Introduction
We are a blank check company formed for
the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business
combination with one or more businesses, which we refer to throughout this annual report as our initial business combination. We
have reviewed a number of opportunities to enter into a business combination. We have neither engaged in any operations nor generated
any revenue to date. Based on our business activities, the Company is a “shell company” as defined under the Exchange
Act because we have no operations and nominal assets consisting almost entirely of cash.
Our founder, Michael Klein, is also the
founder and managing partner of M. Klein and Company, which he founded in 2012. M. Klein and Company is a global strategic advisory
firm that provides its clients a variety of advice tailored to their objectives. M. Klein and Company has established an entity
within the firm, Archimedes Advisors, which will invest in our sponsor and which consists of operating partners (“operating
partners”) who will assist Mr. Klein in sourcing potential acquisition targets, and creating long-term value in the business
combination for us. M. Klein and Company’s operating partners are comprised of former senior operating executives of leading
S&P 500 companies across multiple sectors and industries, including consumer, industrial, materials, energy, mining, chemicals,
finance, data, software, enterprise technology, and media.
Our executive offices are located at 640
Fifth Avenue, 12th Floor, New York, NY 10019 and our telephone number is (212) 380-7500. Our corporate website address
is www.churchillcapitalcorp.com. Our website and the information contained on, or that can be accessed through, the website
is not deemed to be incorporated by reference in, and is not considered part of, this annual report. You should not rely on any
such information in making your decision whether to invest in our securities.
Company History
In May 2019, our sponsor purchased an aggregate
of 8,625,000 shares of Class B common stock (our “founder shares”) for an aggregate purchase price of $25,000, or approximately
$0.003 per share. Our Class B common stock will automatically convert into shares of Class A common stock, on a one-for-one basis,
upon the completion of a business combination. On June 7, 2019, we effected a stock dividend at one-third of one share of Class
B common stock for each outstanding share of Class B common stock, resulting in an aggregate of 11,500,000 founder shares outstanding.
On June 26, 2019, we effected a further stock dividend of one-half of a share of Class B common stock for each outstanding share
of Class B common stock, resulting in our sponsor holding an aggregate of 17,250,000 founder Shares. All share and per-share amounts
have been retroactively restated to reflect the stock dividends. The number of founder shares issued was determined based on the
expectation that the founder shares would represent 20% of the outstanding shares of our Class A common stock and our Class B common
stock (collectively, our “common stock’) upon completion of the initial public offering (the “IPO”).
On July 1, 2019, we completed our IPO of
69,000,000 units at a price of $10.00 per unit (the “units”), generating gross proceeds of $690,000,000. Each unit
consists of one of the Company’s shares of Class A common stock, par value $0.0001 per share, and one-third of one warrant.
Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject
to certain adjustments.
Concurrently with the completion of the
IPO, our sponsor purchased an aggregate of 15,800,000 warrants (the “private placement warrants”) at a price of $1.00
per warrant, or $15,800,000 in the aggregate. An aggregate of $690,000,000 from the proceeds of the
IPO and the private placement warrants was placed in a trust account (the “trust account”)
such that the trust account held $690,000,000 at the time of closing of the IPO. Each whole private placement warrant entitles
the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to certain adjustments.
On July 23, 2019, we announced that, commencing
July 26, 2019, holders of the 69,000,000 units sold in the IPO may elect to separately trade the shares of Class A common stock
and the warrants included in the units. Those units not separated continued to trade on the New York Stock Exchange (the “NYSE”)
under the symbol “CCX.U” and the shares of Class A common stock and warrants that were separated trade under the symbols
“CCX” and “CCX WS,” respectively.
Initial Business Combination
The NYSE rules require that an initial business
combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets
held in the trust account (net of amounts disbursed to management for working capital purposes, if applicable, and excluding the
amount of any deferred underwriting discount). We refer to this as the 80% of net assets test. 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 that is a member of FINRA or from an independent accounting firm, with respect to the satisfaction of such
criteria. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination, although there is no assurance that will be the case.
We may structure our initial business combination
so that the post-transaction company in which holders (our “public stockholders”) of our Class A common stock sold
as part of the units in the IPO (the “public shares”), including our sponsor, officers and directors to the extent
our sponsor, officers or directors own public shares, provided that each of their status as a “public stockholder”
shall only exist with respect to their public shares, will own or acquire 100% of the outstanding 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 stockholders 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 business 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 stockholders prior to our initial business combination may collectively own a minority interest in
the post-transaction company, depending on valuations ascribed to the target and us in our initial 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 stockholders immediately prior to our initial business combination could own
less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity
interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such
business or businesses that is owned or acquired is what will be 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.
Our amended and restated certificate of
incorporation requires the affirmative vote of a majority of our board of directors, which must include a majority of our independent
directors to approve our initial business combination.
Corporate Information
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012, or 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
of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and
proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result,
there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth
company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company
until the earlier of: (1) the last day of the fiscal year (a) following July 1, 2024, (b) in which we have total annual gross revenue
of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class
A common stock and our Class B common stock (collectively, our “common stock”) that is held by non-affiliates exceeds
$700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which we have issued more
than $1.00 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company”
shall have the meaning associated with it in the JOBS Act.
Financial Position
With funds available for a business combination
in the amount of approximately $673,924,000 as of December 31, 2019, assuming no redemptions and after payment of up to $21,371,000
of deferred underwriting fees, 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.
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 highly 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 our initial business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you
that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Redemption rights for public stockholders upon completion
of our initial business combination
We will provide our public stockholders
with the opportunity to redeem all or a portion of their shares of common stock upon the completion of our initial business combination
at a per share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days
prior to the consummation of the initial business combination, including interest (net of permitted withdrawals), divided by the
number of then outstanding public shares, subject to the limitations described herein. At completion of the business combination,
we will be required to purchase any public shares properly delivered for redemption and not withdrawn. The amount in the trust
account as of the closing of the IPO was $10.00 per public share. The per share amount we will distribute to investors who properly
redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption
right will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify
itself in order to validly redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us,
pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held
by them in connection with the completion of our initial business combination (the “letter agreement”).
Manner of conducting redemptions
We will provide our public stockholders
with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business
combination either: (1) in connection with a stockholder meeting called to approve the business combination; or (2) by means of
a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender
offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock exchange listing
requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to
amend our amended and restated certificate of incorporation would typically require stockholder approval. If we structure a business
combination transaction with a target company in a manner that requires stockholder approval, we will not have discretion as to
whether to seek a stockholder vote to approve the proposed business combination. We currently intend to conduct redemptions pursuant
to a stockholder vote unless stockholder approval is not required by applicable law or stock exchange listing requirement and we
choose to conduct redemptions pursuant to the tender offer rules of the SEC for business or other reasons.
If a stockholder vote is not required and
we do not decide to hold a stockholder vote for business or other reasons, we will, pursuant to our amended and restated certificate
of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers;
and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the
same financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial
business combination, we and our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares
of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number
of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause
our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not
then become subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than
we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
If, however, stockholder approval of the
transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain stockholder approval for
business or other reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates
the solicitation of proxies, and not pursuant to the tender offer rules; and
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file proxy materials with the SEC.
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We expect that a final proxy statement would
be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect that a draft proxy statement
would be made available to such stockholders well in advance of such time, providing additional notice of redemption if we conduct
redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with
the substantive and procedural requirements of Regulation 14A in connection with any stockholder vote even if we are not able to
maintain our NYSE listing or Exchange Act registration.
