Overview
We
are a blank check company incorporated as a Delaware corporation in March 2017 and formed for the purpose of effecting a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, with one or more businesses
or assets. We have generated no operating revenues to date, and we do not expect that we will generate operating revenues until
we consummate our initial business combination.
We
have concentrated our efforts in identifying businesses which provide disruptive technological innovation to the financial services
industry, with particular emphasis on businesses that provide data processing; transactional and data security; rewards, loyalty,
and consumer engagement platforms by which financial services engage their clients and market and provide services to them; digital
marketing; and payment processing services. We have sought to acquire established businesses that we believe are fundamentally
sound but potentially in need of financial, operational, strategic or managerial redirection to maximize value. We do not intend
to acquire start-up companies, companies with speculative business plans or companies that are excessively leveraged.
At
December 31, 2018, we had not yet commenced operations. All activity through December 31, 2018 relates to the Company’s
formation and its initial public offering, and identifying a target company for our initial business combination.
The
registration statement for our initial public offering was declared effective on November 15, 2018. On November 20, 2018, we consummated
the initial public offering of 34,500,000 units generating gross proceeds of $345,000,000.
Simultaneously
with the closing of the initial public offering, we consummated the sale of 930,000 placement units at a price of $10.00 per unit
in a private placement to our sponsor and Cantor Fitzgerald & Co., the representative of the underwriters for the initial
public offering, generating gross proceeds of $9,300,000.
Following
the closing of the initial public offering on November 20, 2018, an amount of $345,000,000 ($10.00 per unit) from the net proceeds
of the sale of the units in the initial public offering and the placement units was placed in a trust account and invested in
U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds
itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule
2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a business combination,
(ii) the redemption of any public shares 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 a
business combination within 24 months from the consummation of the initial public offering; or (iii) the distribution of the trust
account, if we are unable to complete a business combination within the combination period or upon any earlier liquidation of
us.
We
anticipate structuring our initial business combination to acquire 100% of the equity interest or assets of the target business
or businesses.
Nasdaq
rules require that our initial business combination must be with one or more target businesses that together have a fair market
value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable
on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. The
fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is
not independently able to determine the fair market value of the target business or businesses, we will obtain an opinion with
respect to the satisfaction of such criteria from an independent investment banking firm that is a member of FINRA or an independent
accounting firm, and reasonably acceptable to Cantor Fitzgerald, as representative of the underwriters.
Business
Strategy
We
have sought to capitalize on the significant financial services, financial technology and banking experience and contacts of Daniel
G. Cohen, our Chief Executive Officer, Betsy Z. Cohen, our Chairman of the Board, and James J. McEntee, III, our President and
Chief Financial Officer, and our board of directors to identify, evaluate, acquire and operating a financial technology business,
although we may pursue a business combination outside that industry.
Our
management team served as executive officers and/or directors of FinTech Acquisition Corp., or FinTech I, a former blank check
company which raised $100.0 million in its initial public offering in February 2015 and completed its initial business combination
in July 2016, which we refer to as the FinTech I Acquisition. Our management team also served as executive officers and/or directors
of FinTech Acquisition Corp. II, or FinTech II, a blank check company which raised $175.0 million in its initial public offering
in January 2017 and completed its initial business combination when it acquired Intermex Holdings II in July 2018, which we refer
to as the FinTech II Acquisition. We believe that potential sellers of target businesses will view the fact that our management
team has successfully closed multiple business combinations with vehicles similar to our company as a positive factor in considering
whether or not to enter into a business combination with us. However, past performance by our management team is not a guarantee
of success with respect to any business combination we may consummate.
Mr.
Cohen, our Chief Executive Officer, Mrs. Cohen, our Chairman of the Board, and Mr. McEntee, our President and Chief Financial
Officer, have extensive experience in the financial services industry, generally, and the financial technology industry in particular
as well as extensive experience in operating financial services companies in a public company environment.
Mr.
Cohen, with over 20 years of experience in financial services and financial technology, is a founder, the former Chief Executive
Officer and the current Chairman of The Bancorp, Inc. (NASDAQ: TBBK), which we refer to as Bancorp, a financial holding company
with over $4.3 billion of total assets as of September 30, 2018, whose principal subsidiary is The Bancorp Bank, that provides
a wide range of commercial and retail banking products and services to both regional and national markets. Bancorp’s customers
access its banking services through its website and obtain cash withdrawals from automated teller machines. Bancorp provides affinity
banking services to members and employees of organizations or businesses under the name of and through the website of such organization
or business, and has developed extensive systems for processing debit and credit card transactions and providing prepaid (or stored
value) card services. Mr. Cohen also served as Chief Executive Officer, President and a director of FinTech I until the FinTech
I Acquisition, and as Chief Executive Officer and a director of FinTech II until the FinTech II Acquisition. Mr. Cohen is the
Chairman of the Board of Directors and of the Board of Managers of Cohen & Company, LLC, and serves as the President and Chief
Executive of the European Business of Cohen and Company Inc. (NYSE: COHN), a financial services company with approximately $3.1
billion in assets under management as of September 30, 2018, and as President, a director and the Chief Investment Officer of
Cohen and Company Inc.’s indirect majority owned subsidiary, Cohen & Company Financial Limited (formerly known as EuroDekania
Management Limited), a Financial Conduct Authority regulated investment advisor and broker dealer focusing on the European capital
markets . He is also a past Chief Executive Officer of RAIT Financial Trust (OTCQB: RASFD), which we refer to as RAIT, a real
estate finance company focused on the commercial real estate industry, from December 2006 when it merged with Taberna Realty Finance
Trust, to February 2009, and served as a trustee from the date RAIT acquired Taberna in February 2009 until his resignation from
that position in February 2010. From 1998 to 2000, Mr. Cohen served as the Chief Operation Officer and Resource America, Inc.,
formerly a publicly traded asset management company with interests in energy, real estate and financial services. Mr. Cohen was
also a past director of Jefferson Bank of Pennsylvania, a commercial bank and subsidiary of JeffBanks, Inc., a publicly traded
bank holding company, which we refer to as JeffBanks, acquired by Hudson United Bancorp in 1999.
Mrs.
Cohen, with over 40 years of experience, is a founder, and from September 2000 through December 2014 served as the Chief Executive
Officer of, Bancorp. Mrs. Cohen served as Chairman of the Board of FinTech II until the FinTech II Acquisition, and also served
as Chairman of the Board of FinTech I until the Fintech I Acquisition and, following the FinTech I Acquisition, continued to serve
on the FinTech I board of directors until May 2017. Mrs. Cohen is also a founder of RAIT, and was its Chairman until December
2010 and its Chief Executive Officer until December 2006. She was also the founder and Chief Executive Officer of JeffBanks and
its subsidiary banks from 1974 until the merger of JeffBanks into Hudson United Bancorp in 1999.
Mr.
McEntee, with over 20 years of experience, is a director of Bancorp and The Bancorp Bank, was previously the Chief Executive Officer
of Alesco Financial, an investment firm specializing in credit related fixed income investment, until it merged with Cohen &
Company and was the Chief Operating Officer of Cohen & Company. Mr. McEntee served as Chief Financial Officer of FinTech II
until the FinTech II Acquisition, and also served as Chief Financial Officer and Chief Operating Officer of FinTech I until the
Fintech I Acquisition.
We
have identified the following criteria that we intend to use in evaluating business transaction opportunities. We expect that
no individual criterion will entirely determine a decision to pursue a particular opportunity. Further, any particular business
transaction opportunity which we ultimately determine to pursue may not meet one or more of these criteria:
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History
of free cash flow generation
. We have sought to acquire one or more businesses
or assets that have a history of, or potential for, strong, stable free cash flow generation,
with predictable and recurring revenue streams.
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Strong
management team
. We have sought to acquire one or more businesses or assets
that have strong, experienced management teams or those that provide a platform for us
to assemble an effective and experienced management team. We have focused on management
teams with a proven track record of driving revenue growth, enhancing profitability and
creating value for their stockholders.
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Opportunities
for add-on acquisitions
. We have sought to acquire one or more businesses
or assets that we can grow both organically and through acquisitions. In addition, we
believe that our ability to source proprietary opportunities and execute transactions
will help the business we acquire grow through acquisition, and thus serve as a platform
for further add-on acquisitions.
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Defensible
business niche
. We have sought to acquire on one or more businesses or assets
that have a leading or niche market position and that demonstrate advantages when compared
to their competitors, which may help to create barriers to entry against new competitors.
We anticipate that these barriers to entry will enhance the ability of these businesses
or assets to generate strong profitability and free cash flow.
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Diversified
customer and supplier base
. We have sought to acquire one or more businesses
or assets that have a diversified customer and supplier base, which are generally better
able to endure economic downturns, industry consolidation, changing business preferences
and other factors that may negatively impact their customers, suppliers and competitors.
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Competitive
Strengths
We
believe we have the following competitive strengths:
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Management
Operating and Investing Experience
. Our directors and executive officers
have significant experience in the financial services and financial technology industries.
Daniel G. Cohen, with over 20 years’ experience in the financial services industry,
is a founder of Bancorp, the Chairman and Chief Investment Officer of an investment bank
and is an officer and director of a broker-dealer subsidiary of the investment bank.
Betsy Z. Cohen has over 40 years’ experience in the financial services industry
and is a founder of and, until her retirement in December 2014, served as chief executive
officer of, The Bancorp, Inc., a financial holding company whose banking subsidiary,
The Bancorp Bank, provides banking services principally through the internet. James J.
McEntee, III, with over 20 years of experience in the financial services industry, is
a director of The Bancorp, Inc. and The Bancorp Bank, was previously the Chief Executive
Officer of an investment firm specializing in credit related fixed income investment,
a managing director of COHN and the Vice-Chairman and Co-Chief Operating Officer of JVB
Financial. Additionally, each of Mr. Cohen, Mrs. Cohen and Mr. McEntee served as an executive
officer and/or director of FinTech I and FinTech II. We believe that this breadth of
experience provides us with a competitive advantage in evaluating businesses and acquisition
opportunities in our target industry.
