Our
Company
We
are a newly organized blank check company incorporated as a Delaware corporation on August 12, 2019 and formed for the purpose
of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination
with one or more businesses, which we refer to throughout this Report as our initial business combination.
While
we may pursue an initial business combination target in any business, industry or geographical location, we intend to focus our
search within the industrial sector, where we believe our management team has a competitive advantage due to their prior experiences
and roles. We intend to focus our search efforts on North American-based targets with an aggregate enterprise value of $1 billion
to $2 billion.
We
believe our management team is well positioned to identify attractive businesses within the industrials sector that would benefit
from access to the public markets and the skills of our management team. Our objective is to consummate our initial business combination
and enhance shareholder value by helping to identify and recruit effective management, enhance existing business models and strategic
planning, identify and complete follow-on acquisitions, implement operational improvements, and expand product offerings and geographic
footprint. We expect to utilize our management team’s experience and network to achieve their objectives. We intend to focus
on evaluating established companies with leading competitive positions, strong management teams, and long-term potential for growth
and profitability.
We
believe our management team has substantive experience across many different types of businesses, and a proven track record of
working together for 16 years to acquire and operate product, solution, and service-oriented businesses across the commercial,
industrial, and residential end markets. We believe their robust skillsets and deep industry experience will allow them to apply
their expertise and create shareholder value across a wide range of potential target companies.
Roger
Fradin serves as our Chairman. Mr. Fradin has over 40 years of experience acquiring, building, and leading a diverse set of industrial
businesses. Mr. Fradin began his career at Pittway Corporation where he held a variety of roles of increasing responsibility,
including President and Chief Executive Officer of the Security and Fire Solutions segment, and helped lead an entrepreneurial
team which transformed Pittway into a $2 billion world leader in electronic security and fire systems. In 2000, Pittway was acquired
by Honeywell International Inc. (NYSE: HON), or Honeywell. Shortly thereafter, Mr. Fradin assumed the role of President and Chief
Executive Officer of Honeywell Automation and Control Solutions, or ACS. In this role, Mr. Fradin transformed ACS from a business
with $7 billion in sales in 2003 focused predominantly on the U.S. market to a $17 billion in sales (as of 2014) global business
leader in the development and manufacture of environmental controls, life safety products, and building and process solutions.
From 2000 to 2017, Mr. Fradin oversaw, directed, and integrated the acquisition of over 60 companies at Honeywell, aggregating
billions of dollars in deal value. Mr. Fradin’s strategy and execution for ACS helped deliver more than $85 billion of value
to Honeywell’s shareholders. During his tenure at Honeywell, Mr. Fradin also served as Vice Chairman of Honeywell where
he was responsible for acquisition strategy for all of Honeywell. After retiring from Honeywell, Mr. Fradin was named Chairman
of Resideo Technologies, Inc. (NYSE: REZI), or Resideo, a leading provider of home comfort and security solutions. At Resideo,
Mr. Fradin recruited the Chief Executive Officer, senior management team, and Board of Directors as well as installed all public
company board processes and procedures. In addition to Resideo, Mr. Fradin currently sits on the boards of L3Harris Technologies
Inc. (NYSE: LHX), MSC Industrial Direct Co., Inc. (NYSE: MSM), or MSC, Pitney Bowes, Inc. (NYSE: PBI), GS Acquisition Holdings
Corp. (NYSE: GSAH), and several of The Carlyle Group’s, or Carlyle, portfolio companies in his capacity as a Carlyle Operating
Executive.
Brian
Cook serves as our Chief Executive Officer, Chief Financial Officer and Director. Mr. Cook has over 20 years of experience within
mergers and acquisitions, business development, and strategic planning across a wide range of industries. Mr. Cook began his career
at PricewaterhouseCoopers, or PwC, where he was responsible for providing business and financial due diligence and transaction
structuring services to financial sponsor and corporate clients on a global basis. While at PwC, Mr. Cook’s transaction
experience included Viacom’s acquisition of CBS, Ingersoll-Rand’s disposal of Ingersoll-Dresser Pump and Ford Motor
Company’s acquisition of the Volvo Car Corporation. Following his tenure at PwC, Mr. Cook served as the Vice President of
Corporate Development and subsequently Global Head of M&A at Honeywell, in which he oversaw a global team of approximately
25 people. Over the course of his 17 years at Honeywell, Mr. Cook aided or led the execution of over 60 buy- and sell-side transactions,
most of which were attributable to the ACS segment in which he partnered directly with Mr. Fradin. These transactions included
the acquisitions of Novar plc, Norcross Safety Products and Intelligrated, among others. During 2018, Mr. Cook led the execution
of the tax-free spinoffs of Honeywell’s Home Automation (Resideo) and Turbochargers (Garrett Motion) businesses. Mr. Cook’s
transaction experience includes public and private transactions across a variety of end markets and product categories.
Mitchell
Jacobson serves as a member of our Board of Directors. Mr. Jacobson began his career in 1976 at MSC, a premier distributor of
Metalworking and Maintenance, Repair and Operations (“MRO”) products and services to industrial customers throughout
North America. In 1995, Mr. Jacobson was appointed President and Chief Executive Officer and served as President until 2003 and
Chief Executive Officer until 2005. Mr. Jacobson became Chairman of the Board of MSC in 1998 and transitioned to Non-Executive
Chairman in 2013, where he continues to serve today and remains active in ongoing growth initiatives. Mr. Jacobson has served
as Director of Ambrosia Holdings, L.P. (the holding company of TriMark USA, the country’s largest provider of equipment,
supplies, and design services to the foodservices industry) since 2017 and previously served as a member of the Board of Directors
at HD Supply Holdings, Inc. (NASDAQ: HDS) from 2007 to 2013.
Mark
Levy serves as a member of our Board of Directors. Mr. Levy has over 20 years of experience within the industrials sector. Mr.
Levy has deep expertise in building businesses, developing customer relationships, and executing lean manufacturing. From 2000
to 2014, Mr. Levy served as President and Chief Executive Officer of Honeywell Life Safety where he led the transformation of
the business into a global leader in commercial fire alarm systems, gas detection, and industrial-grade personal protection equipment.
During his tenure at Honeywell Life Safety, in which he worked very closely with Messrs. Fradin and Cook, Mr. Levy executed over
10 acquisitions, a crucial factor to the segment’s growth. Mr. Levy currently serves as member of the Board of Directors
at Quexco, Inc, Eco-Bat Technologies, and Sciens Building Solutions. Mr. Levy also currently serves as Co-Chairman of the Board
of Directors at Potter Electric Signal Co.
With
respect to the above, past performance of our management team, Juniper Industrial Holdings, Inc. and its affiliates is not a guarantee
of either (i) success with respect to a business combination that may be consummated or (ii) the ability to successfully identify
and execute a transaction. You should not rely on the historical record of management or Juniper and its affiliates as indicative
of future performance. Our management has limited experience in operating blank check companies or special purpose acquisition
companies. For a list of our executive officers and entities for which a conflict of interest may or does exist between such officers
and the company, please refer to “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest.”
Competitive
Strengths
We
will seek to capitalize on the significant experience and network of Roger Fradin, our Chairman, and Brian Cook, our Chief Executive
Officer, Chief Financial Officer and Director, as well as the other members of our Board of Directors in consummating an initial
business combination. Our competitive strengths and factors that we believe will contribute to our ability to execute a transaction
include the following:
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Leading
Operating Executives: Mr. Fradin has over
40 years of experience in operating industrial companies. Mr. Fradin served 17 years
as a top executive at Honeywell, a Fortune 100 industrial technology company that delivers
industry-specific solutions including aerospace products and services, control technologies
for buildings and industry, and performance materials globally. Mr. Fradin has a highly
successful track record of recruiting and building leadership teams, growing companies
at above market rates, improving business operations, expanding margins, maximizing cash
flow, and generating robust return on capital. Mr. Fradin was instrumental in co-creating
the signature Honeywell Operating System, an integrated program built on Six Sigma principals
to drive sustainable safety, quality, delivery, cost, and inventory improvement among
Honeywell businesses. During Mr. Fradin’s time at Honeywell, he expanded the business
into new markets, drove global expansion, built first-rate leadership teams and executed
strategic M&A to enhance shareholder value. We believe Mr. Fradin’s notable
expertise within the industrials sector will allow him and his team to evaluate and prioritize
potential opportunities relevant to his background and execute an efficient and successful
business combination.
