Overview
We are an early stage
blank check company incorporated on October 22, 2018 as a Delaware corporation 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 intend to capitalize on the ability of our management
team to identify, acquire and operate a business in the diversified resources and industrial materials sectors, including the chemicals,
energy services and alternatives, environmental services, metals and power sectors, that may provide opportunities for attractive
long-term risk-adjusted returns, though we reserve the right to pursue an acquisition opportunity in any business or industry.
Significant Activities Since Inception
On February 12, 2019,
the Company consummated its initial public offering of 20,000,000 units (the “initial units”). On February 19, 2019,
we consummated the full exercise of the underwriters’ 3,000,000 unit over-allotment option (the “over-allotment units”;
collectively with the initial units, the “units”). Each unit consists of one share of Class A common stock, $0.0001
par value per share (“Class A common stock”), and one-third of one warrant (“public warrant”), each whole
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 $230,000,000. Simultaneously with the consummation of the initial public
offering and the sale of the units, the Company consummated the private placement (“private placement”) of an aggregate
of 4,600,000 warrants (“private placement warrants”) to our sponsor and the Anchor Investors at a price of $1.50 per
private placement warrant, generating total proceeds of $6,900,000.
A total of $230 million
of the net proceeds from our initial public offering (including the over-allotment) and the private placement with the sponsor
and the Anchor Investors were deposited in a trust account established for the benefit of the Company’s public stockholders.
Our units began trading
on February 8, 2019 on the NYSE under the symbol RMG.U. On April 1, 2019, the securities comprising the units began separate trading.
The common stock and warrants trade on the NYSE under the symbols “RMG” and “RMG.WS,” respectively.
Business Strategy
Our business strategy
is to utilize the investment identification and evaluation experience of our management, members of our Board and Advisory Board
and Riverside Management Group, an entity of which our Chairman is the founder and serves as a Senior Managing Director and the
Chief Executive Officer, to identify and complete our initial business combination with a company that we believe, with proper
utilization of their network and experience, has compelling potential for value creation. Over the course of their careers, the
members of our management team, Board and Advisory Board and their affiliates (including Riverside Management Group) have developed
a broad network of contacts and corporate relationships that we believe will serve as a useful source of acquisition opportunities.
This network has been developed through the extensive experience of our management team, members of our Board and Advisory Board
and Riverside Management Group in both investing in and operating chemicals, energy services and alternatives, environmental services,
metals and power companies and assets. We expect these networks will provide us with a robust flow of acquisition opportunities
among lower middle-market and middle-market companies with overall transaction values between $750 million and $2.5 billion. To
the extent the purchase price for any acquisition to be paid in cash exceeds the net proceeds available to us, we may issue debt
or equity to consummate the acquisition. Such additional financing may come in the form of bank financings or preferred equity,
common equity or debt offerings or a combination of the foregoing. We believe our management’s experience and track record
are particularly differentiated, and will enable us to successfully identify and execute an initial business combination.
Our management team
has experience in:
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Operating companies, setting and changing strategies, and identifying, mentoring and recruiting
exceptional talent;
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Developing and growing companies, both organically and through strategic transactions and acquisitions,
and expanding the product range and geographic footprint of a number of target businesses;
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Investing in leading private and public diversified resources and industrial materials companies
to accelerate their growth and maturation;
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Sourcing, structuring, acquiring, and selling businesses;
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Accessing the capital markets, including financing businesses and helping companies transition
to public ownership; and
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Fostering relationships with sellers, capital providers and target management teams.
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Acquisition Criteria
We will seek to identify
companies that have compelling growth potential and a combination of the following characteristics. We will use these criteria
and guidelines in evaluating acquisition opportunities, but we may decide to enter our initial business combination with a target
business that does not meet these criteria and guidelines. We intend to acquire companies or assets that we believe have the following
attributes:
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Network utilization. We will focus on companies that can utilize and leverage the extensive
networks and insights that we, members of our Board and our Advisory Board and Riverside Management Group have built in the diversified
resources and industrial materials sectors;
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Large and growing market. We will focus on investments in industry segments that we believe
demonstrate attractive long-term growth prospects and reasonable overall size or potential;
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Attractive, profitable business. We will seek to invest in companies that we believe possess
not only established business models but sustainable competitive advantages as well;
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Strong management teams. We will spend significant time assessing a company’s
leadership and personnel and evaluating what we can do to augment or upgrade the team over time if needed;
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Opportunity for operational improvements. We will seek to identify businesses that
we believe are stable but at an inflection point and would benefit from our additional management expertise, ability to drive improvements
in the company’s production processes, research and development, go-to-market strategy, products or service offerings, sales
and marketing efforts, geographical presence and/or leadership team;
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Opportunity for financial improvements. We will seek to identify businesses that we believe
would benefit from our management’s ability to improve and optimize a company’s capital structure, including by assisting
the company in accessing the capital markets and any other financing sources;
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Differentiated products or services. We will focus on businesses whose products or
services are differentiated or where we see an opportunity to create value by implementing best practices;
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Unrecognized value. We will seek to identify business that we believe exhibit unrecognized
value or other characteristics, desirable returns on capital, and a need for capital to achieve the company’s growth strategy,
and that we believe have been misevaluated by the marketplace based on our analysis and due diligence review;
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Minimal technology risk. We will seek to invest in companies that do not depend on
experimental technology; and
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Appropriate valuations. We will seek to be a disciplined and valuation-centric investor
that will invest on terms that we believe provide significant upside potential with limited downside risk.
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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 may
deem relevant.
Our Management Team, Board and Advisors
Our Management Team
Our management team
is led by our Chairman, D. James Carpenter, our Chief Executive Officer, Robert S. Mancini, and our President and Chief Operating
Officer, Philip Kassin, who combined have over 80 years of experience in advising and investing in private and public companies
in the diversified resources and industrial materials sectors. Mr. Carpenter is a Senior Managing Director and Chief Executive
Officer of Riverside Management Group, and former Chief Executive Officer of Horsehead Industries Inc. Mr. Mancini is a former
partner and Managing Director at The Carlyle Group and the former co-head of Carlyle Power Partners, and prior to that was a Managing
Director at Goldman Sachs and most recently was head of the power and commodity principal investment businesses and Chief Executive
Officer of Cogentrix Energy Power Management LLC. Mr. Kassin is the former Head of M&A and Financing at Access Industries and
M-III Partners, and has also held senior investment banking roles at Evercore, Morgan Stanley, Goldman Sachs, Merrill Lynch and
AIG.