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Established
Deal Sourcing Network
. As a result of their extensive experience in the
financial services industry, our management team members have developed a broad array
of contacts in the industry. We believe that these contacts will be important in generating
acquisition opportunities for us.
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Strong
Financial Position and Flexibility
. With a trust account initially in the
amount of $345,000,000 and a public market for our common stock, we offer a target business
a variety of options to facilitate a future business transaction and fund the growth
and expansion of business operations. Because we are able to consummate an initial business
transaction using our capital stock, debt, cash or a combination of the foregoing, we
have the flexibility to design an acquisition structure to address the needs of the parties.
We have not, however, taken any steps to secure third party financing and would only
do so simultaneously with the consummation of our initial business transaction. Accordingly,
our flexibility in structuring an initial business transaction may be constrained by
our ability to arrange third-party financing, if required.
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Status
as a Public Company
. We believe our structure makes us an attractive business
transaction partner to prospective 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 transaction with us. In this situation, the owners
of the target business would exchange their shares of stock in the target business for
shares of our stock. Once public, we believe the target business would have greater access
to capital and additional means of creating management incentives that are better aligned
with stockholders’ interests than it would as a private company. We believe that
being a public company can also augment a company’s profile among potential new
customers and vendors and aid it in attracting and retaining talented employees.
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Effecting
Our Initial Business Combination
General
We
are not presently engaged in, and we will not engage in, any operations until our initial business combination. We intend to effectuate
our initial business combination using cash from the proceeds of the initial public offering and the private placement, our capital
stock, debt or a combination of these as the consideration to be paid in our initial business combination.
If
we pay for our initial business combination using stock or debt securities, or we do not use all of the funds released from the
trust account for payment of the purchase price in connection with our business combination or for redemptions or purchases of
our 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 acquired businesses, the payment of principal or interest due on indebtedness incurred
in consummating our initial business combination, to fund the purchase of other companies or for working capital.
While
we have not contacted any of the prospective target businesses that FinTech I or FinTech II had considered and rejected while
searching for target businesses to acquire, we may do so in the future if we become aware that the valuations, operations, profits
or prospects of such target business, or the benefits of any potential transaction with such target business, would be attractive.
Accordingly, there is no current basis for stockholders to evaluate the possible merits or risks of the target business with which
we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular
target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks
that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing
to control or reduce the chances that those risks will adversely impact a target business.
Nasdaq
rules require that our initial business combination be with one or more target businesses that together have a fair market value
equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest
earned) at the time of our signing a definitive agreement in connection with our initial business combination. However, if our
securities are not listed on Nasdaq or another securities exchange, we will no longer be subject to that requirement.
We
may seek to raise additional funds through a private offering of debt or equity securities to finance our initial business combination,
and we may effectuate an 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 consummate such financing only simultaneously
with the consummation 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 or Nasdaq, we would seek stockholder approval of such financing. There are
no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination.
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.
Sources
of Acquisition Candidates
We
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment
bankers, attorneys, accountants, venture capital funds, private equity funds, leveraged buyout funds, management buyout funds,
brokers and other members of the financial community and corporate executives. These target candidates may present solicited or
unsolicited proposals. Such sources became aware that we were seeking a business combination candidate by a variety of means,
including publicly available information relating to the initial public offering, public relations and marketing efforts or direct
contact by management following the completion of the initial public offering.
Our
officers and directors, as well as their affiliates, may also bring to our attention target business candidates of which they
become aware through their contacts. While we do not presently anticipate engaging the services of professional firms or other
individuals that specialize in business acquisitions on any formal basis, other than Deutsche Bank Securities Inc., we may engage
these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee or other compensation
to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only if our
management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders
approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue.
Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out
of the funds held in the trust account. In no event, however, will our sponsor or any of our 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 consummation of our initial business combination (regardless of the type of transaction
that it is), other than (i) repayment of loans made to us prior to the date of the initial public offering by our sponsor to cover
offering-relating and organization expenses, (ii) repayment of loans that our sponsor, members of our management team or
any of their respective affiliates or other third parties may make to finance transaction costs in connection with an intended
initial business combination (provided that if we do not consummate an initial business combination, we may use working capital
held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment),
(iii) payments to our sponsor or its affiliate of a total of $10,000 per month for office space, utilities, secretarial support
and administrative services, and (iv) to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigation
and completing an initial business combination. None of the initial holders, our officers, our directors or any entity with which
they are affiliated will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective acquisition
target in connection with a contemplated acquisition of such target by us. Although some of our officers and directors may
enter into employment or consulting agreements with the acquired business following our initial business combination, the presence
or absence of any such arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers,
directors or their affiliates. Additionally, we are not prohibited from partnering, submitting joint bids, or entering into any
similar transaction with such persons in the pursuit of an initial business combination. If we seek to complete an initial business
combination with such a company or we partner with such persons in our pursuit of an initial business combination, we, or a committee
of independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA or an
independent accounting firm, and reasonably acceptable to Cantor Fitzgerald, as representative of the underwriters, that such
an initial business combination is fair to our stockholders from a financial point of view. Generally, such opinion is rendered
to a company’s board of directors and investment banking firms may take the view that stockholders may not rely on the opinion.
Such view will not impact our decision on which investment banking firm to hire.
Unless
we consummate our initial business combination with an affiliated entity, we are not required to obtain a financial fairness opinion
from an independent investment banking firm. If we do not obtain such an opinion, our stockholders will be relying on the judgment
of our board of directors, who will determine fair market value and fairness based on standards generally accepted by the financial
community. The application of such standards would involve a comparison, from a valuation standpoint, of our business combination
target to comparable public companies, as applicable, and a comparison of our contemplated transaction with such business combination
target to other then-recently announced comparable private and public company transactions, as applicable. The application of
such standards and the basis of our board of directors’ determination will be discussed and disclosed in our tender offer
or proxy solicitation materials, as applicable, related to our initial business combination.
Selection
of a target business and structuring of our initial business combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of our initial business combination will be determined by our board of directors based upon one or more
standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading
multiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable
businesses. If our board of directors is not able to independently determine the fair market value of our initial business combination,
we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not
be able to make an independent determination of the fair market value of our initial business combination, it may be unable to
do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Subject to this requirement, our management will have virtually unrestricted
flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate
our initial business combination with another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction
company is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. There is no basis for stockholders
to evaluate the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective business target, we expect to conduct a thorough due diligence review, which may encompass, among other
things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection
of facilities, as well as a review of financial and other information that will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack
of business diversification
For
an indefinite period of time after consummation 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 consummating a 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 closely scrutinize the management
of a prospective target business when evaluating a target 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. The future role of members of our management team, 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
a business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to a business
combination. Moreover, we cannot assure you that members of our management team will have experience or knowledge relating to the
operations of the particular target business.
We cannot assure you that any of our key
personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any
of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may
seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Stockholders may not have the ability to approve a business
combination
We may not seek stockholder approval before
we effect our initial business combination as not all business combinations require stockholder approval under applicable state
law. However, we will seek stockholder approval if it is required by law or Nasdaq, or we may decide to seek stockholder approval
for business or other reasons. Presented in the table below is a table 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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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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Permitted purchases of our securities
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer
rules, our sponsor, directors, officers or their respective affiliates may purchase shares in the open market or in privately negotiated
transactions either prior to or following the consummation of our initial business combination, although as of the date of this
Annual Report they have no commitments, plans or intentions to engage in such transactions. If they do effect such purchases, we
anticipate that they would approach a limited number of large holders of our securities that have voted against the business combination
or sought redemption of their shares, or that have indicated an intention to do so, and engage in direct negotiations for the purchase
of such holders’ positions. All holders approached in this manner would be institutional or sophisticated holders. There
is no limit on the number of shares they may acquire. Our sponsor, directors, officers, advisors or their affiliates will not make
any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or during a restricted
period under Regulation M under the Exchange Act or in transactions that would violate Section 9(a)(2) or Rule 10(b)-5 under the
Exchange Act. Although they do not currently anticipate paying any premium purchase price for such public shares, there is no limit
on the price they may pay. They may also enter into transactions to provide such holders with incentives to acquire shares or vote
their shares in favor of an initial business combination. No funds in the trust account may be used to effect purchases of shares
in the open market or in privately negotiated transactions.
The purpose of such purchases would be to
(i) 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 the business
combination, where it appears that such requirement would otherwise not be met. This may result in the consummation of a business
combination that may not otherwise have been possible.
As a consequence of any such purchases by
our sponsor, directors, officers or their affiliates, 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 obtain the continued listing of our
securities on Nasdaq or another national securities exchange in connection with our initial business combination.
Our sponsor, officers, directors and/or their
respective affiliates anticipate that they will identify the public stockholders with whom they may pursue privately negotiated
purchases through either direct contact by the public stockholders or by our receipt of redemption requests or votes against the
business combination submitted by such public stockholders following our mailing of proxy materials in connection with our initial
business combination. The sellers of any shares so purchased by our sponsor, officers, advisors, directors and/or their affiliates
would, as part of the sale arrangement, revoke their election to redeem such shares and withdraw their vote against the business
combination. The terms of such purchases would operate to facilitate our ability to consummate a proposed business combination
by potentially reducing the number of shares redeemed for cash.
Redemption rights for public stockholders upon consummation
of our initial business combination
We will provide our stockholders with the
opportunity to redeem their shares of Class A common stock upon the consummation 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, including any amounts representing
deferred underwriting commissions and interest earned on the trust account not previously released to us to pay our franchise and
income taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount
in the trust account is approximately $10.03 per public share (based on the trust account balance as of December 31, 2018). There
will be no redemption rights upon the consummation of our initial business combination with respect to our warrants. The initial
holders, our officers and directors and Cantor Fitzgerald have agreed to waive their redemption rights with respect to their founder
shares and placement shares, as applicable, (i) in connection with the consummation of a business combination, (ii) 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
completion of this offering (excluding any exercise of the underwriters’ overallotment option) and (iii) if we fail to consummate
a business combination by November 20, 2020 or if we liquidate prior to November 20, 2020. The initial holders and our directors
and officers have also agreed to waive their redemption rights with respect to public shares in connection with the consummation
of a business combination and 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 by November 20, 2020. However, the initial holders and our directors and officers will be entitled to redemption rights
with respect to any public shares held by them if we fail to consummate a business combination or liquidate by November 20, 2020.