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Mr. Cook,
through his time as Vice President of Corporate Development and Global Head of M&A at Honeywell, led acquisitions across many
different industries within the broader industrial sector which include fire and security, gas detection, safety products, building
and HVAC controls, building services, home automation, low voltage products and distribution, sensing and control products, data
capture technologies, warehouse automation, supply chain software, process automation, automotive products, field instruments,
and metering. Mr. Cook has extensive experience in acquiring private equity-owned businesses, family-owned and operated companies,
and public companies. Mr. Cook maintains a vast global network of relationships with investment banks, private equity firms, professional
advisors and senior industrial executives. During his time as Honeywell’s Global Head of M&A, Mr. Cook oversaw the identification
and development of the company-wide acquisition pipeline, including potential adjacent market opportunities in connection with
the overall strategic planning process. While at Honeywell, Mr. Cook was highly instrumental in the evaluation and recommendation
to proceed with new platform investments in the warehouse automation, smart meter, gas detection, personal protective equipment,
and data capture segments. Mr. Cook was also highly instrumental in the reengineering of Honeywell’s global acquisition
processes during 2002. Through his roles at both PwC and Honeywell, Mr. Cook has extensive experience overseeing large due diligence
teams, valuation of target companies, and the negotiation of definitive acquisition agreements. Mr. Cook’s professional
focus will be on Juniper and executing a successful transaction.
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Deep
Deal Execution Experience: Messrs. Fradin
and Cook are both highly experienced in mergers and acquisitions across a wide variety
of industrial sectors. They have successfully identified, executed and integrated highly
synergistic transactions within a variety of product categories including, but not limited
to, fire and security, gas detection, safety products, building and HVAC controls, building
services, home automation, low voltage products and distribution, sensing and control
products, data capture technologies, warehouse automation, supply chain software, process
automation, automotive products, field instrumentation and metering. During their tenure
at Honeywell, Messrs. Fradin and Cook were responsible for consummating over 60 discrete
acquisitions at attractive net multiples that contributed billions in revenue and represented
over $20 billion of capital deployed. Messrs. Fradin and Cook were instrumental in the
creation of several new verticals within Honeywell including Scanning & Mobility
Technology, Life Safety/Gas Detection, and Warehouse Automation. Today, these are each
leaders in their respective industries.
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Highly
Leverageable Network: We intend to source
initial business combination opportunities through our management team’s extensive
network of industrial sector business owners, public and private company executives and
board members, investment bankers, private equity and debt investors, high net worth
families and their advisors, commercial bankers, attorneys, management consultants, accountants
and other transaction intermediaries. We believe this approach, as well as Messrs. Fradin
and Cook’s recognized track record of completing acquisitions across a variety
of categories within the broader industrials sector, will provide meaningful opportunities
to drive value creation for our shareholders. Additionally, Mr. Fradin holds the highest
level of security clearance approved by the U.S. government, which broadens the scope
of potential acquisition targets, especially in regard to companies that perform government,
defense, and/or classified work.
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Our
Board of Directors: Our directors have experience
with acquisitions, divestitures and corporate strategy and implementation, as well as
the public markets, which we believe will significantly benefit us as we evaluate potential
initial business combination candidates as well as, to the extent they remain on our
board of directors, following the completion of our initial business combination.
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Business
Combination Criteria
Consistent
with our strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating
prospective target businesses. Our comprehensive due diligence review will include, among other things, management and employee
meetings, review of financial information, facility inspection, and an extensive review of all other material target company information.
We intend to use these criteria as guidelines in evaluating potential acquisition opportunities, but an acquisition may be executed
even if it does not meet our guidelines.
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Focus
on companies within the industrials sector such as those within aerospace and defense,
automation, building products and construction, business services, capital goods, distribution,
industrial services, industrial technology, packaging, safety and security, and supply
chain/logistics, among others. We will seek businesses that are currently North American-centric
with unrealized potential for global expansion. Additionally, we believe our management
team’s deep industry experience and vast network will allow us to identify undervalued
assets where we can accelerate operational improvements, organic revenue growth, and
potential acquisition opportunities to drive shareholder value.
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Identify
market leaders within their particular industries that also have distinguished technologies
or proprietary processes that differentiate them from their competitors. Our management
team has a track record of identifying market leading technologies across the industrials
spectrum and an affinity for businesses with strong brands, mission-critical offerings,
and often times an electronic or software foundation.
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Seek
opportunities with an attractive financial profile that can be enhanced with the targeted
expertise of our management team. While this may include businesses with sound histories
of growth and profitability, we may also target underperforming businesses that we believe
will benefit from new ownership and the implementation of enhanced operating efficiencies.
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Seek
“channel-based” businesses with end-user connections (i.e., businesses that
sell through a dealer/installer network of end-users). Our management team has deep experience
with this go-to-market approach.
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Target
platforms that can be expanded through bolt-on M&A and/or through targeted capital
deployment, such as those within fragmented markets.
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Focus
on businesses that offer a degree of market strength or competitive advantages through
regulation, strong brands, channel access, and/or superior technology.
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Seek
target businesses that have a strong leadership team that may benefit from the additional
industry expertise of our management team.
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These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination
may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our
management team may deem relevant. In the event that we decide to enter into our initial business combination with a target business
that does not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria
in our stockholder communications related to our initial business combination, which would be in the form of proxy solicitation
materials or tender offer documents that we would file with the U.S. Securities and Exchange Commission (the “SEC”).
Our
Acquisition Process
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review that will encompass, among other
things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial
and other information that will be made available to us. We will also utilize our operational and capital allocation experience.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor,
officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking
firm which is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent accounting firm that our initial
business combination is fair to our company from a financial point of view.
Members
of our management team will directly or indirectly own founder shares and/or private placement warrants and, accordingly, may
have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate
our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to
evaluating a particular business combination if the retention or resignation of any such officers and directors was included by
a target business as a condition to any agreement with respect to our initial business combination.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations
to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity.
Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an
entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary
or contractual obligations to present such opportunity to such entity. We do not believe, however, that the fiduciary duties or
contractual obligations of our officers or directors will materially affect our ability to complete our business combination.
Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as
a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would
otherwise be reasonable for us to pursue.
Our
executive officers are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts
of interest in allocating management time among various business activities, including in connection with Mr. Fradin’s service
as a director of GS Acquisition Holdings Corp., a special purpose acquisition company that intends to pursue a business combination
in the industrial sector and has already raised funds in its initial public offering. However, Mr. Fradin and Mr. Cook have agreed
not to participate in the formation of, or become an officer or director of, any other special purpose acquisition company with
a class of securities registered under the Exchange Act, as amended, or the Exchange Act, until we have entered into a definitive
agreement regarding our initial business combination or we have failed to complete our initial business combination within 24
months after the closing of our initial public offering, or November 13, 2021 (the “Combination Period”).
Significant
Activities Since Inception
On
November 13, 2019, we consummated our initial public offering of 34,500,000 units (“Units”), including Units issued
pursuant to the full exercise of the underwriters’ option to purchase additional Units to cover over-allotments. Each Unit
consists of one share of Class A Common Stock, $0.0001 par value per share, and one-half of one redeemable warrant, to purchase
one share of Class A Common Stock at an exercise price of $11.50 per share. The Units were sold at an offering price of $10.00
per Unit, generating gross proceeds of $345,000,000 (before underwriting discounts and commissions and offering expenses). Simultaneously
with the consummation of our initial public offering and the sale of the Units, we consummated the private placement of 10,150,000
warrants at a price of $1.00 per private placement warrant, issued to our sponsor, generating total proceeds of $10,150,000.
Approximately
an aggregate of $345 million of the net proceeds from the initial public offering (including the over-allotment) and certain of
the proceeds of the private placements with our sponsor were deposited in a trust account established for the benefit of our public
stockholders.
Our
Units began trading on November 8, 2019 on the NYSE under the symbol “JIH.U”. Commencing on December 20, 2019, the
securities comprising the Units began separate trading. The Units, common stock, and warrants are trading on the NYSE under the
symbols “JIH.U,” “JIH” and “JIH WS,” respectively.
