Introductory Note
The following describes the business
of Foley Trasimene Acquisition Corp. Except where otherwise noted, all references to “we,” “us,”
“our,” “FTAC,” or the “Company,” are to Foley Trasimene Acquisition Corp.
Description of Business
The Company is a newly incorporated blank
check company incorporated in Delaware on March 26, 2020. The Company was 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 (“Business
Combination” or referred to throughout this Annual Report on Form 10-K (“Report”) as our initial business combination).
Although the Company is not limited to
a particular industry or geographic region for purposes of consummating a Business Combination, the Company is focused on
identifying a prospective target business in financial technology or business process outsourcing, which acts as an essential utility
to industries that are core to the economy. The Company is an early stage and emerging growth company and, as such, the Company
is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2020, the Company
had not commenced any operations. All activity for the period from March 26, 2020 (inception) through December 31, 2020
relates to the Company’s formation, our initial public offering (“Initial Public Offering” or
"IPO"), which is described below, and identifying a target company for a Business Combination. The Company will not
generate any operating revenues unless and until completion of a Business Combination, at the earliest. The Company
generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
During the period ended April 7, 2020,
our sponsors, as defined below, paid in the aggregate $25,000, or approximately $0.001 per share, to cover certain of our offering
costs in consideration of 21,562,500 shares of our Class B common stock, par value $0.0001. On May 26, 2020, we effected a stock
dividend with respect to our Class B common stock of 4,312,500 shares thereof, resulting in our sponsors holding an aggregate of
25,875,000 shares of our Class B common stock (the "Founder Shares").
On May 29, 2020, the Company consummated
the Initial Public Offering of 103,500,000 units (the “Units”), which includes the full exercise by the underwriters
of the over-allotment option to purchase an additional 13,500,000 Units. Each Unit consists of one share of Class A common stock
of the Company, par value $0.0001 per share (“Common Stock”), and one-third of one redeemable warrant of the Company,
each whole warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price of $11.50 per
share (each whole warrant referred to as a “warrant” throughout this report). The Units were sold at a price of $10.00 per share, generating gross proceeds
to the Company of $1,035,000,000.
Substantially concurrently with the closing
of the Initial Public Offering, the Company consummated the sale of 15,133,333 warrants (the “Private Placement Warrants”)
at a price of $1.50 per Private Placement Warrant in a private placement to Trasimene Capital Management FT, LP (the “Trasimene
Sponsor”), an affiliate of Trasimene Capital Management, LLC (“Trasimene Capital”), and Bilcar FT, LP (the “Bilcar
Sponsor” and collectively with the Trasimene Sponsor, referred to throughout this report as sponsors), an affiliate of Bilcar Limited Partnership,
a Florida limited partnership, generating gross proceeds of $22,700,000.
A total of $1,035,000,000 from the net
proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a
trust account (the “Trust Account”) and invested in U.S. government securities until the earlier of: (i) the completion
of a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described
below.
Company Common Stock and Warrants trade
on the New York Stock Exchange (“NYSE”) under the symbols “WPF” and “WPF.WS,” respectively. Those
Units not separated continue to trade on the NYSE under the symbol “WPF.U.”
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a
Business Combination. Under applicable rules of the NYSE, the Company must complete its initial Business Combination with one or more target businesses that together
have a fair market value equal to at least 80% of the net assets held in the Trust Account (excluding any deferred underwriting
commissions and taxes payable on the interest earned in the Trust Account) at the time the Company signs a definitive agreement
in connection with a Business Combination. The Company will only complete a Business Combination if the post-Business Combination
company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling
interest in the target business sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination.
Pending Business
Combination
On January 25, 2021, we entered into
a Business Combination Agreement (the “Business Combination Agreement”) with Tempo Holding Company, LLC, a
Delaware limited liability company (“Alight”), Acrobat Holdings, Inc., a Delaware corporation and our
direct, wholly owned subsidiary (“Alight Pubco”), Acrobat SPAC Merger Sub, Inc., a Delaware corporation
and direct, wholly owned subsidiary of Alight Pubco (“FTAC Merger Sub”), Acrobat Merger Sub, LLC, a
Delaware limited liability company and our direct, wholly owned subsidiary (“Tempo Merger Sub”), Acrobat
Blocker 1 Corp., a Delaware corporation and a direct, wholly owned subsidiary of Alight Pubco (“Blocker Merger Sub
1”), Acrobat Blocker 2 Corp., a Delaware corporation and a direct, wholly owned subsidiary of Alight Pubco
(“Blocker Merger Sub 2”), Acrobat Blocker 3 Corp., a Delaware corporation and a direct, wholly owned
subsidiary of Alight Pubco (“Blocker Merger Sub 3”), Acrobat Blocker 4 Corp., a Delaware corporation and a
direct, wholly owned subsidiary of Alight Pubco (“Blocker Merger Sub 4” and, together with Blocker Merger
Sub 1, Blocker Merger Sub 2 and Blocker Merger Sub 3, the “Blocker Merger Subs”), Tempo Blocker I, LLC, a
Delaware limited liability company (“Tempo Blocker 1”), Tempo Blocker II, LLC, a Delaware limited
liability company (“Tempo Blocker 2”), Blackstone Tempo Feeder Fund VII, L.P., a Delaware limited
partnership (“Tempo Blocker 3”), and New Mountain Partners IV Special (AIV-E), LP, a Delaware limited
partnership (“Tempo Blocker 4” and, together with Tempo Blocker 1, Tempo Blocker 2 and Tempo Blocker 3,
the “Tempo Blockers”). The Business Combination Agreement contemplates the consummation of the following
transactions (the “Pending Business Combination”): (i) FTAC Merger Sub will merge with and into FTAC, with
FTAC being the surviving corporation in the merger and becoming a subsidiary of Alight Pubco (the “Pubco
Merger”) and (ii) Alight Pubco will, through a series of mergers and related transactions, acquire equity interests
in Alight and the Tempo Blockers. Following the Pending Business Combination, Alight Pubco will become a publicly traded
entity under the name “Alight, Inc.” and symbol ALIT. Substantially all of the assets and business of Alight
Pubco will be held by Alight and the combined companies’ business will continue to operate through the subsidiaries of
Alight. The transaction reflects an implied pro-forma enterprise value for Alight Pubco of approximately $7.3 billion at
closing and is expected to satisfy the conditions described above.