In the event that we seek stockholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders
with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will
complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding
capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company
entitled to vote at such meeting. Our initial stockholders, officers and directors will count towards this quorum and have agreed
to vote any founder shares and any public shares held by them in favor of our initial business combination. These quorum and voting
thresholds and agreements, may make it more likely that we will consummate our initial business combination. Each public stockholder
may elect to redeem its public shares without voting, and if they do vote, irrespective of whether they vote for or against the
proposed transaction. 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 any founder shares and any public shares held by them in
connection with the completion of a business combination.
Our amended and restated certificate of
incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets,
after payment of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the
SEC’s “penny stock” rules). 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: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target
for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance
with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay
for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete
the business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned
to the holders thereof.
Limitation on redemption upon completion of
our initial business combination if we seek stockholder approval
Notwithstanding the foregoing, if we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than
an aggregate of 15% of the shares sold in the IPO, without our prior consent, which we refer to as the “Excess Shares.”
We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such
holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us
or our affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms.
Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in the IPO could threaten
to exercise its redemption rights if such holder’s shares are not purchased by us or our sponsor or our affiliates at a premium
to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than
15% of the shares sold in the IPO, we believe we will limit the ability of a small group of stockholders to unreasonably attempt
to block our ability to complete our initial business combination, particularly in connection with a business combination with
a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not
be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination.
Tendering stock certificates in connection
with a tender offer or redemption rights
We may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed
to such holders, or up to two business days prior to the vote on the proposal to approve the 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 at the holder’s
option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements,
which will include the requirement that any beneficial owner on whose behalf a redemption right is being exercised must identify
itself in order to validly redeem its shares. Accordingly, a public stockholder would have from the time we send out our tender
offer materials until the close of the tender offer period, or up to two business 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 stockholder vote,
a final proxy statement would be mailed to public stockholders at least 10 days prior to the stockholder vote. However, we expect
that a draft proxy statement would be made available to such stockholders well in advance of such time, providing additional notice
of redemption if we conduct redemptions in conjunction with a proxy solicitation. Given the relatively short exercise period, it
is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with
the above-referenced tendering process and the act of certificating the shares or delivering them through The Depository Trust
Company’s DWAC (Deposit/ Withdrawal At Custodian) System. The transfer agent will typically charge the tendering broker $80.00
and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred
regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver
shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures
used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many
blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and
a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was
seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder
to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option
window” after the completion of the business combination during which he or she could monitor the price of the company’s
stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before
actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders
were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion
of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery
prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is
approved.
Any request to redeem such shares, once
made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting
set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection
with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights,
such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated
that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after
the completion of our initial business combination.
If our initial business combination is not
approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any
certificates delivered by public holders who elected to redeem their shares.
If our initial proposed business combination
is not completed, we may continue to try to complete a business combination with a different target until the end of the completion
window.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated certificate of
incorporation provides that we will have until July 1, 2021, the date that is 24 months from the closing of the IPO, to complete
our initial business combination (the period from the closing of the IPO until July 1, 2021, the “completion window”).
If we are unable to complete our initial business combination within such period, we will: (1) cease all operations except for
the purpose of winding up; (2) 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
(net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right
to receive further liquidating distributions, if any), subject to applicable law; and (3) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless
if we fail to complete our initial business combination within the completion window.
Our initial stockholders, officers and directors
have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within
the completion window. However, if our sponsor or any of our officers and directors acquires public shares after the IPO, 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 the completion window.
Our sponsor, officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection
with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within the completion window, unless we provide our public stockholders with the opportunity to redeem their shares of Class A
common stock upon approval of any such amendment at a per share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including interest (net of permitted withdrawals), 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, after payment of the deferred
underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s “penny stock”
rules).
We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining held outside
the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds
are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there
is any interest accrued in the trust account not required to pay taxes, we may request the trustee to release to us an additional
amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds
of the IPO and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without
taking into account interest, if any, earned on the trust account and any tax payments or expenses for the dissolution of the trust,
the per share redemption amount received by stockholders upon our dissolution would be $10.00. The proceeds deposited in the trust
account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public
stockholders. We cannot assure you that the actual per share redemption amount received by stockholders will not be substantially
less than $10.00. Please see “Item 1A. Risk Factors — If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per
share” and other risk factors included herein. Under Section 281(b) of the DGCL, our plan of dissolution must provide
for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient
assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all
creditors’ claims.
Although we will seek to have all vendors,
service providers (other than our independent registered public accounting firm), prospective target businesses or other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies
held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements
or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but
not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging
the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including
the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative. 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 we are 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. In order to protect the amounts held in the trust account, our
sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered
public accounting firm) 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 (1) $10.00 per public share or
(2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less
than $10.00 per share due to reductions in the value of the trust assets, in each case net of permitted withdrawals, except as
to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust account (whether or
not such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of the IPO against certain
liabilities, including liabilities under the Securities Act. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and,
therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations.
Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could be
reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination, and
you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers will
indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust
account are reduced below: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as
of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust
assets, in each case net of permitted withdrawals, 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 certain instances. For example,
the cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the
independent directors may determine that a favorable outcome is not likely. 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. Please see
“Item 1A. Risk Factors — If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share” and other
risk factors included herein.
We will seek to reduce the possibility that
our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers
(other than our independent registered public accounting firm), prospective target businesses or other entities with which we do
business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.
Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities,
including liabilities under the Securities Act. As of December 31, 2019, we had access to approximately $695,295,400 in the trust
account with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation,
currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined
that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable
for claims made by creditors.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within the completion window may be considered a liquidating distribution under
Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that
it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can
be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional
150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect
to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of
our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within the completion window, is not considered a liquidating distribution under Delaware law
and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations
for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case
of a liquidating distribution. If we are unable to complete our initial business combination within the completion window, we will:
(1) cease all operations except for the purpose of winding up; (2) 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 (net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and
(3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our
board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of
creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as
reasonably possible following July 1, 2021 and, therefore, we do not intend to comply with those procedures. As such, our stockholders
could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our
stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section
280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our
payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent ten years.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective
target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to any monies held in the trust account.
As a result of this obligation, the claims
that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending
to the trust account is remote.
Further, our sponsor may be liable only
to the extent necessary to ensure that the amounts in the trust account are not reduced below: (1) $10.00 per public share; or
(2) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less
than $10.00 per share due to reductions in value of the trust assets, in each case net of permitted withdrawals and will not be
liable as to any claims under our indemnity of the underwriters of the IPO against certain liabilities, including liabilities under
the Securities Act.
If we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able
to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable
debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board
may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself
and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims
of creditors. We cannot assure you that claims will not be brought against us for these reasons. Please see “Item 1A. Risk
Factors — If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds,
and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing
the members of our board of directors and us to claims of punitive damages.”
Our public stockholders will be entitled
to receive funds from the trust account only in the event of the redemption of our public shares if we do not complete our initial
business combination within the completion window or if they redeem their respective shares for cash upon the completion of the
initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the
trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s
voting in connection with our initial business combination alone will not result in a stockholder’s redeeming its shares
to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described
above.
