We are an early stage blank check company incorporated as a
Cayman Islands company incorporated as an exempted company with limited liability. We chose to incorporate in the Cayman Islands
due to (i) its tax-neutrality, which allows international transactions to be structured efficiently without an additional layer
of tax and (ii) simplicity of establishment and flexibility of administration, including easy migration to another jurisdiction,
the existence of statutory procedures for merger or consolidation, and no takeover code or bespoke public company filing requirements.
Exempted companies are Cayman Islands companies wishing to conduct
business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As
an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance
with section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 20 years from the date of the
undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations
shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which
is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations
or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us
to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We were formed for the purpose of entering into a merger, share
exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more
businesses or entities, which we refer to as a “target business.” Our efforts to identify a prospective target business
will not be limited to a particular industry or geographic location but will initially focus in Asia (excluding China). However,
we believe we are particularly well-positioned to capitalize on growing opportunities created by consumer/lifestyle assets. We
will not undertake our initial business combination with any entity with its principal business operations in China. We do not
have any specific business combination under consideration and we have not (nor has anyone on our behalf), directly or indirectly,
contacted any prospective target business or had any substantive discussions, formal or otherwise, with respect to such a transaction.
Business Combination
On May 14, 2021, we entered into a Share Exchange Agreement (the “Share
Exchange Agreement”) with Giga Energy Inc., a corporation formed under the laws of the Province of British Columbia, Canada (“Giga
Energy”), each of Giga Energy’s shareholders named therein (collectively, the “Sellers”), LF International Pte.
Ltd., a Republic of Singapore company, in the capacity as the representative from and after the closing of the Transactions (as defined
below) for Yunhong’s shareholders other than the Sellers, and Yang Lan, in the capacity as the representative for the Sellers thereunder.
Pursuant to the Share Exchange Agreement, among other things and subject to the terms and conditions contained therein, we will effect
an acquisition of Giga Energy, by acquiring from the Sellers all of the issued and outstanding equity interests of Giga Energy in exchange
for newly issued ordinary shares of our Company (together with the other transactions contemplated by the Share Exchange Agreement, the
“Transactions”).
We will file a proxy statement/prospectus in connection
with our proposed business combination with Giga Energy. Investors should review the proxy statement/prospectus for additional information
regarding the Share Exchange Agreement, the proposed business combination and Giga Energy, including the risks and uncertainties regarding
the business combination and Giga Energy’s business.
Other than as specifically discussed, this report does not give effect
to the proposed business combination with Giga Energy.
Business Strategies
We have sought to capitalize on the strength of our management
team. Our team consists of experienced financial services and accounting professionals and senior operating executives of companies
worldwide. Collectively, our officers and directors have decades of experience in mergers and acquisitions and operating companies.
We believe we benefit from their accomplishments, and specifically, their current activities, in identifying attractive acquisition
opportunities. However, there is no assurance that we will complete a business combination. Our officers and directors have no
prior experience consummating a business combination for a “blank check” company. We believe that we will add value
to these businesses primarily by providing them with access to the U.S. capital markets.
There is no restriction in the geographic location of targets
we can pursue, although we intend to initially prioritize Asia (excluding China) as the geographical focus. We believe that there
is a large pool of quality companies looking for exit opportunities with an increasing number of PE and VC activities in Asia,
which provides us opportunities given the limited exit options for mid-market companies in Asia. Also, we believe that the consumer
goods, healthcare and pharmaceutical, and E-commerce industries in Asia represent a particularly attractive deal sourcing environment
that allows us to leverage our team’s skill sets and experience to identify a business combination which can potentially
serve as a strong platform for future add-on acquisitions. Our investment thesis is supported by the following trends:
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The Development of PE and VC Activities in Asia. The total AUM of Asia-focused PE and VC funds reached $772 billion in 2017, which accounted for 25% of the global alternative assets industry. The growth of PE and VC investments in Asia is driving demand for exits, which reached a 9-year high in 2018. According to the Asia-Pacific Private Equity Report 2019 issued by Bain & Company, secondary deals represented 10% of the total deal value for the sales of smaller companies in 2018 and are likely to continue rising. Furthermore, tougher market conditions for smaller and less established PE firms and the decline in assets held less than three years are putting pressure on returns. According to Asia-Pacific Private Equity Report 2019 issued by Bain & Company, the Asia Pacific fund managers intend to sell assets faster going forward, which positions us as a natural exit alternative and creates opportunities for us to identify targets for our initial business combination.
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Rapid Expansion of Service Sector in Asia. The Asian economy experienced sustained expansion in recent years. While growth of manufacturing activity weakened and reached the lowest level since September 2016, the service sector continues to expand and drive growth in Asia, with healthcare, business services and consumer strategies, particularly asset-light and tech enabled business, being the best value creation sectors.
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The Evolvement of the Consumer Goods and E-Commerce Industries in Asia. We believe E-commerce will play an important role in Asia’s digital economy. The digital ecosystem in Southeast Asia is rapidly evolving due to new consumer needs and disruptive business models. According to the State of Digital Transformation in Southeast Asia report issued by BCG Consulting, Google and Mindshare, Southeast Asia is expected to become one of the world’s fastest-growing regions for E-commerce revenues, estimated to be $88 billion by 2025. The South Asia’s internet market size is expected to be worth more than $240 billion by 2025, according to the e-Conomy SEA 2018 report issued by Temasek and Google. Growing at an annual rate of 51%, led by companies such as Flipkart, Snapdeal and Firstcry, India is also expected to become the next big E-commerce market.
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Acquisition Criteria
Our management team intends to focus on creating shareholder
value by leveraging its experience in the management, operation and financing of businesses to improve the efficiency of operations
while implementing strategies to scale revenue organically and/or through acquisitions. We have identified the following general
criteria and guidelines, which we believe are important in evaluating prospective target businesses. While we have used these criteria
and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines should we see justification
to do so.
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Valuation and Industry: Target businesses of total enterprise value from $150 to $450 million in the consumer/lifestyle sector which are strategically significant to Asia, and who could benefit from our industry networks and expertise.
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Businesses with Revenue and Earnings Growth Potential. We seek to acquire one or more businesses that have the potential for significant revenue and earnings growth through a combination of both existing and new product development, increased production capacity, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.
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Businesses with Potential for Strong Free Cash Flow Generation. We seek to acquire one or more businesses that have the potential to generate strong, stable and increasing free cash flow. We intend to focus on one or more businesses that have predictable revenue streams and definable low working capital and capital expenditure requirements. We may also seek to prudently leverage this cash flow in order to enhance shareholder value.
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Benefit from Being a Public Company. We intend to only acquire a business or businesses that will benefit from being publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are associated with being a publicly traded company.
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This criteria does not intend to be exhaustive. Any evaluation
relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines
as well as other considerations, factors and criteria that our sponsor and management team may deem relevant.
Competition
In identifying, evaluating and selecting a target business for
our initial business combination, we may encounter intense competition from other entities having a business objective similar
to ours, including other blank check companies, private equity groups, venture capital, funds leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have significant 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 is limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, the
requirement that, so long as our securities are listed on Nasdaq, we acquire a target business or businesses having a fair market
value equal to at least 80% of the value of the trust account (less any deferred underwriting commissions and taxes payable on
interest earned and less any interest earned thereon that is released to us for taxes) at the time of the agreement to enter into
the business combination, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights,
and our outstanding warrants, rights and unit purchase options and the potential future dilution they represent, may not be viewed
favorably by certain target businesses. Any of these factors may place us at a competitive disadvantage in successfully negotiating
our initial business combination.
Our Investment Process
In evaluating a prospective target business, we have conducted
and will continue to conduct a thorough due diligence review, which encompasses, among other things, meetings with incumbent management
and employees, document reviews, inspection of facilities, as well as a review of financial and other information that will be
made available to us. We also utilize our operational and capital planning experience. Due to the relationships among our sponsor,
management team and their respective affiliates, we believe that we have the capacity to appropriately source opportunities, and
to conduct critical business, financial and other analyses of prospective target businesses ourselves, and accordingly, relative
to other blank check companies, we believe we have less reliance on unaffiliated third parties to provide such key elements of
the investment process.
Each of our directors and officers presently has, and in the
future any of our directors and officers may have additional, fiduciary or contractual obligations to other entities pursuant to
which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject
to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity
which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to
honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present
it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that,
subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered
to any officer or director unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue. We do not believe, however, that any fiduciary duties or contractual obligations of our directors
or officers would materially undermine our ability to complete our business combination.
Sourcing of Potential Business Combination Targets
We believe that the operational and transactional experience
of our management team and their respective affiliates, and the relationships they have developed as a result of such experience,
provides us with a substantial number of potential business combination targets. These individuals and entities have developed
a broad network of contacts and corporate relationships around the world. This network has grown through sourcing, acquiring and
financing businesses, relationships with sellers, financing sources and target management teams and experience in executing transactions
under varying economic and financial market conditions. We believe that these networks of contacts and relationships provide us
important sources of investment opportunities. In addition, target business candidates may be brought to our attention from various
unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to
divest noncore assets or divisions.
Our acquisition criteria, due diligence processes and value
creation methods are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our
management may deem relevant.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors, or making the acquisition through a joint venture or
other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete an initial business combination
with a target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain
an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions for
the type of company we are seeking to acquire or an independent accounting firm, that such an initial business combination is fair
to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
Unless we complete our initial business combination with an
affiliated entity, or our Board of Directors cannot independently determine the fair market value of the target business or businesses,
we are not required to obtain an opinion from an independent investment banking firm, another independent firm that commonly renders
valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are
paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders 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.
If any of our officers or directors becomes aware of a business
combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual
obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such
business combination opportunity to us, subject to his or her fiduciary duties under Cayman Islands law. All of our officers currently
have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Other Acquisition Considerations
Members of our management team directly or indirectly own our
ordinary shares and/or private placement units, and, accordingly, may have a conflict of interest in determining whether a particular
target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers
and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or
resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to
our initial business combination.
Our sponsor, officers and directors have agreed not to become
an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange
Act, until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete
our initial business combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate
a business combination by the full amount of time).
Initial Business Combination
NASDAQ rules require that our initial business combination must
be with one or more target businesses that together have an aggregate 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. If our Board of Directors is not able to independently
determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment
banking firm or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire
or an independent accounting firm with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination.
We will have until February 18, 2021 (or until November 18,
2021 if we extend the period of time to consummate a business combination by the full amount of time) to consummate an initial
business combination. However, if we anticipate that we may not be able to consummate our initial business combination within such
time frame, we may extend the period of time to consummate a business combination up to three times, each by an additional three
months (or up to 21 months from the closing of our initial public offering if we extend the period of time to consummate a business
combination by the full amount of time). Pursuant to the terms of our amended and restated memorandum and articles of association
and the trust agreement entered into between us and American Stock Transfer & Trust Company during our initial public offering,
in order to extend the time available for us to consummate our initial business combination, our sponsor or its affiliates or designees,
upon ten days advance notice prior to the applicable deadline, must deposit into the trust account $690,000 ($0.10 per share) on
or prior to the date of the applicable deadline, for each three month extension (up to an aggregate of $2,070,000, or $0.30 per
share if we extend for the full nine months). Any such payments would be made in the form of a loan. Any such loans will be non-interest
bearing and payable upon the consummation of our initial business combination. If we complete our initial business combination,
we would repay such loaned amounts out of the proceeds of the trust account released to us. If we do not complete a business
combination, we will not repay such loans. Furthermore, the letter agreement with our initial shareholders contains a provision
pursuant to which our sponsor has agreed to waive its right to be repaid for such loans out of the funds held in the trust account
in the event that we do not complete a business combination. Our sponsor and its affiliates or designees are not obligated to fund
the trust account to extend the time for us to complete our initial business combination.