Alight is a leading cloud-based provider
of integrated digital human capital and business solutions. Leveraging proprietary artificial intelligence and data analytics,
Alight optimizes business process as a service to deliver superior outcomes for employees and employers across a comprehensive
portfolio of services. Alight allows employees to optimize their health, wealth and work while enabling global organizations to
achieve a high-performance culture. Alight’s 15,000 dedicated colleagues serve more than 30 million employees and family
members.
Consummation of the transactions
contemplated by the Business Combination Agreement is subject to customary conditions, representations, warranties and
covenants in the Business Combination Agreement, including, among others, approval by FTAC stockholders, the effectiveness of
a registration statement on Form S-4 (the “Form S-4”) to be filed with the Securities and Exchange Commission
(the “SEC”) in connection with the Pending Business Combination, and other customary closing conditions,
including the receipt of certain regulatory approvals. The transaction is expected to close in the second quarter of
2021.
In connection with the execution of
the Business Combination Agreement, FTAC and Alight Pubco entered into certain Alight Pubco Class A common stock subscription
agreements (the “Subscription Agreements”) with certain investment funds (the “PIPE
Investors”) pursuant to which Alight Pubco has agreed to issue and sell to the PIPE Investors, in the aggregate,
$1,550,000,000 of Alight Pubco Class A common stock (the “PIPE Investment”) at a purchase price of $10.00
per share. The closing of the PIPE Investment is conditioned on all conditions set forth in the Business Combination
Agreement having been satisfied or waived and other customary closing conditions, and it is expected that the Pending
Business Combination will be consummated immediately following the closing of the PIPE Investment.
In connection with the execution of
the Business Combination Agreement, we amended and restated (a) that certain letter agreement, dated May 29, 2020, with our
sponsors and (b) that certain letter agreement, dated as of May 29, 2020, with each of our directors and officers, pursuant
to which, among other things, our sponsors, directors and officers agreed (i) to vote any FTAC securities held by them in
favor of the Pending Business Combination and other FTAC Stockholder Matters (as defined in the Business Combination
Agreement), (ii) not to seek redemption of any FTAC securities and not to transfer any FTAC securities for a period of 270
days following the closing date of the Pending Business Combination (or, if the volume weighted average price of the Alight
Pubco Class A common stock equals or exceeds $12.00 per share for any 20 trading days within a 30 trading day period
following the closing date of the Pending Business Combination, 150 days thereafter), and (vi) to be bound to certain other
obligations as described therein (the “Amended and Restated Sponsor Agreement”). Additionally, our
sponsors and certain of our directors and officers who hold shares of our Class B common stock acknowledged and agreed that
they would receive the consideration set forth in the Business Combination Agreement in lieu of the consideration they would
otherwise have been entitled to under our certificate of incorporation.
The Business Combination Agreement and
related agreements are further described in the Current Report on Form 8-K filed by the Company on January 27, 2021.
Other than as specifically discussed,
this report does not assume the closing of the Pending Business Combination or the transactions contemplated by the Business
Combination Agreement.
Strategy
Foley Trasimene
Acquisition Corp. employs a fundamental, value-oriented acquisition framework that seeks a target with utility-like features,
a defensible market position, reliable cash flows and low overall economic cycle risk. Our business strategy is to identify
and complete our initial business combination with a company that complements the experience of our founder and can benefit
from his operational expertise. Our selection process will leverage our founder’s broad and deep relationship network,
unique industry experiences and proven deal sourcing capabilities to access a broad spectrum of differentiated opportunities.
This network has been developed through our founder’s extensive experience and demonstrated success in both investing
in and operating businesses across a variety of industries, and developing a distinctive combination of capabilities
including:
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a track record of building industry-leading companies and proven ability to deliver stockholder value over an extended time period
with above-market-average investment returns that are multiples greater than comparable benchmarks and peers;
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a prolific acquisition history, having completed hundreds transactions that have in sum contributed to such companies’ financial
results and strategic position. This acquisition history has been executed using established proprietary deal sourcing and differentiated
transaction execution/structuring capabilities;
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experience deploying a unique and broad value creation toolkit including identifying value enhancements, recruiting world-class
talent and delivering elite operating efficiency by exceeding synergy targets in transactions across multiple industries; and
an extensive history of accessing the capital markets across various business cycles, including financing businesses and assisting
companies with the transition to public ownership.
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Mr. Foley communicates with his networks
of relationships to articulate the parameters for our search for a target company and a potential business combination and begin
the process of pursuing and reviewing potential opportunities.
Acquisition Criteria
Our acquisition strategy leverages Mr. Foley’s network of proprietary deal sources where we believe a combination of a proactive outreach and
receptivity to inbound ideas will provide us with a number of business combination opportunities. Additionally, we expect
that relationships cultivated from years of transaction experience and management teams of public and private companies,
investment bankers and other business associates will provide potential opportunities for the Company.
Consistent with our strategy, we have identified the following general criteria and guidelines which we believe are important
in evaluating prospective target businesses. We use these criteria and guidelines in evaluating acquisition
opportunities, but we may decide to enter into our initial business combination with a target business that does not meet
these criteria and guidelines. We intend to acquire one or more businesses that we believe:
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have the opportunity to become an industry utility with a defensible market position that can benefit from Mr. Foley’s leadership
and guidance;
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are at a critical strategic inflection point, such as requiring additional management expertise or access to capital to launch
a new phase of growth or corporate/business model evolution;
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exhibit unrecognized value or other characteristics that we believe Mr. Foley can optimize over the long-run to produce outsized
investor returns;
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exhibit unrecognized value or other characteristics, desirable returns on capital, and a need for capital to achieve the company’s
growth strategy, which we believe have been misevaluated by the marketplace based on our analysis and due diligence review;
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will offer an attractive risk-adjusted return for our stockholders, similar to Mr. Foley’s historical achievements; and
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have been materially impacted by possible current market dislocations but are fundamentally sound businesses whose products and/or
services are necessary to the continuing function of a core economic industry or service.