Messrs. Carpenter,
Mancini and Kassin played a major role in over 85 investments with total transaction values in excess of $55 billion and more than
$20 billion of invested equity, and were involved in investments across numerous geographies, through a variety of different structures
and amidst diverse economic cycles. These investments included some of the largest and most complex private equity deals in the
diversified resources and industrial materials sectors. Success at this level requires the highest degree of diligence, financial
and market analyses, process management, structuring abilities, operational knowhow and investment acumen.
Our management team
has extensive experience in corporate finance, mergers and acquisitions, divestitures, and equity and debt capital markets transactions.
Additionally, our management team has been responsible for developing bank relationships with banks worldwide that have provided
billions of dollars of committed capital to their companies. Our team has experience investing across a variety of commodity price
cycles and a track record of identifying high-quality assets and businesses with significant resources, capital and optimization
potential.
Our management team
has an extensive history of partnering with other management teams and operators to successfully create greater value. Our team
has consistently brought in management teams to enhance the value of assets, while providing expertise in public equity and debt
markets, and mergers and acquisitions. It has been a differentiating strength of our management team in finding acquisitions and
growth opportunities to be flexible in partnering with other management teams and companies.
Our Board
In addition to Messrs.
Carpenter, Mancini and Kassin, our Board is comprised of W. Grant Gregory, Craig Broderick, W. Thaddeus Miller and Steven P. Buffone.
Mr. Gregory is
the founder and Chairman of Gregory & Hoenemeyer, Inc., a financial advisory firm providing mergers and acquisitions and
strategic services to firms, including private equity firms. Mr. Gregory has served successfully in numerous leadership roles
as chairman of the board, chief executive officer, investment banker, merchant banker and director of public, private and
nonprofit corporations, including serving on the board of directors of Touche Ross & Co. (Deloitte Touche Tohmatsu),
where he worked for 24 years, Chrysler Corporation, MCI and Renaissance Hotels Inc. Mr. Broderick is a Senior Director of
Goldman, Sachs & Co., from which he retired as an active employee in January 2018 after 32 years. He was most recently
Goldman’s Chief Risk Officer, a member of its Management Committee, and chair or co-chair of key risk committees. Mr.
Broderick also currently serves as a Director of the Bank of Montreal and is a Senior Advisor to Stone Point Capital, a
private equity firm primarily investing in the global financial services industry. Mr. Miller currently serves as Executive
Vice Chairman and Chief Legal Officer of Calpine Corporation, and has decades of legal and energy industry experience. Mr.
Buffone currently is founder of Kenilworth Advisors, LLC, a legal and business consulting firm, and previously a partner at
the law firm of Gibson, Dunn & Crutcher LL, where he served as a member of the Executive Committee and as co-chair of the
firm’s Corporate Transactions Practice Group and Energy and Infrastructure Practice Group.
Our Advisory Board
Our Advisory Board
is comprised of Steven J. Gilbert and Edward Forst, each of whom has expertise in diversified resources and industrial materials
companies. Mr. Gilbert is the founder and Chairman of the Board of Gilbert Global Equity Partners, L.P., an institutional investment
firm established in 1997. In addition, Mr. Gilbert also founded Soros Capital, Commonwealth Capital Partners, and Chemical Venture
Partners. He currently serves on the boards of several public companies, and has served on the boards of more than 25 companies
over the span of his career. Mr. Forst previously served as President and Chief Executive Officer of Cushman & Wakefield, Inc.,
a commercial real estate firm operating in over 60 countries. Prior to that, he was a partner at Goldman Sachs, where during his
career he held numerous executive roles. We anticipate that our Advisory Board will contribute to our efforts in sourcing and evaluating
transaction opportunities.
Riverside Management Group
Riverside Management
Group, an entity of which our Chairman is the founder and serves as a Senior Managing Director and the Chief Executive Officer,
is a merchant banking boutique founded in 1996. Through its team of approximately 40 professionals, including the broader Riverside
Management Group platform of more than 20 senior finance professionals, Riverside Management Group provides capital placement,
principal investments and mergers and acquisitions advisory services to companies, funds and entrepreneurs. Additionally, Riverside
Management Group’s advisory board includes nine former or current “C-level” executives of world leading companies
in the diversified resources and industrial materials sectors. As a result, Riverside Management Group has an active and highly
robust network of deal flow through personal relationships with companies and management teams leading to proprietary opportunities.
We expect to leverage the exceptional industry expertise and executive and operational management skills of Riverside Management
Group and its senior advisors and employees to assist us in identifying, evaluating and performing due diligence on a target, as
well as structuring, financing and completing our initial business combination.
Riverside Management
Group’s advisory board includes Dr. Heinz C. Schimmelbusch, Mark R. White, Nils A. Kindwall, William Smelas and Ronald J. Statile. These advisory board members have significant experience as founders, owners, directors and/or executive
officers of companies such as Horsehead Holding Corporation, one of the largest zinc recyclers and producers in the U.S., Great
Lakes Carbon Corp., the world’s largest producer of calcined petroleum products, AMG Advanced Metallurgical Group, a global
leading producer of critical materials for carbon dioxide reduction and Freeport-McMoran, a leading producer of copper, gold and
molybdenum and SAP, the global leader in enterprise software.
The past performance
of our management team, members of our Board and Advisory Board and Riverside Management Group are not a guarantee either (i) that
we will be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business
combination we may consummate. Certain of our officers, directors and advisors have had management and successful deal execution
experience with special purpose acquisition corporations in the past. You should not rely on the historical record of performance
of our management, members of our Board and Advisory Board and Riverside Management Group as indicative of our future performance.
Initial Business Combination
Our initial business
combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of
the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on
the trust account) at the time of the agreement to enter into the initial business combination. If our Board is not able to independently
determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment
banking firm that is a member of the Financial Industry Regulatory Authority (“FINRA”) or an independent accounting
firm with respect to the satisfaction of such criteria. Our stockholders may not be provided with a copy of such opinion, nor will
they be able to rely on such opinion.