If we are unable to consummate an initial business combination
within such time period, we will, as promptly as reasonably possible but not more than ten business days thereafter, redeem 100%
of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account, including any interest earned on the funds held in the trust account (net of interest that may be used by us to pay our
taxes payable and for dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions,
if any), subject to applicable law and as further described herein, and then seek to dissolve and liquidate. We expect the pro
rata redemption price to be approximately $10.00 per public share (regardless of whether or not the underwriters exercise their
over-allotment option) (subject to increase of up to an additional $0.30 per share in the event that our sponsor elects to extend
the period of time to consummate a business combination by the full nine months), without taking into account any interest earned
on such funds. However, we cannot assure you that we will in fact be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public shareholders.
We anticipate structuring our initial business combination so
that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity interests
or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives
of the target management team or shareholders or for other reasons, but we will only complete such business combination if the
post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more
of the voting securities of the target, our shareholders prior to the business combination may collectively own a minority interest
in the post-transaction 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 in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the
issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity
interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such
business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If our initial
business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of
all of the target businesses.
Status as a Public Company
We believe our structure makes us an attractive business combination
partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial
public offering through a merger or other business combination. In this situation, the owners of the target business would exchange
their shares of stock in the target business for our shares or for a combination of our shares and cash, allowing us to tailor
the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being
a public company, we believe target businesses will find this method a more certain and cost-effective method to becoming a public
company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred
in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination
with us.
Furthermore, once a proposed business combination is completed,
the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring.
Once public, we believe the target business would then have greater access to capital and an additional means of providing management
incentives consistent with shareholders’ interests. It can offer further benefits by augmenting a company’s profile
among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s
backgrounds makes us an attractive business partner, some potential target businesses may have a negative view of us since we are
a blank check company, without an operating history, and there is uncertainty relating to our ability to obtain shareholder approval
of our proposed initial business combination and retain sufficient funds in our trust account in connection therewith.
We are an “emerging growth company,” as defined
in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following
the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least
$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares
that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2) the date on which we have issued more
than $1.0 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With
funds available for a business combination in the amount of $66,642,508 ,
as of June 30, 2020 (assuming no redemptions and after payment of $2,415,000 of deferred underwriting fees), before fees and expenses
associated with our initial business combination, we offer a target business a variety of options such as creating a liquidity
event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet
by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities,
or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the
consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third
party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged in, and we will not engage in,
any operations until we consummate our initial business combination. We intend to effectuate our initial business combination using
cash from the proceeds of our initial public offering and the private placement of the private placement units, our shares, debt
or a combination of these as the consideration to be paid in our initial business combination. We may, although we do not currently
intend to, seek to complete our initial business combination with a company or business that may be financially unstable or in
its early stages of development or growth, start-up companies or companies with speculative business plans or excess leverage,
which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity
or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection
with our initial business combination or used for redemptions of our Class A ordinary shares, we may apply the balance of the cash
released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional funds through a private offering
of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial
business combination using the proceeds of such offering rather than using the amounts held in the trust account.
In the case of an initial business combination funded with assets
other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose
the terms of the financing and, only if required by law, we would seek shareholder 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.
Selection of a target business and structuring of our initial
business combination
NASDAQ rules require that our initial business combination must
be with one or more target businesses that together have an aggregate 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. Our shareholders will be relying on the business judgment of
our Board of Directors, which has significant discretion in choosing the standard used to establish the fair market value of the
target or targets, and different methods of valuation may vary greatly in outcome from one another. Such standards used will be
disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
If our Board of Directors is not able to independently determine
the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm
or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent
accounting firm, with respect to the satisfaction of such criteria. We do not intend to purchase multiple businesses in unrelated
industries in conjunction with our initial business combination. Subject to this requirement, our management has virtually unrestricted
flexibility in identifying and selecting one or more prospective target businesses, although we are not 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 valued for purposes of the 80% of net
assets test.
To the extent we effect our initial business combination with
a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous
risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular
target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business, we have conducted
and will continue to conduct a thorough due diligence review which encompasses, among other things, meetings with incumbent management
and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information
which will be made available to us.
The time required to select and evaluate a target business and
to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable
with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business
with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the
funds we can use to complete another business combination.
Lack of business diversification
For an indefinite period of time after the completion of our
initial business combination, the prospects for our success may depend entirely on the future performance of a single business.
Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries,
it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line
of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination; and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited ability to evaluate the target’s management
team
Although we intend to closely scrutinize the management of a
prospective target business when evaluating the desirability of effecting our initial business combination with that business,
our assessment of the target business’s management may not prove to be correct. In addition, the future management may not
have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or
more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely
that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot
assure you that members of our management team will have significant experience or knowledge relating to the operations of the
particular target business.
We cannot assure you that any of our key personnel will remain
in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel
will remain with the combined company will be made at the time of our initial business combination.
Following 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 such additional managers will have the requisite skills, knowledge or experience necessary to enhance
the incumbent management.
Shareholders may not have the ability to approve our initial
business combination
We may conduct redemptions without a shareholder vote pursuant
to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek
shareholder approval for business or other legal reasons.
Under the NASDAQ’s listing rules, shareholder approval
would be required for our initial business combination if, for example:
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we issue ordinary shares that will be equal to or in excess of 20% of the number of Class A ordinary shares then outstanding (other than in a public offering);
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any of our directors, officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of ordinary shares could result in an increase in issued and outstanding ordinary shares or voting power of 5% or more; or
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the issuance or potential issuance of ordinary shares will result in our undergoing a change of control.
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Permitted purchases of our securities
In the event we seek shareholder approval of our initial business
combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our sponsor, directors, officers, advisors or their affiliates may purchase our Class A ordinary shares in privately negotiated
transactions or in the open market either prior to or following the completion of our initial business combination. There is no
limit on the number of shares such persons may purchase. However, they have no current commitments, plans or intentions to engage
in such transactions and have not formulated any terms or conditions for any such transactions. In the event our sponsor, directors,
officers, advisors or their affiliates determine to make any such purchases at the time of a shareholder vote relating to our initial
business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None
of the funds in the trust account will be used to purchase shares in such transactions. They will not make any such purchases when
they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by
Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such shareholder, although
still the record holder of our Class A ordinary shares is no longer the beneficial owner thereof and therefore agrees not to exercise
its redemption rights. We have adopted an insider trading policy which requires insiders to: (i) refrain from purchasing our ordinary
shares during certain blackout periods and when they are in possession of any material non-public information and (ii) to clear
all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases
pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size
of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan
or determine that such a plan is not necessary.
In the event that our sponsor, directors, officers, advisors
or their affiliates purchase Class A ordinary shares in privately negotiated transactions from public shareholders who have already
elected to exercise their redemption rights, such selling shareholders would be required to revoke their prior elections to redeem
their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender
offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however,
if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will
comply with such rules.
The purpose of such purchases would be to (i) vote such Class
A ordinary shares in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of
the business combination or (ii) to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement
would otherwise not be met. This may result in the completion of our initial business combination that may not otherwise have been
possible.
In addition, if such purchases are made, the public “float”
of our Class A ordinary shares may be reduced and the number of beneficial holders of our securities may be reduced, which may
make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors, advisors and/or their affiliates
anticipate that they may identify the shareholders with whom our sponsor, officers, directors, advisors or their affiliates may
pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption requests
submitted by shareholders following our mailing of proxy materials in connection with our initial business combination. To the
extent that our sponsor, officers, directors or their affiliates enter into a private purchase, they would identify and contact
only potential selling shareholders who have expressed their election to redeem their shares for a pro rata share of the trust
account or vote against the business combination. Such persons would select the shareholders from whom to acquire shares based
on the number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at
the time of purchase. The price per share paid in any such transaction may be different than the amount per share a public shareholder
would receive if it elected to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors,
advisors or their affiliates will only purchase our shares if such purchases comply with Regulation M under the Exchange Act and
the other federal securities laws.
Any purchases by our sponsor, officers, directors, advisors
and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent
such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under
Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in
order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors, advisors and/or their affiliates
will not make purchases of our ordinary shares if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption rights for public shareholders upon completion
of our initial business combination
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the
consummation of the initial business combination, including interest (which interest shall be net of taxes payable) divided by
the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account, as
June 30, 2020, was $69,057,508. The per-share amount we will distribute to investors who properly redeem their shares will not
be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder
shares and any public shares they may hold in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary shares upon the completion of our initial business combination either (i)
in connection with a shareholder meeting called to approve the business combination or (ii) by means of a tender offer. The decision
as to whether we will seek shareholder 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 shareholder approval under the law or stock exchange listing requirement. Under NASDAQ
rules, asset acquisitions and stock purchases would not typically require shareholder approval while direct mergers with our company
where we do not survive and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek
to amend our amended and restated memorandum and articles of association would require shareholder approval. We intend to conduct
redemptions without a shareholder vote pursuant to the tender offer rules of the SEC unless shareholder approval is required by
law or stock exchange listing requirement or we choose to seek shareholder approval for business or other legal reasons. So long
as we maintain a listing for our securities on NASDAQ, we are required to comply with NASDAQ rules.
If a shareholder vote is not required and we do not decide to
hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated memorandum and articles
of association:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers; and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial business combination,
we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in
the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer
rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange
Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares
which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public shares in an
amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001
upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If, however, shareholder approval of the transaction is required
by law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other legal reasons,
we will, pursuant to our amended and restated memorandum and articles of association:
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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
shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available
to such shareholders 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 shareholder vote even if we are not able to maintain our NASDAQ listing or
Exchange Act registration.
In the event that we seek shareholder approval of our initial
business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the
redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial
business combination only if a majority of the issued and outstanding ordinary shares voted are voted in favor of the business
combination. In such case, pursuant to the terms of a letter agreement entered into with us, our sponsor, officers and directors
have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor
of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination,
our sponsor and its permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote
thereon. Each public shareholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed
transaction. In addition, our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion
of a business combination.
Our amended and restated memorandum and articles of association
provide 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 (so that we are not subject to the SEC’s “penny stock”
rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to
an agreement relating to our initial business combination. For example, the proposed business combination may require: (i) cash
consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general
corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business
combination. In the event the aggregate cash consideration we would be required to pay for all Class A ordinary shares that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business
combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares,
and all Class A ordinary shares submitted for redemption will be returned to the holders thereof.
Limitation on redemption upon completion of our initial business
combination if we seek shareholder approval
Notwithstanding the foregoing, if we seek shareholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant
to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together
with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than
15% of the shares hold in the initial public offering (the “Excess Shares”). We believe this restriction will discourage
shareholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise
their redemption rights against a proposed business combination as a means to force us or our 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 shareholder holding more than an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the
then-current market price or on other undesirable terms. By limiting our shareholders’ ability to redeem no more than 15%
of the shares sold in our initial public offering our purchased thereafter through open market purchases, we believe we will limit
the ability of a small group of shareholders 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 shareholders’ ability to vote all of their
shares (including Excess Shares) for or against our initial business combination. Our sponsor, officers and directors have, pursuant
to a letter agreement entered into with us and waived their right to have any founder shares or public shares held by them redeemed
in connection with our initial business combination. Unless any of our other affiliates acquires founder shares through a permitted
transfer from an initial shareholder, and thereby becomes subject to the letter agreement, no such affiliate is subject to this
waiver. However, to the extent any such affiliate acquires public shares in our initial public offering or thereafter through open
market purchases, it would be a public shareholder and restricted from seeking redemption rights with respect to any Excess Shares.
Tendering share certificates in connection with a tender
offer or redemption rights
We may require our public shareholders seeking to exercise their
redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates
(if any) to our transfer agent prior to the date set forth in the tender offer documents, or up to two business days prior to the
vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares
to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System,
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 shareholders to satisfy such delivery requirements. Accordingly, a public shareholder would have from the time we send out
our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination
if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Pursuant
to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a shareholder vote,
a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect
that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice
of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it
is advisable for shareholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced
tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically
charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder.
However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such
delivery must be effectuated.