Initial
Business Combination
Our
initial business combination must occur with one or more target businesses that together have an aggregate fair market value of
at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the
income earned on the trust account) at the time of the agreement to enter into the initial business combination. If our board
is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from
an independent investment banking firm that is a member of FINRA or an independent accounting firm with respect to the satisfaction
of such criteria.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. 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. However, we will only complete such business combination if the post-transaction company owns or acquires 50% or
more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment
Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our
stockholders prior to the business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a
transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial
number of new shares, our 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 the 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
and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking
stockholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement regarding an initial
business combination without the prior consent of our sponsor. Roger Fradin, who controls both us and our sponsor, is also a member
of the board of directors of GS Acquisition Holdings Corp., a special purpose acquisition company that intends to pursue a business
combination in the industrial sector and has already raised funds in its initial public offering. Mr. Fradin’s roles at
both GS Acquisition Holdings Corp. and as our Chairman led Mr. Fradin to enter into an agreement with an affiliate of GS Acquisition
Holdings Corp. pursuant to which Mr. Fradin has agreed, prior to the earlier of GS Acquisition Holdings Corp. entering into a
definitive agreement regarding its initial business combination or June 12, 2020 (the deadline by which GS Acquisition Holdings
Corp. must enter into an initial business combination), not to pursue, and therefore will not permit our sponsor to consent to,
our entry into a definitive agreement regarding an initial business combination with an entity that has an enterprise value of
greater than $3 billion.
Our
Management Team
Members
of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much
of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time
that any member of our management team will devote in any time period will vary based on whether a target business has been selected
for our initial business combination and the current stage of the business combination process.
We
believe our management team’s operating and transaction experience and network of relationships with investment banks, private
equity firms, professional advisors and senior industrial executives will provide us with a substantial number of potential business
combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts
and corporate relationships around the world. This network has grown through the activities of our management team sourcing, acquiring
and financing businesses, our management team’s relationships with sellers, financing sources and target management teams.
Our management team is also highly experienced in executing transactions under varying economic and financial market conditions.
Status
as a Public Company
We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company,
we offer a target business an alternative to the traditional initial public offering through a merger or other business combination.
In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of
our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs
of the sellers. Although there are various costs and obligations associated with being a public company, we believe certain target
businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial
public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public
reporting efforts that may not be present to the same extent in connection with a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring or could have negative valuation consequences. Once public, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent
with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new
customers and vendors and aid in attracting talented employees.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012 (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 the
Sarbanes-Oxley Act of 2002 (the “Sarbanes Oxley Act”), reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities
less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may
be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Common Stock that is held
by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter, and (2) the date
on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References
herein to emerging growth company shall have the meaning associated with it in the JOBS Act.
Financial
Position
With
funds available for a business combination currently in the amount of $333,639,541, after payment of $12,075,000 of deferred underwriting
commissions before fees and expenses associated with our initial business combination, we offer a target business a variety of
options such as creating a liquidity event for its owners, providing access to the expertise of our management team, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage
ratio. Because we are able to complete our business combination using our cash, debt or equity securities, or a combination of
the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to
be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing
and there can be no assurance it will be available to us.
Effecting
our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the
private placement warrants, our capital stock, debt or a combination of these as the consideration to be paid in our initial business
combination. We may seek to complete our initial business combination with a company or business that may be financially unstable
or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust
account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases
of our Class A Common Stock, we may apply the balance of the cash released to us from the trust account for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working
capital.
We
currently do not have any specific transaction under consideration with a target business with which to consummate our initial
business combination. We may seek to raise additional funds through a private offering of debt or equity securities in connection
with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds
of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws,
we would expect to complete such financing only simultaneously with the completion of our business combination. In the case of
an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials
disclosing the business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder
approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with
our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with
respect to raising any additional funds through the sale of securities or otherwise.
Sources
of Target Businesses
We
anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment
market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us through calls
or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited
basis, since many of these sources will have read the prospectus relating to our initial public offering and know what types of
businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business
candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions
they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal
flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers
and directors. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize
in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we
may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length negotiation based
on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder
may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with
a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily
tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no
event, however, will our sponsor or any of our existing officers or directors, or any entity with which they are affiliated, be
paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate,
the completion of our initial business combination (regardless of the type of transaction that it is). We have agreed to pay an
affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support and
to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business
combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company
following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion
in our selection process of an acquisition candidate.
We
are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with our
sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership with our sponsor,
officers or directors. In the event we seek to complete our initial business combination with a business combination target that
is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from
an independent investment banking firm which is a member of FINRA or an independent accounting firm that such an initial business
combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other
context.
As
more fully discussed in “Item 10. Directors, Executive Officers and Corporate Governance—Conflicts of Interest,”
if any of our officers or directors becomes aware of a business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such
business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers
and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties
to us.
Selection
of a Target Business and Structuring of Our Initial Business Combination
Our
initial business combination must occur with one or more target businesses that together have an aggregate fair market value of
at least 80% of our assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the
income earned on the trust account) at the time of the agreement to enter into the initial business combination. The fair market
value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted
by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not 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 intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting
one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with
another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction
company is what will be valued for purposes of the 80% of net assets test.
To
the extent we effect our business combination with a company or business that may be financially unstable or in its early stages
of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will
endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review, which will encompass, among other
things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection
of facilities, as well as a review of financial and other information that will be made available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed
will result in our incurring losses and will reduce the funds we can use to complete another business combination.
In
addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior
consent of our sponsor. Roger Fradin, who controls both us and our sponsor, is also a member of the board of directors of GS Acquisition
Holdings Corp., a special purpose acquisition company that intends to pursue a business combination in the industrial sector and
has already raised funds in its initial public offering. Mr. Fradin’s roles at both GS Acquisition Holdings Corp. and as
our Chairman led Mr. Fradin to enter into an agreement with an affiliate of GS Acquisition Holdings Corp. pursuant to which, Mr.
Fradin has agreed, prior to the earlier of GS Acquisition Holdings Corp. entering into a definitive agreement regarding its initial
business combination or June 12, 2020 (the deadline by which GS Acquisition Holdings Corp. must enter into an initial business
combination), not to pursue, and therefore will not permit our sponsor to consent to, our entry into a definitive agreement regarding
an initial business combination with an entity that has an enterprise value of greater than $3 billion.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business
combination in a single industry. By completing our business combination with only a single business, our lack of diversification
may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on
the particular industry in which we operate after our initial business combination, and
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cause
us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting
our business combination with that business, our assessment of the target business’ management may not prove to be correct.
In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company.
Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with
any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following
our business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business
combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge
relating to the operations of the particular target business.
We
cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company.
The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our
initial business combination.
Following
a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business.
We cannot assure you that we will have the ability to recruit additional managers, or that those additional managers will have
the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders
May Not Have the Ability to Approve our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder
approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business
or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we
may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Type of Transaction
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Whether Stockholder Approval is Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under
the NYSE’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we
issue shares of Class A Common Stock that will either (a) be equal to or in excess of 20% of the number of shares of our Class
A Common Stock then outstanding or (b) have voting power equal to or in excess of 20% of the voting power then outstanding;
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any
of our directors, officers or substantial stockholders (as defined by NYSE rules) has a 5% or greater interest (or such persons
collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired and if the
number of shares of Class A Common Stock to be issued, or if the number of shares of Class A Common Stock into which the securities
may be convertible or exercisable, exceeds either (a) 1% of the number of shares of Class A Common Stock or 1% of the voting power
outstanding before the issuance in the case of any of our directors and officers or (b) 5% of the number of Class A Common Stock
or 5% of the voting power outstanding before the issuance in the case of any substantial stockholders; or
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the
issuance or potential issuance of common stock will result in our undergoing a change of control.
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The
decision as to whether we will seek stockholder approval of a proposed business combination in those instances in which stockholder
approval is not required by law or applicable stock exchange rules will be made by us, solely in our discretion, and will be based
on business and legal reasons, which include a variety of factors, including, but not limited to:
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the
timing of the transaction, including in the event we determine stockholder approval would require additional time and there is
either not enough time to seek stockholder approval or doing so would place
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the
company at a disadvantage in the transaction or result in other additional burdens on the company;
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the
expected cost of holding a stockholder vote;
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the
risk that the stockholders would fail to approve the proposed business combination;
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other
time and budget constraints of the company; and
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additional
legal complexities of a proposed business combination that would be time-consuming and burdensome to present to stockholders.
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Permitted
Purchases of our Securities
In
the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such
transactions. They will be restricted from making any such purchases when they are in possession of any material non-public information
not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include
a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial
owner thereof and therefore agrees not to exercise its redemption rights. We have adopted an insider trading policy which requires
insiders to refrain from purchasing shares during certain blackout periods and when they are in possession of any material non-public
information and to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders
will make such purchases pursuant to a Rule 10b5-1 plan, as such purchases will be dependent upon several factors, including but
not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases
pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
In
the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions
from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required
to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute
a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private
rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject
to such rules, the purchasers will comply with such rules.
The
purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it
appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may
not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor,
officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly
or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against the business combination. Our sponsor, officers, directors,
advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the
other federal securities laws.
Any
purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the
Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act.