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These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular initial business combination are based, to the extent relevant, on these
general guidelines as well as other considerations, factors and criteria that our management 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 tender offer documents or proxy solicitation materials that we would file with
the SEC.
Initial Business Combination
In accordance with the rules of the NYSE,
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 amount of deferred underwriting discounts held in trust
and taxes payable on the income earned on the trust account) at the time of our signing a definitive agreement in connection with
our initial business combination. If our board of directors is not able to independently determine the fair market value of the
target business or businesses, we will obtain an opinion from an independent investment banking firm that is a member of FINRA
or an independent valuation or appraisal firm with respect to satisfaction of such criteria. Our stockholders may not be provided
with a copy of such opinion nor will they be able to rely on such opinion. 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 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.
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 prior owners of the target business, the target management team or stockholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required
to register as an investment company under 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, shares or other equity interests 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 issued and 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.
To the extent we effect our initial business
combination with a company or business that may be financially unstable or in its early stages of development or growth, we may
be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business,
we conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management
and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information
which will be made available to us.
The time required to select and evaluate
a target business and to structure and complete our initial business combination, and the costs associated with this process, are
not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation
of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
Our Acquisition Process
In evaluating any prospective target business,
we conduct a thorough due diligence review which encompasses, among other things, meetings with incumbent management and employees,
document reviews, inspection of facilities, as well as a review of financial, operational, legal and other information which will
be made available to us.
We are not prohibited from pursuing an
initial business combination with a company that is affiliated with our sponsors, founder, officers or directors. In the event
we seek to complete our initial business combination with a company that is affiliated with our sponsors, founder, officers or
directors, we, or a committee of independent directors, will obtain an opinion that our initial business combination is fair to
our company from a financial point of view from either an independent investment banking firm that is a member of FINRA or an independent
accounting firm.
Members of our management team and officers
and directors of entities affiliated with our sponsors may directly or indirectly own our common stock 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 is 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 another entity
pursuant to which such officer or director is or will be required to present a business combination opportunity to such
entity. Accordingly, if any of our founder, 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 business combination opportunity to such other entity, subject to
their fiduciary duties under Delaware law. 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 initial business combination. Our second
amended and restated certificate of incorporation provides that we renounce our interest in any business combination
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 the Company and it is an opportunity that we are able to complete on a reasonable
basis.
Trasimene Capital externally manages Cannae
Holdings, Inc. ("Cannae Holdings") pursuant to a management services agreement. Investment vehicles managed by Trasimene
Capital, Bilcar Limited Partnership or their affiliates may be seeking acquisition opportunities and related financing at any time.
We may compete with any one or more of them on any given acquisition opportunity.
Status as a Public Company
We believe our structure makes us an attractive
business combination partner to target businesses. As an existing public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. In a business combination transaction
with us, the owners of the target business may, for example, exchange their shares of stock, shares or other equity interests in
the target business for our Class A common stock (or shares of a new holding company) or for a combination of our Class A common
stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will
find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering.
The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction
process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions,
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, an additional means of providing management incentives consistent with stockholders’ interests
and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting
a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and
our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any
proposed initial business combination, negatively.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved, If some investors find our securities less attractive as a result,
there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act
also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth
company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company
until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, (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 are held by non-affiliates equals or exceeds $700.0 million
as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during
the prior three-year period.
Effecting our Initial Business Combination
We intend to effectuate our initial business combination using
cash from the proceeds of the IPO, the private placements of the private placement warrants, our equity, 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 initial business combination or used for redemptions of our Class A common stock, we may apply the balance
of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
Some of the members of our management team
are employed by certain affiliates of Trasimene Capital. Trasimene Capital and Bilcar Limited Partnership are continuously made
aware of potential business opportunities, one or more of which we may desire to pursue for a business combination.. We will not
consider a business combination with any company that has already been identified to Trasimene Capital and Bilcar Limited Partnership
as a suitable acquisition candidate for it.
Although our management will assess the
risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result
in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control,
meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.
We may need to obtain additional financing
to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds
held in our trust account, or because we become obligated to redeem a significant number of our public shares upon completion of
the business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
There are no prohibitions on our ability to issue securities or incur debt in connection with our initial business combination.
We are not currently a party to any arrangement or understanding with any third party with respect to raising any additional funds
through the sale of securities, the incurrence of debt or otherwise.
Sources of Target Businesses
Our process of identifying acquisition
targets leverages Trasimene Capital, Bilcar Limited Partnership, our sponsors and our management team’s industry experiences,
proven deal sourcing capabilities and broad and deep network of relationships in numerous industries, including executives and
management teams, private equity groups and other institutional investors, large business enterprises, lenders, investment bankers
and other investment market participants, restructuring advisers, consultants, attorneys and accountants, which we believe should
provide us with a number of business combination opportunities. We expect that the collective experience, capability and network
of our founder, Trasimene Capital and Bilcar Limited Partnership, our directors and officers, combined with their individual and
collective reputations in the investment community, will help to create prospective business combination opportunities.
In addition, business candidates may be brought to our attention from various unaffiliated sources, including investment bankers and private
investment funds. 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 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 of which they become aware 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.
We also 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 either of our sponsors 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 by the company 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). None of our sponsors, executive officers
or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or
consulting fees from a prospective business combination target in connection with a contemplated acquisition of such target
by us.