Cantor Fitzgerald will have the same redemption rights as a public stockholder with respect to any public shares it acquires.
Manner of Conducting Redemptions
We will provide our stockholders with the
opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either in
connection with a stockholder meeting called to approve the business combination or 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.
We currently intend to conduct redemptions
pursuant to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement
and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
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 any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of the proposed business combination, and
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file tender offer documents with the SEC prior to consummating our initial business combination that will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial
business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and 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, in order
to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to consummate 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 number will be based on the requirement that we may not redeem public shares in an amount that would
cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do
not then become 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 such initial business combination.
If, however, stockholder approval of the
transaction is required by law or Nasdaq, or we decide to obtain stockholder approval for business or other reasons, we will:
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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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We expect that a final proxy statement would
be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement
would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct
redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with
the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to
maintain our Nasdaq listing or Exchange Act registration.
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 initial stockholders, officers and directors will count towards this quorum and have agreed
to vote any founder shares, private placement shares and any public shares held by them in favor of our initial business combination.
We expect that at the time of any stockholder vote relating to our initial business combination, our initial stockholders and their
permitted transferees will own at least 21.9% of our outstanding shares of common stock entitled to vote thereon. As a result,
in addition to our initial stockholders’ founder shares, we would need 12,456,251, or 36.1%, of the 34,500,000 public shares
to be voted in favor of a transaction (assuming all issued and outstanding shares are voted) in order to have such initial business
combination approved. These quorum and voting thresholds and agreements may make it more likely that we will consummate our initial
business combination. Each public stockholder may elect to redeem its public shares without voting, and if they do vote, irrespective
of whether they vote for or against the proposed transaction.
Our amended and restated certificate of incorporation
provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon consummation of our initial business combination and, in any event, the terms of the proposed business combination
may require our net tangible assets to be greater than $5,000,001. For example, the proposed business combination may require:
(i) cash consideration to be paid to the target or members of its management team, (ii) cash to be transferred to the target for
working capital or other general corporate purposes or (iii) the allocation of cash to satisfy other conditions in accordance with
the terms of the proposed business combination. If the aggregate cash consideration we would be required to pay for all shares
of Class A common stock that are validly tendered plus the amount of any cash payments required pursuant to the terms of the proposed
business combination exceeds the aggregate amount of cash available to us, taking into consideration the requirement that we maintain
net tangible assets of at least $5,000,001 or such greater amount depending on the terms of our potential business combination,
we will not consummate the business combination and any shares of common stock tendered pursuant to the tender offer will be returned
to the holders thereof following the expiration of the tender offer.
Limitation on redemption upon consummation of a 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 an aggregate
of 20.0% or more of the shares sold in this offering without our prior consent. We believe the restriction described above will
discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights as a means to force us or our sponsor or its affiliates 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 20.0% or more of the shares sold in the initial public offering could threaten to exercise its redemption
rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at
a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem
to no more than 20.0% of the shares sold in the initial public offering, we believe we will limit the ability of a small number
of stockholders to unreasonably attempt to block our ability to complete our initial 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, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares
held by those stockholders that hold more than 20.0% of the shares sold in the initial public offering) for or against our initial
business combination.
Tendering stock certificates in connection with redemption
rights
We may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders,
or up to two business days prior to the vote on the proposal to approve our initial business combination in the event we distribute
proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business
combination. 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,
which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify
itself in order to validly redeem its 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 $45.00 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 redemption rights. After the business combination was approved, the company would contact such stockholder
to arrange for him to deliver his certificate to verify ownership. As a result, the stockholder then had an “option window”
after the consummation of the business combination during which he could monitor the price of the company’s stock in the
market. If the price rose above the redemption price, he could sell his shares in the open market before actually delivering his
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 consummation 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 delivers 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 a business combination.
If the 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 consummated, we may continue to try to consummate a business combination with a different target until 24 months from the
completion of the initial public offering.
Redemption of public shares and liquidation if no initial
business combination
Our sponsor, officers and directors have
agreed that we have only until November 20, 2020 to complete our initial business combination. If we are unable to consummate our
initial business combination by November 20, 2020, we will distribute the aggregate amount then on deposit in the trust account,
pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our
affairs. If we have not consummated a business combination by November 20, 2020, we will: (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem all public
shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
including any amounts representing interest earned on the trust account not previously released to us to pay our franchise and
income taxes and up to $100,000 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 liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial
business combination within such completion window.
The initial holders, our officers and directors
and Cantor Fitzgerald have agreed to waive their redemption rights with respect to their founder shares and placement shares, as
applicable, (i) in connection with the consummation of a business combination, (ii) 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 by November 20, 2020 and (iii) if we fail to consummate a
business combination by November 20, 2020 or if we liquidate prior to November 20, 2020. The initial holders and our officers and
directors have also agreed to waive their redemption rights with respect to public shares in connection with the consummation of
a business combination and 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 by November 20, 2020. However, the initial holders and our officers and directors will be entitled to redemption rights
with respect to any public shares held by them if we fail to consummate a business combination by November 20, 2020. Cantor Fitzgerald
will have the same redemption rights as a public stockholder with respect to any public shares it acquires.
The representative has agreed to waive its
rights to deferred underwriting commissions held in the trust account if we do not consummate a business combination and subsequently
liquidate and, in such event, the deferred underwriting commissions held in the trust account will be available to fund the redemption
of our public shares.
Our initial stockholders, executive officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and
restated certificate of incorporation 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 by November 20, 2020 unless we provide our public stockholders with
the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the
trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding
public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 (so that we are not subject to the SEC’s “penny stock” rules).
We will pay the costs of any liquidation
from the net proceeds from the initial public offering and the private placement held out of trust, and up to $100,000 of the interest
income on the trust account (net of any taxes payable) which may be released to us, and the balance of loans from our sponsor,
members of our management team or any of their respective affiliates or other third parties for working capital purposes and to
pay expenses to identify an acquisition target and consummate initial business combination, although we cannot assure you that
there will be sufficient funds for such purposes. If such funds are insufficient, Daniel G. Cohen, our Chief Executive Officer,
has agreed to pay the balance of liquidation expenses and has agreed not to seek repayment for such amounts.
The proceeds deposited in the trust account
could 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 less than the $10.00 per
public share initially on deposit in the trust account. 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 (except our Independent Registered Public Accounting Firm), prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such
agreements that they would be prevented from bringing claims against the trust account including but not limited to
fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the
monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only
enter into an agreement with a third party that has not executed a waiver if management believes that such third
party’s engagement would be significantly more beneficial to us than any alternative. If we do not obtain a waiver from
a third party, we will obtain the written consent of our sponsor before our entering into an agreement with such third party.
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 and where our sponsor executes a written consent. 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. In order
to protect the amounts held in the trust account, pursuant to a written agreement, Daniel G. Cohen has agreed that he 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 definitive transaction agreement, reduce the amounts in the
trust account to below $10.00 per share, except as to any claims by a third party who executed a waiver of rights to seek
access to the trust account and except as to any claims under our indemnity of the underwriters of the 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, Mr. Cohen will not be responsible to the extent of any liability for such
third party claims. We cannot assure you, however, that Mr. Cohen will be able to satisfy those obligations.
If the proceeds in the trust account are
reduced below $10.00 per public share and Mr. Cohen asserts that he is unable to satisfy any applicable obligations or that he
has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal
action against Mr. Cohen to enforce his indemnification obligations. While we currently expect that our independent directors would
take legal action on our behalf against Mr. Cohen to enforce his indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so in a particular instance. 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 have access to the net proceeds from
the initial public offering and the private placement held out of trust, any amounts representing interest earned on the trust
account, less any interest released to us to pay our franchise and income taxes and up to $100,000 to pay dissolution expenses
with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation). If 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 if we do
not consummate our initial business combination by November 20, 2020 may be considered a liquidation 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 consummate
our initial business combination by November 20, 2020 is not considered a liquidation 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 liquidation
distribution. If we have not consummated a business combination by November 20, 2020, or earlier at the discretion of our board,
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 all public shares then outstanding at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including any amounts representing interest earned on the trust account, less any
interest released to us to pay our franchise and income taxes and up to $100,000 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 liquidation distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following
November 20, 2020 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially
be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may
extend well beyond the third anniversary of such date.
Because we will not be complying with Section
280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our
payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.
As a result of this obligation and Mr. Cohen’s
indemnification of the trust account against certain claims as previously described in this section, we believe that the claims
that could be made against us will be significantly limited and that the likelihood that any claim that would result in any liability
extending to the trust account is remote. Further, Mr. Cohen may be liable only to the extent necessary to ensure that the amounts
in the trust account are not reduced below $10.00 per public share, and will not be liable as to any claims under our indemnity
of the underwriters of this 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, Mr. Cohen 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 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, and 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 consummate a
business combination by November 20, 2020, (ii) 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 by November 20, 2020 or (iii) if they redeem their respective shares for cash upon the consummation
of the initial business combination. Also, our management may cease to pursue a business combination prior to November 20, 2020
(our board of directors may determine to liquidate the trust account prior to such expiration if it determines, in its business
judgment, that it is improbable within the remaining time to identify an attractive business combination or satisfy regulatory
and other business and legal requirements to consummate a business combination). 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 for an applicable pro rata share of the trust account. Such stockholder must have also
exercised its redemption rights described above.
Competition
In identifying, evaluating and selecting
a target business for a business combination, we 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 us. 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 to our public stockholders who exercise their redemption rights will reduce the resources available to us for an initial
business combination. In addition, the number of 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.
Facilities
We currently maintain our executive offices
at 2929 Arch Street, Suite 1703, Philadelphia, PA 19104-2870. The cost for our use of this space is included in the $10,000 per
month fee we pay to our sponsor or its affiliate for office space, utilities, secretarial support and administrative services.