Any party may co-invest
with us in the target business at the time of our initial business combination, or we could raise additional proceeds to complete
the acquisition by issuing to such parties a class of equity or equity-linked securities. We refer to this potential future issuance,
or a similar issuance to other specified purchasers, as a “specified future issuance”. The amount and other terms and
conditions of any such specified future issuance would be determined at the time thereof. We are not obligated to make any specified
future issuance and may determine not to do so. Pursuant to the anti-dilution provisions of our Class B common stock, any such
specified future issuance would result in an adjustment to the conversion ratio such that our initial stockholders and their permitted
transferees, if any, would retain their aggregate percentage ownership at 20% of the sum of the total number of all shares of common
stock outstanding plus all shares issued in the specified future issuance, unless the holders of a majority of the then-outstanding
shares of Class B common stock agreed to waive such adjustment with respect to the specified future issuance at the time thereof.
We cannot determine at this time whether a majority of the holders of our Class B common stock at the time of any such specified
future issuance would agree to waive such adjustment to the conversion ratio. If such adjustment is not waived, the specified future
issuance would not reduce the percentage ownership of holders of our Class B common stock, but would reduce the percentage ownership
of holders of our Class A common stock. If such adjustment is waived, the specified future issuance would reduce the percentage
ownership of holders of both classes of our common stock.
Our Acquisition Process
In evaluating a prospective
initial business combination, we expect to conduct a thorough diligence review that will encompass, among other things, meetings
with incumbent management and employees, document reviews, inspection of assets and facilities and financial analyses, as well
as a review of other information that will be made available to us.
We believe that we
are well positioned to identify attractive risk-adjusted returns in the marketplace and that our contacts and transaction sources,
ranging from industry executives, private owners, private equity funds, and investment bankers, in addition to the reach of Riverside
Management Group, which is further supported by the broader Riverside Management Group platform and its advisory board, will enable
us to pursue a broad range of opportunities.
We will seek to capitalize
on the industry expertise and relationships of members of our Board and Advisory Board and Riverside Management Group to source
and complete an initial business combination. Members of our Board and Advisory Board, as well as the Riverside Management Group’s
team and advisors, who will assist us in sourcing potential target companies and evaluating management teams, have an extensive
track record of identifying high-quality assets, businesses and management teams with significant resources, capital and optimization
potential.
We believe that conducting
comprehensive due diligence on prospective investments is particularly important within the diversified resources and industrial
materials sectors. We will utilize the diligence, rigor, and expertise of our management and members of our Board and Advisory
Board, as well as Riverside Management Group’s platform, to evaluate potential targets’ strengths, weaknesses, and
opportunities to identify the relative risk and return profile of any potential target for our initial business combination. Given
our management team’s extensive tenure investing in natural resources companies, we will often be familiar with the prospective
target’s end-market, competitive landscape and business model.
Certain of our officers
and directors are employed by or affiliated with various investment funds. Such funds and individuals are continuously made aware
of potential investment opportunities, one or more of which we may desire to pursue for a business combination.
We may, at our option,
pursue an opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity
may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds
to complete the acquisition by making a specified future issuance to any such entity. 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.
Our officers and certain
directors have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities
registered under the Securities Exchange Act of 1934, as amended (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 the date that is 24 months after the closing of our initial public offering (February 12, 2021).
Status as a Public Company
We believe our structure
will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target
business an alternative to the traditional initial public offering through a merger or other business combination. In this situation,
the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a
combination of shares of our 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 certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial
public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present
to the same extent in connection with a business combination with us.
Furthermore, once
a proposed 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. Once public, we believe the target
business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’
interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and
aid in attracting talented employees.
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 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 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 do not intend to take advantage of the benefits of this extended transition period and our election
to opt out is irrevocable.
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.
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 complete
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private
placement warrants, our capital stock, debt or a combination of these as the consideration to be paid in our initial business combination.
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 business combination or used for redemptions of our Class A common stock, we may apply
the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion
of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing
our initial business combination, to fund the purchase of other assets, companies or for working capital.
We may seek to raise
additional funds through a private offering of debt or equity securities in connection with the completion of our initial business
combination (which may include a specified future issuance), and we may complete our initial business combination using the proceeds
of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws,
we would expect to complete such financing only simultaneously with the completion of our business combination. In the case of
an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials
disclosing the 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, including pursuant to any specified
future issuance, or through loans in connection with our initial business combination. At this time, we are not a party to any
arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or
otherwise.
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 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.
Sources of Target Businesses
We expect to
receive a number of proprietary transaction opportunities to originate as a result of the business relationships, direct
outreach, and deal sourcing activities of our officers, directors and Advisory Board members. In addition to the proprietary
deal flow, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources,
including investment banking firms, consultants, accounting firms, private equity groups, large business enterprises, and
other market participants. These sources may also introduce us to target businesses in which they think we may be interested
on an unsolicited basis. Our officers, directors and Advisory Board members, as well as 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. Some of our officers,
directors and Advisory Board members 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 acquisition candidate. In no event will our sponsor or any of our existing officers
or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting fee or other
compensation prior to, or 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). However, in connection with the successful completion of our
initial business combination, we may determine to provide a payment to our sponsor, officers, directors, advisors or our or
their affiliates, which payment would not be made from the proceeds of our initial public offering held in the trust account.
We currently do not have any agreement or arrangement with our sponsor, any of our officers, directors, advisors or our or
their affiliates to make any such payments.
We are not prohibited
from pursuing an initial business combination with a business combination target that is affiliated with our sponsor, officers,
directors or Advisory Board members or making the acquisition through a joint venture or other form of shared ownership with our
sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination target
that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion
from an independent investment banking firm which is a member of FINRA 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 a 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. Any such entity
may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds
to complete the acquisition by making a specified future issuance to any such entity.
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. By completing our 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 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 or of our Board, if any, in the target business cannot presently be stated with any
certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our
business combination, it is presently unknown if any of them will devote their full efforts to our affairs subsequent to our 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. The determination as to whether any members of our Board will remain with
the combined company will be made at the time of our initial business combination.