Lack of Business Diversification
For an indefinite period of time after
the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in
one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks
of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification
may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
on the particular industry in which we operate after our initial business combination;and
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cause us to
depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s
Management Team
Although we intend to closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future
management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our
initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key
personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any
of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following a business combination, we may
seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we
will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Limitation on Redemption upon Completion
of Our Initial Business Combination If We Seek Stockholder Approval
Notwithstanding the foregoing, if we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our second 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 redeeming more than an aggregate of 15% of the shares sold in the IPO, 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 could threaten to exercise its redemption rights if such holder’s shares are not purchased by us, our sponsors
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 15% of the shares sold without our prior consent, we believe we will limit the ability of a small
group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in
connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a
certain amount of cash.
However, we would not be restricting our
stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our sponsors, officers and directors have
agreed that we will have only 24 months from the closing of the IPO to complete an initial business combination. If we have not
completed an initial business combination within 24 months from the closing of the IPO, 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 taxes, if any (less up to $100,000
of interest to pay dissolution expenses), divided by the number of the then outstanding public shares, which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, liquidate and dissolve, 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 do not complete an initial business
combination within 24 months from the closing of the IPO.
Our sponsors, directors and each member
of our management team have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating
distributions from the trust account with respect to their founder shares if we do not complete an initial business combination
within 24 months from the closing of the IPO. However, if our sponsors, directors or members of our management team acquire public
shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we do not
complete an initial business combination within 24 months from the closing of the IPO.
Our sponsors, executive officers and directors
have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our second amended and restated
certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination within
24 months from the closing of the IPO, unless we provide our public stockholders with the opportunity to redeem their public shares
upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes,
if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding public shares.
However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so
that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with
respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement, we would not proceed
with the amendment or the related redemption of our public shares at such time. This redemption right shall apply in the event
of the approval of any such amendment, whether proposed by our sponsors, any executive officer, director or director nominee, or
any other person.
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 $1,000,000 of proceeds held outside the trust account plus up to $100,000 of funds from the trust account available
to us to pay dissolution expenses, although we cannot assure you that there will be sufficient funds for such purpose.
If we were to expend all of the net proceeds
of the IPO the sale of the private placement warrants and the forward purchase securities, other than the proceeds deposited in
the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount
received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could,
however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders.
We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00.
Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision
for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before
we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure
you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors,
service providers (other than our independent auditors), prospective target businesses and 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. Credit Suisse and BofA Securities will not execute agreements with us waiving
such claims to the monies held in the trust account. In addition, there is no guarantee that such entities will agree to waive
any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and
will not seek recourse against the trust account for any reason. In order to protect the amounts held in the trust account, our
sponsors have agreed that they will be liable to us if and to the extent any claims by a third party for services rendered or products
sold to us (other than our independent registered public accounting firm), or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amounts in the trust account to below the lesser of (i) $10.00 per
public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust
account if less than $10.00 per share, due to reductions in the value of the trust assets, in each case net of the interest that
may be withdrawn to pay our taxes, if any, provided that such liability will not apply to any claims by a third party or prospective
target business that executed a waiver of any and all rights to seek access to the trust account nor will it apply to any claims
under our indemnity of the underwriters 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 sponsors will not be responsible to the extent
of any liability for such third party claims. However, we have not asked our sponsors to reserve for such indemnification obligations,
nor have we independently verified whether our sponsors have sufficient funds to satisfy their indemnity obligations and we believe
that our sponsors’ only assets are securities of our company. Therefore, we cannot assure you that our sponsors would be
able to satisfy those obligations. None of our officers or directors 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 the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in
the trust account as of the date of the liquidation of the trust account if less than $10.00 per share, due to reductions in
the value of the trust assets, in each case net of the interest which may be withdrawn to pay our taxes, if any, and our
sponsors assert that they are unable to satisfy their indemnification obligations or that they have no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our
sponsors to enforce their indemnification obligations. While we currently expect that our independent directors would take
legal action on our behalf against our sponsors to enforce their indemnification obligations to us, it is possible that our
independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than
$10.00 per share.
We will seek to reduce the possibility
that our sponsors will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service
providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsors
will also not be liable as to any claims under our indemnity of the underwriters against certain liabilities, including liabilities
under the Securities Act. We will have access to up to approximately $1,000,000 from the proceeds of the IPO and the sale of the
private placement warrants 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, however such liability will not be greater than the amount of funds from our trust
account received by any such stockholder. In the event that our offering expenses exceed our estimate of $1,000,000, we may fund
such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held
outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less
than our estimate of $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding
amount.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 24 months from the closing of the IPO may be considered a liquidating
distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and
an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or
the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution.
Furthermore, if the pro rata portion of
our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within 24 months from the closing of the IPO, is not considered a liquidating distribution under
Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings
that a party may bring or due to other circumstances that are currently unknown), 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 do not complete our initial business combination within 24 months from
the closing of the IPO, 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 that
may be released to us to pay our taxes, if any (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) 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 our 24th month and,
therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the
third anniversary of such date.
Because we will not be complying with
Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will
provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the
subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will
be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our
vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the
obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target
businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim
of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made
against us are significantly limited and the likelihood that any claim that would result in any liability extending to the
trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the
trust account are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust
account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case
net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the
underwriters 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 or winding-up petition
or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy or insolvency 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
or winding-up petition or an involuntary bankruptcy or winding-up petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some
or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages,
by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims
will not be brought against us for these reasons.
Our public stockholders will be entitled
to receive funds from the trust account only (i) in the event of the redemption of our public shares if we do not complete an initial
business combination within 24 months from the closing of the IPO, (ii) in connection with a stockholder vote to amend our second
amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in
connection with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business
combination within 24 months from the closing of the IPO or (B) with respect to any other provisions relating to the rights of
holders of our Class A common stock, or (iii) if they redeem their respective shares for cash upon the completion of the initial
business combination. Public stockholders who redeem their shares of our Class A common stock in connection with a stockholder
vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account upon the subsequent
completion of an initial business combination or liquidation if we have not completed an initial business combination within 24
months from the closing of the IPO, with respect to such shares of our Class A common stock so redeemed. 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. These provisions of our second amended and restated
certificate of incorporation, like all provisions of our second amended and restated certificate of incorporation, may be amended
with a stockholder vote.