Any request to redeem such shares, once made, may be withdrawn
at any time up to the date set forth in the tender offer materials or the date of the shareholder meeting set forth in our proxy
materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of
redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply
request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed
to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial
business combination.
If our initial business combination is not approved or completed
for any reason, then our public shareholders who elected to exercise their redemption rights would not be entitled to redeem their
shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered
by public holders who elected to redeem their shares.
If our initial proposed business combination is not completed,
we may continue to try to complete a business combination with a different target by February 18, 2021 (or until November 18, 2021
if we extend the period of time to consummate a business combination by the full amount of time).
Redemption of public shares and liquidation if no initial
business combination
Our sponsor, officers and directors have agreed that we will
have until February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by
the full amount of time) to complete our initial business combination. If we are unable to complete our initial business combination
by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full
amount of time), we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (less up to $50,000 of interest to pay dissolution expenses (which
interest shall be net of taxes payable) divided by the number of then outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (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 shareholders and our Board of Directors, liquidate and dissolve, subject in each case to our obligations under
Cayman Islands 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 public warrants, public rights, private placement warrants or private placement
rights, which will expire worthless if we fail to complete our initial business combination within such time period.
Our sponsor, officers and directors have entered into a letter
agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect
to their founder shares if we fail to complete our initial business combination by February 18, 2021 (or until November 18, 2021
if we extend the period of time to consummate a business combination by the full amount of time). However, if our sponsor acquires
public shares after our initial public offering, it will be entitled to liquidating distributions from the trust account with respect
to such public shares if we fail to complete our initial business combination within such time period.
Our sponsor, officers and directors have agreed, pursuant to
a written letter agreement with us, that they will not propose any amendment to our amended and restated memorandum and articles
of association that would (i) modify the substance or timing of our obligation to redeem 100% of our public shares if we do not
complete our initial business combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate
a business combination by the full amount of time) or (ii) with respect to the other provisions relating to shareholders’
rights or pre-business combination activity, unless we provide our public shareholders with the opportunity to redeem their Class
A ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then
outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to
be less than $5,000,001 upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny
stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that
we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related
redemption of our public shares.
We expect to use the amounts held outside the trust account
($819,755 as of June 30, 2020) to pay for all costs and expenses associated with implementing our plan of dissolution, as well
as payments to any creditors, if we do not complete an initial business combination by February 18, 2021 (or until November 18,
2021 if we extend the period of time to consummate a business combination by the full amount of time), although we cannot assure
you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses
associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not
required to pay taxes, we may request the trustee to release to us an additional amount of such accrued interest to pay those costs
and expenses.
If we were to expend all of the net proceeds of our initial
public offering and the sale of the private placement units, other than the proceeds deposited in the trust account, and without
taking into account interest, if any, earned on the trust account, the per-share redemption amount received by shareholders upon
our dissolution would be approximately $10.00 (subject to increase of up to an additional $0.30 per unit in the event that our
sponsor elects to extend the period of time to consummate a business combination). The proceeds deposited in the trust account
could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public shareholders.
We cannot assure you that the actual per-share redemption amount received by shareholders will not be substantially less than $10.00.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all
creditors’ claims.
Although we have sought and will continue to seek to have all
vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we
do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the
trust account for the benefit of our public shareholders, there is no guarantee that they will execute such agreements or even
if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited
to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability
of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held
in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third
party that has not executed a waiver if management believes that such third party’s engagement would be significantly more
beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute
a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to
be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive
any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and
will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete
our initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with
our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may
be brought against us within the 10 years following redemption. Our sponsor has agreed that it will be liable to us if and to the
extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account,
due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes,
except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except
as to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party,
then our sponsor will not be responsible to the extent of any liability for such third-party claims. We have not independently
verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only
assets are securities of our company. None of our other officers will indemnify us for claims by third parties including, without
limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced
below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation
of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn
to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors
in exercising their business judgment may choose not to do so in any 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 substantially less than $10.00 per share.
We seek to reduce the possibility that our sponsor has to indemnify
the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent
auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right,
title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims
under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under
the Securities Act. We have access to use the amounts held outside the trust account ($819,755 as of June 30, 2020) to pay any
such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more
than approximately $50,000) but these amounts may be spent on expenses incurred as a result of being a public company or due diligence
expenses on prospective business combination candidates. In the event that we liquidate and it is subsequently determined that
the reserve for claims and liabilities is insufficient, shareholders who received funds from our trust account could be liable
for claims made by creditors.
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
shareholders. 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 shareholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by shareholders 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 shareholders. Furthermore, our Board of Directors may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to
claims of punitive damages, by paying public shareholders 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 shareholders will be entitled to receive funds from
the trust account only upon the earlier of (i) the completion of our initial business combination, (ii) the redemption of any public
shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association
to (A) modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination
by the full amount of time) or (B) with respect to any other provision relating to shareholders’ rights or pre-business combination
activity and (iii) the redemption of all of our public shares if we are unable to complete our initial business combination by
February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full
amount of time), subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind
to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination, a shareholder’s
voting in connection with the business combination alone will not result in a shareholder’s redeeming its shares to us for
an applicable pro rata share of the trust account. Such shareholder must have also exercised its redemption rights described above.
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association
contains certain requirements and restrictions relating to our initial public offering that apply to us until the consummation
of our initial business combination. If we seek to amend any provisions of our amended and restated memorandum and articles of
association relating to shareholders’ rights or pre-business combination activity, we will provide dissenting public shareholders
with the opportunity to redeem their public shares in connection with any such vote. Our sponsor, officers and directors have agreed
to waive any redemption rights with respect to their founder shares and public shares in connection with the completion of our
initial business combination. Specifically, our amended and restated memorandum and articles of association provides, among other
things, that:
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prior to the consummation of our initial business combination, we shall either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which shareholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) or (2) provide our public shareholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein;
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we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination;
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if our initial business combination is not consummated by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full amount of time), then our existence will terminate and we will distribute all amounts in the trust account; and
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prior to our initial business combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination.
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These provisions cannot be amended without the approval of holders
of at least two-thirds of our ordinary shares. In the event we seek shareholder approval in connection with our initial business
combination, our amended and restated memorandum and articles of association will provide that we may consummate our initial business
combination only if approved by a majority of the ordinary shares voted by our shareholders at a duly held shareholders meeting.
Competition
In identifying, evaluating and selecting a target business for
our initial business combination, we have encountered and will continue to encounter to 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 is limited
by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target
business. Furthermore, our obligation to pay cash in connection with our public shareholders who exercise their redemption rights
may reduce the resources available to us for our initial business combination, and our outstanding warrants, rights and unit purchase
option 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.
Conflicts of Interest
Each of our officers and directors presently has, and in the
future any of our directors and our officers may have additional, fiduciary or contractual obligations to other entities pursuant
to which such officer or director is or will be required to present acquisition opportunities to such entity. Accordingly, subject
to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes aware of an acquisition opportunity
which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, he or she will need to
honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity, and only present
it to us if such entity rejects the opportunity. Our amended and restated memorandum and articles of association provide that,
subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered
to any officer or director unless such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue. We do not believe, however, that any fiduciary duties or contractual obligations of our directors
or officers would materially undermine our ability to complete our business combination.
Indemnity
Our sponsor has agreed that it will be liable to us if and to
the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we
have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as
to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our
sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified
whether our sponsor has sufficient funds to satisfy their indemnity obligations and believe that our sponsor’s only assets
are securities of our company. We have not asked our sponsor to reserve for such obligations.
Employees
We have two (2) officers. Members of our management team are
not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary
to our affairs until we have completed our initial business combination. The amount of time that our officers or any other members
of our management team devote in any time period will vary based on whether a target business has been selected for our initial
business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We have registered our units, Class A ordinary shares, warrants
and rights under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and
current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial
statements audited and reported on by our independent registered public auditors.
We will provide shareholders with audited financial statements
of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to shareholders to
assist them in assessing the target business. These financial statements may be required to be prepared in accordance with, or
be reconciled to, U.S. GAAP, or IFRS, depending on the circumstances and the historical financial statements may be required to
be audited in accordance with the 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 complete our initial business combination within the prescribed time frame. While this may limit the
pool of potential acquisition candidates, we do not believe that this limitation will be material.
We are required to evaluate our internal control procedures
for the fiscal year ending June 30, 2020 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated
filer or an accelerated filer will we be required to have our internal control procedures audited. A target company may not be
in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the
internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary
to complete any such acquisition.
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 shareholder approval of any golden parachute
payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active
trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b)
in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the prior
December 31, 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 carefully consider all of the risks described
below, together with the other information contained in this report, including the financial statements, before making a decision
to invest in our units. If any of the following risks occur, our business, financial condition or operating results may be materially
and adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your
investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation
with respect to us and our business.
Our warrants are accounted for as liabilities
and changes in the value of our warrants could have a material effect on our financial results.
On April 12, 2021, the SEC Staff expressed its
view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities instead of equity
on the SPAC’s balance sheet. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 3,450,000 public
warrants and 125,250 private placement warrants, and determined to classify the warrants as derivative liabilities measured at fair value,
with changes in fair value reported in our statement of operations for each reporting period.
As a result, included on our balance sheet as
of June 30, 2020 contained elsewhere in this Amendment are derivative liabilities related to embedded features contained within our warrants.
ASC 815-40 provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash
gain or loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring
fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside
of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants
each reporting period and that the amount of such gains or losses could be material.
We identified a material weakness in our
internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results
of operations and financial condition accurately and in a timely manner.
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management also
evaluates the effectiveness of our internal controls and we will disclose any changes and material weaknesses identified through such
evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis.
As described elsewhere in this report, we identified
a material weakness in our internal control over financial reporting related to the classification of our warrants as equity instead of
liabilities. On June 21, 2021, our audit committee authorized management to restate our audited financial statements for the fiscal year
ended June 30, 2020, and, accordingly, management concluded that the control deficiency that resulted in the incorrect classification
of our warrants constituted a material weakness as of June 30, 2020. This material weakness resulted in a material misstatement of our
warrant liabilities, change in fair value of warrant liabilities, additional paid-in capital, accumulated deficit and related financial
disclosures for the affected periods.
We have implemented a remediation plan, described
under Item 9A, Controls and Procedures, to remediate the material weakness surrounding our historical presentation of our warrants but
can give no assurance that the measures we have taken will prevent any future material weaknesses or deficiencies in internal control
over financial reporting. Even though we have strengthened our controls and procedures, in the future those controls and procedures may
not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.
We may face litigation and other risks as
a result of the material weakness in our internal control over financial reporting.
Following the issuance of the SEC Statement, our
management and our audit committee concluded that it was appropriate to restate our previously issued audited financial statements as
of June 30, 2020 and for the year ended June 30, 2020. As part of the restatement, we identified a material weakness in our internal controls
over financial reporting.
As a result of such material weakness, the restatement related to the
accounting for the warrants, and other matters raised or that may in the future be raised by the SEC, we face potential litigation or
other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims
arising from the restatement and material weakness in our internal control over financial reporting. As of the date of this report, we
have no knowledge of any such litigation or dispute. However, we can provide no assurance that such litigation or dispute will not arise
in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results
of operations and financial condition or our ability to complete a business combination.
We are an early stage company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are an early stage company incorporated under the laws of
the Cayman Islands with no operating results, and no revenues. Because we lack significant operating history, you have little basis
upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or
more target businesses. We may be unable to complete our initial business combination. If we fail to complete our initial business
combination, we will never generate any operating revenues.
Our public shareholders may not be afforded an opportunity
to vote on our proposed business combination, which means we may complete our initial business combination even though a majority
of our public shareholders do not support such a combination.