Following a business
combination, to the extent that we deem it necessary, we may seek to recruit additional managers to supplement the incumbent management
team 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 NYSE rules) has a
5% or greater interest, directly or indirectly, in the target business or assets 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
In the event we seek
stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination
pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately
negotiated transactions or in the open market either prior to or following the completion of our initial business combination.
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 in such transactions.
They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller
or if such purchases are prohibited by Regulation M under the Exchange Act. 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. 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.
The purpose of such
purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood of obtaining
stockholder approval of the business combination or (ii) 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 business combination, where it appears that such
requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have
been possible.
In addition, if such
purchases are made, the public “float” of our common stock may be reduced and the number of beneficial holders of our
securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities
on a national securities exchange.
Our sponsor, officers,
directors, advisors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers,
directors, advisors 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 the 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.
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 as well as expenses
relating to the administration of the trust account, divided by the number of then outstanding public shares, subject to the limitations
described herein. The amount in the trust account is approximately $10.00 per public share as of the date of this report. The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions
we will pay to the underwriters. Our sponsor, officers and certain 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 business combination. In addition, each of the Anchor Investors has agreed with us that
if, at the time of any stockholder vote with respect to an initial business combination or the business day immediately prior to
the consummation of our initial business combination, such Anchor Investor does not own a number of public shares equal to the
number of shares purchased by it in the initial public offering, then such Anchor Investor will forfeit to us all of the founder
shares that it purchased prior to the initial public offering.
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 business combination
or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed 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. Asset acquisitions and stock purchases would not typically require stockholder approval while direct
mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock
or seek to amend our amended and restated certificate of incorporation would require stockholder approval. If we structure a business
combination transaction 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 business combination. We intend to 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 maintain a listing for our securities
on the 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 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 completion
of our initial business combination (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 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 sponsor will count toward this quorum and has agreed to vote
its founder shares and any public shares purchased during or after our initial public offering 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 sponsor’s
founder shares, we would need 9,200,001, or 40%, of the 23,000,000 public shares sold in our initial public offering to be voted
in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved.
We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting,
if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and
the voting agreement of our sponsor, 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 (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 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 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 business combination exceed the aggregate amount of cash available to us, we will not complete the 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 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 20% of the shares sold in our initial public offering (the “Excess Shares”).
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 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 20% 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
20% of the shares sold in our initial public offering, we believe we will limit the ability of a small group of stockholders to
unreasonably attempt to block our ability to complete our business combination, particularly in connection with a 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, our amended
and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares (including
Excess Shares) for or against our 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 up to two business days prior to the vote on the proposal to approve the 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 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.
The foregoing is
different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with
their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on
an initial business combination, and a holder could simply vote against a proposed business combination and check a box on
the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination
was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to
verify ownership. As a result, the stockholder then had an “option window” after the completion of the business
combination during which he or she could monitor the price of the company’s stock in the market. If the price rose
above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her
shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to
commit before the stockholder meeting, would become “option” rights surviving past the completion of the business
combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior
to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is
approved.
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 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
business combination is not completed, we may continue to try to complete a business combination with a different target until
February 12, 2021.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and
restated certificate of incorporation provides that we will have only until February 12, 2021 to complete our initial
business combination. If we are unable to complete our business combination by February 12, 2021, we will: (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account including interest earned on the funds held in the trust account and not previously released to us to pay
our franchise and income taxes as well as expenses relating to the administration of the trust account (less up to $100,000
of interest released to us 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, 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.
Although we have no present intention to do so, at some point in the future we may ask our shareholders to approve an
amendment to our charter that would extend the length of the Combination Period, but there are no assurances that such
extension will be granted. There will be no redemption rights or liquidating distributions with respect to our warrants,
which will expire worthless if we fail to complete our business combination within the prescribed time period.
Our sponsor, officers
and certain 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 by February 12, 2021. However, if our sponsor, officers or directors acquire public shares in or after our initial
public offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if
we fail to complete our initial business combination within the prescribed time period.
Our sponsor,
officers and certain directors have agreed, pursuant to a letter agreement with us (filed as an exhibit to this annual
report), that they will not propose any amendment to our amended and restated certificate of incorporation that would modify
the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by February 12, 2021, 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 as well as expenses relating to the administration of the trust account
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 completion of our initial business combination (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.
We expect that all
costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from
proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. 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 as well as expenses
relating to the administration of the trust account on interest income earned on the trust account balance, we may request the
trustee to release to us an 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 $10.00. The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00.
Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision
for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before
we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure
you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek
to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest and 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.
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 (other than
our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per
public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the
trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be
withdrawn to pay taxes as well as expenses relating to the administration of the trust account, except as to any claims by a
third party who executed a waiver of any and all rights to seek access to the trust account and except 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, then our sponsor
will not be responsible to the extent of any liability for such third party claims We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are
securities of our company. We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could
be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business
combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None
of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and
prospective target businesses.
In the event that
the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held
in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in
each case net of the amount of interest which may be withdrawn to pay taxes as well as expenses relating to the administration
of the trust account, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors
in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our
sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual
value of the per-share redemption price will not be less than $10.00 per public share.
We will 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 (other than our independent auditors), 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 may have access to amounts held outside of the
trust account 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 business combination by February 12, 2021 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 business combination by February 12, 2021, is not considered a liquidating distribution
under Delaware law and such redemption distribution is deemed to be unlawful, 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 business combination by February
12, 2021, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but
not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and
not previously released to us to pay our franchise and income taxes as well as expenses relating to the administration of the
trust account (less up to $100,000 of interest released to us 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,
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 February 12, 2021 and, therefore, we do not intend to comply with those procedures. As such, our
stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any
liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not
be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time
that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within
the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations 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 (other than our independent auditors), prospective
target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made
against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust
account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account
are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the
date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of
interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial
public offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver
is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such
third-party claims.
If we file a bankruptcy
petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third
parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot
assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could
be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent
conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore,
our Board 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 (i) in the event of the redemption of our public shares if we do
not complete our business combination by February 12, 2021, subject to applicable law, (ii) in connection with a stockholder vote
to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation
to redeem 100% of our public shares if we have not consummated an initial business combination by February 12, 2021 or (iii) our
completion of an initial business combination, and then only in connection with those shares of our common stock that such stockholder
properly elected to redeem, subject to the limitations described in this annual report. 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 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.