Competition
In identifying, evaluating and selecting
a target business for our initial business combination, we may encounter intense competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies
and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater
financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our
available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business.
Furthermore, our obligation to pay cash 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.
Human Capital Resources
We currently have four executive
officers. These individuals 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 they will devote in any time period will vary based on whether a target business has been selected for our
initial business combination and the stage of the business combination process we are in. We do not intend to have any full
time employees prior to the completion of our initial business combination.
We believe that our management team is
well positioned to identify attractive risk-adjusted returns in the marketplace and that its contacts and transaction sources,
ranging from industry executives, private owners, private equity funds, and investment bankers, will enable us to pursue a broad
range of opportunities. Our management believes that its ability to identify and implement value creation initiatives will remain
central to its differentiated acquisition strategy.
Statement Regarding Forward-Looking
Information
Some of the statements contained in
this report constitute “forward-looking statements” for purposes of the federal securities laws. Our
forward-looking statements include, but are not limited to, statements regarding our or our management team’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to
projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions,
are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intends,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements
in this report may include, for example, statements about:
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our ability to complete the business combination with Alight or any other initial business combination;
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our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
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our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
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the proceeds of the forward purchase securities being available to us;
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our potential ability to obtain additional financing to complete our initial business combination;
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our pool of prospective target businesses if our transaction with Alight is not successfully consummated;
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the ability of our officers and directors to generate a number of potential investment opportunities;
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our public securities’ potential liquidity and trading;
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the limited history of a market for our securities;
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the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
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the trust account not being subject to claims of third parties;
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our financial performance; or
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the outcome of any known and unknown litigation and regulatory proceedings.
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The forward-looking statements contained
in this report are based on our current expectations and beliefs concerning future developments and their potential effects on
us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause
actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, those factors described under the section of this report entitled “Risk
Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as may be required under applicable securities laws.
Additional Information
The Company’s Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections
13(a) and 15(d) of the Exchange Act, are filed with the Securities and Exchange Commission (the "SEC"). The Company
is subject to the informational requirements of the Exchange Act and files or furnishes reports, proxy statements and other
information with the SEC. The SEC maintains an internet site that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC at www.sec.gov.
Our
website address is www.foleytrasimene.com. We make available free of charge on or
through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and all amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after such
material is electronically filed with or furnished to the SEC. However, the information found on our website is not part of this
or any other report.
Our
executive offices are located at 1701Village Center Circle, Las Vegas, NV 89134 and our telephone number at that location is (702)
323-7330.
In the course of conducting our business operations, we
are exposed to a variety of risks, some of which are inherent in our industry and others of which are more specific to our
own businesses. The risk factors summarized below could materially harm our business, operating results and/or financial
condition, impair our future prospects and/or cause the price of our common stock to decline. These risks are discussed more
fully following this summary. Material risks that may affect our business, operating results and financial condition include,
but are not necessarily limited to, the following:
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We are a recently incorporated company with no operating history and no revenues, and you have no basis on which to evaluate
our ability to achieve our business objective.
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Past performance by Trasimene Capital and Bilcar Limited Partnership, or their respective affiliates (including the founder
and our management team), including the businesses referred to herein, may not be indicative of future performance of an investment
in us or in the future performance of any business that we may acquire.
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Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the
exercise of your right to redeem your shares from us for cash.
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If we seek stockholder approval of our initial business combination, our initial stockholders, members of our management
team, Cannae Holdings and THL FTAC have agreed to vote in favor of such initial business combination, regardless of how our public
stockholders vote.
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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.
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The requirement that we complete an initial business combination within 24 months after the closing of the IPO may give
potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct
due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability
to complete our initial business combination on terms that would produce value for our stockholders.
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We may not be able to complete an initial business combination within 24 months after the closing of the IPO, 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.
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Legal proceedings in connection with the business combination,
the outcomes of which are uncertain, could delay or prevent the completion of the business
combination.
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The recent coronavirus (COVID-19) pandemic and the impact on business and debt and equity markets could have a material
adverse effect on our search for a business combination, and any target business with which we ultimately complete a business combination.
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If we seek stockholder approval of our initial business combination, our initial stockholders, directors, executive officers,
advisors and their affiliates may elect to purchase shares or public warrants from public stockholders, which may influence a vote
on a proposed business combination and reduce the public “float” of our Class A common stock.
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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore,
to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
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The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions
in our securities and subject us to additional trading restrictions.
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You will not be entitled to protections normally afforded to investors of many other blank check companies.
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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 do not complete our initial business combination, our public
stockholders may receive only their pro rata portion of the funds in the trust account that are available for distribution to public
stockholders, and our warrants will expire worthless.
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If the net proceeds are insufficient to allow us to operate for at least the next 24 months, 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 sponsors or management team to fund our search and to complete our initial business combination.
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If we have not completed an initial business combination within 24 months from the closing of the IPO, our public stockholders
may be forced to wait beyond such 24 months before redemption from our trust account.
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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 the shares of our Class A common stock.
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We are not required to obtain an opinion from an independent accounting or investment banking firm, and consequently, you
may have no assurance from an independent source that the price we are paying for the business is fair to our stockholders from
a financial point of view.
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Our executive 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.
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Our officers and directors presently have, and any of them in the future may have additional, fiduciary or contractual obligations
to other entities, including another blank check company, and, accordingly, may have conflicts of interest in allocating their
time and determining to which entity a particular business opportunity should be presented.
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Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests
that conflict with our interests.
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We may engage in a business combination with one or more target businesses that have relationships with entities that may
be affiliated with our sponsors, executive officers, directors or existing holders which may raise potential conflicts of interest.
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Since our sponsors, executive officers and directors will lose their entire investment in us if our initial business combination
is not completed (other than with respect to public shares they may acquire), a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
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Our management may not be able to maintain control of a target business after our initial business combination. Upon the
loss of control of a target business, new management may not possess the skills, qualifications or abilities necessary to profitably
operate such business.
