be provided with an opportunity
to evaluate the specific merits or risks of our 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, in no event will we redeem
our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 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 upon consummation of our initial business combination and after payment of
underwriters’ fees and commissions or such greater amount necessary to satisfy a closing condition 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 Chardan 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.
A provision of our warrant agreement may make it more difficult
for us to finance and consummate an initial business combination.
Unlike most 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 an issue price or effective issue price of less than $9.50 per share of Class A common stock,
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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, and
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(iii)
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the volume weighted average trading price of
our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate
our initial business combination (such price, the “Market Value”) is below $9.50 per share, the exercise price
of the warrants will be adjusted to be equal to 115% of the Market Value, and the $24.00 per share redemption trigger price
described below under “Redemption of warrants” will be adjusted to be equal to 240% of the Market Value.
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This may make it more difficult for us to
do an initial business combination with a target business.
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 May 2020. 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 $10.36 per share, or less than
such amount in certain circumstances, based on the balance of our trust account as of December 31, 2019 and before deducting dissolution
expenses, and our warrants will expire worthless.
Our amended and restated certificate of
incorporation provides that we must complete our initial business combination by May 2020. We may not be able to find a suitable
target business and complete our initial business combination within such time period. If we have not completed our initial business
combination within such time period, 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 franchise and income 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 each case 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
$10.36 per share, based on the balance of our trust account as of December 31, 2019 and before deducting dissolution expenses,
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.10 per share
on the redemption of their shares.
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 warrant holders
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 public 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. 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
redeem 100% of our public shares if we do not complete our initial business combination within 21 months from the closing of our
initial public offering 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
within 21 months from the closing of our initial public offering, 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.
The NYSE 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 units, Class A common stock and warrants
are listed on the NYSE. We cannot assure you that our securities will continue to be listed on NYSE in the future or prior to
our initial business combination. In order to continue listing our securities on NYSE prior to our initial business combination,
we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum number of holders
of our securities (400 public holders). Additionally, in connection with our initial business combination, we will be required
to demonstrate compliance with NYSE’s initial listing requirements, which are more rigorous than NYSE’s continued
listing requirements, in order to continue to maintain the listing of our securities on NYSE. For instance, our stock price would
generally be required to be at least $4 per share. We cannot assure you that we will be able to meet those initial listing requirements
at that time.
If NYSE 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.” Since our units, our Class A common stock and warrants are listed on NYSE,
they 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 NYSE,
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.
Our shareholders will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of our initial public
offering and the sale of the private placement warrants 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 will 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 will not be afforded the benefits
or protections of those rules. Among other things, this means our securities are tradable and we will have a longer period of
time to complete our initial business combination than do companies subject to Rule 419. Moreover, 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 more than an aggregate
of 15% 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 less than $10.10 per share, or less than
such amount in certain circumstances, on our redemption of our public shares, and our warrants will expire worthless.
We expect 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 will be 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 private placement warrants, our ability
to compete with respect to the acquisition of certain target businesses that are sizable will be 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 less
than $10.10 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 $10.10 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 the net proceeds of our initial public offering and the
sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate until May 2020,
we may be unable to complete our initial business combination, in which case our public stockholders may only receive $10.10 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 May 2020, assuming that our initial business combination is not
completed during that time. We believe that, upon the closing of our initial public offering, the funds available to us outside
of the trust account will be sufficient to allow us to operate until May 2020; 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 less than $10.10 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 $10.10 per share on the redemption of their shares.
Funds available to us outside of the trust account 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 franchise and income 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.
As of December 31, 2019 we have $482,665
held outside the trust account. 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 private placement-equivalent warrants at a price of $1.00
per warrant at the option of the lender. 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 $10.10 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 $10.10 per share on the redemption of their shares.
Our independent registered public accounting firm’s
report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of December 31, 2019, we had approximately $482,665 in cash
and working capital deficit of $243,892. Further, we have incurred and expect to continue to incur costs in pursuit of our financing
and acquisition plans. Management’s plans to address this need for capital are discussed in the section of this report titled
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you
that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others,
raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this
report do not include any adjustments that might result from our inability to continue as a going concern.
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. Even
though 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 $10.10 per
share.
Our placing of funds in the trust account
may not protect those funds from third-party claims against us. Although we have sought and will continue to 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, will 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 $10.10 per share initially held in the
trust account, due to claims of such creditors. Pursuant to the 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) $10.10 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 $10.10 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 and our sponsor’s only assets are securities of our company. Therefore, we
believe it is highly unlikely 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 independent 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) $10.10 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 $10.10 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 $10.10 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 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
will 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. 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 less than $10.10 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 will be 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 within 21 months from the closing of our initial public offering 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 following
the 21st month from the closing of our initial public offering 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 May 2020 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 NYSE corporate governance
requirements, we are not required to hold an annual meeting of stockholders until no later than one year after our first full
fiscal year end following our listing on NYSE (or until December 31, 2020) and thus may not be in compliance with Section 211(b)
of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with
a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders
want us to hold an annual meeting prior to our consummation of a 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 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 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 above, if our Class A common stock is at
the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a
“covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public
warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the
event we do not so elect, 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
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 private warrants may be able to exercise such private 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 our Class A common stock is at any time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at
our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section
3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration
statement, and in the event we do not so elect, 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. 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 the agreement entered into concurrently
with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees
can demand that we register the private placement warrants, the shares of Class A common stock issuable upon exercise of the founder
shares and the private placement warrants held, or to be held, by them and holders of warrants that may be issued upon conversion
of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such
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 neither 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 financial services industry or businesses providing technological services to the financial
industry, commonly known as fintech businesses, but may also pursue other business combination opportunities, except that we will
not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination
with another blank check company or similar company with nominal operations. 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 and directors
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, may not be indicative
of future performance of an investment in us.