Redemption
Rights for Public Stockholders upon Completion of our Initial Business Combination
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon
the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest
earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided
by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
is initially anticipated to be approximately $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 underwriter. The
redemption rights includes the requirement that a beneficial holder 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 business combination.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business
combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under
the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder
approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our
outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval.
If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will
not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct
redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by
law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will,
pursuant to our amended and restated certificate of incorporation:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file
tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same
financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon
the public announcement of our business combination, we or our sponsor will terminate any plan established in accordance with
Rule 10b5-1 to purchase shares of our Class A Common Stock in the open market if we elect to redeem our public shares through
a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not
tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on
the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001
upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain
stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and
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file
proxy materials with the SEC.
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In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of
common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present
in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all
outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward
this quorum and have agreed to vote their founder shares and any public shares purchased during or after our initial public offering
in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common
stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a
result, in addition to our initial stockholders’ founder shares, we would need 12,937,500, or 37.5%, of the 34,500,000 public
shares outstanding to be voted in favor of a transaction (assuming all outstanding shares are voted) in order to have our initial
business combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior
written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These
quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate
our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote
for or against the proposed transaction.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (so that
we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which
may be contained in the agreement relating to our initial business combination. For example, the proposed business combination
may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the
terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all
shares of Class A Common Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the
business combination or redeem any shares, and all shares of Class A Common Stock submitted for redemption will be returned to
the holders thereof.
Limitation
on Redemption Upon Completion of Our Initial Business Combination If We Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides
that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, 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 management to purchase their shares at a significant premium to the then-current market price or
on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold
in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased
by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’
ability to redeem no more than 10% of the shares sold in our initial public offering, we believe we will limit the ability of
a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly
in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our business combination.
Tendering
Stock Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or 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 Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option.
The proxy solicitation or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection
with our initial business combination will indicate the applicable delivery requirements, which will include the requirement that
a beneficial holder 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 days prior to the vote
on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise
its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery
of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection
with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote
on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on
the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was
approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership.
As a result, the stockholder then had an “option window” after the completion of the business combination during which
he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he
or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.
As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would
become “option” rights surviving past the completion of the business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share
delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable
date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically
or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their
shares will be distributed promptly after the completion of our business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If
our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different
target within the Combination Period.
Redemption
of Public Shares and Liquidation if no Initial Business Combination
Our
sponsor, officers and directors have agreed that if we do not complete our initial business combination within the Combination
Period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously
released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as
stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board
of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to
our warrants, which will expire worthless if we fail to complete our business combination within the Combination Period.
Our
sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights
to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our
initial business combination with the Combination Period. However, if our initial stockholders acquire public shares after our
initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public
shares if we fail to complete our initial business combination within the Combination Period.
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to provide
holders of our Class A Common Stock the right to have their shares redeemed or to redeem 100% of our public shares if we do not
complete our initial business combination within the Combination Period or with respect to any other provisions relating to the
rights of holders of our Class A Common Stock, unless we provide our public stockholders with the opportunity to redeem their
shares of Class A Common Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously
released to us to pay our franchise and income taxes divided by the number of then outstanding public shares. However, we may
not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation
of our initial business combination (so that we are not 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 out of the approximately $2.5 million of proceeds held outside the trust account (as of
December 31, 2019), 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 our franchise and income taxes on interest income earned on the
trust account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest
to pay those costs and expenses. The amount of interest available to us from the trust account may be less than $1,000,000 as
a result of the current interest rate environment.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other
than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account,
the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited
in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims
of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not
be substantially less than $10.00. Under Section 281(b) of the General Corporation Law of Delaware, as amended (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 management is unable to find a service provider willing to execute a waiver.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered
or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce
the amount of funds in the trust account to below (i) $10.00 per public share or (ii) such lesser amount per public share held
in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in
each case net of the interest that may be withdrawn to pay our tax obligations, except as to any claims by a third party who executed
a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters
of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event that
an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent
of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy
its indemnity obligations and believe that our sponsor’s only assets are securities of our company. We have not asked our
sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy
those obligations. As a result, if any such claims were successfully made against the trust account, the funds available for our
initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not
be able to complete our initial business combination, and you would receive such lesser amount per share in connection with any
redemption of your public shares. None of our officers will indemnify us for claims by third parties including, without limitation,
claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay our tax obligations, and our sponsor asserts
that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular
claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification
obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor
to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment
may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative
to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked
our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy
those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption
price will not be less than $10.00 per public share.
We
will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers (other than our independent 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 underwriter
of our initial public offering against certain liabilities, including liabilities under the Securities Act. We will have access
to up to approximately $2.5 million of proceeds held outside the trust account (as of December 31, 2019) 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 business combination within the Combination Period may be considered
a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of
the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any
claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share
of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third
anniversary of the dissolution.
Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our business combination within the Combination Period, is not considered a liquidating distribution
under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute
of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years,
as in the case of a liquidating distribution. If we are unable to complete our business combination within the Combination Period,
we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to
us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible
following the end of the Combination Period and, therefore, we do not intend to comply with those procedures. As such, our stockholders
could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of
our stockholders may extend well beyond the third anniversary of such date.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us
at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained
in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent 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 (i) $10.00 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust
assets, in each case net of the amount of interest withdrawn to pay our franchise and income taxes and will not be liable as to
any claims under our indemnity of the underwriter of our initial public offering against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held
in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to
the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the
trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we
file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received
by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have
acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from
the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons.
Our
public stockholders will be entitled to receive funds from the trust account only in the event of the redemption of our public
shares if we do not complete our business combination within the Combination Period 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 the business combination alone will not result in a stockholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its
redemption rights described above.
Competition
In
identifying, evaluating and selecting a target business for our business combination, we have encountered, and may continue to
encounter, intense competition from other entities having a business objective similar to ours, including other blank check companies,
private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities
are well established and have extensive experience identifying and effecting business combinations directly or through affiliates.
Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to
acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an
advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public
stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination
and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target
businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Employees
We
currently have two officers. Members of our management team are not obligated to devote any specific number of hours to our matters
but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business
combination. The amount of time that any such person will devote in any time period will vary based on whether a target business
has been selected for our initial business combination and the current stage of the business combination process.
Periodic
Reporting and Financial Information
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. 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 stockholders to assist them in assessing the target business. In all likelihood, these
financial statements will need to be prepared in accordance with GAAP or IFRS, depending on the circumstances and the historical
financial statements may be required to be audited in accordance with the PCAOB. We cannot assure you that any particular target
business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with such
requirements or that the potential target business will be able to prepare its financial statements in accordance with such requirements.
To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may
limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.
We
will be required to evaluate our internal controls over financial reporting 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 qualify as an emerging growth company, will we be required to comply with the independent registered public
accounting firm attestation requirements 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 their internal controls over financial reporting. The development
of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs
necessary to complete any such acquisition.
You
should consider carefully all of the risks described below, together with the other information contained in this Report, including
the financial statements. If any of the following risks occur, our business, financial condition or results of operations may
be materially and adversely affected. The risk factors described below are not necessarily exhaustive and you are encouraged to
perform your own investigation with respect to us and our business.
We
are a recently formed 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 formed company with no operating results. Because we lack an operating history, you have no basis upon which to
evaluate our ability to achieve our business objective of completing our initial business combination with one or more target
businesses. We may be unable to complete our business combination. If we fail to complete our business combination, we will never
generate any operating revenues.
Past
performance by our management team is not indicative of future performance of an investment in us.
Information
regarding performance by, or businesses associated with, our management team is presented for informational purposes only. Any
past experience and performance 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 of the performance of our management team as being indicative
of the future performance of an investment in us or the returns we will, or are likely to, generate going forward.
Our
public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even if a majority of our public stockholders do not support such a combination.
We
may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder
approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or
other legal reasons. Except as required by law or the stock exchange listing requirements, the decision as to whether we will
seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender
offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction
and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete
our initial business combination even if holders of a majority of our public shares do not approve of the business combination
we complete.
If
we seek stockholder approval of our initial business combination, after approval of our board, our initial stockholders have agreed
to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Unlike
many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority
of the votes cast by the public stockholders in connection with an initial business combination, after approval of our board,
our initial stockholders have agreed to vote their founder shares, as well as any public shares purchased during or after our
initial public offering, in favor of our initial business combination. As a result, in addition to our initial stockholders’
founder shares, we would need 12,937,500, or 37.5%, of the 34,500,000 public shares outstanding to be voted in favor of a transaction
(assuming all outstanding shares are voted) in order to have our initial business combination approved. Our initial stockholders
own shares representing 20% of our outstanding shares of common stock. Accordingly, if we seek stockholder approval of our initial
business combination, after approval of our board, it is more likely that the necessary stockholder approval will be received
than would be the case if our initial stockholders 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 the business combination.