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The other risks and uncertainties disclosed in this Annual Report on Form 10-K.
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An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this report. If any of the following events occur, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could
decline, and you could lose all or part of your investment. Additional risk factors relating to the Business Combination will be
included in the Form S-4 to be filed with the SEC by Alight Pubco.
The Pending Business Combination is subject to the satisfaction
of certain conditions, which may not be satisfied on a timely basis, if at all.
The consummation of the Pending Business Combination is subject
to customary closing conditions for transactions involving special purpose acquisition companies, including, among others:
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approval of the Business Combination Proposal, FTAC Charter
Amendment Proposal and the NYSE Proposal by Company stockholders;
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the expiration or termination of the waiting period under
the HSR Act;
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receipt of other required regulatory approvals;
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no order, statute, rule or regulation enjoining or prohibiting
the consummation of the Pending Business Combination being in effect;
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the Company having at least $5,000,001 of net tangible
assets as of the closing of the Pending Business Combination;
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the Form S-4 having become effective and no stop order
being in effect;
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the Alight Charter having been filed with the Delaware
Secretary of State; and
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customary bring down conditions.
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Additionally, the obligations of Tempo Holdings and the Tempo
Blockers to consummate the Pending Business Combination are conditioned upon, among other things, (i) the Available Cash Amount
being at least $2,600,000,000 as of the closing of the Business Combination and (ii) each of the covenants of the parties to the
Sponsor Agreement having been performed as of or prior to the closing of the Pending Business Combination in all material respects,
and none of such parties to the Sponsor Agreement having threatened (orally or in writing) that the Sponsor Agreement is not valid,
binding and in full force and effect, that Alight is in breach of or default under the Sponsor Agreement or to terminate the Sponsor
Agreement. Alight’s and the Company’s obligation to close the Pending Business Combination is also conditioned on
the receipt of written consents from the requisite equityholders of Tempo Holdings and the Tempo Blockers approving the Pending
Business Combination and adopting the Business Combination Agreement.
We are a recently incorporated company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently incorporated
company incorporated under the laws of the State of Delaware with a limited history of operating results. Because we have a
limited operating history, you have a limited 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 have a Pending Business Combination and
but may be unable to consummate the transaction. If we do not complete our initial business combination, we
will never generate any operating revenues.
Past performance by Trasimene Capital
and Bilcar Limited Partnership, or their respective affiliates (including the founder and our management team), including the businesses
referred to herein, may not be indicative of future performance of an investment in us or in the future performance of any business
that we may acquire.
Information regarding past
performance of Trasimene Capital and Bilcar Limited Partnership, their respective affiliates, or our management team is
presented for informational purposes only. Any past experience and performance of Trasimene Capital and Bilcar Limited
Partnership, their affiliates, our founder, our management team or the other companies referred to herein is not a guarantee
either: (1) that we will be able to successfully identify a suitable candidate for our initial business combination or
complete such business combination or (2) of any results with respect to any initial business combination we may complete.
You should not rely on the historical record of Trasimene Capital and Bilcar Limited Partnership, their affiliates, our
founder, our management team’s performance or the performance of the other companies referred to herein as indicative
of the future performance of an investment in us or the returns we will, or are likely to, generate going forward. An
investment in us is not an investment in Trasimene Capital and Bilcar Limited Partnership or their affiliates nor the other
companies referred to in this report.
Your only opportunity to affect the
investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares
from us for cash.
At the time of your investment in us, you
will 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, 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.
If we seek stockholder approval of
our initial business combination, our initial stockholders, members of our management team, Cannae Holdings and THL FTAC have agreed
to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Our initial stockholders will own, on
an as-converted basis, 20% of our outstanding shares of our Class A common stock immediately following the completion of the
IPO. In addition, Cannae Holdings and THL FTAC have each agreed to purchase Class A common stock in an aggregate share amount
equal to 15,000,000 shares of our Class A common stock (or a total of 30,000,000 shares of our Class A common stock), plus an
aggregate of 5,000,000 redeemable warrants (or a total of 10,000,000 redeemable warrants) to purchase one share of our Class
A common stock at $11.50 per share. Our initial stockholders and members of our management team also may from time to time
purchase Class A common stock prior to our initial business combination. Our second amended and restated certificate of
incorporation provide that, if we seek stockholder approval of an initial business combination, such initial business
combination will be approved if we receive the affirmative vote of a majority of the shares voted at such meeting, including
the founder shares. When we submit our initial business combination to our public stockholders for a vote, pursuant to the
terms of a letter agreement entered into with us, our sponsors and members of our management team have agreed to vote their
founder shares and any shares purchased during or after the IPO, in favor of our initial business combination. In addition,
pursuant to the terms of the forward purchase agreements, Cannae Holdings and THL FTAC have each agreed to vote any shares
purchased during or after the IPO, in favor of our initial business combination. As a result, in addition to our initial
stockholders’ founder shares, we would need 38,812,501, or 37.5%, of the 103,500,000 public shares to be voted in
favor of an initial business combination in order to have our initial business combination approved (assuming all issued and
outstanding shares are voted and the over-allotment option is not exercised). Accordingly, when we seek stockholder approval
of our initial business combination, the agreement by our initial stockholders, each member of our management team, Cannae
Holdings and THL FTAC to vote in favor of our initial business combination will increase the likelihood that we will receive
the requisite stockholder approval for such initial business combination.
In evaluating a prospective target
business for our initial business combination, our management will rely on the availability of all of the funds from the sale of
the forward purchase securities to be used as part of the consideration to the sellers in the initial business combination. If
the sale of the forward purchase securities fails to close, we may lack sufficient funds to complete our initial business combination.