Information regarding performance by, or
businesses associated with, our management team, is presented for informational purposes only. Past performance by our management
team 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 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. Our officers and directors have not had experience with publicly traded
blank check companies or special purpose acquisition companies prior to our initial public offering.
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 we intend to focus on identifying
companies in the financial services industry or businesses providing technological services to the financial industry, commonly
known as fintech businesses, and have not actively looked to identify business combination candidates in other industries (which
industries may be outside our management’s area of expertise), 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 units 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 approximately $10.10 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 $10.10 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 and directors 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 an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking
to acquire, or an independent accounting firm, 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 firm
that commonly renders valuation opinions for the type of company we are seeking to acquire, or an independent accounting firm
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.
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.
As of December 31, 2019, there were 83,071,111 authorized but unissued shares of Class A common stock and 5,687,500 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 no shares of preferred stock issued and currently 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.
Shares of Class B common stock are also convertible at the option of the holder at any time.
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 redeem 100% of our public shares if we do not complete our initial business combination within
21 months from the closing of our initial public offering 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
$10.10 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. The cost incurred
up to the point that we decide not to complete a specific initial business combination 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 $10.10 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 $10.10 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 and directors
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 and directors. We believe that our success depends on the
continued service of our executive officers and directors, 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 or executive officers.
The unexpected loss of the services of one or more of our directors or executive officers 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, 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 will 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.
Other than our President, our officers and
directors are not required to, and will 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. Certain of our officers
are engaged in other business endeavors for which he or she may be entitled to substantial compensation and such 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 intend to engage in the business of identifying and combining with one or more businesses. Our sponsor and 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 they may not participate in the formation of, or 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 failed to complete our initial business
combination by May 2020.
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 or
their affiliates which may raise potential conflicts of interest.
In light of the involvement of our sponsor,
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers,
directors or their affiliates. Our directors also serve as officers and board members for other entities. Although we will not
be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if
we determined that such affiliated entity met our criteria for an initial business combination and such transaction was approved
by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking
firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire, or
an independent accounting firm, regarding the fairness to our stockholders from a financial point of view of an initial business
combination with one or more domestic or international businesses affiliated with our sponsor, officers, directors or their affiliates,
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.
As of the date of this report, our sponsor
and directors own an aggregate of 4,232,222 shares of our common stock. Such founder shares will be worthless if we do not complete
an 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.
Although we have no commitments as of the
date of this report to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial
public offering, 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 private placement warrants, 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.
As of December 31, 2019, $175,410,617 was
available for completing our initial business combination (which includes up to $6,771,556 for the payment of underwriting
commission).
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 that in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 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 though 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 requires the approval of holders of 65% of our common stock, and amending
our warrant agreement will require a vote of holders of at least 65% of the public warrants. 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 redeem 100% of our public shares if we do not complete our initial business combination within 21 months
from the closing of our initial public offering 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. As of December 31, 2019, our initial stockholders
collectively beneficially own 20% 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 redeem 100% of our public shares if we do not complete
our initial business combination within 21 months from the closing of our initial public offering 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 have not selected any specific business
combination target, but intend to target businesses larger than we could acquire with the net proceeds of our initial public offering
and the sale of the private placement warrants. 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 less
than $10.10 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 franchise and income 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 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 $10.10 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 $10.10
per share on the redemption of their shares.
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
20% of our issued and outstanding shares of common stock. 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 and will be divided into three classes, each
of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not
hold an annual meeting of stockholders to elect new directors prior to the completion of our business combination, in which case
all of the current directors will continue in office until at least the completion of the 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
business combination.
Unlike many other similarly structured blank check companies,
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, or earlier at the option of the holders, 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 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. This is different from most other similarly structured blank check companies
in which the initial stockholder will only be issued an aggregate of 20% of the total number of shares to be outstanding prior
to the initial business combination. 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 65% 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 issued 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 65% of the then outstanding public warrants to make
any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms
of the public warrants in a manner adverse to a holder if holders of at least 65% 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 65% 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 $24.00 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 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 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 private placement warrants will be redeemable by us so long as they are held by our sponsor, Chardan or their permitted
transferees. If the private placement warrants are held by holders other than the sponsor, Chardan or their permitted transferees,
the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included
in the units being sold in our initial public offering.
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 sold warrants to purchase 16,928,889
shares of our Class A common stock as part of units offered in our initial public offering and partial exercise of the underwriters’
over-allotment option. Simultaneously with the closing of our initial public offering and closing in connection with partial exercise
of the over-allotment option, we issued 6,945,778 warrants, each exercisable to purchase one share of our Class A common stock
at $11.50 per share, at a price of $1.00 warrant. Our initial stockholders currently own an aggregate of 4,232,222 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 converted into warrants,
at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants,
including as to exercise price, exercisability and exercise period.
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 private placement warrants 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,
Chardan or their 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 or Chardan 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 market for our securities may not fully develop or sustain,
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 fully develop or may not be sustained. You may be unable to sell your securities unless a market
can be fully developed 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 within the meaning of
the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth 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.
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 over financial reporting beginning with this report. Since we are
not deemed to be a large accelerated filer or an accelerated filer, we are not 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.
Provisions in our amended and restated certificate of incorporation
and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of
incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors,
officers and employees 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 such suit will be deemed to have consented
to service of process on such stockholder’s counsel. This provision may have the effect of discouraging lawsuits against
our directors and officers.
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 technological services to the financial industry.
Business combinations with businesses in
the financial services industry or businesses providing technological 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 technological 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 will
not be limited to businesses in the financial services industry or businesses providing technological 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.