At
the time of your investment in us, you were not be provided with an opportunity to evaluate the specific merits or risks of one
or more target businesses. Since our board of directors may complete a business combination without seeking stockholder approval,
public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder
vote. Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a
potential business combination may be limited to exercising your redemption rights within the period of time (which will be at
least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial
business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less
than $5,000,001 upon consummation of our initial business combination or such greater amount necessary to satisfy a closing condition
as described above, we would not proceed with such redemption and the related business combination and may instead search for
an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a business combination transaction with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust
account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion
of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number
of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater
portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount
of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection
with a business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights
will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by
non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would not be consummated and that you would have to wait for liquidation in
order to redeem your stock.
If
our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would not be consummated
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open
market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your stock in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business
combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination
on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination within the Combination Period. Consequently, such target business may obtain leverage over us
in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase
as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter
into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire
worthless.
Our
sponsor, officers and directors have agreed that we must complete our initial business combination within the Combination Period.
We may not be able to find a suitable target business and complete our initial business combination within such time period. If
we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public
shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest
earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up
to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case,
our public stockholders may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances, our
public stockholders may receive less than $10.00 per share on the redemption of their shares. 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 below.
If
we are unable to complete an initial business combination within the Combination Period, we may seek an amendment to our amended
and restated certificate of incorporation to extend the period of time we have to complete an initial business combination. Our
amended and restated certificate of incorporation will require that such an amendment be approved by holders of 65% of our outstanding
common stock.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce
the public “float” of our Class A Common Stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such
stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not
to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares
in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such
selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could
be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval
of the business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would
otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our Class A Common Stock and the number of beneficial
holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading
of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business
combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as
applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the proxy solicitation
or tender offer materials, as applicable, that we will furnish to holders of our public shares in connection with our initial
business combination will indicate the applicable delivery requirements, which will include the requirement that a beneficial
holder must identify itself in order to validly tender or redeem its shares. For example, we may require our public stockholders
seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials
mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the
event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder
fails to comply with these or any other procedures, its shares may not be redeemed.
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 are entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion
of an initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to
provide holders of our Class A Common Stock the right to have their shares redeemed or to redeem 100% of our public shares if
we do not complete our initial business combination within the Combination Period, or (b) with respect to any other provisions
relating to rights of holders of our Class A Common Stock, and (iii) the redemption of our public shares if we are unable to complete
an initial business combination within the Combination Period, subject to applicable law and as further described herein. In addition,
if we are unable to complete an initial business combination within the Combination Period 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 Combination Period
before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest
of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants,
potentially at a loss.
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
securities are currently listed on the NYSE. However, 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. Additionally, in
connection with our initial business combination, we will be required to demonstrate compliance with the NYSE’s initial
listing requirements, which are more rigorous than the NYSE’s continued listing requirements, in order to continue to maintain
the listing of our securities on the NYSE. For instance, our stock price would generally be required to be at least $4.00 per
share and we must have 400 round lot holders upon the consummation of our initial business combination. We may not be able to
meet those initial listing requirements at that time.
If
the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common
Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market
for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the future.
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The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because our Units, Class A Common Stock
and warrants are currently listed on the NYSE, our Units, Class A Common Stock and warrants are covered securities. Although the
states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or
bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit
or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators
view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on the NYSE, our securities would not be covered
securities and we would be subject to regulation in each state in which we offer our securities.
You
will not be entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete
an initial business combination with a target business, we may be deemed to be a “blank check” company under the United
States securities laws. However, because we have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated
by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits
or protections of those rules. Among other things, this means that we will have a longer period of time to complete our business
combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419, that rule
would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust
account were released to us in connection with our completion of an initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A Common Stock, you
will lose the ability to redeem all such shares in excess of 15% of our Class A Common Stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a
public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the
“Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares will reduce your
influence over our ability to complete our business combination and you could suffer a material loss on your investment in us
if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect
to the Excess Shares if we complete our business combination. And as a result, you will continue to hold that number of shares
exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially
at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on our redemption of our public shares, or less than such amount in certain circumstances,
and our warrants will expire worthless.
We
have encountered and expect to encounter intense competition from other entities having a business objective similar to ours,
including private investors (which may be individuals or investment partnerships), other blank check companies and other entities,
domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities
are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies
operating in or providing services to various industries. Many of these competitors possess greater technical, human and other
resources or more local industry knowledge than we do and our financial resources are relatively limited when contrasted with
those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the
net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete with respect
to the acquisition of certain target businesses that are sizable is limited by our available financial resources. This inherent
competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, because
we are obligated to pay cash for the shares of Class A Common Stock which our public stockholders redeem in connection with our
initial business combination, target companies will be aware that this may reduce the resources available to us for our initial
business combination. This may place us at a competitive disadvantage in successfully negotiating a business combination. If we
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share
on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.00 per share upon our liquidation. 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 below.
If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account
are insufficient to allow us to operate until the end of the Combination Period, we may be unable to complete our initial business
combination, in which case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances,
and our warrants will expire worthless.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until the end of the Combination
Period, assuming that our initial business combination is not completed during that time. We believe that the funds available
to us outside of the trust account are sufficient to allow us to operate until the end of the Combination Period; however, we
cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to
us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as
a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses
from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with
respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into
a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to
forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching
for, or conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
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 below.
If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account
are insufficient, 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 for a business
combination, to pay our franchise and income taxes and to complete our initial business combination. If we are unable to obtain
these loans, we may be unable to complete our initial business combination.
Of
the net proceeds of our initial public offering and the sale of the private placement warrants, only $2.5 million (as of December
31, 2019) will be 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 affiliates is under any obligation to
advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or
from funds released to us upon completion of our initial business combination. We do not expect to seek loans from parties other
than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide
a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we may
be unable to complete our initial business combination. If we are unable to complete our initial business combination because
we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently,
our public stockholders may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants
will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption
of their shares. 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
below.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the recent coronavirus (COVID-19) outbreak.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread
throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.”
On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United
States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized
the outbreak as a “pandemic”. A significant outbreak of COVID-19 and other infectious diseases could result in a widespread
health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target
business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable
to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings
with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will
depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions
posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business
combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially
adversely affected.
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
our stock price, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
surface all material issues that may be present inside a particular target business, that it would be possible to uncover all
material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our
control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In
addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to
such stockholders, or if they are able to successfully bring a private claim under securities laws that the tender offer materials
or proxy statement related to our initial business combination contained an actionable material misstatement or material omission.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 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.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide
for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially
held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and to the
extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay our franchise
and income taxes. This liability will not apply with respect to any claims by a third party who executed a waiver of any and all
rights to seek access to the trust account and except as to any claims under our indemnity of the underwriter of our initial public
offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed
waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability
for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity
obligations and believe that our sponsor’s only assets are securities of our company. We have not asked our sponsor to reserve
for such indemnification obligations. Therefore, our sponsor may not be able to satisfy those obligations. As a result, if any
such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser
amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay our franchise and income taxes, and our sponsor
asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders
may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and
our board may be exposed to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under
applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our business combination.
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If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities, each of which may make it difficult for us to complete our business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
is to identify and complete a business combination and thereafter to operate the post-transaction business or assets for the long
term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated
businesses or assets or to be a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds
held in the trust account may only be invested in United States “government securities” within the meaning of Section
2(a)(16) of the Investment Company Act having a maturity of 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 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 tendered in connection with a stockholder vote to amend
our amended and restated certificate of incorporation (a) to modify the substance or timing of our obligation to provide holders
of our Class A common stock the right to have their shares redeemed or to redeem 100% of our public shares if we do not complete
our initial business combination within the Combination Period, or (b) with respect to any other provisions relating to the rights
of holders of our Class A Common Stock; or (iii) absent a business combination, our return of the funds held in the trust account
to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above,
we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance
with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder
our ability to complete a business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and
results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.
Our
stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination within the Combination Period 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 end of the Combination Period in the event we do not complete our business combination and, therefore, we do not intend to
comply with the foregoing procedures.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us
at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company,
and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise
would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited
to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third
anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon
the redemption of our public shares in the event we do not complete our initial business combination within the Combination Period
is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then
pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution.