We have entered into the forward purchase
agreements pursuant to which Cannae Holdings and THL FTAC have each agreed to purchase the forward purchase shares in a private
placement to occur concurrently with our initial business combination. The funds from the sale of forward purchase securities may
be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial
business combination or for working capital in the post-transaction company. The obligations under the forward purchase agreements
do not depend on whether any public stockholders elect to redeem their shares and provide us with a minimum funding level for the
initial business combination. However, if the sale of the forward purchase securities does not close by reason of the failure by
either Cannae Holdings or THL FTAC to fund the purchase price for their respective forward purchase securities, for example, we
may lack sufficient funds to complete our initial business combination. Additionally, the obligation of Cannae Holdings and THL
FTAC to purchase the forward purchase securities are subject to termination prior to the closing of the sale of the forward purchase
securities by mutual written consent of the Company and Cannae Holdings or THL FTAC, respectively, or, automatically: (a) if the
IPO is not completed on or prior to May 8, 2022, which has occurred; (b) if the initial business combination is not completed within
24 months of the closing of the IPO or such later date as may be approved by the Company’s shareholders; (c) if William P.
Foley, II dies; (d) if William P. Foley, II, the sponsors or the Company become subject to any voluntary or involuntary petition
under the United States federal bankruptcy laws or any state insolvency law, in each case which is not withdrawn within sixty (60)
days after being filed, or a receiver, fiscal agent or similar officer is appointed by a court for business or property of William
P. Foley, II, the sponsors or the Company, in each case which is not removed, withdrawn or terminated within sixty (60) days after
such appointment; or (e) if William P. Foley, II is convicted in a criminal proceeding for a crime involving fraud or dishonesty.
The obligation of Cannae Holdings and THL FTAC, respectively, to purchase the forward purchase securities is subject to fulfillment
of customary closing conditions and other conditions as set forth in the forward purchase agreements, including: (a) the initial
business combination shall be consummated substantially concurrent with, and immediately following, the purchase of the forward
purchase securities; and (b) the Company must have delivered to Cannae Holdings and THL FTAC, respectively, a certificate evidencing
the Company’s good standing as a Delaware corporation, as of a date within ten (10) business days of the closing of the sale
of the forward purchase shares. In the event of any such failure to fund by either Cannae Holdings or THL FTAC, any obligation
is so terminated or any such condition is not satisfied and not waived by Cannae Holdings or THL FTAC, we may not be able to obtain
additional funds to account for such shortfall on terms favorable to us or at all. Any such shortfall would also reduce the amount
of funds that we have available for working capital of the post-business combination company. While Cannae Holdings and THL FTAC
have each represented to us that each has sufficient funds to satisfy its respective obligations under the respective forward purchase
agreement, we have not obligated Cannae Holdings or THL FTAC to reserve funds for such obligations.
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 (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause
our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition 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 additional third party financing. Raising additional third party financing may involve dilutive equity issuances
or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the
most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting
commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial 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 amount held in trust will continue to reflect our
obligation to pay the entire deferred underwriting commissions.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our
shares may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material
loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able
to sell your shares in the open market.
The requirement that we complete
an initial business combination within 24 months after the closing of the IPO may give potential target businesses leverage over
us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business
combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business
combination on terms that would produce value for our stockholders.
Any potential target business with which
we enter into negotiations concerning a business combination will be aware that we must complete an initial business combination
within 24 months from the closing of the IPO. 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 an
initial business combination within 24 months after the closing of the IPO, 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 sponsors, officers and directors have
agreed that we must complete our initial business combination within 24 months from the closing of the IPO. We may not be able
to find a suitable target business and complete an initial business combination within 24 months after the closing of the IPO.
Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in
the capital and debt markets and the other risks described herein. If we have not completed an initial business combination within
such applicable 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 taxes, if any (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, liquidate and dissolve, subject in each case to our obligations under Delaware Islands law to provide for claims
of creditors and the requirements of other applicable law.
Legal proceedings in connection
with the business combination, the outcomes of which are uncertain, could delay or prevent the completion of the business combination.
In connection with the Business Combination, it is not uncommon for lawsuits to be filed against companies
involved and/or their respective directors and officers alleging, among other things, that the proxy statement/prospectus contains false
and misleading statements and/or omits material information concerning the Business Combination. Although no such lawsuits have yet been
filed in connection with the Business Combination or the transactions contemplated by the Business Combination Agreement, it is possible
that such actions may arise and, if such actions do arise, they generally seek, among other things, injunctive relief and an award of
attorneys’ fees and expenses. Defending such lawsuits could require the Company to incur significant costs and draw the attention
of the Company’s management team away from the Business Combination. Further, the defense or settlement of any lawsuit or claim
that remains unresolved at the time the Business Combination is consummated may adversely affect the combined company’s business,
financial condition, results of operations and cash flows. Such legal proceedings could delay or prevent the Business Combination from
becoming effective within the agreed upon timeframe.
The recent coronavirus (COVID-19)
pandemic and the impact on business and debt and equity markets could have a material adverse effect on our search for a business
combination, and any target business with which we ultimately complete a business combination.
In December 2019, a
novel strain of coronavirus (COVID-19) 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 and Europe. On January 30, 2020, the World Health Organization
declared the outbreak of the coronavirus 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 the coronavirus, and on March 11, 2020, the World Health Organization characterized the outbreak
as a “pandemic.” A significant outbreak of the coronavirus has resulted in a widespread
health crisis that adversely affected the economies and financial markets worldwide, business operations and the conduct of
commerce generally and could have a material adverse effect on the business of any potential target business with which we complete
a business combination. Furthermore, we may be unable to complete a business combination if continued concerns relating to the
coronavirus 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 complete a transaction in a timely manner. The extent to which
the coronavirus impacts our search for a business combination and our ability to execute a transaction will depend on future developments,
which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus
pandemic and the actions to contain the coronavirus or treat its impact, among others. If the disruptions posed by the coronavirus
or other matters of global concern continue for an extensive period of time, it could have a material adverse effect on our ability
to complete a business combination, or the operations of a target business with which we ultimately complete a business combination.
In addition, our ability to complete a
transaction may be dependent on the ability to raise equity and debt financing and the coronavirus pandemic and other related events
could have a material adverse effect on our ability to raise adequate financing.