We consider our current office space adequate for our current operations.
Employees
We currently have two executive officers.
These individuals are not obligated to devote any specific number of hours to our affairs but they devote as much of their time
as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they devote
in any time period varies based on whether a target business has been selected for our initial business combination and the stage
of the business combination process we are in. We do not intend to have any full time employees prior to the consummation of our
initial business combination.
Periodic Reporting and Financial Information
We have registered our units, 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 contain financial statements
audited and reported on by our independent registered public accountants.
We will provide stockholders with audited
financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent
to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be
prepared in accordance with GAAP. We cannot assure you that any particular target business identified 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 will be required to evaluate and
report on our internal control procedures over Financial reporting for the fiscal year ending December 31, 2019 as required
by the Sarbanes-Oxley Act. 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.
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 stockholders find our securities less attractive as
a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth
company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company
until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the 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 30
th
, 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. References herein to “emerging growth company” shall have the meaning associated
with it in the JOBS Act.
You should consider
carefully all of the risks described below, which we believe are the principal risks that we face and of which we are currently
aware, and all of the other information contained in this report. If any of the events or developments described below occur, our
business, financial condition or results of operations could be negatively affected.
We are an early stage company with no operating
history and no revenue and, accordingly, you have no basis on which to evaluate our ability to achieve our business
objective.
We are an early stage company with no
operating history and no revenue. We will not commence operations until we consummate our initial business combination. Because
we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of acquiring
one or more operating businesses in the financial technology industry. We may be unable to complete a business combination. If
we fail to complete a 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, unless such vote is required by law or Nasdaq, which means we may consummate 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 state law
or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other reasons. For example, Nasdaq rules currently
allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval
if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination.
Therefore, if we structure a business combination that requires us to issue more than 20% of our outstanding shares, we would seek
stockholder approval of such business combination. However, except as required by law, the decision as to whether we will seek
stockholder approval of a proposed business combination 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 consummate our initial business combination even if holders of a majority of the outstanding shares
of our common stock do not approve of the business combination we consummate.
If we seek stockholder approval of our initial business
combination, our sponsor, directors and officers have agreed to vote in favor of such initial business combination, regardless
of how our public stockholders vote.
Our sponsor, officers and directors have
agreed to vote their founder shares and any placement shares and public shares they hold in favor of our initial business combination.
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 holders of founder shares agreed to vote their founder shares, placement shares and
public shares in accordance with the majority of the votes cast by our public stockholders.
Your ability to affect the investment decision regarding
a potential business combination may 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.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Since our board of
directors may consummate a business combination without seeking stockholder approval, public stockholders may not have the right
to vote on the business combination unless we seek such stockholder vote. Accordingly, your ability to affect the investment decision
regarding a potential business combination may be limited to exercising your redemption rights with respect to a proposed business
combination.
The ability of our public stockholders to redeem their
shares for cash may make us unattractive to potential business combination targets, which may make it difficult for us to enter
into a business combination with a target.
We may enter into a 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. Our
amended and restated certificate of incorporation requires us to provide all of our stockholders with an opportunity to redeem
all of their shares in connection with the consummation of any initial business combination, although our sponsor, directors and
officers and each holder of placement units has agreed to waive his, her or its respective redemption rights with respect to founder
shares and placement shares, and in the case of the initial holders, public shares held by him, her or it in connection with the
consummation of our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause
our net tangible assets to be less than the amount necessary to satisfy a closing condition as described above, or less than the
$5,000,001 minimum of tangible net assets which we are required to maintain, we would not proceed with such redemption and the
related business combination. Prospective targets would be aware of these risks and, thus, may be reluctant to enter into a business
combination transaction with us.
The ability of our stockholders to exercise redemption
rights may not allow us to consummate the most desirable business combination or optimize our capital structure.
In connection with the consummation of our
business combination, we may redeem up to that number of shares of common stock that would permit us to maintain net tangible assets
of $5,000,001 upon consummation of our initial business combination. However, we may be required to maintain significantly larger
amounts of cash depending upon the terms of the business combination. Accordingly, we may need to arrange third party financing
to help fund our business combination in case a larger percentage of stockholders exercise their redemption rights than we expect.
Raising additional funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than
desirable levels. This may limit our ability to effectuate the most attractive business combination available to us.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful increases. 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 maintain a minimum net worth or
retain a certain amount of cash could increase the probability that we will be unable to complete a proposed business combination
and that you would have to wait for liquidation in order to redeem your stock.
If, pursuant to the terms of our proposed
business combination, we are required to maintain a minimum net worth or retain a certain amount of cash in trust in order to consummate
the business combination, the ability of our public stockholders to cause us to redeem their shares in connection with such proposed
transaction will increase the risk that we will not meet that condition and, accordingly, that we will not be able to complete
the proposed transaction. If we do not complete a proposed business combination, you would not receive your pro rata portion of
the trust account until we liquidate or you are able to sell your stock in the open market. If you were to attempt to sell your
stock in the open market at that time, the price you receive could represent a discount to the pro rata amount in our 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.
The requirement that we complete a business combination
by November 20, 2020 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 consummate a 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 consummate a business combination by November
20, 2020. Consequently, such target businesses may obtain leverage over us in negotiating a business combination, knowing that
if we do not complete a business combination with it, we may be unable to identify another target business and complete a business
combination with any target business. This risk will increase as we get closer to November 20, 2020. Depending upon when we identify
a potential target business, we may have only a limited time to conduct due diligence and may enter into a business combination
on terms that we might have rejected upon a more comprehensive investigation.
We may not be able to consummate a business combination
by November 20, 2020, in which case we would cease all operations except for the purpose of winding up and we would redeem our
public shares and liquidate.
We must complete our initial business combination
by November 20 2020. We may not be able to find a suitable target business and consummate a business combination within that time
period. If we have not consummated a business combination by November 20, 2020, or earlier, at the discretion of our board pursuant
to the expiration of a tender offer conducted in connection with a failed business combination, 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
all public shares then outstanding at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account, including any amounts representing interest earned on the trust account, less any interest released to us for the
payment of taxes or 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 liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law.
If we are unable to complete our initial business combination
within the prescribed time frame, our warrants will expire worthless.
Our outstanding warrants may not be exercised
until after the completion of our initial business combination and are not entitled to participate in the redemption of the shares
of our Class A common stock conducted in connection with the consummation of our business combination. Accordingly, our warrants
will expire worthless if we are unable to consummate a business combination by November 20, 2020, or earlier if our board resolves
to liquidate and dissolve in connection with a failed business combination.
If we seek stockholder approval of our business combination,
our sponsor, directors, officers and their affiliates may elect to purchase shares of common stock from public stockholders, in
which case they may influence a vote in favor of a proposed business combination that you do not support.
If 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 or their respective affiliates may purchase shares in the open market or in privately negotiated transactions
either prior to or following the consummation of our initial business combination. Our sponsor, directors, officers and their respective
affiliates may also enter into transactions with stockholders and others to provide them with incentives to, among other things,
acquire shares of our common stock or vote their shares in favor of an initial business combination. Our directors, officers or
their affiliates will not make any such purchases when they are in possession of any material non-public information not disclosed
to the seller or during a restricted period under Regulation M under the Exchange Act or in a transaction which would violate
Section 9(a)(2) or Rule 10(b)-5 under the Exchange Act. Such a purchase would 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 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.
If a stockholder fails to receive notice of our offer
to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as
applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware
of the opportunity to redeem its shares. In addition, 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 materials mailed to such
holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event
we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder
fails to comply with these procedures, its shares may not be redeemed. Please see “Business — Tendering stock certificates
in connection with redemption rights.”
You will not have any rights to or interest in funds from
the trust account, except under limited circumstances. To liquidate your investment, therefore, you may be forced to sell your
shares or warrants, potentially at a loss.
Our public stockholders will be entitled
to receive funds from the trust account only upon the earlier to occur of: (i) the consummation of our initial business combination;
(ii) the redemption of our public shares if we are unable to consummate a business combination by November 20, 2020, subject to
applicable law; (iii) the redemption of any public shares properly tendered 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 by November 20, 2020; or (iv) otherwise upon our liquidation or in
the event our board of directors resolves to liquidate the trust account and ceases to pursue the consummation of a business combination
prior to November 20, 2020 (our board of directors may determine to liquidate the trust account prior to such date if it determines,
in its business judgment, that it is improbable within the remaining time that we will be able to identify an attractive business
combination or satisfy regulatory and other business and legal requirements to consummate a business combination). In addition,
if our plan to redeem our public shares if we are unable to consummate an initial business combination by November 20, 2020 is
not consummated for any reason, 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 November 20, 2020 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.
You will not be entitled to protections normally afforded
to investors of many other blank check companies.
Since we intend to use the net proceeds of
the initial public offering to complete an initial business combination with a target business that has not been identified, we
may be deemed to be a “blank check” company under the United States securities laws. However, because we had net tangible
assets in excess of $5.0 million upon the completion of the initial public offering and we filed a Current Report on Form 8-K,
including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors
in blank check companies, such as Rule 419 under the Securities Act. Accordingly, investors will not be afforded the benefits or
protections of those rules. Among other things, this means our units were immediately tradable and we have a longer period of time
to complete a business combination than would companies subject to Rule 419. Moreover, offerings subject to Rule 419 would prohibit
the release of any interest earned on funds held in the trust account to us, except in connection with our consummation of an initial
business combination.
If we seek stockholder approval of our business combination
and we do not conduct redemptions pursuant to the tender offer rules, a stockholder, or a “group” of stockholders,
who are deemed to hold an aggregate of 20.0% or more of our common stock may not redeem any shares they hold that equal or exceed
such 20.0% amount.
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 shares in excess of 20.0% or
more of the shares sold in the initial public offering. We refer to such shares in excess of 20.0% or more of the shares sold in
the initial public offering as “Excess Shares”. Your inability to redeem any Excess Shares will reduce your influence
over our ability to consummate a 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 consummate our business combination. As a result, you would continue to hold that number of shares exceeding 20.0%
(less one share) and, in order to dispose of such shares, would be required to sell them 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 a business combination. If we are unable to
complete our initial business combination, you may receive only $10.03 per share from our redemption of your shares, and our warrants
will expire worthless.