Amended and Restated Certificate of Incorporation
Our amended and restated certificate of
incorporation contains certain requirements and restrictions relating to the IPO that will apply to us until the consummation of
our initial business combination. If we seek to amend any provisions of our amended and restated certificate of incorporation to
modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion
window or with respect to any other material provisions relating to the rights of holders of our Class A Common Stock or pre-initial
business combination business activity, we will provide public stockholders with the opportunity to redeem their public shares
in connection with any such vote. Our initial stockholders, officers and directors have agreed to waive any redemption rights with
respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Specifically, our amended and restated certificate of incorporation provides, among other things, that:
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prior to the consummation of our initial business combination, we shall either: (1) seek stockholder approval of our initial
business combination at a meeting called for such purpose at which stockholders 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 on deposit
in the trust account as of two business days prior to the consummation of our initial business combination, including interest
(net of permitted withdrawals); or (2) provide our public stockholders with the opportunity to tender their shares to us by means
of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate
amount on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including
interest (net of permitted withdrawals), 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 stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the
business combination at a duly held stockholders meeting;
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if our initial business combination is not consummated within the completion window, 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 shares of capital stock that would entitle the holders
thereof to (1) receive funds from the trust account or (2) vote on any initial business combination.
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These
provisions cannot be amended without the approval of holders of 65% of our common stock. In the event we seek stockholder approval
in connection with our initial business combination, our amended and restated certificate of incorporation provides that, unless
otherwise required by applicable law or stock exchange rules, we may consummate our initial business combination only if approved
by a majority of the shares of common stock voted by our stockholders at a duly held stockholders meeting.
Certain Potential Conflicts of Interest Relating to M.
Klein and Company and Our Officers and Directors
Our sponsor is an affiliate of M. Klein
and Company, LLC (together with its affiliates “M. Klein and Company”). Michael Klein is the founder and managing member
of M. Klein and Company and acts as a strategic advisor to its clients. Mr. Klein has a fiduciary duty to M. Klein and Company.
As a result, Mr. Klein may have a duty to offer acquisition opportunities to clients of M. Klein and Company. Mr. Klein will have
no duty to offer acquisition opportunities to the Company unless presented to him solely in his capacity as an officer or director
of the Company and after he has satisfied his contractual and fiduciary obligations to other parties.As a result, M. Klein and
Company’s clients may compete with us for acquisition opportunities in the same industries and sectors as we may target for
our initial business combination. If any of them decide to pursue any such opportunity, we may be precluded from procuring such
opportunities. In addition, investment ideas generated within M. Klein and Company, including by Mr. Klein and other persons who
may make decisions for the company, may be suitable both for us and for M. Klein and Company or any of its clients, and will be
directed initially to such persons rather than to us. None of Mr. Klein, M. Klein and Company or members of our management team
who are also employed by M. Klein and Company have any obligation to present us with any opportunity for a potential business combination
of which they become aware unless it is offered to them solely in their capacity as a director or officer of the Company and after
they have satisfied their contractual and fiduciary obligations to other parties.
In addition, Mr. Klein and M. Klein and
Company may sponsor or form other blank check companies similar to ours during the period in which we are seeking an initial business
combination. Any such companies may present additional conflicts of interest in pursuing an acquisition target. However, we do
not believe that any such potential conflicts would materially affect our ability to complete our initial business combination.
In addition, Mr. Seibold, our Chief Financial
Officer, is a managing director of M. Klein and Company.
The potential conflicts described above
may limit our ability to enter into a business combination or other transactions. These circumstances could give rise to numerous
situations where interests may conflict.
Additionally, the engagement of M. Klein
and Company, or another affiliate of our sponsor, as our lead financial advisor in connection with our initial business combination
may present certain conflicts of interest. See “Item 1A. Risk Factors — We may engage an affiliate of our
sponsor who may be entitled to earn an advisory fee upon the completion of an initial business combination. Its financial interest
in the completion of the business combination may influence the advice it provides the Company.”
There can be no assurance that these or
other conflicts of interest with the potential for adverse effects on the Company and investors will not arise.
Limitations on Our Access to Investment Opportunities
Sourced by M. Klein and Company
M. Klein and Company may compete with us
for acquisition opportunities that we may target for our initial business combination. If M. Klein and Company decides to pursue
any such opportunity or determines in its sole discretion not to offer such opportunity to us, we may be precluded from procuring
such opportunities. In addition, investment ideas generated within M. Klein and Company or by persons who may make decisions for
us may be suitable for both us and for M. Klein and Company may be directed to M. Klein and Company or other third parties rather
than to us. M. Klein and Company does not have any fiduciary, contractual or other obligations or duties to our company, including,
without limitation, to present us with any opportunity for a potential business combination of which they become aware.
Our management team, in their other endeavors
(including any affiliation they may have with M. Klein and Company), may choose or be required to present potential business combinations
or other transactions to M. Klein and Company or third parties, before they present such opportunities to us. Please see “Item
1A. Risk Factors — 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 or other transaction should be presented.”
Sponsor Indemnity
Our sponsor,
an affiliate of M. Klein and Company, has agreed that it will be liable to us if and to the extent any claims by a third party
(other than our independent registered public accounting firm) 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: (1) $10.00 per public share; or (2) the actual amount per public share held in the trust account as of the date of the liquidation
of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case, net of permitted
withdrawals, except as to any claims by a third party that executed a waiver of any and all rights to the monies held in the trust
account (whether or not any such waiver is enforceable) and except as to any claims under our indemnity of the underwriters of
the IPO against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve
for such obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. We believe the
likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective
target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind
in or to monies held in the trust account.
Facilities
We currently maintain our executive offices
at 640 Fifth Avenue, 12th Floor, New York, NY 10019. The cost for this space is included in
the $20,000 per month fee that we will pay an affiliate of our sponsor for office space, administrative and support services.
Employees
We currently have two officers and do not
intend to have any full-time employees prior to the completion of our initial business combination. Members of our management team
are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they
deem necessary to our affairs until we have completed our initial business combination. The amount of time that any such person
will devote in any time period to our company 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
Our units, Class A common stock and warrants
are registered under the Exchange Act and we have reporting obligations, including the requirement that we file annual, quarterly
and current reports with the SEC. The SEC maintains an internet site at http://www.sec.gov that contains such reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. In accordance
with the requirements of the Exchange Act, our annual reports contain financial statements audited and reported on by our independent
registered public accounting firm.
We will provide stockholders with audited
financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent
to 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 United States generally accepted accounting principles (“GAAP”) or international financial
reporting standards as promulgated by the international accounting standards board (“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 (“PCAOB”). These financial statement requirements may limit the pool of potential target businesses
we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial
statements in accordance with federal proxy rules and complete our initial business combination within the completion window. We
cannot assure you that any particular target business identified by us as a potential business combination candidate will have
financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial
statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not
be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we
do not believe that this limitation will be material.
We will be required to evaluate our internal
control procedures for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley Act. Only in the event we are
deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company will we be required to
have our internal control procedures audited. A target business may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance
with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved. If some 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 July 1, 2024, (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 common
stock that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter;
and (2) the date on which we have issued more than $1.00 billion in non-convertible debt during the prior three-year period. References
herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.
An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this annual report, the prospectus associated with our IPO and the registration statement of which such prospectus forms a part
before making a decision to invest in our securities. If any of the following events occur, our business, financial condition and
operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you
could lose all or part of your investment.
We are a recently incorporated company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated company with
no operating results, and we will not commence operations until completing a business combination. Because we have no operating
history and have no operating results, you have no basis upon which to evaluate our ability to achieve our business objective of
completing our business combination with one or more target businesses. If we fail to complete our business combination, we will
never generate any operating revenues.
Past performance by M. Klein and Company and members
of our management team may not be indicative of future performance of an investment in us.