We may not hold a shareholder vote to approve our initial business
combination unless the business combination would require shareholder approval under applicable Cayman Islands law or the rules
of NASDAQ or if we decide to hold a shareholder vote for business or other reasons. Examples of transactions that would not ordinarily
require shareholder approval under Cayman Islands law or the rules of NASDAQ include asset acquisitions and share purchases, while
transactions such as direct mergers with our company or transactions where we issue more than 20% of our outstanding shares would
require shareholder approval. For instance, NASDAQ rules currently allow us to engage in a tender offer in lieu of a shareholder
meeting but would still require us to obtain shareholder 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 were structuring a business combination
that required us to issue more than 20% of our outstanding shares, we would seek shareholder approval of such business combination.
Except as required by law or NASDAQ rules, the decision as to whether we will seek shareholder approval of a proposed business
combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would
otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial business combination even if holders
of a majority of the issued and outstanding ordinary shares do not approve of the business combination we consummate.
If we seek shareholder approval of our initial business
combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination, regardless
of how our public shareholders vote.
Unlike other blank check companies in which the initial shareholders
agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in connection with
an initial business combination, our sponsor, officers and directors have agreed (and their permitted transferees will agree),
pursuant to the terms of a letter agreement entered into with us, to vote any founder shares held by them, as well as any public
shares purchased after our initial public offering, in favor of our initial business combination. Our sponsor and its permitted
transferees currently beneficially own approximately 20% of our issued and outstanding ordinary shares. As a result, in addition
to our initial shareholder’s founder shares and private placement shares, we would need only 2,427,751, or 35.2%, of the
6,900,000 public shares sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares
are voted and all shares to be issued to Maxim and/or its designees are issued and outstanding and voted in favor of the business
combination) or 191,626, or 2.8%, of the 6,900,000 public shares sold in our initial public offering to be voted in favor of a
transaction (assuming only a quorum is present at such meeting held to vote on our initial business combination and all shares
to be issued to Maxim and/or its designees are issued and outstanding and voted in favor of the business combination) in order
to have our initial business combination approved. Accordingly, if we seek shareholder approval of our initial business combination,
it is more likely that the necessary shareholder approval will be received than would be the case if such persons agreed to vote
their founder shares in accordance with the majority of the votes cast by our public shareholders.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek shareholder approval of the business combination.
You may not be provided with an opportunity to evaluate the
specific merits or risks of one or more target businesses. Since our Board of Directors may complete a business combination without
seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the business combination, unless
we seek such shareholder approval. Accordingly, if we do not seek shareholder approval, your only opportunity to affect the investment
decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time
(which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we
describe our initial business combination.
The ability of our public shareholders to redeem their
shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction
agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of
cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and,
as a result, would not be able to proceed with the business combination. Furthermore, we will only redeem our public shares so
long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to
the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in
the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests
would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition,
each as described above, we would not proceed with such redemption and the related business combination and may instead search
for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a business combination transaction with us.
The ability of our public shareholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure.
At the time we enter into an agreement for our initial business
combination, we will not know how many shareholders may exercise their redemption rights, and therefore we will need to structure
the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to
have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements,
or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially
expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for
third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness
at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provisions of the
Class B ordinary shares result in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of
the Class B shares at the time of the initial business combination. The above considerations may limit our ability to complete
the most desirable business combination available to us or optimize our capital structure.
The ability of our public shareholders 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 shares.
If our initial business combination agreement requires us to
use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is
unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are
in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares 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 shares in the open market.
The requirement that we complete our initial business
combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination
and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for
our shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination will be aware that we must complete our initial business combination by February 18, 2021 (or
until November 18, 2021 if we extend the period of time to consummate a business combination by the full amount of time). Consequently,
such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our
initial business combination with that particular target business, we may be unable to complete our initial business combination
with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited
time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more
comprehensive investigation.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate, in which case our public shareholders may only receive $10.00 per share or less than such
amount in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and our warrants and rights will
expire worthless.
Our sponsor, officers and directors have agreed that we must
complete our initial business combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate
a business combination by the full amount of time). We may not be able to find a suitable target business and complete our initial
business combination within such time period. If we have not completed our initial business combination within such time period,
we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest
to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (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
shareholders and our Board of Directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law
to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders may only
receive $10.00 per share, or less than such amount in certain circumstances, based on the balance of our trust account ($69,057,508
as of June 30, 2020), and our warrants and rights will expire worthless.
If we seek shareholder approval of our initial business
combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares from public shareholders,
which may influence a vote on a proposed business combination and reduce the public “float” of our Class A ordinary
shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, officers or advisors, or their respective affiliates may purchase shares in privately negotiated transactions or in
the open market either prior to or following the completion of our initial business combination, although they are under no obligation
to do so. Such a purchase may include a contractual acknowledgement that such shareholder, 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 advisors, or their respective affiliates purchase our shares in privately negotiated transactions
from public shareholders who have already elected to exercise their redemption rights, such selling shareholders would be required
to revoke their prior elections to redeem their shares. The price per share paid in any such transaction may be different than
the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business
combination. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase
the likelihood of obtaining shareholder approval of the business combination or to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In addition, if such purchases are made, the public “float”
of our Class A ordinary shares and the number of beneficial holders of our securities may be reduced, possibly making it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder 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 shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder 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. In the event that a shareholder fails to comply
with these procedures, its shares may not be redeemed.
You will not have any rights or interests in funds from
the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell
your public shares, warrants or rights, potentially at a loss.
Our public shareholders will be entitled to receive funds from
the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption
of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles
of association to (A) modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate
a business combination by the full amount of time) or (B) with respect to any other provision relating to shareholders’ rights
or pre-business combination activity and (iii) the redemption of all of our public shares if we are unable to complete our initial
business combination by February 18, 2021, subject to applicable law and as further described herein. In no other circumstances
will a public shareholder 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 or rights, potentially at a loss.
NASDAQ may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our securities are listed on NASDAQ. We cannot assure you that
our securities will continue to be listed on NASDAQ in the future or prior to our initial business combination. In order to continue
listing our securities on NASDAQ prior to our initial business combination, we must maintain certain financial, distribution and
stock price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum
number of holders of our securities (generally 300 public holders). Additionally, in connection with our initial business combination,
we will be required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous than NASDAQ’s
continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance, our stock
price would generally be required to be at least $4.00 per share, our shareholders’ equity would generally be required to
be at least $5.0 million and we would be required to have a minimum of 300 round lot holders of our securities (with at least 50%
of such round lot holders holding securities with a market value of at least $2,500). We cannot assure you that we will be able
to meet those initial listing requirements at that time.
If NASDAQ delists our securities from trading on its exchange
and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on
an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A ordinary shares is a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement Act of 1996, which
is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as
“covered securities.” Since our units, Class A ordinary shares, warrants and rights are listed on NASDAQ, they are
covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow
the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the
states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these
powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state
securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder
the sale of securities of blank check companies in their states. Further, if we were no longer listed on NASDAQ, our securities
would not be covered securities and we would be subject to regulation in each state in which we offer our securities, including
in connection with our initial business combination.
Our shareholders will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of our initial public offering and the
sale of the private placement units are intended to be used to complete an initial business combination with a target business
that was not then 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 $5,000,000 at the time of our initial public offering, we are exempt from
rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be
afforded the benefits or protections of those rules. Among other things, this means our units were immediately tradable and we
have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if our
initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in
the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of
an initial business combination.
If we seek shareholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess
of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of
the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares
sold in our initial public offering, which we refer to as the “Excess Shares.” However, we would not be restricting
our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination
and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be
required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are
unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share (as
of June 30, 2020), or less in certain circumstances, on our redemption, and our warrants and rights will expire worthless.
We expect to encounter intense competition from other entities
having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to
acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will
be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses
we could potentially acquire with the net proceeds of our initial public offering and the sale of the private placement units,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target
businesses. Furthermore, if we are obligated to pay cash for the Class A ordinary shares redeemed and, in the event we seek shareholder
approval of our initial business combination, we make purchases of our Class A ordinary shares, potentially reducing the resources
available to us for our initial business combination. 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 shareholders may
receive only approximately $10.00 per share (as of June 30, 2020), or less than such amount in certain circumstances, based on
the balance of our trust account ($69,057,508 as of June 20, 2020), and our warrants and rights will expire worthless. In certain
circumstances, our public shareholders may receive less than $10.00 per share on the redemption of their shares.
If the net proceeds of our initial public offering and
the sale of the private placement units not being held in the trust account are insufficient to allow us to operate until February
18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full amount of
time), we may be unable to complete our initial business combination.
The funds available to us outside of the trust account may not
be sufficient to allow us to operate until February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate
a business combination by the full amount of time), assuming that our initial business combination is not completed during that
time. We expect to incur significant costs in pursuit of our acquisition plans. Our affiliates are not obligated to make loans
to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses.
Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
We believe that the funds currently available to us outside
of the trust account, will be sufficient to allow us to operate until February 18, 2021 (or until November 18, 2021 if we extend
the period of time to consummate a business combination by the full amount of time); however, we cannot assure you that our estimate
is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist
us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions
with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination,
although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive
exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise),
we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. Consequently,
if we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per
share, or less than such amount in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and
our warrants and rights will expire worthless. In certain circumstances, our public shareholders may receive less than $10.00 per
share on the redemption of their shares.
If the net proceeds of our initial public offering and
the sale of the private 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 these loans, we may not be able to complete our initial business combination.
As of June 30, 2020, we had $819,755 held outside the trust
account that is available to us 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 affiliates is under any obligation to advance funds to us in such
circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon
completion of our initial business combination. 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. If we are unable
to complete our initial business combination, our public shareholders may only receive $10.00 per share, or less than such amount
in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and our warrants and rights will expire
worthless.
Subsequent to the completion of our initial business combination,
we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant
negative effect on our financial condition, results of operations and our share price, which could cause you to lose some or all
of your investment.
Even if we conduct extensive due diligence on a target business
with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that
factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result
in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously
known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash
items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants
to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination
debt financing. Accordingly, any shareholders who choose to remain shareholders following the business combination could suffer
a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00
per share.
Our placing of funds in the trust account may not protect those
funds from third-party claims against us. Although we have sought and will continue to seek to have all vendors, service providers
(other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit
of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not
be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order
to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party
refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis
of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if
management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to
the extent any claims by a vendor (other than our independent auditors) for services rendered or products sold to us, or a prospective
target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account
to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of the date
of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which
may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access
to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to
be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party
claims. We have not independently verified whether our sponsor has sufficient funds to satisfy their indemnity obligations and
believe that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available
to satisfy those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently
set aside to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the
funds available for our initial business combination and redemptions could be reduced to less than $10.00 per public share (subject
to increase of up to an additional $0.30 per share in the event that our sponsor elects to extend the period of time to consummate
a business combination by the full nine months). In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to
our public shareholders.
In the event that the proceeds in the trust account are reduced
below the lesser of (i) $10.00 per public share or (ii) such lesser amount per share held in the trust account as of the date of
the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which
may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors
in exercising their business judgment may choose not to do so 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
shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust account
to our public shareholders, 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 shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed,
any distributions received by shareholders 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 shareholders. In addition, our Board of Directors may be viewed as having breached its fiduciary duty
to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
shareholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account
to our public shareholders, 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 shareholders and the per-share amount
that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to
our public shareholders, 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 shareholders. To the extent any bankruptcy claims
deplete the trust account, the per-share amount that would otherwise be received by our shareholders 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.
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In addition, we may have imposed upon us burdensome requirements,
including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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We do not believe that our principal activities subject us to
the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government
treasury bills with a maturity of 180 days or less or in money market funds investing solely in United States Treasuries and meeting
certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted
to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment
Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens
would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination.
If we are unable to complete our initial business combination, our public shareholders may only receive $10.00 per share, or less
than such amount in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and our warrants and
rights will expire worthless.
Changes in laws or regulations, or a failure to comply
with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted by national,
regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance
with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect
on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as
interpreted and applied, could have a material adverse effect on our business and results of operations.