Competition
In identifying,
evaluating and selecting a target business for our 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 acquisitions. 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 acquisition 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
five employees, including our three officers. 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 such person 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.
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. The SEC maintains
an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC at: http://www.sec.gov. Our annual, quarterly and current reports, and any amendments to any of those reports, that
we file with the Securities and Exchange Commission are available free of charge as soon as reasonably practicable through our
corporate website address at www.rmgacquisition.com. The contents of these websites are not incorporated into this filing. Further,
our references to the uniform resource locators, or URLs, for these websites are intended to be inactive textual references only.
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 GAAP. We cannot assure you that any particular target business selected by us as a potential
acquisition 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 GAAP. To the extent that this requirement cannot be met, we may
not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not
believe that this limitation will be material.
We are required to
evaluate our internal control procedures for the fiscal year ending December 31, 2019. Only in the event we are deemed to be a
large accelerated filer or 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 of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary
to complete any such acquisition.
You should carefully
consider all of the risks described below, together with the other information contained in this report, including the financial
statements. 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.
The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect
to us and our business.
We are an early stage company with
no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are an early stage
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 business combination. If we fail to complete our business combination, we will never generate
any operating revenues.
Our public stockholders may not be
afforded an opportunity to vote on our proposed 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 not hold a
stockholder vote to approve our initial business combination unless the 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 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 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 sponsor has agreed to vote in favor of such initial business combination, regardless of how
our public stockholders vote.
Unlike many other
blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the
votes cast by the public stockholders in connection with an initial business combination, our sponsor agreed to vote its founder
shares, as well as any public shares purchased during or after our initial public offering, in favor of our initial business combination.
As a result, in addition to our sponsors’ founder shares, we would need 9,200,001, or 40%, of the 23,000,000 public shares
sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares are voted) in order
to have our initial business combination approved. Our sponsor owns shares representing 18% 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, it is more
likely that the necessary stockholder approval will be received than would be the case if our sponsor agreed to vote its founder
shares in accordance with the majority of the votes cast by our public stockholders.
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 business combination.
You may not be provided
with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our Board may complete a business
combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the 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 a business combination with a target.
We may seek to
enter into a business combination transaction 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 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 completion of our initial business combination (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement that 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 completion of our initial business combination 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 a business combination transaction 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 public 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 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. The above considerations may limit our ability
to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred
underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a
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 business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum
amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial
business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust
account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time
our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a
material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or
you are able to sell your stock in the open market.
The requirement that we complete
our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating
a 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 business combination on terms that would produce value
for our stockholders.
Any potential target
business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial
business combination by February 12, 2021. Consequently, such target business may obtain leverage over us in negotiating a business
combination, knowing that if we do not complete our initial business combination with that particular target business, we may be
unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe
described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination
on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our
initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose
of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00
per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated
certificate of incorporation provides that we must complete our initial business combination within 24 months from the closing
of our initial public offering (February 12, 2021). We may not be able to find a suitable target business and complete our initial
business combination within such time period. Our ability to complete our initial business combination may be negatively impacted
by general market conditions, volatility in the capital and debt markets and the other risks described herein. 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 as well as expenses relating
to the administration of the trust account (less up to $100,000 of interest released to us 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,
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 $10.00 per share and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.
If we seek stockholder approval of
our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares
from public stockholders, which may influence a vote on a proposed 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 business combination pursuant
to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares 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. 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 business combination and thereby increase the likelihood of obtaining stockholder approval of the 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 business combination, where it appears that such requirement would otherwise not be met. This may result
in the completion of our business combination that may not otherwise have been possible.
In addition, if such
purchases are made, the public “float” of our Class A common stock and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our 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 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, the tender offer
documents or proxy materials, 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 or proxy materials mailed to such holders, or up to
two business days prior to the vote on the proposal to approve the 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. See the section of this report entitled
“Business—Redemption Rights for Public Stockholders upon Completion of our Initial Business
Combination—Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights.”
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 our common stock that such stockholder properly elected to redeem,
subject to the limitations described in this annual report, (ii) the redemption of any public shares properly submitted in connection
with a stockholder vote to amend our amended and restated certificate of incorporation 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 24 months from the
closing of our initial public offering and (iii) the redemption of our public shares if we are unable to complete an initial business
combination within 24 months from the closing of our initial public offering, subject to applicable law and as further described
herein. In addition, if we are unable to complete an initial business combination within 24 months from the closing of our initial
public offering for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing
stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders
may be forced to wait beyond 24 months from the closing of our initial public offering before they receive funds from our trust
account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. 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 be, or will continue to be, listed
on the NYSE in the future or prior to our initial business combination.
In order to continue
listing our securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution
and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity and a minimum number of holders
of our securities. On August 15, 2019, we received written notice from the NYSE that we are not compliant with Section 802.01B
of the NYSE Listed Company Manual, which requires us to maintain a minimum of 300 public stockholders on a continuous basis. We
have submitted a business plan to the NYSE to resolve compliance with this standard, which the NYSE has accepted. We will be subject
to quarterly monitoring for compliance with the plan.
Additionally, in connection
with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements,
which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our
securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per share. We cannot assure
you that we will be able to meet those initial listing requirements at that time.
If the 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.” Because our units are listed on the NYSE, and eventually
our Class A common stock and warrants will be listed on the NYSE, our units, Class A common stock and warrants are or will be 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 the NYSE, our securities would
not be covered securities and we would be subject to regulation in each state in which we offer our securities.
Our stockholders 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 selected, we may be deemed to be a “blank check” company under
the United States securities laws. However, because we currently 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 units are tradable and we have a
longer period of time to complete our 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 20% of our Class A common stock, you will lose the ability to redeem all such shares
in excess of 20% 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 20% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” However,
our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares will reduce your
influence over our ability to complete our 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 business combination. As a result, you will continue to hold that number of shares exceeding
20% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a
loss.
Because of our limited resources
and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial
business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will
expire worthless.
We 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, domestic and international, 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 local 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 a business combination. If we
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share
on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.00 per share upon our liquidation.