We expect to encounter intense competition from other entities
having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, 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, 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. Any of these obligations 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 $10.03 per share (based on the trust account balance as of December 31, 2018) from our redemption of our shares, and
our warrants will expire worthless.
If the net proceeds from the initial public offering and
the sale of the placement units not being held in the trust account are insufficient, it could limit the amount available to fund
our search for a target business or businesses and complete our initial business combination and we will depend on loans from our
sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable
to obtain such loans, we may be unable to complete our initial business combination.
Of the net proceeds of the initial public
offering and the sale of the placement units, only $2,300,000 was available to us as of December 31, 2018 outside the trust account
to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our
sponsor, management team or other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management
team nor any of their respective affiliates is under any obligation or other duty to loan funds to us in such circumstances. Any
such loans would be repaid only from funds held outside the trust account or from funds released to us upon completion of 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. In such case, our public stockholders may receive
only $10.00 per share, or less in certain circumstances, and our warrants will expire worthless. Please see “— 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” and other risk factors herein.
Subsequent to consummation 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 examination will uncover all material risks that may
be presented by a particular target business, or that factors outside of the target business and outside of our control will not
later arise. Even if our due diligence successfully identifies the principal risks, unexpected risks may arise and previously known
risks may materialize in a manner not consistent with our preliminary risk analysis. As a result, from time to time following our
initial business combination, we may be forced to write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in our reporting losses. 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.
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.
Placing funds in the trust account may not
protect those funds from third party claims against us. Although we seek to have all vendors, service providers, prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim 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, claims for fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver. If any third party refuses to execute an agreement waiving 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
without a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than
any available alternative. If we do not obtain a waiver from a third party, we will obtain the written consent of our sponsor before
entering into an agreement with such third party.
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 management believes to be significantly superior to those of other consultants who would execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver and where our sponsor executes a written consent.
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 a business combination within the required time frame,
or upon the exercise of a redemption right in connection with a business combination, we will be required to provide for payment
of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly,
the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust
account due to claims of such creditors. Pursuant to a written agreement, Daniel G. Cohen has agreed that he 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 discussed entering into a transaction agreement, reduce the amounts in the trust account to below $10.00 per share except
as to any claims by a third party who executed a waiver of rights to seek access to the trust account and except as to any claims
under our indemnity of the underwriters of the initial public offering against certain liabilities, including liabilities under
the Securities Act. Moreover, if an executed waiver is deemed to be unenforceable against a third party, Mr. Cohen will not be
responsible to the extent of any liability for such third party claims. We have not independently verified whether Mr. Cohen has
sufficient funds to satisfy his indemnity obligations, we have not asked Mr. Cohen to reserve for such indemnification obligations
and we cannot assure you that he would be able to satisfy those obligations.
Our directors may decide not to enforce the indemnification
obligations of Daniel G. Cohen, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public stockholders.
If proceeds in the trust account are reduced
below $10.00 per public share and Daniel G. Cohen asserts that he is unable to satisfy his obligations or that he has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against Mr. Cohen
to enforce his indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against Mr. Cohen to enforce his indemnification obligations to us, it is possible that our independent directors in
exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not
to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public
stockholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy indemnification
claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the
fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title, interest or claim of
any kind in or to any monies in the trust account and to not seek recourse against the trust account for any reason whatsoever.
Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the
trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may
discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such
an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be
adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to
these indemnification provisions.
If, after we distribute the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having
breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us 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, by making distributions to public stockholders before
making provision for creditors, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or
having acted in bad faith, thereby exposing itself and us to claims for punitive damages.
If, before distributing the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent
any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection
with our liquidation may be reduced.
If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities;
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each of which may make it difficult for us to complete our initial
business combination.
In addition, we may have imposed upon us
burdensome requirements, including:
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registration as an investment company with the SEC;
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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 compliance with other rules and regulations that we are currently not subject to.
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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 is 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 anticipated 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. Our securities are not intended for persons who are seeking a return on investments
in government securities or investment securities. 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 provide for the redemption of our public shares in connection with an initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion
window; and (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 consummate
our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.03 per share (based on the trust account balance as of December 31, 2018) 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. Please see “— 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” and other risk factors herein.
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, including in particular, reporting and other requirements under the Exchange Act.
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 result in fines, injunctive relief or similar remedies which could be costly to
us or limit our ability to complete an initial business combination or operate the post-combination company successfully.
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 consummate our initial business combination by November 20, 2020 may be considered a liquidation 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 November 20, 2020 if we do not consummate an
initial business combination and, therefore, we do not intend to comply with those 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 are limited to
searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers
or investment bankers) 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 if
we do not consummate our initial business combination by November 20, 2020 is not considered a liquidation 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 liquidation distribution.
We may not hold an annual meeting of stockholders until
after we consummate a business combination.
We may not hold an annual meeting of stockholders
until after we consummate a business combination (unless required by Nasdaq), and thus may not be in compliance with Section 211(b)
of the DGCL, which requires that an annual meeting of stockholders be held for the purposes of electing directors in accordance
with a company’s bylaws unless directors are elected by written consent in lieu of such a meeting. Therefore, if our stockholders
want us to hold an annual meeting prior to our consummation of a business combination, they may attempt to force us to hold one
by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We are not registering 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 and causing such warrants to expire worthless.
We are not registering the shares of Class
A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However,
under the terms of the warrant agreement, we have agreed to use our best efforts to file 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,
and to use our best efforts to take such action as is necessary to register or qualify for sale, in those states in which the warrants
were initially offered by us, the shares issuable upon exercise of the warrants, to the extent an exemption is not available. We
cannot assure you that we will be able to do so. 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 under the circumstances
specified in the warrant agreement. However, except as specified in the warrant agreement, in no event will we be required to issue
cash, securities or other compensation in exchange for the warrants if we are unable to register or qualify the shares underlying
the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants
is not so registered or qualified, the warrant holder will not be entitled to exercise such warrant and such warrant may have no
value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the
full unit purchase price solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable
by us, we may not exercise our redemption right if the issuance of shares of Class A common stock upon exercise of the warrants
is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration
or qualification.
If you exercise your public warrants on a “cashless
basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants
for cash.
There are circumstances in which the exercise
of the public warrants may be required or permitted to be made on a cashless basis. First, if a registration statement covering
the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing
of our initial business combination, warrantholders may, until such time as there is an effective registration statement, exercise
warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if our Class
A common stock is at any time of any exercise of a warrant not listed on a national securities exchange such that it satisfies
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require
holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event
we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent
an exemption is not available. Third, if we call the public warrants for redemption, our management will have the option to require
all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder
would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the
quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied
by the difference between the exercise price of the warrants and the “fair market value” (as defined in the next sentence)
by (y) the fair market value. The “fair market value” is the average reported last sale price of the Class A common
stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by
the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would
receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial stockholders
and purchasers of placement units may make it more difficult to complete our initial business combination, and the future exercise
of such rights may reduce the market price of our Class A common stock.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the initial public offering, our initial holders and their permitted transferees
and purchasers of placement units can demand that we register the founder shares, placement shares, placement warrants and the
shares of Class A common stock issuable upon exercise of the placement warrants. These registration rights will be exercisable
at any time commencing upon the date that such shares are released from transfer restrictions. 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 reduce 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 because the stockholders of the target business may increase the equity
stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of
our Class A common stock that is expected when the securities owned by our initial holders or their permitted transferees are registered.
Because we have not selected a particular business within
the financial technology industry or any other industry or any specific target businesses with which to pursue a business combination,
you will be unable to ascertain the merits or risks of any particular target business’ operations.
We will seek to consummate a business combination
with an operating company in the financial technology industry, but may also pursue acquisition opportunities in other business
sectors or geographic regions, except that we are not, under our amended and restated certificate of incorporation, permitted to
effectuate a business combination with another blank check company or similar company with nominal operations. Because we have
not yet identified any specific target business with respect to a business combination, you have 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. If we consummate our initial business combination, we may be affected by numerous risks inherent in the business
operations of the entity with which we combine. Because we will seek to acquire businesses that potentially need financial, operational,
strategic or managerial redirection, we may be affected by the risks inherent in the business and operations of a financially or
operationally unstable entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular
target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we
will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us
with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure
you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity
were available, in an acquisition target.
Past performance by our management team may not be indicative
of future performance of an investment in the Company.
Past performance by our management team is
not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to
locate a suitable candidate for our initial business combination. You should not rely on the historical record of our management
team’s performance as indicative of our future performance of an investment in the company or the returns the company will,
or is likely to, generate going forward.
We may seek investment opportunities in sectors outside
of our industry focus (which may or may not be outside of our management’s area of expertise).
Although we currently intend to consummate
a business combination in the financial technology industry, we will consider a business combination outside this industry if a
business combination candidate is presented to us and we determine that such candidate offers an attractive investment opportunity
for our company. If we elect to pursue an investment outside of the financial technology industry, our management’s expertise
in that industry would not be directly applicable to its evaluation or operation, and the information contained herein regarding
the financial technology industry might not be relevant to an understanding of the business that we elect to acquire.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into a 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 specific criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into a business
combination will not have all of these positive attributes. If we consummate a business combination with a target that does not
meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet
all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does
not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may
make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a
certain amount of cash. In addition, if stockholder approval of the transaction is required by law or Nasdaq, or we decide to obtain
stockholder approval for business or other reasons, it may be more difficult for us to obtain 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 only receive $10.03 per share (based on the trust account balance as
of December 31, 2018) on our redemption, and our warrants will expire worthless.
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, intense competition and difficulties in obtaining and 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 sales 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,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant
risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent
investment banking firm and, consequently, you may have no assurance from an independent source that the price we are paying for
the target in our initial business combination is fair to our stockholders from a financial point of view.
Unless we consummate our initial business
combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that
the price we are paying is fair to our stockholders from a financial point of view. If we do not obtain an opinion, our stockholders
will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination.