Information regarding performance by, or
businesses associated with, M. Klein and Company and other members of our management team is presented for informational purposes
only. Any past experience and performance, including related to acquisitions, of M. Klein and Company and members of our management
team is not a guarantee either: (1) that we will be able to successfully identify a suitable candidate for our initial business
combination; or (2) of any results with respect to any initial business combination we may consummate. You should not rely on the
historical record and performance of M. Klein and Company and members of our management team as indicative of the future performance
of an investment in us or the returns we will, or are likely to, generate going forward. An investment in us is not an investment
in M. Klein and Company.
Our public stockholders may not be afforded
an opportunity to vote on our proposed initial business combination, and even if we hold a vote, holders of our founder shares
will participate in such vote, which means we may complete our initial business combination even though a majority of our public
stockholders do not support such a combination.
We may not hold a stockholder vote to approve
our initial business combination unless the business combination would require stockholder approval under applicable law or stock
exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. For instance, the NYSE
rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder
approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business
combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding
shares, we would seek stockholder approval of such business combination. However, except as required by applicable law or stock
exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders
to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors,
such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.
Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such approval. Accordingly,
we may consummate our initial business combination even if holders of a majority of our outstanding public shares do not approve
of the business combination we consummate. Please see “Item 1. Business — Stockholders may not have the ability to
approve our initial business combination” for additional information.
If we seek stockholder approval of our initial business
combination, our initial stockholders, officers and directors have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.
Our initial stockholders, 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. As a result, in addition to our initial stockholders’ founder shares, we would need
25,875,001, or 37.5%, of the 69,000,000 public shares sold in the IPO to be voted in favor of a transaction (assuming all issued
and outstanding shares are voted) in order to have such initial business combination approved. We expect that our initial stockholders
and their permitted transferees will own at least 20% of our outstanding shares of common stock at the time of any such stockholder
vote. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder
approval will be received than would be the case if our initial stockholders and their permitted transferees agreed to vote their
founder shares in accordance with the majority of the votes cast by our public stockholders.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of such business combination.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since
our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have
the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder approval, your only opportunity
to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights
within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it
difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions
payable to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and
such amount of deferred underwriting discount is not available for us to use as consideration in an initial business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment
of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. 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 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. If we are able to consummate an initial business combination, the per-share value of shares held by non-redeeming
stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into an agreement for
our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore, 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 is submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account
or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution
provision of the Class B common stock results in the issuance of shares of Class A common stock on a greater than one-to-one basis
upon conversion of the Class B common stock at the time of our initial business combination. In addition, the amount of deferred
underwriting commissions payable to the underwriters is not required to be adjusted for any shares that are redeemed in connection
with an 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 stockholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock
may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your stock in the open market.
The requirement that we complete our initial business
combination within the completion window may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we
approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that
would produce value for our stockholders.
Any potential target business with which
we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within the completion window. 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 completion window, in which case we would cease all operations except for the purpose of winding up and
we would redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less
than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have
agreed that we must complete our initial business combination within the completion window. We may not be able to find a suitable
target business and complete our initial business combination within such time period. Our ability to complete our initial business
combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks
described herein.
If we have not completed our initial business
combination within such time period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as
reasonably possible but not more than 10 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 (net of permitted withdrawals and up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law; and (3) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders
may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire
worthless. Please see “If third parties bring claims against us, the proceeds held in the trust account could be reduced
and the per share redemption amount received by stockholders may be less than $10.00 per share” and other risk factors
herein.
If the net proceeds of the IPO and the sale
of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to
fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from
our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are
unable to obtain such loans, we may be unable to complete our initial business combination.
If we are required to seek additional capital,
we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate.
Neither our sponsor, members of our management team nor any of their respective affiliates is under any obligation or other duty
to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside the trust account or from
funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will
expire worthless. Please see “If third parties bring claims against us, the proceeds held in the trust account could be
reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk
factors herein.
If we seek stockholder approval of our initial business
combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares or warrants
from the public, which may influence a vote on a proposed business combination and reduce the public “float” of our
common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares or public
warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination, although they are under no obligation or other duty to do so. Please see “Item 1. Business
— Permitted Purchases of our Securities” for a description of how such persons will determine from which stockholders
to seek to acquire shares or warrants. Such a purchase may include a contractual acknowledgement that such public stockholder,
although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its
redemption rights. In the event that our sponsor, directors, officers, advisors or any of their respective affiliates purchase
public shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption
rights, such selling public stockholders 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 stockholder 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 stockholder approval of our initial business
combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain
amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be
met. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining stockholder approval of our initial business combination or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be
to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for
approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to
Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. Please
see “Item 1. Business — Permitted Purchases of our Securities” for a description of how our sponsor, directors,
officers, advisors or any of their respective affiliates will select which stockholders to purchase securities from in any private
transaction.
In addition, if such purchases are made,
the public “float” of our Class A common stock and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
If a stockholder fails to receive notice of our
offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules
or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance
with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various
procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy
materials documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial
business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.
In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. Please see “Item 1.
Business — Redemption rights for public stockholders upon completion of our initial business combination — Tendering
stock certificates in connection with a tender offer or redemption rights.”
You will not have any rights or interests in funds
from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced
to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be entitled
to receive funds from the trust account only upon the earlier to occur of: (1) the completion of our initial business combination,
and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject
to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide
for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares
if we do not complete our initial business combination within the completion window; and (3) the redemption of all of our public
shares if we are unable to complete our initial business combination within the completion window, subject to applicable law and
as further described herein. In addition, if we are unable to complete an initial business combination within the completion window
for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders
for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced
to wait beyond the completion window before they receive funds from our trust account. In no other circumstances will a public
stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds
held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your
public shares or warrants, potentially at a loss.
The NYSE may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional
trading restrictions.
Our units, Class A common stock and warrants
are listed on the NYSE. Although we expect to continue to meet the minimum initial listing standards set forth in the NYSE listing
standards, we cannot assure you that our securities will continue to be listed on the NYSE in the future or prior to our initial
business combination. In order to continue listing our securities on the NYSE prior to our initial business combination, we must
maintain certain financial, distribution and stock price levels. In general, we must maintain a minimum number of holders of our
securities. Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with
the NYSE’s initial listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in
order to continue to maintain the listing of our securities on the NYSE. For instance, our stock price would generally be required
to be at least $4 per share. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If the NYSE delists any of our securities
from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such
securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences,
including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class
A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading
market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future. The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities.” Because our units, Class A common stock and warrants are listed on the
NYSE, our units, Class A common stock and warrants will qualify as covered securities under such statute. Although the states are
preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there
is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered
securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of
securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check
companies in their states. Further, if we were no longer listed on the NYSE, our securities would not qualify as covered securities
under such statute and we would be subject to regulation in each state in which we offer our securities.
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You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of the IPO and the
sale of the private placement warrants are intended to be used to complete an initial business combination with a target business,
we may be deemed to be a “blank check” company under the U.S. securities laws. However, because we have net tangible
assets in excess of $5,000,000 and filed a Current Reports on Form 8-K, including an audited balance sheet of our company demonstrating
this fact, 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 will be immediately
tradable and we will have a longer period of time to complete our initial business combination than do companies subject to Rule
419. Moreover, if the IPO 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
our initial business combination.
If we seek stockholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders
are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess
of 15% of our Class A common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined
under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in the IPO, without our prior consent, which we refer to as the “Excess Shares.” However,
our amended and restated certificate of incorporation does not restrict our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our 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 the Excess Shares
and, in order to dispose of such shares, would be required to sell your Excess 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 stockholders may receive only approximately $10.00 per
share, or less in certain circumstances, on our redemption of their stock, and our warrants will expire worthless.