We
may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay
the opportunity for our stockholders to elect directors.
In
accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after
our first fiscal year end following our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold
an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is
made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior
to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL,
which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of
our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court
of Chancery in accordance with Section 211(c) of the DGCL.
Holders
of Class A Common Stock will not be entitled to vote on any election of directors we hold prior to our initial business combination.
Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors.
Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to
the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board
of directors for any reason. Accordingly, you may not have any say in the management of our company prior to the consummation
of an initial business combination.
We
have not registered the shares of Class A Common Stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus
precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants
to expire worthless.
We
have not registered the shares of Class A Common Stock issuable upon exercise of the warrants issued in our initial public offering
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 twenty business days after the closing of our initial business
combination, we will use commercially reasonable efforts to file with the SEC a registration statement for the registration, under
the Securities Act, of the shares of Class A Common Stock issuable upon exercise of the warrants and thereafter will use commercially
reasonable efforts to cause the same to become effective within 60 business days following our initial business combination and
to maintain a current prospectus relating to the Class A Common Stock issuable upon exercise of the warrants, until the expiration
of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so
if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration
statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or
the SEC issues a stop order. If the shares issuable upon exercise of the warrants issued in our initial public offering are not
registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However,
no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking
to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities
laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our
Class A Common Stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require
holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement,
but we will be required to use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws
to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying
the warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise
of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of Units will have paid the full unit purchase price solely for the shares of Class A Common
Stock included in the Units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we
are unable to register or qualify the underlying shares of Class A Common Stock for sale under all applicable state securities
laws.
The
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A Common Stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial
stockholders and their permitted transferees can demand that we register the private placement warrants and the shares of Class
A Common Stock issuable upon exercise of the founder shares and the private placement warrants held by them and holders of warrants
that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A Common Stock
issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability
of such a significant number of securities for trading in the public market may have an adverse effect on the market price of
our Class A Common Stock. In addition, the existence of the registration rights may make our initial business combination more
costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A Common
Stock that is expected when the securities owned by our initial stockholders or holders of working capital loans or their respective
permitted transferees are registered.
Because
we are not limited to a particular industry, sector or any specific target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
Although
we expect to focus our search for a target business in the industrial sector, 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 business combination with another blank check company or similar company with nominal operations.
Because we have not yet entered into a definitive agreement with any specific target business with respect to a business combination,
there is no basis to evaluate the possible merits or risks of any particular target business’ operations, results of operations,
cash flows, liquidity, financial condition or prospects. To the extent we complete our business combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable
business or an entity lacking an established record of revenues or earnings, we may be affected by the risks inherent in the business
and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all 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 securities will ultimately prove to be more favorable to
investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders
who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such
stockholders are unlikely to have a remedy for such reduction in value.
We
may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of
expertise.
Although
we intend to focus on identifying business combination candidates in the industrials sector, we may consider a business combination
outside of our management’s area of expertise if a business combination candidate is presented to us and we determine that
such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or
assess all of the significant risk factors. We also cannot assure you that an investment in our securities will not ultimately
prove to be less favorable to investors in our initial public offering than a direct investment, if an opportunity were available,
in a business combination candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information
contained herein regarding the areas of our management’s expertise would not be relevant to an understanding of the business
that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant
risk factors. Accordingly, any stockholders who choose to remain stockholders following our business combination could suffer
a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be
as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce
a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders
may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business
that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction
is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult
for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
We
may seek acquisition opportunities with a financially unstable business or an entity lacking an established record of revenue
or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we
combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although
our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to
properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our
company from a financial point of view.
Unless
we complete our business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that
is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A Common Stock upon the conversion
of the Class B Common Stock at a ratio greater than one-to-one at the time of our initial business combination as a result of
the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute
the interest of our stockholders and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 500,000,000 shares of Class A Common Stock,
par value $0.0001 per share, 50,000,000 shares of Class B Common Stock, par value $0.0001 per share, and 1,000,000 shares of preferred
stock, par value $0.0001 per share. There are currently 465,500,000 and 41,375,000 authorized but unissued shares of Class A Common
Stock and Class B Common Stock, respectively, available for issuance, excluding shares of Class A Common Stock reserved for issuance
upon exercise of outstanding warrants and currently issuable upon conversion of Class B Common Stock. There are no shares of preferred
stock issued and outstanding. Shares of Class B Common Stock are convertible into shares of our Class A Common Stock initially
at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue Class
A Common Stock or equity-linked securities related to our initial business combination. Shares of Class B Common Stock are also
convertible at the option of the holder at any time.
We may issue a substantial number of additional
shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination. We may also issue shares of Class A Common Stock to redeem the warrants or upon conversion
of the Class B Common Stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the
anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated
certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional
shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any
initial business combination. The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in our initial public offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our
common stock;
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could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our
present officers and directors; and
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may adversely affect prevailing market prices for our Units, Class A Common Stock and/or warrants.
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Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
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 on the liquidation of our trust account and our warrants will expire worthless.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join
us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully effect our 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 business combination, it is likely that some or all of the management of the target business will
remain in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar
with such requirements.
In addition, the officers and directors
of an acquisition candidate may resign upon completion of our initial business combination. The departure of a business combination
target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role
of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an
acquisition candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination. These agreements may provide for them to
receive compensation following our business combination and as a result, may cause them to have conflicts of interest in determining
whether a particular business combination is the most advantageous.
Our key personnel may be able to remain
with the company after the completion of our business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business
combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for
services they would render to us after the completion of the business combination. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such
individuals to remain with us after the completion of our business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key
personnel will remain with us after the completion of our business combination. We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain
with us will be made at the time of our initial business combination. In addition, pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in our initial public offering, our sponsor, upon consummation of an initial business
combination, will be entitled to nominate three individuals for election to our board of directors.
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, which could, in turn, negatively impact the value
of our stockholders’ investment in us.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’ management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain
stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely
to have a remedy for such reduction in value.
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 businesses. We do not intend to have any full-time employees
prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for which
he may be entitled to substantial compensation, including Mr. Fradin’s service as a director of GS Acquisition Holdings Corp.,
a special purpose acquisition company that, like us, intends to pursue a business combination in the industrial sector, and our
officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve
as officers or board members for other entities. If our officers’ and directors’ other business affairs require them
to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For
a complete discussion of our officers’ and directors’ other business affairs, please see Item 10 “Directors,
Executive Officers and Corporate Governance” and Item 13 “Certain Relationships and Related Transactions, and Director
Independence.”
Certain of our officers and directors are now, and
all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity should be presented.
Until we consummate our initial business
combination, we will continue to engage in the business of identifying and combining with one or more businesses. Our sponsor and
officers and directors are, and may in the future become, affiliated with entities that are engaged in a similar business. For
instance, Mr. Fradin is currently a member of the board of directors of GS Acquisitions Holding Corp., a special purpose acquisition
company that intends, like us, to pursue a business combination in the industrial sector and has already raised funds in its initial
public offering. However, Mr. Fradin and Mr. Cook have agreed not to participate in the formation of, or become an officer or director
of, any other special purpose acquisition company with a class of securities registered under the Exchange Act, until we have entered
into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination
within the Combination Period. Our officers and directors also may become aware of business opportunities which may be appropriate
for presentation to us and the other entities to which they owe certain fiduciary or contractual duties.
Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved
in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and
restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of
our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue. For a complete discussion of our officers’ and directors’ business affiliations and the potential
conflicts of interest that you should be aware of, please see Item 10 “Directors, Executive Officers and Corporate Governance”
and Item 13 “Certain Relationships and Related Transactions, and Director Independence.”
Brian Cook, our Chief Executive Officer, Chief Financial
Officer and Director, is a party to a non-competition agreement that could limit the companies and businesses that we may target
for an initial business combination. This could negatively impact our prospects for an initial business combination.
Brian Cook, our Chief Executive Officer,
Chief Financial Officer and Director, is a party to a non-competition agreement with Honeywell International, Inc. (“Honeywell”)
that expires on May 6, 2020. The non-competition agreement precludes Mr. Cook from, without the written consent of Honeywell, becoming
employed by, performing services for, or otherwise becoming associated with (as an employee, officer, director, principal, agent,
manager, partner, co-partner or consultant or any other individual or representative role) any competing business of Honeywell
prior to expiration. No assurance can be given that Honeywell would provide any consent on terms satisfactory to us or at all.