We may issue additional common or preferred shares to
complete our initial business combination or under an employee incentive plan after consummation of our initial business combination,
which 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 85,000,000 shares of Class A common stock, par value $0.0001 per share, and 15,000,000 shares
of Class B common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per
share. There are currently 31,855,000 and 6,142,500 authorized but unissued shares of Class A and Class B common stock, respectively,
available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but
not upon the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of
our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment.
There are no shares of preferred stock currently issued and outstanding.
We may issue a substantial number of additional
shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue additional securities that can vote on amendments to our amended and restated certificate
of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account).
We may also issue shares 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 applicable anti-dilution provisions. 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 (1) receive funds from the trust account or (2) 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 the initial public offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change in control if a substantial number of shares of 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, common stock and/or warrants.
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Resources could be wasted in researching acquisitions
that are not consummated, which could materially adversely affect subsequent attempts to locate another target business and consummate
our initial business combination. If we are unable to complete our initial business combination, our public stockholders may only
receive $10.03 per share from our redemption of our shares 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. If we decide
not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to consummate
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 due to a reduction in the funds available for expenses relating to such efforts. If we are unable to
complete our initial business combination, our public stockholders may only receive $10.03 per share (based on the trust account
balance as of December 31, 2018) from our redemption of their shares and our warrants will expire worthless.
We are dependent upon our officers and directors; the
loss of any one or more of them could adversely affect our ability to complete a business combination.
Our operations depend upon the background,
experience and contacts of our officers and directors. We believe that our success depends on the continued service of our officers
and directors, at least until we have consummated a business combination. We do not have an employment agreement with, or key-man
insurance on the life of, any of our directors or officers. In addition, our executive officers and directors are not required
to, and do not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between
our operations and the search for a business combination and their other business commitments. We do not intend to have any full-time
employees prior to the consummation of our business combination. Each of our executive officers and directors is engaged in other
business endeavors and is not obligated to contribute any specific number of hours per week to our affairs. If our executive officers’
and directors’ other business commitments require them to devote substantial amounts of time in excess of their current commitment
levels, it could limit their ability to devote time to our affairs which make it more difficult for us to identify an acquisition
target and consummate our business combination.
Our success following our initial business combination
likely will depend upon the efforts of management of the target business. The loss of any of the key personnel of the target’s
management team could make it more difficult to operate the target profitably.
Although some of our key personnel may remain
with the target business in senior management or advisory positions following a business combination, we can offer no assurance
that any will do so. Moreover, as a result of the existing commitments of our key personnel, it is likely that we will retain some
or all of the management of the target business to conduct its operations. The departure of any key members of the target’s
management team could thus make it more difficult to operate the post-combination business profitably. Moreover, to the extent
that we will rely upon the target’s management team to operate the post-combination business, we will be subject to risks
regarding their managerial competence. While we intend to closely scrutinize the skills, abilities and qualifications of any individuals
we retain after a business combination, our ability to do so may be limited due to a lack of time resources or information. Accordingly,
we cannot assure you that our assessment of these individuals will prove to be correct and that they will have the skills, abilities
and qualifications we expect.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with our initial business combination. These agreements may provide for them to
receive compensation following our initial business combination and, as a result, may cause them to have conflicts of interest
in determining whether a particular business combination would be advantageous to us.
Our key personnel may decide to remain with
the company after the consummation of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the business combination. Such negotiations would 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 consummation of our initial business combination. The personal and
financial interests of such individuals may influence their motivation in identifying and selecting a target business and cause
them to have conflicts of interest in determining whether a particular business combination would be advantageous to us. However,
we believe the ability of such individuals to remain with us after the consummation of our initial business combination will not
be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is
no certainty, however, that any of our key personnel will remain with us after the consummation of our initial business combination.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination
as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
Our officers and directors are now and 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 determining to which entity a particular business opportunity should be presented.
Until we consummate our initial business
combination, we will engage in the business of identifying and combining with one or more businesses, with a focus on financial
technology businesses. Our executive officers and directors are now and may in the future become affiliated with entities that
are in the financial services or financial technology industries or entities engaged in the business of acquiring other entities
or businesses. In each case, our executive officers and directors’ existing directorships or other responsibilities may give
rise to contractual or fiduciary obligations that take priority over any obligation owed to us. Our amended and restated certificate
of incorporation provides that the doctrine of corporate opportunity, or any other analogous doctrine, does not apply to us or
any of our officers or directors or in circumstances that would conflict with any fiduciary duties or contractual obligations to
other entities they may have as of the date of this Annual Report. Accordingly, business opportunities that may be attractive to
the entities described above will not be presented to us unless such entities have declined to accept such opportunities. As a
result, our officers and directors may have conflicts of interest in determining to which entity a particular business opportunity
should be presented. We cannot assure you that these conflicts will be resolved in our favor or that a potential target business
would not be presented to another entity prior to its presentation to us.
We may engage in a business combination with one or more
target businesses that have relationships with entities that may be affiliated with our executive officers, directors or existing
stockholders, which may raise potential conflicts of interest.
We may decide to acquire one or more businesses
affiliated with holders of founder shares, or our officers and directors. Our officers and directors also serve as officers and
board members of other entities. Such entities may compete with us for business combination opportunities. The holders of founder
shares and our officers and directors are not currently aware of any specific opportunities for us to consummate a business combination
with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination
with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated
entities, we would pursue such a transaction if we determined that the targeted affiliated entity met our criteria for a business
combination and the 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 reasonably acceptable to Cantor Fitzgerald, as representative of the underwriters,
regarding the fairness to our stockholders from a financial point of view of a business combination with one or more businesses
affiliated with our executive officers, directors or holders of founder shares, 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.
We may have a limited ability to assess the management
of a prospective target business and, as a result, may effect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
a business combination with a prospective target business, our ability to assess the target business’ 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 expected. 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.
The officers and directors of an acquisition candidate
may resign upon consummation of a business combination. The loss of an acquisition 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 consummation 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 us 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 an acquisition target’s key personnel could negatively impact the operations and profitability of our post-combination
business.
We may partner, submit a joint bid or enter into a similar
transaction with holders of founder shares or an affiliate in connection with our pursuit of, or in connection with, a business
combination.
We are not prohibited from partnering, submitting
a joint bid or entering into any similar transaction with holders of founder shares or their affiliates in our pursuit of a business
combination. Although we currently have no plans to do so, we could pursue such a transaction if we determined that such affiliated
entity met our criteria for a business combination and the 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 reasonably acceptable to Cantor
Fitzgerald, as representative of the underwriters, regarding the fairness to our stockholders from a financial point of view of
a business combination with any holder of founder shares or its affiliates, the terms of the business combination may not be as
advantageous to our public stockholders as they would be absent any conflicts of interest. Additionally, were we successful in
consummating such a transaction, conflicts could invariably arise from the interest of the holder of founder shares or its affiliate
in maximizing its returns, which may be at odds with the strategy of the post-business combination company or not in the best interests
of the public stockholders of the post-business combination company. Any or all of such conflicts could materially reduce the value
of your investment, whether before or after our initial business combination.
Since holders of founder shares and placement units will
lose some or all of their investment in us if we do not consummate a business combination, a conflict of interest may arise in
determining whether a particular acquisition target is appropriate for our initial business combination.
Our initial holders currently own 8,857,500
founder shares, which will be worthless if we do not consummate our initial business combination. Our sponsor has also purchased
830,000 placement units for an aggregate purchase price of $8.3 million. There will be no redemption rights or liquidating distributions
from the trust account with respect to the founder shares, placement shares or placement warrants, which will expire worthless
if we do not consummate a business combination by November 20, 2020. If we do not consummate a business combination, our sponsor
will realize a loss on the placement units it purchased. As a result, the personal and financial interests of certain of
our officers and directors, directly or as members of our sponsor, in consummating an initial business combination, along with
their flexibility in identifying and selecting a prospective acquisition candidate, may influence their motivation in identifying
and selecting a target business combination and completing an initial business combination that is not in the best interests of
our stockholders. Consequently, the discretion of our officers and directors, in identifying and selecting a suitable target business
combination may result in a conflict of interest when determining whether the terms, conditions and timing of a particular initial
business combination are appropriate and in the best interest of our public stockholders.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our financial condition and the value of
our stockholders’ investment in us.
We may choose to incur substantial debt in
order to complete our initial business combination. 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 meet our debt service 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 covenants that require the maintenance of 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 is payable on demand and the lender demands payment;
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our inability to obtain necessary additional financing if any debt we incur contains covenants restricting our ability to obtain additional financing while the debt is outstanding;
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prohibitions of, or limitations on, our ability to pay dividends on our common stock;
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use of 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, as well as for expenses, capital expenditures, acquisitions and 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; and
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of growth strategies and other purposes and other disadvantages compared to our competitors who have less debt.
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We do not have a policy with respect to how
much debt we may incur. To the extent that the amount of our debt increases, the impact of the effects listed above may also increase.
We may complete a business combination with only one business,
which would result in our success being dependent solely on a single business which may have a limited number of products or services.
This lack of diversification may harm our operations and profitability.
We are not limited as to the number of businesses
we may acquire in our initial business combination. However, we may not be able to effectuate a business combination with more
than one target business because of various factors, including the limited amount of the net proceeds of the initial public offering,
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 consummating an initial business combination with only a single entity, our lack of diversification may subject us to
numerous economic, competitive and regulatory risks particular to the industry area in which the acquired business operates. 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. Accordingly, the prospects for our success may:
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solely depend upon the performance of a single business, property or asset, or
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depend upon the development or market acceptance of a single or limited number of products, processes or services.
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We may attempt to consummate business combinations with
multiple prospective targets simultaneously, which may hinder our ability to consummate an initial business combination and give
rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to acquire several businesses
simultaneously that are owned by different sellers, we will need each seller 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 the 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, we may be unable to operate
the combined business successfully, and you could lose some or all of your investment in us.
We may attempt to consummate 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 expected, or at all.