If we are unable to consummate our initial business combination
by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full
amount of time), our public shareholders may be forced to wait beyond February 18, 2021 (or until November 18, 2021 if we extend
the period of time to consummate a business combination by the full amount of time) before redemption from our trust account.
If we are unable to consummate our initial business combination
by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full
amount of time), we will distribute the aggregate amount then on deposit in the trust account (less up to $50,000 of the net interest
earned thereon to pay dissolution expenses), pro rata to our public shareholders by way of redemption and cease all operations
except for the purposes of winding up of our affairs, as further described herein. Any redemption of public shareholders from the
trust account shall be effected automatically by function of our amended and restated memorandum and articles of association prior
to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro
rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply
with the applicable provisions of the Companies Law. In that case, investors may be forced to wait beyond February 18, 2021 (or
until November 18, 2021 if we extend the period of time to consummate a business combination by the full amount of time) before
the redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of
the proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or
liquidation unless we consummate our initial business combination prior thereto or an amendment is made to our amended and restated
memorandum and articles of association to modify the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business combination by the full
amount of time) and only then in cases where investors have sought to redeem their Class A ordinary shares. Only upon our redemption
or any liquidation or aforementioned amendment to our amended and restated memorandum and articles of association will public shareholders
be entitled to distributions if we are unable to complete our initial business combination.
Our shareholders may be held liable for claims by third
parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any
distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors may be viewed as having
breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and
our company to claims, by paying public shareholders 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. We and our directors and officers who knowingly and willfully
authorized or permitted any distribution to be paid out of our trust account while we were unable to pay our debts as they fall
due in the ordinary course of business would be guilty of an offense and may be liable to a fine of up to $18,292 and to imprisonment
for five years in the Cayman Islands.
We may not hold an annual meeting of shareholders until
after the consummation of our initial business combination. Our public shareholders will not have the right to elect directors
prior to the consummation of our initial business combination.
In accordance with NASDAQ corporate governance requirements,
we are not required to hold an annual meeting until no later than one full year after our first fiscal year end following our listing
on the NASDAQ (or until June 30, 2021). There is no requirement under the Companies Law for us to hold annual general meetings
in order to elect directors. Until we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity
to discuss company affairs with management. In addition, as holders of our Class A ordinary shares, our public shareholders will
not have the right to vote on the election of directors prior to consummation of our initial business combination.
We have not registered the Class A ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not
be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
except on a cashless basis and potentially causing such warrants to expire worthless.
We have not registered the Class A ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the
warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of
our initial business combination, we will use our best efforts to file, and within 60 business days following our initial business
combination to have declared effective, a registration statement covering such shares and maintain a current prospectus relating
to the Class A ordinary shares issuable upon exercise of the warrants, until the expiration of the warrants in accordance with
the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events
arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial
statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares
issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise
their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be
obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise
is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available. Notwithstanding
the foregoing, if a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective
within a specified period following the consummation of our initial business combination, warrant holders may, until such time
as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration
statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided
that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise
their warrants on a cashless basis. We will use our best efforts to register or qualify the shares under applicable blue sky laws
to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying
the warrants under applicable state securities laws and no exemption is available. If the issuance of the shares upon exercise
of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of units will have paid the full unit purchase price solely for the Class A ordinary shares
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 upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or
we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares under
the blue sky laws of the state of residence in those states in which the warrants were offered by us in our initial public offering.
The grant of registration rights to our sponsor and holders
of our private placement units may make it more difficult to complete our initial business combination, and the future exercise
of such rights may adversely affect the market price of our Class A ordinary shares.
Pursuant to the agreement entered into concurrently with the
issuance and sale of the securities in our initial public offering, our initial shareholders and their permitted transferees can
demand that we register the private placement rights, the Class A ordinary shares issuable upon conversion of the private placement
rights, the private placement warrants, the Class A ordinary shares issuable upon exercise of the private placement warrants, the
Class A ordinary shares issuable upon conversion of the founder shares, the Class A ordinary shares included in the private placement
units, and holders of units that may be issued upon conversion of working capital loans may demand that we register such Class
A ordinary shares, warrants, rights or the Class A ordinary shares issuable upon exercise of such warrants and conversion of such
rights. Maxim or its permitted transferees may demand that we register the units underlying the unit purchase option being issued
to the underwriters of our initial public offering. We will bear the cost of registering these securities. The registration and
availability of such a significant number of securities for trading in the public market may have an adverse effect on the market
price of our Class A ordinary shares. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the shareholders of the target business may increase the equity stake they
seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A
ordinary shares that is expected when the Class A ordinary shares owned by our sponsor, holders of our private placement units
or holders of our working capital loans or their respective permitted transferees are registered.
Because we are not limited to a particular industry or
any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits
or risks of any particular target business’s operations.
We may pursue acquisition opportunities in any industry or sector.
However, we are not, under our amended and restated memorandum and articles of association, permitted to effectuate our initial
business combination with another blank check company or similar company with nominal operations. To the extent we complete our
initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For
example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we
may be affected by the risks inherent in the business and operations of a financially unstable entity. Although our officers and
directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore,
some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks
will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be
more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any shareholders who choose to remain shareholders following the business combination could suffer a reduction in the value of
their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them,
or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement
relating to the business combination contained an actionable material misstatement or material omission.
Past performance by our management team and their respective
affiliates may not be indicative of future performance of an investment in us.
Information regarding performance by, or businesses associated
with, our management team and their affiliates is presented for informational purposes only. Past performance by our management,
including their affiliates’ past performance, 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 and their affiliates as indicative of our future performance and you may
lose all or part of your invested capital. Additionally, in the course of their respective careers, members of our management team
have been involved in businesses and deals that were unsuccessful. Our officers and directors have not had management experience
with blank check companies or special purpose acquisition corporations in the past.
We may seek acquisition opportunities in industries or
sectors that may be outside of our management’s areas of expertise.
We will consider a business combination outside of our management’s
areas of expertise if a business combination candidate is presented to us and we determine that such candidate offers an attractive
acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information
contained in this report regarding the areas of our management’s expertise would not be relevant to an understanding of the
business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors. Accordingly, any shareholders who choose to remain shareholders following our initial business combination could
suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with
a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines
for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that
does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that
does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of shareholders 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 shareholder approval of the transaction is required by law, or we decide to
obtain shareholder approval for business or other legal reasons, it may be more difficult for us to attain shareholder 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 shareholders may receive only approximately $10.00 per share, or less
than such amount in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and our warrants and
rights will expire worthless.
We may seek acquisition opportunities with a financially
unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with
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 volatile revenues or earnings and difficulties
in obtaining and retaining key personnel. Although our officers and directors 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 or from an independent accounting firm, and consequently, you may have no assurance from an independent source
that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our business combination with an affiliated
entity, or our Board of Directors cannot independently determine the fair market value of the target business or businesses, we
are not required to obtain an opinion from an independent investment banking firm or another independent firm that commonly renders
valuation opinions for the type of company we are seeking to acquire or from an independent accounting firm that the price we are
paying for a target is fair to our company from a financial point of view. If no opinion is obtained, our shareholders 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. However, if our Board of Directors is unable to determine the fair value
of an entity with which we seek to complete an initial business combination based on such standards, we will be required to obtain
an opinion.
We may issue additional Class A ordinary or preference
shares to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares at a ratio greater than
one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended
and restated memorandum and articles of association. Any such issuances would dilute the interest of our shareholders and likely
present other risks.
Our amended and restated memorandum and articles of association
authorizes the issuance of up to 47,000,000 Class A ordinary shares, par value $0.001 per share, 2,000,000 Class B ordinary shares,
par value $0.001 per share and 1,000,000 undesignated preference shares, par value $0.001 per share. As of June 30, 2020, there
were 35,490,200 and 275,000 authorized but unissued Class A and Class B ordinary shares available, respectively, for issuance,
which amount takes into account shares reserved for issuance upon exercise of outstanding warrants and conversion of our outstanding
rights but not upon conversion of the Class B ordinary shares. Class B ordinary shares are convertible into Class A ordinary shares,
initially at a one-for-one ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles
of association. There are no preference shares issued and currently outstanding.
We may issue a substantial number of additional ordinary shares,
and may issue preference shares, in order to complete our initial business combination (including pursuant to any specified future
issuance) or under an employee incentive plan after completion of our initial business combination. We may also issue Class A ordinary
shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one at the time of our initial business combination
as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association. However,
our amended and restated memorandum and articles of association provide, among other things, that prior to our initial business
combination, we may not issue additional ordinary shares that would entitle the holders thereof to (i) receive funds from the trust
account or (ii) vote on any initial business combination. The issuance of additional ordinary shares or preference shares:
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may significantly dilute the equity interest of investors in our initial public offering;
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may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;
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could cause a change in control if a substantial number of ordinary shares 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, ordinary shares, warrants and/or rights.
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We may be a passive foreign investment company, or “PFIC,”
which could result in adverse U.S. federal income tax consequences to U.S. investors.
If we are determined to be a PFIC (under the rules described
below) for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined below) of
our Class A ordinary shares, warrants or rights, the U.S. Holder may be subject to adverse U.S. federal income tax consequences
and may be subject to additional reporting requirements. The term “U.S. Holder” means a beneficial owner of Class A
ordinary shares or warrants who or that is for U.S. federal income tax purposes: (i) an individual citizen or resident of the United
States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) that is created
or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District
of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source or
(iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust
and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid
election to be treated as a U.S. person.
A foreign (i.e., non-U.S.) corporation will be a PFIC for U.S.
tax purposes if at least 75% of its gross income in a taxable year, including its pro rata share of the gross income of any corporation
in which it is considered to own at least 25% of the shares by value, is passive income. Alternatively, a foreign corporation will
be a PFIC if at least 50% of its assets in a taxable year of the foreign corporation, ordinarily determined based on fair market
value and averaged quarterly over the year, including its pro rata share of the assets of any corporation in which it is considered
to own at least 25% of the shares by value, are held for the production of, or produce, passive income. Passive income generally
includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or
business) and gains from the disposition of passive assets.
Because we are a blank check company, with no current active
business, we believe that it is likely that we will meet the PFIC asset or income test for our current taxable year. However, pursuant
to a start-up exception, a corporation will not be a PFIC for the first taxable year the corporation has gross income (the “start-up
year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a
PFIC for either of the two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either
of those years. The applicability of the start-up exception to us will not be known until after the close of our current taxable
year. After the acquisition of a company or assets in a business combination, we may still meet one of the PFIC tests depending
on the timing of the acquisition and the amount of our passive income and assets as well as the passive income and assets of the
acquired business. If the company that we acquire in a business combination is a PFIC, then we will likely not qualify for the
start-up exception and will be a PFIC for our current taxable year. Our actual PFIC status for our current taxable year or any
future taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance
with respect to our status as a PFIC for our current taxable year or any future taxable year.
If we are determined to be a PFIC for any taxable year (or portion
thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary shares or warrants and, in the case of
our Class A ordinary shares, the U.S. Holder did not make either a timely qualified electing fund (“QEF”) election
for our first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) Class A ordinary shares or a timely
“mark to market” election, each as described below, such holder generally will be subject to special rules with respect
to:
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any gain recognized by the U.S. Holder on the sale or other disposition of its Class A ordinary shares or warrants; and
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any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for the Class A ordinary shares).
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the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Class A ordinary shares and warrants (as applicable);
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the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which we are a PFIC, will be taxed as ordinary income;
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the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and
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the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other taxable year of the U.S. Holder.
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In general, if we are determined to be a PFIC, a U.S. Holder
may avoid the PFIC tax consequences described above in respect to our Class A ordinary shares (but not our warrants) by making
a timely QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term capital
gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed, in the
taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate election
to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes will be subject
to an interest charge.