As a result, we may be precluded from pursuing an initial business combination with certain businesses, which could limit our prospects
for an initial business combination and make us a less attractive buyer to certain target companies. In addition, if our initial
business combination does not cause Mr. Cook to violate the non-competition agreement, no assurance can be given that the combined
company would not in the future engage in competitive activities which would cause Mr. Cook to be in breach of the non-competition
agreement. If a court were to conclude that a violation this non-competition agreement had occurred, it could extend the term of
Mr. Cook’s non-competition restrictions and/or enjoin Mr. Cook from participating in our company, or enjoin us from engaging
in aspects of the business which compete with Honeywell, as applicable. A court could also impose monetary damages against Mr.
Cook or us. This could materially harm our business and the trading prices of our securities. Even if ultimately resolved in our
favor, any litigation associated with the non-competition agreement could be time consuming, costly and distract management’s
focus from locating suitable acquisition candidates and operating our 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, upon 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, directors, security holders and their
respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest
in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact,
we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or officers,
although we do not intend to do so. We do not have a policy that expressly prohibits any such persons from engaging for their own
account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between
their interests and ours.
We may engage in a business combination with one
or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or
existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor,
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers
or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described
under Item 13 “Certain Relationships and Related Transactions, and Director Independence.” 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 business combination with any entities with which they are affiliated, and there have been no preliminary
discussions concerning a business combination with any such entity or entities. Although we are not 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 disinterested directors.
Despite our agreement to obtain an opinion from an independent investment banking firm that is a member of FINRA, or from an independent
accounting firm, regarding the fairness to our company from a financial point of view of a business combination with one or more
domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts of interest
still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as
they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose
their entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
In August 2019, our sponsor purchased 8,625,000
founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2019, our sponsor transferred
35,000 founder shares to each of our independent directors. The founder shares will be worthless if we do not complete an initial
business combination. In addition, our sponsor purchased 10,150,000 private placement warrants, each exercisable for one share
of our Class A Common Stock at $11.50 per share, for a purchase price of $10,150,000, or $1.00 per whole warrant, that will also
be worthless if we do not complete a business combination. Holders of founder shares have agreed (A) to vote any shares owned by
them in favor of any proposed business combination and (B) not to redeem any founder shares in connection with a stockholder vote
to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor
or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in
identifying and selecting a target business combination, completing an initial business combination and influencing the operation
of the business following the initial business combination.
We may issue notes or other debt securities, or
otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the
date of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur
substantial debt to complete our business combination. We have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such,
no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence
of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay
our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we
breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available
for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund
other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in
government regulation;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
and execution of our strategy; and
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other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business combination
with the proceeds of the initial public offering and the sale of the private placement warrants, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
Of the net proceeds from our initial public
offering and the sale of the private placement warrants, $ 347,250,000 is available to complete our initial business combination
and pay related fees and expenses (which includes up to approximately $ 12,075,000, for the payment of deferred underwriting commissions).
We may effectuate our business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not
be able to effectuate our business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present
operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible
spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations
in different industries or different areas of a single industry. In addition, we intend to focus our search for an initial business
combination in a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject
us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if
there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services
or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could
negatively impact our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with
a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we
may seek to effectuate our initial business combination with a privately held company. By definition, very little public information
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of 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 may structure a business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to the business combination may collectively own a minority interest in the post business combination company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares of Class A Common Stock in exchange for all of the outstanding capital stock
of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial
number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of
our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently
combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially
acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target
business. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills,
qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial
majority of our stockholders do not agree.
Our amended and restated certificate of
incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination
(such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our
business combination even if a substantial majority of our public stockholders do not agree with the transaction and have redeemed
their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection
with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their
shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would
be required to pay for all shares of Class A Common Stock that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available
to us, we will not complete the business combination or redeem any shares, all shares of Class A Common Stock submitted for redemption
will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate our initial business combination,
we may seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make
it easier for us to complete our initial business combination but that our stockholders may not support.
In order to effectuate a business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments.
For example, blank check companies have amended the definition of business combination, increased redemption thresholds and changed
industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments or change our industry
focus in order to effectuate our initial business combination.
The provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a
lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended
and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination
that some of our stockholders may not support.
Some other blank check companies have a
provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s
pre-business combination activity, without approval by a certain percentage of the company’s stockholders. In those companies,
amendment of these provisions sometimes requires approval by between 90% and 100% of the company’s public stockholders. Our
amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity
(including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust
account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders
as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding
provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of
65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation
may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions
of the DGCL or applicable stock exchange rules. Our initial stockholders, who collectively beneficially own up to 20% of our common
stock, will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will
have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated
certificate of incorporation which govern our pre-business combination behavior more easily than some other blank check companies,
and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies
against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation that would affect the substance or timing of our obligation to provide holders of our Class A Common Stock the
right to have their shares redeemed or redeem 100% of our public shares if we do not complete our initial business combination
within the Combination Period or with respect to any other provisions relating to the rights of holders of our Class A Common Stock,
unless we provide our public stockholders with the opportunity to redeem their shares of Class A Common Stock upon approval of
any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided
by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into
with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements
and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these
agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject
to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to
restructure or abandon a particular business combination.
Although we believe that the net proceeds
of our initial public offering and the sale of the private placement warrants are sufficient to allow us to complete our initial
business combination, because we have not yet entered into a definitive agreement with any prospective target business we cannot
ascertain the capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale
of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the
depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number
of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing
or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative
target business candidate. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share plus any pro rata interest earned on the funds held in the trust account and not previously released
to us to pay our franchise and income taxes on the liquidation of our trust account and our warrants will expire worthless. In
addition, even if we do not need additional financing to complete our business combination, we may require such financing to fund
the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect
on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide
any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business
combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of our trust account, and
our warrants will expire worthless.
Our initial stockholders may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own shares representing
20% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring
a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate
of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of common
stock in the aftermarket or in privately negotiated transactions, this would increase their control. Factors that would be considered
in making such additional purchases would include consideration of the current trading price of our Class A Common Stock. In addition,
our board of directors, whose members were elected by our initial stockholders, is and will be divided into three classes, each
of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not
hold an annual meeting of stockholders to elect new directors prior to the completion of our business combination, in which case
all of the current directors will continue in office until at least the completion of the business combination. If there is an
annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will
be considered for election and our initial stockholders, because of their ownership position, will have considerable influence
regarding the outcome. In addition, prior to the completion of an initial business combination, holders of a majority of our founder
shares may remove a member of the board of directors for any reason. We have also agreed not to enter into a definitive agreement
regarding an initial business combination without the prior consent of our sponsor. Roger Fradin, who controls both us and our
sponsor, is also a member of the board of directors of GS Acquisition Holdings Corp., a special purpose acquisition company that
intends to pursue a business combination in the industrial sector and has already raised funds in its initial public offering.
Mr. Fradin’s roles at both GS Acquisition Holdings Corp. and as our Chairman led Mr. Fradin to enter into an agreement with
an affiliate of GS Acquisition Holdings Corp. pursuant to which Mr. Fradin has agreed, prior to the earlier of GS Acquisition Holdings
Corp. entering into a definitive agreement regarding its initial business combination or June 12, 2020 (the deadline by which GS
Acquisition Holdings Corp. must enter into an initial business combination), not to pursue, and therefore will not permit our sponsor
to consent to, our entry into a definitive agreement regarding an initial business combination with an entity that has an enterprise
value of greater than $3 billion. Accordingly, our initial stockholders will continue to exert control at least until the completion
of our business combination.
We may amend the terms of the warrants in a manner
that may be adverse to holders with the approval by the holders of at least 50% of the then outstanding public warrants. As a result,
the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of our
Class A Common Stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants are issued in registered form
under a warrant agreement between 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. 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 and, solely
with respect to any amendment to the terms of the private placement warrants or any provision of the warrant agreement with respect
to the private placement warrants, 50% of the number of the then outstanding private placement warrants. 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, shorten the exercise
period or decrease the number of shares of our Class A Common Stock purchasable upon exercise of a warrant.
We may redeem your unexpired warrants prior to their
exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the last reported sales price of our Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30
trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided
certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption right even if
we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption
of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it
may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish
to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for
redemption, is likely to be substantially less than the market value of your warrants. Except as otherwise set forth herein, none
of the private placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.
In addition, we may redeem your warrants
after they become exercisable for $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided
that holders will be able to exercise their warrants prior to redemption for a number of Class A Common Stock determined based
on the redemption date and the fair market value of our Class A Common Stock. Please see Exhibit 4.2 of this Report. Any such redemption
may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants
are “out-of-the-money,” in which case you would lose any potential embedded value from a subsequent increase in the
value of the Class A Common Stock had your warrants remained outstanding.