In pursuing our acquisition strategy, we
may seek to effectuate our initial business combination with a privately held company. By definition, very little public information
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 the information developed during our due diligence examination, which may be limited. As a result,
we could acquire a company that is not as profitable as we expected, or at all. Furthermore, the relative lack of information about
a private company may hinder our ability to properly assess the value of such a company which could result in our overpaying for
that company.
If we effect our initial business combination with a business
located outside of the United States, the laws applicable to such business will likely govern all of our material agreements and
we may not be able to enforce our legal rights.
If we effect our initial business combination
with a business located outside of the United States, the laws of the country in which such business operates will govern almost
all of the material agreements relating to its operations. The target business may not be able to enforce any of its material agreements
or enforce remedies for breaches of those agreements in that jurisdiction. The system of laws and the enforcement of existing laws
in such jurisdiction may not be as certain in implementation and interpretation as in the United States. The inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business, business opportunities or
capital. Additionally, if we acquire a business located outside of the United States, it is likely that substantially all of our
assets would be located outside of the United States and some of our officers and directors might reside outside of the United
States. As a result, it may not be possible for investors in the United States to enforce their legal rights, to effect service
of process upon our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities
and criminal penalties of our directors and officers under federal securities laws.
We 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 anticipate structuring our initial business
combination to acquire 100% of the equity interest or assets of the target business or businesses. However, we may structure our
initial business combination to acquire less than 100% of the equity interest or assets of the target business, but only if we
(or any entity that is a successor to us in a business combination) acquire a majority of the outstanding voting securities or
assets of the target. Even if we own a majority interest in 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 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
we will not be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold will make it easier for us to consummate a business combination with which a substantial
number of our stockholders do not agree.
We may be able to consummate a business combination
even though a substantial number 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, if our sponsor, officers, directors or their affiliates have entered into privately
negotiated agreements with public stockholders to acquire public shares. However, in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination,
and the amount that we redeem may be further limited by the terms and conditions of our initial business combination. In such case,
we would not proceed with the redemption of our public shares and the related initial business combination, and instead may search
for an alternate business combination.
In order to effectuate a business combination, we may
seek to amend provisions of our charter and other governing instruments. We cannot assure you that we will not seek to amend our
amended and restated certificate of incorporation or other governing instruments in a manner that will make it easier for us to
consummate a business combination that our stockholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments. For
example, blank check companies have amended the definition of initial business combination, increased redemption thresholds and
extended the time period in which the company must consummate its initial business combination. We cannot assure you that we will
not seek to amend our charter or governing instruments in order to effectuate our initial business combination. However, if the
effect of the proposed amendments would be either to (i) reduce the amount in the trust account available to redeeming stockholders
to less than $10.00 per share, or (ii) delay the date on which a stockholder could otherwise redeem shares for the per share amount
in the trust account and, if such amendments are approved by persons holding at least 65% of the outstanding shares of our common
stock, we will provide a right for dissenting public stockholders to redeem their public shares, if such amendment is approved,
in the same manner as if we were seeking a stockholder vote on a business combination except that the amount on deposit in the
trust account for purposes of calculating the per share redemption price will be determined at the close of business two business
days before the meeting date.
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 owning 65% of the issued and outstanding shares
of our common stock, which is a lower amendment threshold than that of many blank check companies. It may be easier for us, therefore,
to amend our amended and restated certificate of incorporation to facilitate the consummation of an initial business combination
that our stockholders may not support.
Many blank check companies have a provision
in their charter which 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. Amendment of these
provisions requires approval by between 90% and 100% of the company’s public stockholders in many cases. Our amended and
restated certificate of incorporation provides that provisions related to pre-business combination activity may be amended if approved
by holders owning 65% of the issued and outstanding shares of our common stock, and corresponding provisions of the trust agreement
governing the release of funds from our trust account may be amended if approved by holders owning 65% of the issued and outstanding
shares of our common stock and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders owning 65% of the issued and outstanding shares of our common stock (in each case including
all shares held by initial holders, holders of placement units, our officers and our directors); provided, however, that if the
effect of any proposed amendment, if adopted, would be either to (i) reduce the amount in the trust account available to redeeming
stockholders to less than $10.00 per share, or (ii) delay the date on which a public stockholder could otherwise redeem shares
for such per share amount in the trust account, we will provide a right for dissenting public shareholders to redeem public shares
if such an amendment is approved). As a result, we may be able to amend the provisions of our amended and restated certificate
of incorporation which govern our pre-business combination actions more easily that many blank check companies, and this may increase
our ability to consummate a business combination with which you do not agree.
Our initial holders, executive officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated
certificate of incorporation 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 by November 20, 2020 unless we provide our public stockholders with the opportunity
to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. Our stockholders
are not parties to, or third-party beneficiaries of, this written agreement with our initial holders, executive officers and directors
and, as a result, will not have the ability to pursue remedies against these persons and entities for any breach of such agreement.
Accordingly, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable
law.
Certain agreements related to the initial public offering
may be amended without stockholder approval.
Certain agreements, including the underwriting agreement relating
to the initial public offering, the investment management trust agreement between us and Continental Stock Transfer & Trust
Company, the letter agreement among us and our initial holders, officers and directors, the registration rights agreement among
us and our initial holders may be amended without stockholder approval. These agreements contain various provisions that our public
stockholders might deem to be material. For example, the underwriting agreement contains (i) a representation that we will not
consummate any public or private equity or debt financing prior to the consummation of a business combination, unless all investors
in such financing expressly waive, in writing, any rights in or claims against the trust account and (ii) a covenant that the target
company that we acquire must have a fair market value equal to at least 80% of the balance in the trust account at the time of
signing the definitive agreement for the transaction with such target business (excluding the deferred underwriting commissions
and taxes payable on the income earned on the trust account) so long as we obtain and maintain a listing for our securities on
Nasdaq. While we do not expect our board to approve any amendment to any of these agreements prior to our initial business combination,
it may be possible that our board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve
one or more amendments to any such agreement in connection with the consummation of our initial business combination. Any such
amendment may have an adverse effect on the value of an investment in our securities.
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. If we are unable to complete our initial business combination, our public stockholders
may only receive $10.03 per share on our redemption.
Because of the size of our initial business
combination, 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 may be
unable to obtain any necessary financing on acceptable terms, if at all. The current economic environment has made it especially
difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when
needed to consummate our initial business combination, we would be compelled to either restructure or abandon the transaction and
seek an alternative target business candidate. If we are unable to complete our initial business combination, our public stockholders
may only receive $10.03 per share (based on the trust account balance as of December 31, 2018) on our redemption. In addition,
even if we do not need additional financing to consummate our initial business combination, we may require such financing to fund
the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide
any financing to us after a business combination.
Our initial stockholders will control the election of
our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As a
result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own approximately 21.9% of our outstanding
common stock, including placement shares. In addition, the founder shares, all of which are held by our initial stockholders, entitle
the holders to elect all of our directors prior to the consummation of our initial business combination. Holders of our public
shares have no right to vote on the election of directors during such time. These provisions of our amended and restated certificate
of incorporation may only be amended by a majority of at least 90% of our common stock voting at a stockholder meeting. As a result,
you will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders nor, to our knowledge, any
of our officers or directors, have any current intention to purchase additional securities. 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,
as a result of their substantial ownership in our company, our initial stockholders may exert a substantial influence on other
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 influence over these
actions. Accordingly, our initial stockholders will exert significant influence over actions requiring a stockholder vote.
Holders of founder shares and purchasers of placement
units will control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote,
potentially in a manner that you do not support.
Holders of founder shares and placement units
(excluding placement units held by Cantor Fitzgerald) own 21.9% 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. Holders of founder shares are not restricted from
purchasing Class A common stock in the aftermarket or in privately negotiated transactions, which would increase their control.
The holders of founder shares do not have any current intention to purchase additional securities. Factors that would be considered
in making such additional purchases would include consideration of the current trading price of our common stock. In addition,
our board of directors, whose members were elected by our sponsor, is divided into two classes with only one class of directors
being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders)
serving a two-year term. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of
our initial business combination, in which case all of the current directors will continue in office at least until the consummation
of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors,
only a minority of the board of directors will be considered for election and our sponsor, because of its ownership position, will
have considerable influence regarding the outcome. Accordingly, you should anticipate that holders of founder shares and purchasers
of placement units will continue to exert control at least until the consummation of our initial business combination.
We may amend the terms of the warrants in a manner that
may be adverse to holders with the approval by the holders of at least 65% of the then outstanding public warrants.
Our warrants were issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner
adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our
ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the
exercise period or decrease the number of shares of our 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 (excluding any placement warrants held by our sponsor or its permitted transferees) at any time after they become exercisable
and prior to their expiration, at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of our
Class A common stock in the event the shares of our Class A common stock are not traded on any specific trading day) of the Class
A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third business
day prior to the date we send proper notice of such redemption, provided that on the date we give notice of redemption and during
the entire period thereafter until the time we redeem the warrants, we have an effective registration statement under the Securities
Act covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them
is available. 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.
Our warrants and founder shares may have an adverse effect
on the market price of our Class A common stock and make it more difficult to effectuate a business combination.
In the initial public offering, we issued
warrants to purchase 17,250,000 shares of our Class A common stock as part of the public units. In addition, on the closing date
of the initial public offering, we sold 930,000 placement units to our sponsor and Cantor Fitzgerald, with each unit consisting
of one placement share and one-half of one placement warrant, each whole warrant exercisable to purchase one share of Class A common
stock. Prior to the initial public offering, we issued an aggregate of 8,857,500 founder shares in a private placement. The founder
shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment. In addition, any portion
or all of loans that may be made to us by our sponsor, members of our management team or any of their respective affiliates or
other third parties to fund working capital requirements or finance transaction costs in connection with an intended initial business
combination may be converted, at the option of the lender, into additional warrants of the post-business combination entity at
$1.00 per warrant.
To the extent we issue shares of Class A
common stock to effect 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 effectuate a business combination or increase the cost of acquiring the target business.
The placement warrants are identical to the
warrants sold as part of the units in the initial public offering except that, so long as they are held by our sponsor or its permitted
transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these
warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the
completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
Because each unit contains one-half of one warrant and
only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one warrant.
Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant
may be exercised at any given time. This is different from other blank check companies similar to ours whose units include one
share of common stock and one warrant to purchase one whole share. We established the components of the units in this way in order
to reduce the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable
in the aggregate for one-half of the number of shares compared to units that each contain a warrant to purchase one whole share,
thus making us, we believe, a more attractive business combination partner for target businesses. Nevertheless, this unit structure
may cause our units to be worth less than if they included a warrant to purchase one whole share.
Nasdaq may delist our securities from trading which could
limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We cannot assure you that our securities
will continue to be listed on Nasdaq in the future or prior to a business combination. In order to continue listing our securities
on Nasdaq prior to a business combination, we must maintain certain financial, distribution and stock price levels. Generally,
we must maintain a minimum amount in stockholders’ equity (generally $2,500,000), a minimum number of public stockholders
(generally 300 public holders), and a minimum number of shares held by non-affiliates (500,000 shares). Additionally, in connection
with our business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet its
initial listing requirements which are more rigorous than Nasdaq’s continued listing requirements. We cannot assure you that
we will be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could
be quoted on the Over-The-Counter Bulletin Board or the “pink sheets.” If this were to occur, there could be 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 common stock is a “penny stock” which will require brokers trading in our 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, or no, news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement
Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our units, Class A common stock and warrants are listed on Nasdaq,
our units, Class A common stock and warrants are covered securities. Although the states are preempted from regulating the sale
of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud and, if
there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state, other than the state of Idaho, having used these powers to prohibit or restrict the sale of
securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might
use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further,
if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in
each state in which we offer our securities.
Purchases of Class A common stock in the open market or
in privately negotiated transactions by our sponsor, directors, officers or their affiliates may make it difficult for us to continue
to list our common stock on Nasdaq or another national securities exchange.
If our sponsor, directors, officers or their
affiliates purchase shares of our Class A common stock in the open market or in privately negotiated transactions, it would reduce
the public “float” of our Class A common stock and the number of beneficial holders of our common stock, which may
make it difficult to maintain the listing or trading of our common stock on a national securities exchange if we determine to apply
for such listing in connection with the business combination. If the number of our public holders falls below 300 or if the total
number of shares held by non-affiliates is less than 500,000, we will be non-compliant with Nasdaq’s continued listing rules
and our common stock could be de-listed. If our common stock were de-listed, we could face the material consequences set forth
in the immediately preceding risk factor.
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.
If we hold a stockholder vote to approve
our initial business combination, the federal proxy rules require that a proxy statement with respect to a vote on a business combination
meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports.
If we make a tender offer for our public shares, we will include the same financial statement disclosure in our tender offer documents
whether or not they are required under the tender offer rules. These financial statements must be prepared in accordance with accounting
principles generally accepted in the United States of America, or GAAP, and the historical financial statements must 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
statements in time for us to disclose such statements in accordance with federal proxy rules and consummate our initial business
combination by November 20, 2020.
The requirements of being a public company may strain
our resources and divert management’s attention.
As a public company, we are subject to the
reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (which we refer to as the Sarbanes-Oxley Act), the Dodd-Frank
Act Wall Street Reform and Consumer Protection Act (which we refer to as the Dodd-Frank Act), the listing requirements of Nasdaq
and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and
financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and
resources, particularly after we are no longer an “emerging growth company.” The Sarbanes-Oxley Act requires, among
other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order
to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet
this standard, significant resources and management oversight may be required. As a result, management’s attention may be
diverted from other business concerns, which could adversely affect our business and operating results. We may need to hire more
employees in the future or engage outside consultants to comply with these requirements, which will increase our costs and expenses.
In addition, changing laws, regulations and
standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal
and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject
to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may
evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding
compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest
resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing
bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against
us and our business may be adversely affected.
However, for as long as we remain an “emerging
growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements
that are applicable to “emerging growth companies” including, but not limited to, not being required to comply with
the auditor attestation requirements of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these
reporting exemptions until we are no longer an “emerging growth company.”
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 the initial public
offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large
accelerated filer, which means the market value of our shares of common stock that are held by non-affiliates exceeds $700 million
as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior
three year period.
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 common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in
which case we would no longer be an emerging growth company as of the end of such fiscal year. 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 election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accountant standards used.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate a business combination, require substantial financial and management resources, and
increase the time and costs of completing an acquisition.
The Sarbanes-Oxley Act requires that
we maintain a system of internal controls over Financial reporting and, beginning with our annual report on Form 10-K for the
fiscal year ending December 31, 2019, that we evaluate and report on such system of internal controls over Financial
reporting. In addition, once we are no longer an “emerging growth company,” we must have our
system of internal controls over Financial reporting audited. 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 a business combination may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls over Financial reporting. The development of
the internal controls over Financial reporting of any such entity to achieve compliance with the Sarbanes-Oxley Act may
increase the time and costs necessary to complete any such 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 common stock and could entrench management.
Our amended and restated certificate of incorporation
contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests.
These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and
issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for our securities.
If we effect our initial business combination with
a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that
may negatively impact our operations.
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial
and legal requirements of overseas markets;
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rules and regulations or 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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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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challenges in collecting accounts receivable;
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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 appropriation 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.
Our amended and restated certificate
of incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole
and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable
judicial forum for disputes with us or our directors, officers, employees or stockholders.
Our amended and restated certificate of incorporation
requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers
and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State
of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service
of process on such stockholder’s counsel. Any person or entity purchasing or otherwise acquiring any interest in shares of
our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate
of incorporation.
This choice of forum provision may limit
a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors,
officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court
were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable
or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which
could harm our business, operating results and financial condition.
Risks applicable to financial technology businesses
Business combinations with financial technology
businesses may involve special considerations and risks. If we complete our initial business combination with a financial technology
business, we will be subject to the following risks, any of which could be detrimental to us and the business we acquire:
We may be subject to claims from both the firms to whom
we provide our products and services and the clients they serve.
If the products or services we provide relate
to the facilitation of financial transactions, such as funds or securities settlement systems, and a failure or compromise of our
product or service results in loss to a customer or its clients, we may be liable for such loss. The amount of the loss could be
significantly greater that the revenues we derived from providing the product or service.
If we are unable to keep pace with evolving technology
and changes in the financial services industry, our revenues and future prospects may decline.
We expect that the markets for the products
and services of any target business we acquire will likely be characterized by rapid technological change, frequent new product
introductions and evolving industry standards. The introduction of products and services embodying new technologies and the emergence
of new industry standards can render existing products and services obsolete and unmarketable in short periods of time. We expect
new products and services, and enhancements to existing products and services, will be developed and introduced by others, which
will compete with the products and services that we offer. Our success will depend upon our ability to enhance current products
and services and to develop and introduce new products and services that keep pace with technological developments and emerging
industry standards. If we are unable to develop and introduce new products and services or enhancements in a timely manner, or
if a release of a new product or service does not achieve market acceptance, our revenues and future prospects may decline.
Our ability to provide financial technology products and
services to customers may be reduced or eliminated by regulatory changes.
We expect that the customer base for our
products or services will be principally banks and other financial institutions such as insurance companies and securities firms,
all of which are subject to extensive regulation. Any product or service we supply to these firms likely will be affected by and
designed to comply with the customer’s regulatory environment. If the regulatory environment affecting a particular product
or service changes, the product or service could become obsolete or unmarketable, or require extensive and expensive modification.
As a result, regulatory changes may impair our revenues and our profitability. If we only provide a single product or service a
change in the applicable regulatory environment could cause a significant business interruption and loss of revenue until appropriate
modifications are made. Moreover, if the regulatory change eliminates the need for the product or service, or if the expense of
making necessary modifications exceeds our resources or available financing, we may be unable to continue in business.
Difficulties with any products or services we provide
could damage our reputation and business.
We expect that market acceptance of our products
and services will depend upon the reliable operation and security of our systems and their connection to the systems of our customers.
Any operational or connectivity failures, system outages or security breaches would likely result in revenue loss to us until corrected
and could result in client dissatisfaction, causing them to terminate or reduce their business dealings with us. It may also damage
our business reputation, making it more difficult for us to obtain new customers and maintain or expand our business.
A failure to comply with privacy regulations could adversely
affect relations with customers and have a negative impact on business.
Depending upon the type of financial technology
business we acquire, in the course of providing services to our customers we may collect, process and retain sensitive and confidential
information on our customers and their clients. A failure of our systems due to security breaches, acts of vandalism, computer
viruses, misplaced or lost data, programming and/or human errors, or other causes could result in the misappropriation, loss or
other unauthorized disclosure of confidential customer information. Any such failure could result in damage to our reputation with
our customers, expose us to the risk of litigation and liability, disrupt our operations, and impair our ability to operate profitably.
We may not be able to protect our intellectual property
and we may be subject to infringement claims.
We expect to rely on a combination of contractual
rights and copyright, trademark, patent and trade secret laws to establish and protect any proprietary technology of a target business.
Although we intend to protect vigorously any intellectual property we acquire, third parties may infringe or misappropriate our
intellectual property or may develop competitive technology. Our competitors may independently develop similar technology, duplicate
our products or services or design around our intellectual property rights. We may have to litigate to enforce and protect our
intellectual property rights, trade secrets and know-how or to determine their scope, validity or enforceability, which is expensive,
could cause a diversion of resources and may not prove successful. The loss of intellectual property protection or the inability
to secure or enforce intellectual property protection could harm our business and ability to compete.
We also may be subject to claims by third
parties for infringement of another party’s proprietary rights, or for breach of copyright, trademark or license usage rights.
Any such claims and any resulting litigation could subject us to significant liability for damages. An adverse determination in
any litigation of this type could require us to design around a third party’s intellectual property, obtain a license for
that technology or license alternative technology from another party. None of these alternatives may be available to us at a price
which would allow us to operate profitably. In addition, litigation is time consuming and expensive to defend and could result
in the diversion of the time and attention of management and employees. Any claims from third parties may also result in limitations
on our ability to use the intellectual property subject to these claims.