If the net proceeds of our initial
public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us
to operate until February 12, 2021, we may be unable to complete our initial business combination, in which case our public stockholders
may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
The funds available
to us outside of the trust account may not be sufficient to allow us to operate until February 12, 2021, assuming that our initial
business combination is not completed during that time. We cannot assure you that, the funds available to us outside of the trust
account will be sufficient to allow us to operate until February 12, 2021. We plan to 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 business combination, although we do not have any current intention to do so. If we entered
into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were
subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share
upon our liquidation.
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 a business combination.
If we are unable to obtain these loans, we may be unable to complete our initial business combination.
As of the date
of this report, we have approximately $1.2 million held outside the trust account that is available to us. If we are required
to seek additional capital, we would need to withdraw interest from the trust account as described elsewhere in this annual
report (i.e. for our franchise and income taxes as well as expenses relating to the administration of the trust account)
and/or borrow funds from our sponsor, management team or other third parties to operate, or we 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. We do not expect to seek loans from parties other than
our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide
a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we
may be unable to complete our initial business combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust
account. Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our
public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less
than $10.00 per share upon our liquidation.
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 post-combination debt financing. Accordingly, any stockholders who choose to remain
stockholders following the 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.
If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by
stockholders may be less than $10.00 per share.
Our placing of funds
in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors,
service providers (other than our independent auditors), 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, 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. Making such a request of potential target businesses may make our acquisition proposal less attractive
to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target
businesses that we might pursue.
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 business
combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our business
combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought
against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public
stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or
products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement,
reduce the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the
trust assets, in each case net of the interest which may be withdrawn to pay taxes as well as expenses relating to
administration of the trust account. This liability will not apply with respect to any claims by a third party who executed a
waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the
underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not
be responsible to the extent of any liability for such third party claims. We have not independently verified whether our
sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are
securities of our company. We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we
cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could
be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business
combination, and you would receive such lesser amount per share in connection with any redemption of your public shares. None
of our officers 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) $10.00 per public share or (ii) such lesser amount per share
held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets,
in each case net of the interest which may be withdrawn to pay taxes as well as expenses relating to administration of the trust
account, 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 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. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders
may be reduced below $10.00 per share.
We may not have sufficient funds
to satisfy indemnification claims of our directors, executive officers and Advisory Board members.
We have agreed to
indemnify our directors, executive officers and Advisory Board members to the fullest extent permitted by law. However, our directors,
executive officers and Advisory Board members 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 directors, executive officers and Advisory Board members may discourage
stockholders from bringing a lawsuit against our directors, executive officers and Advisory Board members for breach of their fiduciary
duties. These provisions also may have the effect of reducing the likelihood of derivative litigation against our directors, executive
officers and Advisory Board members, 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 directors, executive officers and Advisory Board members 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 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 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 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 of 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 a 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. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the
completion of our primary business objective, which is a business combination; (ii) the redemption of any public shares
properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation 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 24 months from the closing of our initial public offering; or (iii) absent a business
combination, our return of the funds held in the trust account to our public stockholders as part of our redemption of the
public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company
Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would
require additional expenses for which we have not allotted funds and may hinder our ability to complete a business
combination. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
Changes in laws or regulations, or
a failure to comply with any laws and regulations, may adversely affect our business, investments 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 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 24 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 24 month anniversary from the closing of our initial public offering in the event we do not complete our 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 within 24 months from the closing of our
initial public offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed
to be unlawful, 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
the NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our
first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an
annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made
by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to
the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which
requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial
business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in
accordance with Section 211(c) of the DGCL.
We have not registered the shares
of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time,
and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being
able to exercise its warrants except on a cashless basis and potentially causing such warrants to 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 will use our reasonable best efforts to file, and within 60
business days following our initial business combination to have declared effective, a registration statement under the Securities
Act covering such shares and 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, but we will be required to 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. 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 shall 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 exercise our redemption right even if we are unable to register
or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.
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 their founder shares, after those shares convert to
our Class A common stock at the time of our initial business combination. In addition, holders of our private placement
warrants and their permitted transferees can demand that we register the private placement warrants and the Class A common
stock issuable upon exercise of the private placement warrants, 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 shareholders 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 common stock owned by our initial stockholders, holders of our private placement warrants or
holders of our working capital loans or their respective permitted transferees are registered.
Because we are not limited to a particular
industry, sector or 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’ operations.
Although we expect
to focus our search for a target business in the diversified resources and industrial materials sectors, we may seek to complete
a business combination with an operating company in any industry or sector. However, are not, under our amended and restated certificate
of incorporation, permitted to complete our business combination with another blank check company or similar company with nominal
operations. There is no basis to evaluate the possible merits or risks of any particular target business’s operations, results
of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our 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 revenues 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 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 the 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.
Because we intend to seek a business
combination with a target business in the diversified resources and industrial materials sectors, we expect our future operations
to be subject to risks associated with this sector.
We intend to focus
our search for a target business in the diversified resources and industrial materials sectors, including the chemicals, energy
services and alternatives, environmental services, metals and power sectors. Risks inherent in investments in the diversified resources
and industrial materials sectors include, but are not limited to, the following:
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volatility of commodity prices;
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significant federal, state and local regulation, taxation and regulatory approval processes as
well as changes in applicable laws and regulations;
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denial or delay of receiving requisite regulatory approvals and/or permits;
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the speculative nature of and high degree of risk involved in investments in the diversified resources
and industrial materials sectors;
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exploration and development risks, which could lead to environmental damage, injury and loss of
life or the destruction of property;
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proximity and capacity of transportation and support infrastructure to production facilities;
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availability of key inputs, such as strategic consumables and raw materials;
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changes in global supply and demand and prices for commodities;
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impact of energy conservation efforts;
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technological advances affecting energy production and consumption;
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overall domestic and global economic conditions;
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availability of, and potential disputes with, independent contractors;
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adverse weather conditions, natural disasters or other events (such as equipment malfunctions,
explosions, fires or spills);
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value of U.S. dollar relative to the currencies of other countries; and
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terrorist acts.
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Past performance by our management
team, members of our Board and Advisory Board and Riverside Management Group may not be indicative of future performance of an
investment in us.