We expect to encounter intense competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment
partnerships), other blank check companies and other entities, domestic and international, including, without limitation, M. Klein
and Company, 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 will be numerous target businesses we could potentially acquire with the net proceeds of the IPO and the
sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that
are sizable will be limited by our available financial resources. Our sponsor or any of its affiliates (including M. Klein and
Company) may make additional investments in us, although our sponsor and its affiliates have no obligation or other duty to do
so. Please see “Item 1. Business — Certain Potential Conflicts of Interest Relating to M. Klein and Company”
for a discussion on certain limitations related to other resources M. Klein and Company may, but is under no obligation or other
duty to, provide us.
This inherent competitive limitation gives
others an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek stockholder approval
of our initial business combination and we are obligated to pay cash for public shares that are redeemed, it will potentially reduce
the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage
in successfully negotiating and completing a business combination. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of
our trust account and our warrants will expire worthless. Please see “If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share” and other risk factors herein.
If the funds not being held in the trust account
are insufficient to allow us to operate for at least the completion window, 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 for at least the completion window, assuming that our initial business
combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans. Management’s
plans to address this need for capital through funds available outside the trust account and potential loans from certain of our
affiliates are discussed in the section of this annual report titled “Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations.” However, 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 available to us
outside of the trust account will be sufficient to allow us to operate for at least the completion window; however, we cannot assure
you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees
to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or
to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses
from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses)
with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered
into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were
subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds
to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account and our warrants will expire worthless. Please see “If third parties bring claims
against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders
may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of the IPO and the sale of the
private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our
search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor
or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain
such loans, we may be unable to complete our initial business combination.
Of the net proceeds of the IPO and the sale
of the private placement warrants, only a limited amount is available to us outside the trust account to fund our working capital
requirements. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or
other third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their
respective affiliates is under any obligation or other duty to loan funds to us in such circumstances. Any such loans would be
repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination.
If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will
be forced to cease operations and liquidate the trust account. In such case, our public stockholders may receive only $10.00 per
share, or less in certain circumstances, and our warrants will expire worthless. Please see “If third parties bring claims
against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders
may be less than $10.00 per share” and other risk factors herein.
Subsequent to our 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 the price of our securities, 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 identify all material issues that may
be present with a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of
these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders
who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the
value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per share redemption amount received by stockholders may be less than $10.00
per share.
Our placing of funds in the trust account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other
than our independent registered public accounting firm), prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements
they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in
each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account.
If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has
not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to
us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive
to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target
businesses that we might pursue. Examples of possible instances where we may engage a third party that refuses to execute a waiver
include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly
superior to those of other consultants that would agree to execute a waiver or in cases where we are 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 completion window, or upon the exercise of a redemption right in connection with our initial business combination, we
will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10
years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the
$10.00 per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) 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: (1) $10.00 per public share; or (2) the actual amount per public share
held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions
in the value of the trust assets, in each case net of permitted withdrawals, except as to any claims by a third party that executed
a waiver of any and all rights to the monies held in the trust account (whether or not any such waiver is enforceable) and except
as to any claims under our indemnity of the underwriters of the IPO offering against certain liabilities, including liabilities
under the Securities Act. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and we have not asked our sponsor to reserve for such indemnification obligations. We have not asked our sponsor to
reserve for 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. 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 independent directors may decide not to enforce
the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available
for distribution to our public stockholders.
In the event that the proceeds in the trust
account are reduced below the lesser of: (1) $10.00 per public share; or (2) the actual amount per share held in the trust account
as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust
assets, in each case net of permitted withdrawals, 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 certain instances. For example, the
cost of such legal action may be deemed by the independent directors to be too high relative to the amount recoverable or the independent
directors may determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below
$10.00 per share.
If, after we distribute the proceeds in the trust
account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed
as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims
of punitive damages.
If, after we distribute the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public stockholders from the trust account
prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If, before distributing the proceeds in the trust
account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per
share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent
any bankruptcy claims deplete the trust account, the per share amount that would otherwise be received by our public stockholders
in connection with our liquidation would be reduced.
If we are deemed to be an investment company under
the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities;
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each of which may make it difficult for us to complete our initial
business combination. In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company with the SEC;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and compliance with other rules and regulations that we
are currently not subject to.
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In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily
in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S.
government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination
and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets
with a view to resale or profit from their resale.
We do not plan to buy unrelated businesses
or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested
in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having
a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not
permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having
a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in
the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within
the meaning of the Investment Company Act. The IPO was not intended for persons who are seeking a return on investments in government
securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of:
(i) the completion of our primary business objective, which is a business combination; (ii) the redemption of any public shares
properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation to modify
the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion
window; and (iii) absent a business combination, our return of the funds held in the trust account to our public stockholders as
part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject
to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional
regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate
our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. Please see “If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share” and other risk factors herein.
Changes in laws or regulations, or a failure to
comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and
regulations and their interpretation and application may also change from time to time and those changes could have a material
adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or
regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate
and complete our initial business combination, and results of operations.
Our stockholders may be held liable for claims by
third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within the completion window may be considered a liquidating distribution under
Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it
makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can
be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional
150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect
to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However,
it is our intention to redeem our public shares as soon as reasonably possible following the 24th
month from the closing of the IPO in the event we do not complete our initial business combination and, therefore, we do
not intend to comply with the foregoing procedures.
Because we do not intend to comply with
Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide
for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following
our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited
to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers,
investment bankers, consultants, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b)
of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be
barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be
potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions
received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our initial business combination within the completion window is not considered a liquidating distribution
under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute
of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years,
as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders
until after we consummate our initial business combination and you will not be entitled to any of the corporate protections provided
by such a meeting.
We may not hold an annual meeting of stockholders
until after we consummate our initial business combination (unless required by the NYSE) and thus may not be in compliance with
Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in
accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore,
if our stockholders want us to hold an annual meeting prior to our consummation of our initial business combination, they may attempt
to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the
DGCL.
We are not registering the shares of Class A common
stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a “cashless basis” and potentially causing such warrants to expire worthless.
We are not registering the shares of Class
A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However,
under the terms of the warrant agreement, we have agreed 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 reasonable best efforts to file with the SEC, and within
60 business days following our initial business combination to have declared effective, a registration statement covering the issuance
of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those
shares of Class A common stock until the warrants expire or are redeemed. 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, complete or correct or
the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act,
we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for
cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder or an exemption from registration or qualification is available. Notwithstanding the above, if our Class A common stock
is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition
of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public
warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will
use our reasonable 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 shares of Class A common stock included in the units. If and
when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
underlying shares of Class A common stock for sale under all applicable state securities laws.
The grant of registration rights to our initial
stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future
exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in the IPO, our initial stockholders and their permitted transferees can demand that
we register the resale of their founder shares after those shares convert to shares of our Class A common stock at the time of
our initial business combination. In addition, our sponsor and its permitted transferees can demand that we register the resale
of the private placement warrants and the shares of Class A common stock issuable upon exercise of the private placement warrants,
and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of such
warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse
effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial
business combination more costly or difficult to complete. This is because the stockholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market
price of our Class A common stock that is expected when the common stock owned by our initial stockholders or their permitted transferees,
the private placement warrants owned by our sponsor or warrants issued in connection with working capital loans are registered
for resale.