A U.S. Holder may not make a QEF election with respect to its
warrants to acquire our Class A ordinary shares. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other
than upon exercise of such warrants), any gain recognized generally will be subject to the special tax and interest charge rules
treating the gain as an excess distribution, as described above, if we were a PFIC at any time during the period the U.S. Holder
held the warrants. If a U.S. Holder that exercises such warrants properly makes a QEF election with respect to the newly acquired
Class A ordinary shares (or has previously made a QEF election with respect to our Class A ordinary shares), the QEF election will
apply to the newly acquired Class A ordinary shares, but the adverse tax consequences relating to PFIC shares, adjusted to take
into account the current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired
Class A ordinary shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the
period the U.S. Holder held the warrants), unless the U.S. Holder makes a purging election. The purging election creates a deemed
sale of such shares at their fair market value. The gain recognized by the purging election will be subject to the special tax
and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election,
the U.S. Holder will have a new basis and holding period in the Class A ordinary shares acquired upon the exercise of the warrants
for purposes of the PFIC rules.
The QEF election is made on a shareholder-by-shareholder basis
and, once made, can be revoked only with the consent of the IRS. A QEF election may not be made with respect to our warrants. A
U.S. Holder generally makes a QEF election by attaching a completed IRS Form 8621 (Return by a Shareholder of a Passive Foreign
Investment Company or Qualified Electing Fund), including the information provided in a PFIC annual information statement, to a
timely filed U.S. federal income tax return for the tax year to which the election relates. Retroactive QEF elections generally
may be made only by filing a protective statement with such return and if certain other conditions are met or with the consent
of the IRS. U.S. Holders should consult their own tax advisors regarding the availability and tax consequences of a retroactive
QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election,
a U.S. Holder must receive a PFIC annual information statement from us. If we determine we are a PFIC for any taxable year, we
will endeavor to provide to a U.S. Holder such information as the IRS may require, including a PFIC annual information statement,
in order to enable the U.S. Holder to make and maintain a QEF election. However, there is no assurance that we will have timely
knowledge of our status as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our
Class A ordinary shares, and the special tax and interest charge rules do not apply to such shares (because of a timely QEF election
for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the PFIC taint
pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares generally will
be taxable as capital gain and no interest charge will be imposed under the PFIC rules. As discussed above, U.S. Holders of a QEF
are currently taxed on their pro rata shares of its earnings and profits, whether or not distributed. In such case, a subsequent
distribution of such earnings and profits that were previously included in income generally should not be taxable as a dividend
to such U.S. Holders. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in
income, and decreased by amounts distributed but not taxed as dividends, under the above rules.
Although a determination as to our PFIC status will be made
annually, an initial determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held
Class A ordinary shares or warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years.
A U.S. Holder who makes the QEF election discussed above for our first taxable year as a PFIC in which the U.S. Holder holds (or
is deemed to hold) our Class A ordinary shares, however, will not be subject to the PFIC tax and interest charge rules discussed
above in respect to such shares. In addition, such U.S. Holder will not be subject to the QEF inclusion regime with respect to
such shares for any taxable year of us that ends within or with a taxable year of the U.S. Holder and in which we are not a PFIC.
On the other hand, if the QEF election is not effective for each of our taxable years in which we are a PFIC and the U.S. Holder
holds (or is deemed to hold) our Class A ordinary shares, the PFIC rules discussed above will continue to apply to such shares
unless the holder makes a purging election, as described above, and pays the tax and interest charge with respect to the gain inherent
in such shares attributable to the pre-QEF election period.
Alternatively, if a U.S. Holder, at the close of its taxable
year, owns shares in a PFIC that are treated as marketable stock, the U.S. Holder may make a mark-to-market election with respect
to such shares for such taxable year. If the U.S. Holder makes a valid mark-to-market election for the first taxable year of the
U.S. Holder in which the U.S. Holder holds (or is deemed to hold) Class A ordinary shares in us and for which we are determined
to be a PFIC, such holder generally will not be subject to the PFIC rules described above in respect to its Class A ordinary shares.
Instead, in general, the U.S. Holder will include as ordinary income each year the excess, if any, of the fair market value of
its Class A ordinary shares at the end of its taxable year over the adjusted basis in its Class A ordinary shares. The U.S. Holder
also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its Class A ordinary shares
over the fair market value of its Class A ordinary shares at the end of its taxable year (but only to the extent of the net amount
of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Class A ordinary
shares will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable
disposition of the Class A ordinary shares will be treated as ordinary income. Currently, a mark-to-market election likely may
not be made with respect to our warrants.
The mark-to-market election is available only for stock that
is regularly traded on a national securities exchange that is registered with the Securities and Exchange Commission, including
the Nasdaq Capital Market, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure that the market
price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding the availability
and tax consequences of a mark-to-market election in respect to our Class A ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary
that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and
generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or
dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an
interest in the lower-tier PFIC. We will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that
may be required to make or maintain a QEF election with respect to the lower-tier PFIC. However, there is no assurance that we
will have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any
such lower-tier PFIC and thus there can be no assurance we will be able to cause the lower-tier PFIC to provide the required information.
U.S. Holders are urged to consult their own tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC
during any taxable year of the U.S. Holder, may have to file an IRS Form 8621(whether or not a QEF or market-to-market election
is made) and such other information as may be required by the U.S. Treasury Department.
The rules dealing with PFICs and with the QEF and mark-to-market
elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders
of our Class A ordinary shares or warrants should consult their own tax advisors concerning the application of the PFIC rules to
our Class A ordinary shares or warrants under their particular circumstances.
We may reincorporate in another jurisdiction in connection
with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination
and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target company
or business is located. The transaction may require a shareholder to recognize taxable income in the jurisdiction in which the
shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend to make
any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes with
respect to their ownership of us after the reincorporation.
Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public shareholders may only receive approximately
$10.00 per share, or less than such amount in certain circumstances, based on the balance of our trust account (as of June 30,
2020), and our warrants and rights will expire worthless.
The investigation of each specific target business and the negotiation,
drafting and execution of relevant agreements, disclosure documents and other instruments requires substantial management time
and attention and substantial costs for accountants, attorneys and others. The costs incurred up to the point that we decide not
to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore,
if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any
number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public shareholders may only receive approximately $10.00 per share, or less
than such amount in certain circumstances, based on the balance of our trust account (as of June 30, 2020), and our warrants and
rights will expire worthless.
We are dependent upon our officers and directors and their
departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of
individuals and, in particular, Yubao Li and our other officers and directors. We believe that our success depends on the continued
service of our officers and directors, at least until we have completed our initial business combination. In addition, our officers
and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest
in allocating management time among various business activities, including identifying potential business combinations and monitoring
the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors
or officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on
us.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join
us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully effect our initial business combination
is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently
be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions
following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure
you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar
with such requirements.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after
the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection
with the 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 completion of the business combination. The personal and financial interests of such individuals
may influence their motivation in identifying and selecting a target business, subject to his or her fiduciary duties under Cayman
Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial business
combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial
business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions
with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business
combination.
In addition, the officers and directors of an initial business
combination candidate may resign upon completion of our initial business combination. The departure of an initial business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot
be ascertained at this time. Although we contemplate that certain members of an initial business combination candidate’s
management team will remain associated with the initial business combination candidate following our initial business combination,
it is possible that members of the management of an initial business combination candidate will not wish to remain in place. The
loss of key personnel could negatively impact the operations and profitability of our post-combination business.
We 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 our initial business
combination with a prospective target business, our ability to assess the target business’s management may be limited due
to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may
prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain shareholders following
the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value.
Our officers and directors may allocate their time to
other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This
conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not,
commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to
the completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which
he or she may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours
per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their
current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability
to complete our initial business combination.
Certain of our officers and directors are now, and all
of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should
be presented.
Until we consummate our initial business combination, we intend
to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors are,
or may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in
making and managing investments in a similar business, although they may not participate in the formation of, or become an officer
or director of, any other special purpose acquisition companies with a class of securities registered under the Exchange Act until
we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial
business combination by February 18, 2021 (or until November 18, 2021 if we extend the period of time to consummate a business
combination by the full amount of time).
Our officers and directors also may become aware of business
opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual
duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should
be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities
prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law.
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors,
officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to
be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into
a business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not
intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business
activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and
ours.
We may engage in a business combination with one or more
target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing
holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers and directors. Such entities may compete with us for business combination opportunities.
Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our initial 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 such affiliated entity met our criteria for a business combination and such transaction was approved by a
majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm
or another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or an independent
accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more
domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts of interest
still may exist and, as a result, the terms of the business combination may not be as advantageous to our public shareholders as
they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their
entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
As of the date of this report, our sponsor, officers and directors
own an aggregate of 1,725,000 founder shares. In addition, our sponsor owns 250,500 private placement units, and each private placement
unit consists of one Class A ordinary share, one-half of one warrant to purchase one Class A ordinary share at $11.50 per share
and one right to receive of one-tenth of one Class A ordinary share upon the completion of our initial business combination, subject
to adjustment as provided herein. Such warrants, rights, founder shares and private placement units will be worthless if we do
not complete an initial business combination.
The founder shares are identical to the Class A ordinary shares
included in the units being sold in our initial public offering except that (i) holders of the founder shares have the right to
vote on the election of directors prior to our initial business combination, (ii) the founder shares are subject to certain transfer
restrictions, (iii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed (A) to waive their redemption rights with respect to their founder shares and public shares in connection with the completion
of our initial business combination and (B) to waive their rights to liquidating distributions from the trust account with respect
to their founder shares if we fail to complete our initial business combination by February 18, 2021 (or until November 18, 2021
if we extend the period of time to consummate a business combination by the full amount of time) (although they will be entitled
to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial
business combination within the prescribed time frame) and (iv) the founder shares will automatically convert into our Class A
ordinary shares at the time of our initial business combination, or earlier at the option of the holder, on a one-for-one basis,
subject to adjustment pursuant to certain anti-dilution rights, as described herein and in our amended and restated memorandum
and articles of association.
The personal and financial interests of our officers and directors
may influence their motivation in identifying and selecting a target business combination, completing an initial business combination
and influencing the operation of the business following the initial business combination.
Since our sponsor, officers and directors will not be
eligible to be reimbursed for their out-of-pocket expenses if our initial business combination is not completed, a conflict of
interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
At the closing of our initial business combination, our sponsor,
officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection
with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities
on our behalf. These financial interests of our sponsor, officers and directors may influence their motivation in identifying and
selecting a target business combination and completing an initial business combination.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and
thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the date of this report
to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to
complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from
the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such,
no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence
of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, 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 our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business combination
with the proceeds of our initial public offering and the sale of the private placement units, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
As of June 30, 2020, $69,057,508 was available for completing
our initial business combination (which includes up to approximately $2,415,000 for the payment of deferred underwriting commission).
We may effectuate our initial business combination with a single
target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate
our initial business combination with more than one target business because of various factors, including the existence of complex
accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing
our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive
and regulatory risks. 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 be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject us to numerous economic,
competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which
we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses
that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent
on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability,
to complete our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple
sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the
acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact
our profitability and results of operations.
We may attempt to complete our initial business combination
with a private company about which little information is available, which may result in a business combination with a company that
is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate
our initial business combination with a privately held company. Very little public information generally exists about private companies,
and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited
information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of
a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business,
new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure a business combination so that the post-transaction
company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required
to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet
such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders 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 ordinary shares 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 ordinary shares,
our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares
subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a
single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may
make it more likely that our management will not be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial
majority of our shareholders have redeemed their Class A ordinary shares.
Our amended and restated memorandum and articles of association
do not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long as (after such
redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial
business combination and after payment of underwriters’ fees and commissions (such that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. As a result, we may be able to complete our initial business combination even though
a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek
shareholder approval of our initial business combination and do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor,
officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for
all Class A ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders
thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments.
We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing
instruments in a manner that will make it easier for us to complete our initial business combination that our shareholders may
not support.