Information regarding
performance by, or businesses associated with, our management team, members of our Board and Advisory Board and Riverside Management
Group is presented for informational purposes only. Past performance by such individuals and Riverside Management Group 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. Certain of our officers, directors and advisors have had management
and deal execution experience with special purpose acquisition corporations in the past. You should not rely on the historical
record of performance of our management team, members of our Board and Advisory Board and Riverside Management Group as indicative
of our future performance of an investment in us or the returns we will, or are likely to, generate going forward. Additionally,
in the course of their respective careers, members of our management team, Board and Advisory Board have been involved in businesses
and deals that were unsuccessful.
We may seek acquisition opportunities
in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a
business combination outside of our management’s area of expertise if a business combination candidate is presented to us
and we determine that such candidate offers an attractive acquisition opportunity for our company. 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 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 than a direct investment, if an opportunity were available, in a business combination candidate.
In the event we elect to pursue an acquisition 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 annual 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 the significant risk factors. Accordingly, any
stockholders who choose to remain stockholders following our 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 criteria and guidelines, such combination may not be as successful
as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective
business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may
exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that
requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is
required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for
us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
We may seek acquisition opportunities
with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings,
which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To the extent we
complete our initial business combination with an early stage company, 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 investing in a business without a proven business model and with limited
historical financial data, 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 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 from 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 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 that is a member of
FINRA or from 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, who will determine fair market value
based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy solicitation
or tender offer materials, as applicable, related to our initial business combination.
We may issue additional shares of
common stock or preferred stock to complete our initial business combination, and may issue shares of common stock to redeem the
warrants or issue shares of common stock or preferred stock 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 the date of this report, there are 77,000,000 and 4,250,000 authorized but unissued shares of Class A
common stock and Class B common stock, respectively, available for issuance, which amount does not take into account the shares
of Class A common stock reserved for issuance upon exercise of any outstanding warrants or 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.
We may issue a substantial
number of additional shares of common or preferred stock to complete our initial business combination (including pursuant to a
specified future issuance). After the completion of our initial business combination, we may issue a substantial number of additional
shares of common stock to redeem the warrants as described herein or shares of common or preferred stock under an employee incentive
plan. 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. The issuance of additional shares
of common or preferred stock:
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may significantly dilute the equity interest of investors in our 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
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and
our warrants will expire worthless.
We anticipate that
the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys
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
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our
public stockholders may receive less than $10.00 per share on the redemption of their shares.
Our ability to successfully complete
our initial business combination and to be successful thereafter will be totally dependent upon the efforts of members of our management
team and Advisory Board, some of whom may not join us following our initial business combination. The loss of such people could
negatively impact the operations and profitability of our post-combination business.
Our ability to successfully
complete our business combination is dependent upon the efforts of members of our management team and Advisory Board. The role
of members of our management team and Advisory Board in the target business, however, cannot presently be ascertained. Although
some members of our management team and Advisory Board may remain with the target business in senior management or advisory positions
following our 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 engage 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 acquisition candidate may resign upon completion of our initial business combination. The departure of a business
combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition 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 acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an
acquisition 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.
Members of our management team or
Advisory Board 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 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.
Members of our
management team or Advisory Board may be able to remain with the company after the completion of our business combination
only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such
negotiations could take place simultaneously with the negotiation of the 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 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 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 members of
our management team or Advisory Board will remain with us after the completion of our business combination. We cannot assure
you that any members of our management team or Advisory Board will remain in senior management or advisory positions with us.
The determination as to whether any members of our management team or Advisory Board 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 complete 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 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.
The officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an acquisition 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 acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an
acquisition candidate will not wish to remain in place.
Our officers and directors may allocate
their time to other businesses, thereby causing conflicts of interest in their determination as to how much time to devote to our
affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and 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 a business combination and their other businesses. Each of our officers is
engaged in several other business endeavors for which he or she may be entitled to substantial compensation and our officers are
not obliged to contribute any specific number of hours per week to our affairs. 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.
Following the completion
of our initial public offering and 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.
Our officers and
directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities in the future 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.
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 (subject to certain approvals and consents) we may enter into a 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 a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors
or existing holders 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 or directors. Our directors also serve as officers and board members for other entities. Such entities may compete
with us for business combination opportunities. 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 a 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 that is a member of FINRA, or from an independent accounting firm,
regarding the fairness to our company from a financial point of view of a business combination with one or more domestic or international
businesses affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as
a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any
conflicts of interest.
Since our sponsor will lose its entire
investment in us if our business combination is not completed and our officers, directors and Advisory Board members may have differing
personal and financial interests than you, 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 owns an aggregate of 5,175,000 shares of Class B common stock, which it acquired for an aggregate purchase
price of $25,000. Such founder shares will be worthless if we do not complete an initial business combination. In addition, our
sponsor has purchased an aggregate of 3,766,667 warrants, each exercisable for one share of our Class A common stock at $11.50
per share, for a purchase price of approximately $5,650,000.50 or $1.50 per whole warrant, which will also be worthless if we do
not complete a business combination. Our sponsor has agreed (A) to vote any shares owned by it in favor of any proposed business
combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business
combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal
and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business
combination, completing an initial business combination and influencing the operation of the business following the initial business
combination. The personal and financial interests of our Advisory Board members may also influence the advice they provide to the
Board regarding identifying and selecting a target business.
We may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a 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, we may choose to incur substantial debt to complete our 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 products or services.
This lack of diversification may negatively impact our operations and profitability.
As of the date of
this report, approximately $234 million is available in our trust account for completing our business combination and pay related
fees and expenses (which includes up to approximately $8,050,000 for the payment of deferred underwriting commissions). We may
complete our 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 complete our 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 developments, any or all of which may have a substantial adverse
impact upon the particular industry in which we may operate subsequent to our business combination.
We may attempt to simultaneously
complete business combinations with multiple prospective targets, which may hinder our ability to complete our 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. 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 a business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition
strategy, we may seek to complete 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 a 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 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 may structure a
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 an interest in the
target sufficient for the post-transaction company 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 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 business combination
transaction. 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 a 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 completion
of our initial business combination (such that we are not subject to the SEC’s “penny stock” rules). As a
result, we may be able to complete our 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 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 business combination exceed the aggregate amount of cash available to us, we will not complete the 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.
The exercise price for the public
warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely
to expire worthless.