Our search for a business combination, and any target
business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus
(“COVID-19”) outbreak.
On March 11, 2020, the World Health Organization
officially declared the outbreak of the COVID-19 a “pandemic.” A significant outbreak of COVID-19 and other
infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial
markets worldwide, and the business of any potential target business with which we consummate a business combination could be
materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target
company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a
timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of
COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other
matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the
operations of a target business with which we ultimately consummate a business combination, may be materially adversely
affected.
Because we are not limited to evaluating target
businesses in a particular industry, you will be unable to ascertain the merits or risks of any particular target business’s
operations.
We may seek to complete a business combination
with an operating company in any industry or sector. However, we are not, under our amended and restated certificate of incorporation,
permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations.
To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations
with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate
time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to
control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment
in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available,
in a business combination target. Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant
holder following our initial business combination could suffer a reduction in the value of their securities. Such stockholders
or warrant holders are unlikely to have a remedy for such reduction in value.
We may seek acquisition opportunities in acquisition
targets that may be outside of our management’s areas of expertise.
We may consider a business combination in
sectors which may be outside of our management’s areas of expertise if such 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 annual report regarding the areas of our management’s
expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not
be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly, any stockholders
or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer
a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction
in value.
Although we have identified general criteria and
guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our
initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have all of these positive attributes. If we complete our initial business combination with
a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination
with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or
stock exchange rules, or we decide to obtain stockholder approval for business or other reasons, it may be more difficult for us
to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and
guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with an early
stage company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject
us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or
earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include
investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant
risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an
independent investment banking firm 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 stockholders from a financial point of view.
Unless we complete our initial business
combination with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that
is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our stockholders from a financial
point of view.
In addition, if our board of directors is
not able to determine the fair market value of the target business or businesses, in connection with the NYSE rules that require
that an initial business combination be with one or more operating businesses or assets with a fair market value equal to at least
80% of the net assets held in the trust account (net of amounts disbursed to management for working capital purposes, if applicable,
and excluding the amount of any deferred underwriting discount), we will obtain an opinion from an independent investment banking
firm that is a member of FINRA or from an independent accounting firm with respect to the satisfaction of such criteria.
Other than the two circumstances described
above, we are not required to obtain an opinion from an independent investment banking firm that is a member of FINRA or from an
independent accounting firm. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
We may issue additional shares of Class A common
stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our
initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock
at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions
described herein. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of
incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, and 20,000,000
shares of Class B common stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001
per share. There are 92,200,000 and 2,750,000 authorized but unissued shares of Class A and Class B common stock, respectively,
available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants but
not upon the conversion of the Class B common stock. Shares of Class B common stock are automatically convertible into shares of
our Class A common stock at the time of our initial business combination, initially at a one-for-one ratio but subject to adjustment
as set forth herein. There are no shares of preferred stock issued and outstanding.
We may issue a substantial number of additional
shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue additional securities that can vote on amendments to our amended and restated certificate
of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account).
We may also issue shares upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial
business combination as a result of the anti-dilution provisions described herein. However, our amended and restated certificate
of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares
of capital stock that would entitle the holders thereof to (1) receive funds from the trust account or (2) vote on any initial
business combination. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in the IPO;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our
common stock;
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could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our
present officers and directors; and
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may adversely affect prevailing market prices for our units, common stock and/or warrants.
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Resources could be wasted in researching initial
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial business combination for any number of reasons including those beyond our control. Any such event will result in a
loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless. Please see “If third parties bring claims against us, the proceeds held in the trust account could be
reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share” and other risk
factors herein.
Our officers and directors will allocate their time
to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
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 responsibilities. We do not intend to have any full-time
employees prior to the completion of our 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.
Mr. Klein is the founder and managing member
of M. Klein and Company and acts as a strategic advisor to its clients. Mr. Klein has a fiduciary duty to M. Klein and Company.
As a result, Mr. Klein may have a duty to offer acquisition opportunities to clients of M. Klein and Company. Mr. Klein will have
no duty to offer acquisition opportunities to the Company unless presented to him solely in his capacity as an officer or director
of the Company.
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. Please see “Item 10. Directors, Executive Officers and Corporate Governance” for
a discussion of our officers’ and directors’ other business affairs.
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. 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. We do not have an employment agreement with, or key-man insurance on
the life of any of our other 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 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, we do not currently expect that any of them will do so. While
we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot assure you that our
assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating
a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such
requirements.
In addition, the officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an
acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination, and a particular business combination may
be conditioned on the retention or resignation of such key personnel. These agreements may cause our key personnel to have conflicts
of interest in determining whether to proceed with a particular business combination. However, we do not expect that any of our
key personnel will remain with us after the completion of our initial business combination.
Our key personnel may be able to remain
with our 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. Such negotiations also could
make such key personnel’s retention or resignation a condition to any such agreement. The personal and financial interests
of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability
of such individuals to remain with us after the completion of our initial business combination will not be the determining factor
in our decision as to whether or not we will proceed with any potential business combination, as we do not expect that any of our
key personnel will remain with us after the completion of our initial business combination. The determination as to whether any
of our key personnel will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the management
of a prospective target business and, as a result, may affect 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 business’s
management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public
company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders
or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination could suffer
a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction
in value.
The officers and directors of an initial
business combination candidate may resign upon completion of our initial business combination. The departure of a business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an 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 acquisition 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 acquisition candidate will not wish to remain in place. As a result, we may need to reconstitute
the management team of the post-transaction company in connection with our initial business combination, which may adversely impact
our ability to complete an initial business combination in a timely manner or at all.
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 or other
transaction 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 a similar business. We do not have employment contracts with our officers and directors that will limit their ability
to work at other businesses. In addition, our sponsor, officers and directors may participate in the formation of, or become an
officer or director of, any other blank check company prior to completion of our initial business combination. As a result, our
sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other blank check company with which they may become involved.
As described in “Item 1 Business —
Sourcing of Potential Business Combination Targets” and “Item 10. Directors, Executive Officers and Corporate Governance
— Conflicts of Interest,” each of our officers and directors presently has, and any of them in the future may have
additional, fiduciary, contractual or other obligations or duties to one or more other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity to such entities. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she
has fiduciary, contractual or other obligations or duties, he or she will honor these obligations and duties to present such business
combination opportunity to such entities first, and only present it to us if such entities reject the opportunity and he or she
determines to present the opportunity to us (including as described in “Item 1. Business — Sourcing of Potential Business
Combination Targets”). These conflicts may not be resolved in our favor and a potential target business may be presented
to another entity prior to its presentation to us. Our amended and restated certificate of incorporation provides that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such
person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually
permitted to undertake and would otherwise be reasonable for us to pursue.
In addition, none of the operating partners
are officers or directors of our company and therefore owe us no fiduciary duties as such. While we expect that they will assist
us in identifying business combination targets, they have no obligation to do so and may devote a substantial portion of their
business time to activities unrelated to us. Each operating partner may have fiduciary, contractual or other obligations or duties
to other organizations to present business combination opportunities to such other organizations rather than to us. Accordingly,
if any operating partner becomes aware of a business combination opportunity which is suitable for one or more entities to which
he or she has fiduciary, contractual or other obligations or duties, he or she will honor those obligations and duties to present
such business combination opportunity to such entities first and only present it to us if such entities reject the opportunity
and he or she determines to present the opportunity to us. These conflicts may not be resolved in our favor and a potential business
may be presented to another entity prior to its presentation to us.