In order to effectuate a business combination, blank check companies
have, in the past, amended various provisions of their charters and modified governing instruments. For example, blank check companies
have amended the definition of business combination, increased redemption thresholds and extended the period of time in which it
had to consummate a business combination. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments or extend the time in which we have to consummate a business combination through
amending our amended and restated memorandum and articles of association which will require at least a special resolution of our
shareholders as a matter of Cayman Islands law.
The provisions of our amended and restated memorandum
and articles of association that relate to our pre-initial business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account
such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated,
may be amended with the approval of holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting,
which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend
our amended and restated memorandum and articles of association and the trust agreement to facilitate the completion of an initial
business combination that some of our shareholders may not support.
Some other 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-initial business
combination activity, without approval by a certain percentage of our shareholders. In those companies, amendment of these provisions
requires approval by between 90% and 100% of the company’s public shareholders. Our amended and restated memorandum and articles
of association provide that any of its provisions, including those related to pre-initial business combination activity (including
the requirement to deposit proceeds of our initial public offering and the private placement of units into the trust account and
not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders as described
herein and in our amended and restated memorandum and articles of association or an amendment to permit us to withdraw funds from
the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced
or eliminated), but excluding the provision of the articles relating to the appointment of directors, may be amended if approved
by holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, and corresponding provisions
of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 90% of our
ordinary shares. Should our insiders vote all their shares in favor of any such amendment, such amendment would not be approved
regardless how public shares are voted. We may not issue additional securities that can vote on amendments to our amended and restated
memorandum and articles of association. Our insiders, which beneficially owns approximately 20% of our ordinary shares, will participate
in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion
to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated memorandum and
articles of association which govern our pre-business combination behavior more easily than some other blank check companies, and
this may increase our ability to complete a business combination with which you do not agree. Our shareholders may pursue remedies
against us for any breach of our amended and restated memorandum and articles of association.
Certain agreements related to our initial public offering
may be amended without shareholder approval.
Certain agreements, including the underwriting agreement relating
to our initial public offering, the investment management trust agreement between us and American Stock Transfer & Trust Company,
the letter agreement among us and our sponsor, officers and directors, the registration rights agreement among us and our sponsor
and the administrative services agreement between us and our sponsor, may be amended without shareholder approval. These agreements
contain various provisions that our public shareholders might deem to be material. For example, the underwriting agreement related
to this offering contains 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 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 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 the net proceeds of our initial public offering and the sale
of the private placement units prove to be insufficient to allow us to complete our initial business combination, either because
of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the
obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial
business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination,
we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such
financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when
needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that
particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional
financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target
business. The failure to secure additional financing could have a material adverse effect on the continued development or growth
of the target business. None of our officers, directors or shareholders is required to provide any financing to us in connection
with or after our initial business combination. If we are unable to complete our initial business combination, our public shareholders
may only receive approximately $10.00 per share, or less than such amount in certain circumstances, based on the balance of our
trust account (as of June 30, 2020), and our warrants and rights will expire worthless. In certain circumstances, our public shareholders
may receive less than $10.00 per share on the redemption of their shares.
Our sponsor 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, it will
elect all of our directors and may exert a substantial influence on actions requiring shareholder vote, potentially in a manner
that you do not support.
Our sponsor owns approximately 20% of our issued and outstanding
ordinary shares. In addition, the founder shares, all of which are held by our sponsor, will entitle our sponsor to elect all of
our directors prior to our initial business combination. Holders of our public shares will have no right to vote on the election
of directors during such time. These provisions of our amended and restated memorandum and articles of association may only be
amended by a special resolution passed by at least holders of at least 90% of our ordinary shares voting in a general meeting of
our shareholders. As a result, you will not have any influence over the election of directors prior to our initial business combination.
Neither our sponsor nor, to our knowledge, any of our officers
or directors, have any current intention to purchase additional securities, other than as disclosed in this report. Factors that
would be considered in making such additional purchases would include consideration of the current trading price of our Class A
ordinary shares. In addition, as a result of its substantial ownership in our company, our sponsor may exert a substantial influence
on other actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended
and restated memorandum and articles of association and approval of major corporate transactions. If our sponsor purchases any
additional Class A ordinary shares in the aftermarket or in privately negotiated transactions, this would increase its influence
over these actions. Accordingly, our sponsor will exert significant influence over actions requiring a shareholder vote at least
until the completion of our initial business combination.
We may amend the terms of the warrants in a manner that
may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public
warrants.
Our warrants were issued in registered form under a warrant
agreement between American Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the
terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision,
but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any change that
adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public
warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants approve of such
amendment. Although our ability to amend the terms of the public warrants with the consent of at least a majority of the then outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price
of the warrants, shorten the exercise period or decrease the number of Class A ordinary shares purchasable upon exercise of a warrant.
We may amend the terms of the rights in a way that may
be adverse to holders with the approval by the holders of a majority of the then outstanding rights.
Our rights were issued in registered form under a rights agreement
between American Stock Transfer & Trust Company, as rights agent, and us. The rights agreement provides that the terms of the
rights may be amended without the consent of any holder to cure any ambiguity or correct any defective provision. The rights agreement
requires the approval by the holders of a majority of the then outstanding rights in order to make any change that adversely affects
the interests of the registered holders.
A provision of our warrant agreement
may make it more difficult for us to consummate an initial business combination.
Unlike some other blank check companies,
if (i) we issue additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with
the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per Class A ordinary
share (the “Newly Issued Price”); (ii) the aggregate gross proceeds from such issuances represent more than 60% of
the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the
consummation of our initial business combination (net of redemptions), and (iii) the volume weighted average trading price of our
Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate a
Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants
will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $16.50 per share redemption
trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued
Price. This may make it more difficult for us to consummate an initial business combination with a target business.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time
after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales
price of our Class A ordinary shares equal or exceed $16.50 per share (as adjusted for share splits, share capitalizations, rights
issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the warrants is not
exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or
qualification. We will use our best efforts to register or qualify such shares under the blue sky laws of the state of residence
in those states in which the warrants were offered by us in our initial public offering. Redemption of the outstanding warrants
could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for
you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or
(iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to
be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so
long as they are held by our sponsor or its permitted transferees.
Our management’s ability to require holders of our
warrants to exercise such warrants on a cashless basis will cause holders to receive fewer Class A ordinary shares upon their exercise
of the warrants than they would have received had they been able to exercise their warrants for cash.
If we call our public warrants for redemption after the redemption
criteria described elsewhere in this report have been satisfied, our management will have the option to require any holder that
wishes to exercise his warrant (including any warrants held by our sponsor, officers or directors, other purchasers of our founders’
units, or their permitted transferees) to do so on a “cashless basis.” If our management chooses to require holders
to exercise their warrants on a cashless basis, the number of Class A ordinary shares received by a holder upon exercise will be
fewer than it would have been had such holder exercised his warrant for cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company.
U.S. federal income tax reform could adversely affect
us and holders of our units.
On December 22, 2017, President Trump signed into law H.R. 1,
originally known as the “Tax Cuts and Jobs Act,” which significantly reformed the Internal Revenue Code of 1986, as
amended. The new legislation, among other things, changes the U.S. federal tax rates, imposes significant additional limitations
on the deductibility of interest, allows the expensing of capital expenditures, and puts into effect the migration from a “worldwide”
system of taxation to a territorial system. We continue to examine the impact this tax reform legislation may have on us. The impact
of this tax reform, or of any future administrative guidance interpreting provisions thereof, on holders of our units is uncertain
and could be adverse. This report does not discuss any such tax legislation or the manner in which it might affect holders of our
units. We urge prospective investors to consult with their legal and tax advisors with respect to any such legislation and the
potential tax consequences of investing in our units.
Our warrants, rights and founder shares may have an adverse
effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We sold warrants to purchase 3,450,000 Class A ordinary shares
and rights convertible into 690,000 of our Class A ordinary shares, as part of the units offered in our initial public offering
and, simultaneously with the closing of our initial public offering, we issued 125,250 private placement warrants, to purchase
an aggregate of 125,250 of our Class A ordinary shares and private placement rights convertible into an aggregate of 25,050 of
our Class A ordinary shares underlying private units in such private placement, and warrants exercisable for 172,500 Class A ordinary
shares at a price of $11.50 per share, subject to adjustment as provided herein, and rights convertible into 17,250 of our Class
A ordinary shares underlying the unit purchase option. Prior to our initial public offering, our sponsor purchased an aggregate
of 1,725,000 founder shares in a private placement. The founder shares are convertible into Class A ordinary shares on a one-for-one
basis, subject to adjustment as set forth herein and in our amended and restated memorandum and articles of association. In addition,
if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into units, at the price of $10.00
per unit at the option of the lender. Such units would be identical to the private placement units. To the extent we issue Class
A ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number of additional Class
A ordinary shares upon exercise of these warrants, conversion of these rights or conversion of these working capital loans into
our securities could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase the number
of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the business
transaction. Therefore, our warrants, rights and founder shares may make it more difficult to effectuate a business combination
or increase the cost of acquiring the target business.
The private placement warrants are identical to the warrants
sold as part of the units in our initial public offering except that, so long as they are held by our sponsor or its permitted
transferees, (i) they will not be redeemable by us, (ii) they (including the Class A ordinary shares 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 redeemable
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 redeemable warrant. No fractional
warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least
two units, you will not be able to receive or trade a whole warrant. This is different from other offerings similar to ours whose
units include one Class A ordinary share and one warrant to purchase one whole share. We have established the components of the
units in this way in order to reduce the dilutive effect of the warrants upon completion of an initial business combination since
the warrants will be exercisable in the aggregate for one-half of the number of shares compared to units that contain a warrant
to purchase one whole share, thus making us, we believe, a more attractive merger 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.
A market for our securities may not fully develop, which
would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly due to one
or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our
securities may not be sustained. You may be unable to sell your securities unless a market can be fully developed and sustained.
Because we must furnish our shareholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy statement with
respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender
offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be
prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or
U.S. GAAP, or international financing reporting standards as issued by the International Accounting Standards Board, or IFRS, depending
on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of
the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for
us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the
prescribed time frame.
We are an emerging growth company within the meaning of
the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies,
this could make our securities less attractive to investors and may make it more difficult to compare our performance with other
public companies.
We are an “emerging growth company” within the meaning
of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a
result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class
A ordinary shares held by non-affiliates exceeds $700 million as of any December 31 before that time, in which case we would no
longer be an emerging growth company as of the following June 30. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of
our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be
a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period
which means that when a standard is issued or revised and it has different application dates for public or private companies, we,
as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor
an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accountant standards used.
Our search for a business combination may be significantly
adversely affected by the recent outbreak of COVID-19.
In December 2019, a novel strain of coronavirus was reported
to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including
the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19)
a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary
Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to
COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. Since the
outbreak of the virus, the United States has imposed a travel ban on certain countries in Europe and Asia. On March 20, 2020, President
Trump imposed additional travel restrictions, including the closure of both the Canadian and Mexican borders to any non-essential
travel. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread health crisis that could
adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we
consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business
combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors
or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction
in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19
and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of
global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of
a target business with which we ultimately consummate a business combination, may be materially adversely affected.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate
and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending June 30, 2020.
Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the
independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further,
for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting
firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes
compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies
because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions
of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws of the Cayman
Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal
courts may be limited.
We are an exempted company incorporated under the laws of the
Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors
or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs and the rights of shareholders are governed
by our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended
from time to time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions
by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent
governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited
judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority,
but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our
directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions
in the U.S. In particular, the Cayman Islands has a different body of securities laws as compared to the U.S., and certain states,
such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands
companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by our Cayman Islands legal counsel that
the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated
upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions
brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities
laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances,
although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the
Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial
on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation
to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in
the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or
a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud
or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman
Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay
enforcement proceedings if concurrent proceedings are being brought elsewhere..