The exercise price
of the public warrants is higher than has been typical in many similar blank check companies in the past. Historically, the exercise
price of a warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price
for our public warrants is $11.50 per share. As a result, the warrants are less likely to ever be in the money and more likely
to expire worthless.
In order to complete our initial
business combination, we may seek to amend our amended and restated certificate of incorporation or other governing instruments,
including our warrant agreement, in a manner that will make it easier for us to complete our initial business combination but that
our stockholders or warrant holders may not support.
In order to complete
a business combination, blank check companies have, in the recent past, amended various provisions of their charters and governing
instruments, including their warrant agreement. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds, changed industry focus and, with respect to their warrants, amended their warrant agreements to
require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we will not seek to amend our
charter or other governing instruments or change our industry focus in order to complete 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) 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.
Some other blank check
companies have a provision in their charter that prohibits the amendment of certain of its provisions, including those which relate
to a company’s pre-business combination activity, without approval by a certain percentage of the company’s stockholders.
In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders.
Our amended and restated certificate of incorporation provides that any of its provisions related to pre-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) 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 or in our initial business combination. Our initial stockholders, who 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 that govern our pre-business combination behavior more easily than some
other blank check companies, and this may increase our ability to complete a 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 certain directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to
redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of
our initial public offering, 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 (which interest shall be net of amounts released to us to pay taxes and
expenses related to the administration of the trust account), divided by the number of then outstanding public shares. Our
stockholders are not parties to, or third-party beneficiaries of, this letter agreement 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.
Although we believe
that the net proceeds of our initial public offering and the sale of the private placement warrants will be sufficient to allow
us to complete our initial business combination, because we have not yet selected any prospective target business we cannot ascertain
the capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale of the
private placement warrants prove to be insufficient, either because of the size of our initial business combination, 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 or the terms of negotiated transactions
to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon
the proposed 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. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share plus any pro rata interest earned on the funds held in the trust account (and not previously released to us to
pay our franchise and income taxes as well as expenses relating to the administration of the trust account) 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 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
$10.00 per share on the liquidation of our trust account, and our warrants will expire worthless. In certain circumstances, our
public stockholders may receive less than $10.00 per share on the redemption of their shares.
Our 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, whose members were elected by our initial stockholders or appointed by the other members
of the Board, 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,
only a minority of the Board 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.
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 50% 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 American 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 50% 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 50% 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 50% 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 for cash at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30
trading-day period 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 exercise our redemption right even if
we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. 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. In addition, we may redeem your warrants
after they become exercisable for a number of shares of Class A common stock determined based on the redemption date and the fair
market value of our Class A common stock. Any such redemption may have similar consequences to a cash redemption described above.
In addition, such redemption may occur at a time when the warrants are “out-of-the-money,” in which case you would
lose any potential embedded value from a subsequent increase in the value of the Class A common stock had your warrants remained
outstanding.
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 complete our business combination.
We have issued warrants
to purchase 7,666,666 shares of our Class A common stock as part of the units offered in our initial public offering. In connection
with the closing of our initial public offering and the underwriters’ full exercise of their over-allotment option, we issued
in a private placement warrants to purchase an aggregate of 4,600,000 shares of Class A common stock at $11.50 per share. Our initial
stockholders currently own 5,750,000 founder shares. The founder shares are convertible into shares of Class A common stock on
a one-for-one basis, subject to adjustment as set forth in our amended and restated articles of incorporation. 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 $1.50
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 complete a 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 acquisition
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 business combination. Therefore, our warrants
and founder shares may make it more difficult to complete a 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, the Anchor Investors or their permitted transferees, (i) they will not be redeemable by
us for cash, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to
certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial
business combination and (iii) they may be exercised by the holders on a cashless basis.
A provision of our warrant agreement
may make it more difficult for us to consummate an initial business combination.
Unlike most blank
check companies, if we issue additional shares of common stock or equity-linked securities for capital raising purposes in connection
with the closing of our initial business combination at a newly issued price of less than $9.20 per share of common stock, then
the exercise price of the warrants will be adjusted to be equal to 115% of the newly issued price. This may make it more difficult
for us to consummate an initial business combination with a target business.
A market for our securities may not
fully develop or be sustained, 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 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 a business combination meeting certain financial significance tests
include target historical and/or pro forma financial statement disclosure. 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 financial 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 to irrevocably
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 will adopt the new or revised standard at the time public companies adopt the new or
revised standard. This may make comparison of our financial statements with another emerging growth company that has not 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 complete our initial business combination, require substantial financial
and management resources, and increase the time and costs of completing an acquisition.
Section 404 of the
Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on
Form 10-K for the year ending December 31, 2019. Only in the event we are deemed to be a large accelerated filer or an accelerated
filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply
with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome
on us as compared to other public companies because a target company with which we seek to complete our 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 acquisition.
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 and the ability of the Board to designate the terms of
and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject
to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may
make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium
over prevailing market prices for our securities.
Our amended and restated certificate
of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of
actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain
a favorable judicial forum for disputes with us or our directors, officers, Advisory Board members, employees or agents.
Our amended and
restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum,
the Court of Chancery of the State of Delaware (“Court of Chancery”) will, to the fullest extent permitted by
applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any
action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, Advisory Board members,
employees or stockholders to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of
the DGCL, our amended and restated certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the
Court of Chancery or (iv) any action asserting a claim against us, our directors, officers, Advisory Board members, or
employees that is governed by the internal affairs doctrine, in each such case except for such claims as to which (a) the
Court of Chancery determines that it does not have personal jurisdiction over an indispensable party, (b) exclusive
jurisdiction is vested in a court or forum other than the Court of Chancery, or (c) the Court of Chancery does not have
subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of our
common stock will be deemed to have notice of, and consented to, the provisions of our amended and restated certificate of
incorporation described in the preceding sentence. This choice of forum provision may limit a stockholder’s ability to
bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, Advisory Board
members, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were
to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of
the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other
jurisdictions, which could adversely affect our business, financial condition or results of operations.
Our amended and restated
certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by
applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty
or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates concurrent
jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act
or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce
any duty or liability created by the Exchange Act, the Securities Act, or any other claim for which the federal courts have exclusive
jurisdiction.
If we complete 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 complete 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, such as 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.