Please see “Item 10. Directors, Executive
Officers and Corporate Governance — Conflicts of Interest” for a discussion of our officers’ and directors’
business affiliations and potential conflicts of interest.
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 M. Klein and Company, our sponsor or our
directors or officers. We do not have a policy that expressly prohibits any such persons from engaging for their own account in
business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests
and ours.
In particular, affiliates of our sponsor
(including M. Klein and Company) have invested, and may in the future invest, in a broad array of sectors, including those in which
our company may invest. As a result, there may be substantial overlap between companies that would be a suitable business combination
for us and companies that would make an attractive target for such other affiliates. Please see “Item 10. Directors, Executive
Officers and Corporate Governance — Conflicts of Interest Relating to M. Klein and Company” for additional information.
We may engage in a business combination with one
or more target businesses that have relationships with entities that may be affiliated with M. Klein and Company, our sponsor,
officers or directors which may raise potential conflicts of interest.
In light of the involvement of our sponsor,
officers and directors with other businesses, we may decide to acquire one or more businesses affiliated with or competitive with
M. Klein and Company, our sponsor, officers and directors, and their respective affiliates. Our directors also serve as officers
and board members for other entities, including, without limitation, those described under “Management — Conflicts
of Interest.” 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 substantive 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 as set forth
in “Item 1. Business — Selection of a Target Business and Structuring of our Initial Business Combination” and
such transaction was approved by a majority of our independent and disinterested directors. Despite our agreement to obtain an
opinion from an independent investment banking firm that is a member of FINRA or from an independent accounting firm, regarding
the fairness to our stockholders from a financial point of view of a business combination with one or more domestic or international
businesses affiliated with M. Klein and Company, our sponsor, officers or directors, potential conflicts of interest still may
exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would
be absent any conflicts of interest.
We may engage M. Klein and Company, or another affiliate
of our sponsor, as our lead financial advisor on our business combinations and other transactions. Any fee in connection with such
engagement may be conditioned upon the completion of such transactions. This financial interest in the completion of such transactions
may influence the advice such affiliate provides.
We may engage M. Klein and Company, or another
affiliate of our sponsor, as a financial advisor in connection with our initial business combination and pay such affiliate a customary
financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable transactions. Pursuant
to any such engagement, the affiliate may earn its fee upon closing of the initial business combination. The payment of such fee
would likely be conditioned upon the completion of the initial business combination. Therefore, our sponsor may have additional
financial interests in the completion of the initial business combination. These financial interests may influence the advice any
such affiliate provides us as our financial advisor, which advice would contribute to our decision on whether to pursue a business
combination with any particular target.
Since our initial stockholders will lose their entire
investment in us if our initial business combination is not completed (other than with respect to any public shares they may hold),
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
In May 2019, our sponsor purchased an aggregate
of 8,625,000 shares of our founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. Our Class
B common stock will automatically convert into shares of Class A common stock, on a one-for-one basis, upon the completion of a
business combination. On June 7, 2019, we effected a stock dividend at one-third of one share of Class B common stock for each
outstanding share of Class B common stock, resulting in an aggregate of 11,500,000 founder shares outstanding. On June 26, 2019,
we effected a further stock dividend of one-half of a share of Class B common stock for each outstanding share of Class B common
stock, resulting in our sponsor holding an aggregate of 17,250,000 founder Shares. All share and per-share amounts have been retroactively
restated to reflect the stock dividends. The number of founder shares issued was determined based on the expectation that the founder
shares would represent 20% of the outstanding shares of common stock upon the completion of the IPO. The founder shares will be
worthless if we do not complete an initial business combination.
In addition, our sponsor purchased an aggregate
of 15,800,000 private placement warrants for a purchase price of $15,800,000, or $1.00 per warrant, that will also be worthless
if we do not complete our initial business combination. Each private placement warrant entitles the holder thereof to purchase
one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the
shares of Class A common stock included in the units being sold in the IPO, except that: (1) only holders of the founder shares
have the right to vote on the election of directors prior to our initial business combination; (2) the founder shares are subject
to certain transfer restrictions, as described in more detail below; (3) our sponsor, officers and directors have entered into
a letter agreement with us, pursuant to which they have agreed to: (a) waive their redemption rights with respect to any founder
shares and any public shares held by them in connection with the completion of our initial business combination, (b) waive their
redemption rights with respect to any founder shares and public shares held by them in connection with a stockholder vote to approve
an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to provide
for the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares
if we have not consummated our initial business combination within the completion window; and (c) waive their rights to liquidating
distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business
combination within the completion window (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 completion window); (4)
the founder shares are automatically convertible into shares of our Class A common stock at the time of our initial business combination
on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein; and (5) the holders
of founder shares are entitled to registration rights.
The personal and financial interests of
our sponsor, 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.
This risk may become more acute as the deadline for completing our initial business combination nears.
We may issue notes or other debt securities, or
otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the
date of this annual report to issue any notes or other debt securities, or to otherwise incur outstanding debt following the IPO,
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 is payable on demand;
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our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such
financing while the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available
for dividends on our common stock if declared, 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 the IPO and the sale of the private placement warrants, which will cause us to be solely dependent on a single
business which may have a limited number of products or services. This lack of diversification may materially negatively impact
our operations and profitability.
The net proceeds from the IPO and the sale
of the private placement warrants provided us with $690,000,000 (that we may use to complete our initial business combination (which
includes $21,371,000 of deferred underwriting commissions being held in the trust account)).
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 our initial business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business
sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider
any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities
of the target, our stockholders prior to our initial business combination may collectively own a minority interest in the post
business combination company, depending on valuations ascribed to the target and us in our initial business combination. For example,
we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of
a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than
a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may
subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock
than we initially acquired. Accordingly, this may make it more likely that 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 our initial business combination with which
a substantial majority of our stockholders do not agree.
Our amended and restated certificate of
incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares
in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than
$5,000,001 (such that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we
may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree
with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and
do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered
into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective
affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares
of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business
combination.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments,
including their warrant agreements.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds extended the time to consummate an initial business combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you
that we will not seek to amend our warrant agreement, our charter or governing instruments or extend the time to consummate an
initial business combination in order to effectuate our initial business combination.
Certain provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account) may be amended with the approval of holders of not less than 65% of our common stock,
which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend
our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business
combination that some of our stockholders may not support.
Our amended and restated certificate of
incorporation provides that any of its provisions (other than amendments relating to the appointment of directors, which require
the approval by a majority of at least 90% of our common stock voting at a stockholder meeting) related to pre-business combination
activity (including the requirement to deposit proceeds of the IPO and the private placement warrants into the trust account and
not release such amounts except in specified circumstances and to provide redemption rights to public stockholders as described
herein) may be amended if approved by holders of at least 65% of our common stock, and corresponding provisions of the trust agreement
governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all
other instances, our amended and restated certificate of incorporation provides that it may be amended by holders of a majority
of our common stock, subject to applicable provisions of the DGCL, or applicable stock exchange rules. We may not issue additional
securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination.
Our initial stockholders, who beneficially own 20% of our common stock, may participate in any vote to amend our amended and restated
certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result,
we may be able to amend the provisions of our amended and restated certificate of incorporation which will govern our pre-business
combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial
business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended
and restated certificate of incorporation.