Our warrants and founder shares may have an adverse
effect on the market price of our Class A Common Stock and make it more difficult to effectuate our business combination.
We issued warrants to purchase 17,250,000
shares of Class A Common Stock as part of the Units sold in our initial public offering and, simultaneously with the closing of
our initial public offering, we issued in a private placement warrants to purchase an aggregate of 10,150,000 shares of Class A
Common Stock at $11.50 per share. Prior to our initial public offering, our sponsor purchased an aggregate of 8,625,000 founder
shares in a private placement. The founder shares are convertible into shares of Class A Common Stock on a one-for-one basis, subject
to adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans
may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical
to the private placement warrants, including as to exercise price, exercisability and exercise period. Our public warrants are
also redeemable by us for Class A Common Stock as described in Exhibit 4.2 of this Report.”
To the extent we issue shares of Class A
Common Stock to effectuate a business combination, the potential for the issuance of a substantial number of additional shares
of Class A Common Stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition vehicle
to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A Common Stock and
reduce the value of the shares of Class A Common Stock issued to complete the business combination. Therefore, our warrants and
founder shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical
to the warrants sold as part of the Units in our initial public offering except that, so long as they are held by our sponsor or
its permitted transferees, (i) they will not be redeemable by us, except as otherwise set forth herein (ii) they (including the
Class A Common Stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred,
assigned or sold by our sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised
by the holders on a cashless basis.
Because each unit contains one-half of one warrant
and only a whole warrant may be exercised, the Units may be worth less than Units of other blank check companies.
Each unit contains one-half of one warrant.
Because, pursuant to the warrant agreement, the warrants may only be exercised for a whole number of shares, only a whole warrant
may be exercised at any given time. This is different from other offerings similar to ours whose Units include one share of common
stock and one warrant to purchase one whole share. We have established the components of the Units in this way in order to reduce
the dilutive effect of the warrants upon completion of a business combination since the warrants will be exercisable in the aggregate
for one-half of the number of shares compared to Units that each contain a warrant to purchase one whole share, thus making us,
we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our Units to be
worth less than if they included a warrant to purchase one whole share.
The requirements of being a public company may strain
our resources and divert management’s attention.
As a public company, we are subject to the
reporting requirements of the Exchange Act, the Sarbanes Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations
increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand
on our systems and resources, particularly after we are no longer an “emerging growth company.” The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial
reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial
reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s
attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may
need to hire more employees in the future or engage outside consultants to comply with these requirements, which will increase
our costs and expenses.
A provision in our warrant agreement may make it
more difficult for us to consummate an initial business combination.
Unlike most blank check companies, if (i)
we issue additional shares of Class A Common Stock or equity-linked securities for capital raising purposes in connection with
the closing of our initial business combination at a price of less than $9.20 per share (with such issue price or effective issue
price to be determined in good faith by us and, (x) in the case of any such issuance to our sponsor or its affiliates, without
taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance, and (y) without
taking into account the transfer of founder shares or private placement warrants (including if such transfer is effectuated as
a surrender to us and subsequent reissuance by us) by our sponsor in connection with such issuance) (the “Newly Issued Price”),
(ii) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our initial business combination on the date of the consummation of our initial business combination
(net of redemptions), and (iii) the the volume weighted average trading price of Class A Common Stock during the 20 trading day
period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market
Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted to be equal to 115% of the higher
of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest
cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may make it more difficult for us
to consummate an initial business combination with a target business.
A market for our securities may not develop, which
would adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly
due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market
for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless
a market can be established and sustained.
Because we must furnish our stockholders with target
business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require that a proxy
statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or
pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection
with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may
be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America, or GAAP, or international financial reporting standards, 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 statements may also be required to be prepared in accordance with GAAP in connection
with our current report on Form 8-K announcing the closing our initial business combination within four business days following
such closing. These financial statement requirements may limit the pool of potential target businesses we may acquire because some
targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors
and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging
growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our Class A Common Stock held by non-affiliates exceeds $700 million as of the end of a prior fiscal year’s second
fiscal quarter before that time, in which case we would no longer be an emerging growth company as of the following December 31.
We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some
investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities
may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices
of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accountant standards used.
Additionally, we are a “smaller reporting
company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the end of the prior fiscal year’s second fiscal quarter, or (2) our annual revenues exceeded
$100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million
as of the end of the prior fiscal year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure
obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management
resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls over financial reporting beginning with our Annual Report on Form
10-K 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. The fact that we are a blank check company makes
compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies
because a target company with which we seek to complete our business combination may not be in compliance with the provisions of
the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control over financial reporting
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in
the future for our Class A Common Stock and could entrench management.
Our amended and restated certificate of
incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage
transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
Our amended and restated certificate of incorporation
will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and
proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable
judicial forum for disputes with our company or our company’s directors, officers or other employees.
Our amended and restated certificate of
incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the
State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action
or proceeding brought on behalf of our company, (2) action asserting a claim of breach of a fiduciary duty owed by any director,
officer, employee or agent of our company to our company or our stockholders, or any claim for aiding and abetting any such alleged
breach, (3) action asserting a claim against our company or any director, officer or employee of our company arising pursuant to
any provision of the DGCL or our amended and restated certificate of incorporation or our bylaws, or (4) action asserting a claim
against us or any director, officer or employee of our company governed by the internal affairs doctrine except for, as to each
of (1) through (4) above, any claim (a) as to which the Court of Chancery determines that there is an indispensable party not subject
to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the
Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or
forum other than the Court of Chancery, or (c) arising under the federal securities laws, including the Securities Act, as to which
the Court of Chancery and the federal district court for the District of Delaware shall concurrently be the sole and exclusive
forums. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability
or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America shall
be the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital
stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of
incorporation. If any action the subject matter of which is within the scope the forum provisions is filed in a court other than
a court located within the State of Delaware (a “foreign action”) in the name of any stockholder, such stockholder
shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of
Delaware in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”),
and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s
counsel in the foreign action as agent for such stockholder.
This choice-of-forum provision may limit
a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company or its
directors, officers or other employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision
of our amended and restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified
types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which
could materially and adversely affect our business, financial condition and results of operations and result in a diversion of
the time and resources of our management and board of directors.
If we effect our initial business combination with
a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that
may negatively impact our operations.
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial
and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.
Cyber incidents or attacks directed at us could
result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including
information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive
or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently
protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate
any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse
consequences on our business and lead to financial loss.
We may face risks related to businesses in the industrial
sector.
Business combinations with businesses in
the industrial sector entail special considerations and risks. If we are successful in completing a business combination with such
a target business, we may be subject to, and possibly adversely affected by, the following risks:
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the markets we may serve may be subject to general economic conditions and cyclical demand, which could lead to significant
shifts in our results of operations from quarter to quarter that make it difficult to project long-term performance;
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fluctuations in customer demand;
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competition and consolidation of the specific sector of the industry within which the target business operates;
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volatility in costs for strategic raw material and energy commodities or disruption in the supply of these commodities could
adversely affect our financial results;
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supplier stability, factory transitions and capacity constraints;
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inability to obtain necessary insurance coverage for the target business’ operations;
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additional expenses and delays due to technical problems, labor problems (including union disruptions) or other interruptions
at our manufacturing facilities after our initial business combination;
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work-related accidents that may expose us to liability claims;
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our manufacturing processes and products not complying with applicable statutory and regulatory requirements, or if we manufacture
products containing design or manufacturing defects, the demand for our products declining and potential liability claims;
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litigation and other proceedings, including that we may be liable for damages based on product liability claims, and we may
also be exposed to potential indemnity claims from customers for losses due to our work or if our employees are injured performing
services;
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warranty claims related to our products, and resulting reputational damage and incurrence of significant costs;
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changes in industry standards;
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changes in tariffs and other trade practices;
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inability to protect our intellectual property rights;
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our products and manufacturing processes being subject to technological change;
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being subject to applicable laws and regulations of federal, state and provincial governments, including environmental and
health and safety laws and regulations, and the costs of compliance with such regulations;
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disruption or failure of networks, systems or technology as a result of computer viruses, “cyber-attacks,” misappropriation
of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar
events;
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fluctuations in foreign currency exchange rates; and
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the failure of our customers to pay the amounts owed to us in a timely manner.
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Any of the foregoing could have an adverse
impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will
not be limited to the industrial sector. Accordingly, if we acquire a target business in another industry, we will be subject to
risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different
than those risks listed above.