As a result of all of the above, public shareholders may have
more difficulty in protecting their interests in the face of actions taken by management, members of the Board of Directors or
controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum and
articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association
contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
These provisions include two-year director terms and the ability of the Board of Directors to designate the terms of and issue
new series of preference 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.
After our initial business combination, it is possible
that a majority of our directors and officers will live outside the United States and all of our assets will be located outside
the United States; therefore investors may not be able to enforce federal securities laws or their other legal rights.
It is possible that after our initial business combination,
a majority of our directors and officers will reside outside of the United States and all of our assets will be located outside
of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce
their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States
courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
In particular, investors should be aware that there is uncertainty
as to whether the courts of the Cayman Islands or any other applicable jurisdiction would recognize and enforce judgements of U.S.
courts obtained against us or our directors or officers predicted upon the civil liability provisions of the securities laws of
the United States or any state in the United States or entertain original actions brought in the Cayman Islands or any other applicable
jurisdiction’s courts against us or our directors or officers predicated upon the securities laws of the United States or
any state.
If our management following our initial business combination
is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial business combination any or all of our
management could resign from their positions as officers of the Company, and the management of the target business at the time
of the business combination will remain in place. Management of the target business may not be familiar with United States securities
laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect
our operations.
Recently introduced economic substance legislation of
the Cayman Islands may adversely impact us or our operations.
The Cayman Islands, together with several other non-European
Union jurisdictions, have recently introduced legislation aimed at addressing concerns raised by the Council of the European Union
(the “EU”) as to offshore structures engaged in certain activities which attract profits without real economic activity.
With effect from January 1, 2019, the International Tax Co-operation (Economic Substance) Law, 2018 (the “Substance Law”)
came into force in the Cayman Islands introducing certain economic substance requirements for in-scope Cayman Islands entities
which are engaged in certain “relevant activated”, which in the case of exempted companies incorporated before January
1, 2019, will apply in respect of financial years commencing July 1, 2019, onwards. On March 12, 2019, the EU, as part of this
ongoing initiative, announced the results of its assessment of the 2018 implementation efforts by various countries under its review.
Cayman Islands was not on the announced list of non-cooperative jurisdictions, but was referenced in the report (along with 33
other jurisdictions) as being among countries requiring adjustments to their legislation to meet EU concerns by December 31, 2019
to avoid being moved to the list of non-cooperative jurisdictions.
Based on the Substance Law currently and announced guidance
in effect, it is not anticipated that the company itself will be subject to any such requirements prior to any business combination
and thereafter, subject to the structuring of such combination, the company may still remain out of scope of the legislation or
else be subject to more limited substance requirements. Although it is presently anticipated that the Substance Law will have little
material impact on the company or its operations, as the legislation is new and remains subject to further clarification and interpretation,
it is not currently possible to ascertain the precise impact of these legislation changes on the company.
If we effect our initial business
combination with a company located outside of the U.S., 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
located outside of the U.S., we would be subject to any special considerations or risks associated with companies operating in
the target business’ home jurisdiction, including any of the following:
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rules and regulations or currency redemption or 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 U.S.;
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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 and wars; and
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deterioration of political relations with the U.S. which could result in any number of difficulties, both normal course such as above or extraordinary such as sanctions being imposed. We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer.
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If we effect a business combination
with a company located outside of the United States, the laws applicable to such company will likely govern all of our material
agreements and we may not be able to enforce our legal rights.
If we effect a business combination with a company located outside
of the United States, the laws of the country in which such company operates will govern almost all of the material agreements
relating to its operations. We cannot assure you that the target business will be able to enforce any of its material agreements
or that remedies will be available in this new 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 company 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.
Because of the costs and difficulties
inherent in managing cross-border business operations after we acquire it, our results of operations may be negatively impacted
following a business combination.
Managing a business, operations, personnel or assets in another
country is challenging and costly. Management of the target business that we may hire (whether based abroad or in the U.S.) may
be inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal regimes and
labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border
business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively
impact our financial and operational performance.
Many countries, and especially those
in emerging markets, have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and
subject to corruption and inexperience, which may adversely impact our results of operations and financial condition.
Our ability to seek and enforce legal protections, including
with respect to intellectual property and other property rights, or to defend ourselves with regard to legal actions taken against
us in a given country, may be difficult or impossible, which could adversely impact our operations, assets or financial condition.
Rules and regulations in many countries, including some of the
emerging markets within the regions we will initially focus, are often ambiguous or open to differing interpretation by responsible
individuals and agencies at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and
agencies are often difficult to predict and inconsistent.
Delay with respect to the enforcement of particular rules and
regulations, including those relating to customs, tax, environmental and labor, could cause serious disruption to operations abroad
and negatively impact our results.
After our initial business combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations
in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic,
political and legal policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government
policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically
and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s
economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries.
A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive
target business with which to consummate our initial business combination and if we effect our initial business combination, the
ability of that target business to become profitable.
Exchange rate fluctuations and currency policies may cause
a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target, all revenues and
income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions, if any, could
be adversely affected by reductions in the value of the local currency. The value of the currencies in our target regions fluctuate
and are affected by, among other things, changes in political and economic conditions. Any change in the relative value of such
currency against our reporting currency may affect the attractiveness of any target business or, following consummation of our
initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value
against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in
dollars will increase, which may make it less likely that we are able to consummate such transaction.
Because foreign law could govern
almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere, which could
result in a significant loss of business, business opportunities or capital.
Foreign law could govern almost all of our material agreements.
The target business may not be able to enforce any of its material agreements or remedies may be unavailable outside of such foreign
jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction may
not be as certain in implementation and interpretation as in the U.S. Judiciaries in such jurisdiction may also be relatively inexperienced
in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to the outcome of any litigation.
As a result, the inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss
of business and business opportunities.
Corporate governance standards in
foreign countries may not be as strict or developed as in the U.S. and such weakness may hide issues and operational practices
that are detrimental to a target business.
General corporate governance standards in some countries are
weak in that they do not prevent business practices that cause unfavorable related party transactions, over-leveraging, improper
accounting, family company interconnectivity and poor management. Local laws often do not go far to prevent improper business practices.
Therefore, shareholders may not be treated impartially and equally as a result of poor management practices, asset shifting, conglomerate
structures that result in preferential treatment to some parts of the overall company, and cronyism. The lack of transparency and
ambiguity in the regulatory process also may result in inadequate credit evaluation and weakness that may precipitate or encourage
financial crisis. In our evaluation of a business combination we will have to evaluate the corporate governance of a target and
the business environment, and in accordance with U.S. laws for reporting companies take steps to implement practices that will
cause compliance with all applicable rules and accounting practices. Notwithstanding these intended efforts, there may be endemic
practices and local laws that could add risk to an investment we ultimately make and that result in an adverse effect on our operations
and financial results.
Companies in foreign countries may be subject to accounting,
auditing, regulatory and financial standards and requirements that differ, in some cases significantly, from those applicable to
public companies in the United States, which may make it more difficult or complex to consummate a business combination. In particular,
the assets and profits appearing on the financial statements of a foreign company may not reflect its financial position or results
of operations in the way they would be reflected had such financial statements been prepared in accordance with U.S. GAAP and there
may be substantially less publicly available information about companies in certain jurisdictions than there is about comparable
U.S. companies. Moreover, foreign companies may not be subject to the same degree of regulation as are U.S. companies with respect
to such matters as insider trading rules, tender offer regulation, shareholder proxy requirements and the timely disclosure of
information.
Legal principles relating to corporate affairs and the validity
of corporate procedures, directors’ fiduciary duties and liabilities and shareholders’ rights for foreign corporations
may differ from those that may apply in the U.S., which may make the consummation of a business combination with a foreign company
more difficult. We therefore may have more difficulty in achieving our business objective.
Because a foreign judiciary may determine
the scope and enforcement of almost all of our target business’ material agreements under the law of such foreign jurisdiction,
we may be unable to enforce our rights inside and outside of such jurisdiction.
The law of a foreign jurisdiction, may govern almost all of
our target business’ material agreements, some of which may be with governmental agencies in such jurisdiction. We cannot
assure you that the target business or businesses will be able to enforce any of their material agreements or that remedies will
be available outside of such jurisdiction. The inability to enforce or obtain a remedy under any of our future agreements may have
a material adverse impact on our future operations.
A slowdown in economic growth in
the markets that our business target operates in may adversely affect our business, financial condition, results of operations,
the value of its equity shares and the trading price of our shares following our business combination.
Following the business combination, our results of operations
and financial condition may be dependent on, and may be adversely affected by, conditions in financial markets in the global economy,
and, particularly in the markets where the business operates. The specific economy could be adversely affected by various factors
such as political or regulatory action, including adverse changes in liberalization policies, business corruption, social disturbances,
terrorist attacks and other acts of violence or war, natural calamities, interest rates, inflation, commodity and energy prices
and various other factors which may adversely affect our business, financial condition, results of operations, value of our equity
shares and the trading price of our shares following the business combination.
Regional hostilities, terrorist attacks,
communal disturbances, civil unrest and other acts of violence or war may result in a loss of investor confidence and a decline
in the value of our equity shares and trading price of our shares following our business combination.
Terrorist attacks, civil unrest and other acts of violence or
war may negatively affect the markets in which we may operate our business following our business combination and also adversely
affect the worldwide financial markets. In addition, the countries we will focus on, have from time to time experienced instances
of civil unrest and hostilities among or between neighboring countries. Any such hostilities and tensions may result in investor
concern about stability in the region, which may adversely affect the value of our equity shares and the trading price of our shares
following our business combination. Events of this nature in the future, as well as social and civil unrest, could influence the
economy in which our business target operates, and could have an adverse effect on our business, including the value of equity
shares and the trading price of our shares following our business combination.
The occurrence of natural disasters
may adversely affect our business, financial condition and results of operations following our business combination.
The occurrence of natural disasters, including hurricanes, floods,
earthquakes, tornadoes, fires and pandemic disease may adversely affect our business, financial condition or results of operations
following our business combination. The potential impact of a natural disaster on our results of operations and financial position
is speculative, and would depend on numerous factors. The extent and severity of these natural disasters determines their effect
on a given economy. Although the long term effect of diseases such as the H5N1 “avian flu,” or H1N1, the swine flu,
cannot currently be predicted, previous occurrences of avian flu and swine flu had an adverse effect on the economies of those
countries in which they were most prevalent. An outbreak of a communicable disease in our market could adversely affect our business,
financial condition and results of operations following our business combination. We cannot assure you that natural disasters will
not occur in the future or that our business, financial condition and results of operations will not be adversely affected.
Any downgrade of credit ratings of
the country in which the company we acquire business may adversely affect our ability to raise debt financing following our business
combination.
No assurance can be given that any rating organization will
not downgrade the credit ratings of the sovereign foreign long-term debt of the country in which our business target operates,
which reflect an assessment of the overall financial capacity of the government of such country to pay its obligations and its
ability to meet its financial commitments as they become due. Any downgrade could cause interest rates and borrowing costs to rise,
which may negatively impact both the perception of credit risk associated with our future variable rate debt and our ability to
access the debt markets on favorable terms in the future. This could have an adverse effect on our financial condition following
our business combination.
Returns on investment in foreign
companies may be decreased by withholding and other taxes.
Our investments will incur tax risk unique to investment in
developing economies. Income that might otherwise not be subject to withholding of local income tax under normal international
conventions may be subject to withholding of income tax in a developing economy. Additionally, proof of payment of withholding
taxes may be required as part of the remittance procedure. Any withholding taxes paid by us on income from our investments in such
country may or may not be creditable on our income tax returns. We intend to seek to minimize any withholding tax or local tax
otherwise imposed. However, there is no assurance that the foreign tax authorities will recognize application of such treaties
to achieve a minimization of such tax. We may also elect to create foreign subsidiaries to effect the business combinations to
attempt to limit the potential tax consequences of a business combination.