Our sponsor, officers and directors have
agreed, pursuant to a written agreement, that they will not propose any amendment to our amended and restated certificate of incorporation
to modify the substance or timing of our obligation to provide for the redemption of our public shares in connection with an initial
business combination or to redeem 100% of our public shares if we do not complete our initial business combination within the completion
window, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval
of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,
divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered
into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements
and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these
agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject
to applicable law.
Certain agreements related to the IPO may be amended
without stockholder approval.
Certain agreements, including the underwriting
agreement relating to the IPO, the letter agreement among us and our sponsor, officers and directors, and the registration rights
agreement among us and our initial stockholders, may be amended without stockholder approval. These agreements contain various
provisions that our public stockholders might deem to be material. Our board, in exercising its business judgment and subject to
its fiduciary duties, may choose to approve one or more amendments to any such agreement in connection with the consummation of
our initial business combination. Any such amendments would not require approval from our stockholders, may result in the completion
of our initial business combination that may not otherwise have been possible, and may have an adverse effect on the value of an
investment in our securities.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to
restructure or abandon a particular business combination.
Although we believe that the net proceeds
of the IPO and the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination,
because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular
transaction.
If the net proceeds of the IPO and the sale
of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the
depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number
of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing
(including from M. Klein and Company) or to abandon the proposed business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all.
M. Klein and Company is not obligated to
provide, or seek, any such financing or, except as expressly set forth herein, to provide any other services to us. 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 stockholders is required
to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account, and our warrants will expire worthless.
Our initial stockholders will control the election
of our board of directors until consummation of our initial business combination and will hold a substantial interest in us. As
a result, they will elect all of our directors prior to the consummation of our initial business combination and may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of the IPO, our initial
stockholders owned 20% of our outstanding common stock. In addition, the founder shares, all of which are held by our initial stockholders,
will entitle the holders to elect all of our directors prior to the consummation of 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 certificate of incorporation may only be amended by a majority of at least 90% of our common stock voting at a stockholder
meeting. As a result, you will not have any influence over the election of directors prior to our initial business combination.
Neither our initial stockholders nor, to
our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed
in this annual report. Factors that would be considered in making such additional purchases would include consideration of the
current trading price of our Class A common stock. In addition, as a result of their substantial ownership in our company, our
initial stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that
you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate
transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated
transactions, this would increase their influence over these actions. Accordingly, our initial stockholders will exert significant
influence over actions requiring a stockholder vote. Please see “Item 1. Business — Permitted Purchases of our Securities.”
Our sponsor contributed $25,000, or approximately
$0.001 per founder share, and, accordingly, holders of our Class A common stock will experience substantial dilution.
Our sponsor acquired the founder shares
at a nominal price, significantly contributing to the dilution of holders of our Class A common stock. This dilution would increase
to the extent that the anti-dilution provisions of the Class B common stock result in the issuance of Class A shares on a greater
than one-to-one basis upon conversion of the Class B common stock at the time of our initial business combination and would become
exacerbated to the extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution rights
of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination
would be disproportionately dilutive to our Class A common stock.
We may amend the terms of the warrants in a manner
that may be adverse to holders of public warrants with the approval by the holders of at least 50% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the warrants could be converted into cash or stock
(at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our Class A
common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants were issued in registered form
under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public
warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.
Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public
warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the
warrants, convert the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or
decrease the number of shares of our common stock purchasable upon exercise of a warrant. Our initial stockholders may purchase
public warrants with the intention of reducing the number of public warrants outstanding or to vote such warrants on any matters
submitted to warrantholders for approval, including amending the terms of the public warrants in a manner adverse to the interests
of the registered holders of public warrants. While our initial stockholders have no current commitments, plans or intentions to
engage in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number
of our public warrants that our initial stockholders may purchase and it is not currently known how many public warrants, if any,
our initial stockholders may hold at the time of our initial business combination or at any other time during which the terms of
the public warrants may be proposed to be amended. Please see “Item 1. Business — Permitted Purchases of our Securities.”
We may redeem your unexpired warrants prior to their
exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period 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 exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under
all applicable state securities laws. Redemption of the outstanding warrants could force you to: (1) exercise your warrants and
pay the exercise price therefor at a time when it may be disadvantageous for you to do so (2) sell your warrants at the then-current
market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price which, at the
time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants.
Our warrants and founder shares may have an adverse
effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 23,000,000
shares of our Class A common stock at a price of $11.50 per whole share (subject to adjustment as provided herein), as part of
the units offered in the IPO. Simultaneously with the closing of the IPO, we also issued in a private placement an aggregate of
15,800,000 private placement warrants, each exercisable to purchase one share of Class A common stock at a price of $11.50 per
share, subject to adjustment as provided herein. Our initial stockholders currently hold 17,250,000 founder shares. The founder
shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In
addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make any working capital loans,
up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant, at the option of the lender.
Such warrants would be identical to the private placement warrants.
To the extent we issue shares of Class A
common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares
of Class A common stock upon exercise of these warrants or conversion rights could make us a less attractive acquisition vehicle
to a target business. Any such issuance will increase the number of outstanding shares of our Class A common stock and reduce the
value of the Class A common stock issued to complete the business transaction. Therefore, our warrants and founder shares may make
it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical
to the warrants sold as part of the units in the IPO except that, so long as they are held by our sponsor or its permitted transferees:
(1) they will not be redeemable by us; (2) they (including the Class A common stock issuable upon exercise of these warrants) may
not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion
of our initial business combination; (3) they may be exercised by the holders on a cashless basis; and (4) the holders thereof
(including with respect to the shares of common stock issuable upon exercise of these warrants) are entitled to registration rights.
Because we must furnish our stockholders with target
business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require that a proxy
statement with respect to a vote on a business combination include historical and/or pro forma financial statement disclosure.
We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are
required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled
to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards
as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial
statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United
States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because
some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance
with federal proxy rules and complete our initial business combination within the completion window.
We are an emerging growth company within the meaning
of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth
companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance
with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging
growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our common stock held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in
which case we would no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors
will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive
as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be,
there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management
resources, and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual report for the year ending December 31,
2020. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging
growth company, 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 business 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 initial business combination.
Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in
the future for our Class A common stock and could entrench management.
Our amended and restated certificate of
incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include three-year director terms and the ability of the board of directors to designate the terms
of and issue new series of preferred shares, which may make more difficult the removal of management and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
Section 203 of the DGCL affects the ability
of an “interested stockholder” to engage in certain business combinations, for a period of three years following the
time that the stockholder becomes an “interested stockholder.” We elected in our certificate of incorporation not to
be subject to Section 203 of the DGCL. Nevertheless, our certificate of incorporation contains provisions that have the same effect
as Section 203 of the DGCL, except that it will provide that affiliates of our sponsor and their transferees will not be deemed
to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and will therefore
not be subject to such restrictions. These charter provisions may limit the ability of third parties to acquire control of our
company.
Provisions in our amended and restated certificate
of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of
incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors,
officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the
State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service
of process on such stockholder’s counsel. This provision may have the effect of discouraging lawsuits against our directors
and officers.
If our management team pursues a company with operations
or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection
with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be
subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our
initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local
governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
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costs and difficulties inherent in managing cross-border business operations and complying with commercial and legal requirements
of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States;
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obligatory military service by personnel; and
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government appropriation of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, we may be unable to complete such initial business combination or, if we complete
such initial business combination, our operations might suffer, either of which may adversely impact our business, results of operations
and financial condition.
If our management following our initial business
combination is unfamiliar with U.S. 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 could remain in place. Management of the target business may not be familiar with U.S.
securities laws. If new management is unfamiliar with U.S. 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.