If we seek stockholder approval of
our initial business combination, our initial stockholders, directors, executive officers, advisors and their affiliates may elect
to purchase shares or public warrants 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 initial business combination pursuant to
the tender offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares
or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our
initial business combination, where otherwise permissible under applicable laws, rules and regulations, although they are under
no obligation to do so. However, other than as expressly stated herein, 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 or public warrants in such transactions.
Such a purchase may include a
contractual acknowledgment 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 initial stockholders,
directors, executive 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 any such purchases of shares 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 initial business combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants
outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our
initial business combination. Any such purchases of our securities may result in the completion of our initial business
combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section
16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases are made,
the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the
procedures for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules or
tender offer rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our
compliance with these rules, if a stockholder fails to receive our proxy solicitation or tender offer 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 describe the various procedures that must be complied with in order to validly redeem or tender public shares. For example,
we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the
tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal
to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent
electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed.
You will not have any rights or interests
in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be
forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be
entitled to receive funds from the trust account only upon the earlier to occur of: (i) our completion of an initial business
combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected
to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in
connection with a stockholder vote to amend our second amended and restated certificate of incorporation (A) to modify the
substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete an initial business combination within 24 months from the closing of the IPO
or (B) with respect to any other provisions relating to the rights of our Class A common stock, and (iii) the redemption of
our public shares if we have not completed an initial business within 24 months from the closing of the IPO, subject to
applicable law and as further described herein. Public stockholders who redeem their Class A common stock in connection with
a stockholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the trust account
upon the subsequent completion of an initial business combination or liquidation if we have not completed an initial business
combination within 24 months from the closing of the IPO, with respect to such Class A common stock so redeemed. In addition,
if we do not complete an initial business combination within 24 months from the closing of the IPO for any
reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for
approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced
to wait beyond 24 months from the closing of the IPO before they receive funds from our trust account. In no other
circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will
not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your
investment, you may be forced to sell your public shares or warrants, potentially at a loss.
The NYSE may delist our securities
from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
Our units, Class
A common stock and warrants are listed on the NYSE. We cannot assure you that our securities will be, or will continue
to be, listed on the NYSE in the future or prior to our initial business combination. In order to continue listing our
securities on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and share
price levels. Generally, we must maintain a minimum market capitalization (generally $50,000,000), a minimum number of
holders of our securities (generally 400 public holders) and a minimum share price of $1.
Additionally, our units will not be traded
after completion of our initial business combination and, 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 share price
would generally be required to be at least $4.00 per share and our stockholders’ equity would generally be required to be
at least $4.0 million. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock are 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 and our Class A common stock and warrants are listed on
the NYSE, our units, Class A common stock and warrants qualify as covered securities under the statute. Although the states are
preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there
is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered
securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of
securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check
companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check
companies in their states. Further, if we were no longer listed on the NYSE, our securities would not qualify as covered securities
under the statute, 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 the IPO and the sale of the private placement warrants are intended to be used to complete an initial business combination with
a target business that has not been selected, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of the
IPO and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet
demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as
Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means
our units will be immediately tradable and we will have a longer period of time to complete our initial business combination than
do companies subject to Rule 419. Moreover, if the IPO were subject to Rule 419, that rule would prohibit the release of any interest
earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection
with our completion of 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 second 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 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 initial business combination. Your inability to redeem the Excess
Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a
material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not
receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a
result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be
required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources
and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial
business combination. If we do not complete our initial business combination, our public stockholders may receive only their pro
rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will
expire worthless.
We expect to encounter intense competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment
partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying
and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many
of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous
target businesses we could potentially acquire with the net proceeds of the IPO and the sale of the private placement warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target
businesses. Furthermore, we are obligated to offer holders of our public shares the right to redeem their shares for cash at the
time of our initial business combination in conjunction with a stockholder vote or via a tender offer. Target companies will be
aware that this may reduce the resources available to us for our initial business combination. Any of these obligations may place
us at a competitive disadvantage in successfully negotiating a business combination. If we do not complete our initial business
combination our public stockholders may receive only their pro rata portion of the funds in the trust account that are available
for distribution to public stockholders, and our warrants will expire worthless.
If the net proceeds are insufficient
to allow us to operate for at least the next 24 months, 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 sponsors or management team to
fund our search and to complete our initial business combination.
The funds available to us outside of the
trust account to fund our working capital requirements may not be sufficient to allow us to operate for at least the next 24 months,
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, together with funds available from loans from our sponsors will be sufficient to allow us to operate for
at least the next 24 months; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we expect
to use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We
could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of
intent designed to keep target businesses from “shopping” around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not
have any current intention to do so. If we entered into a letter of intent 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 do not
complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation
of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less
than $10.00 per share upon our liquidation.
If
we are required to seek additional capital to fund expenses related to our operations before our initial business combination, we would need to borrow funds from our sponsors, management team or other third
parties to operate or may be forced to liquidate. Neither our sponsors, 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. Up to
$1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.50 per
warrant at the option of the lender. The warrants would be identical to the private placement warrants. Prior to the
completion of our initial business combination, we do not expect to seek loans from parties other than our sponsors or an
affiliate of our sponsors 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 do not 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 an estimated $10.00 per share, or possibly less, 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.
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 share price, which could
cause you to lose some or all of your investment.
Even if we conduct due diligence on a target
business with which we combine, we cannot assure you that this diligence will surface all material issues with a particular target
business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors
outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced
to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in
our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously
known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash
items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants
to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination
debt financing. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer
a reduction in the value of their securities. 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 them, or if they are able to successfully bring a private claim under securities laws that the proxy
solicitation or tender offer materials, as applicable, relating to the 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 auditors), prospective target businesses and other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our
public stockholders, such parties may not execute such agreements, or even if they execute such agreements, they may not be prevented
from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage
with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes
that such third party’s engagement would be significantly more beneficial to us than any alternative. Making such a request
of potential target businesses may make our acquisition proposal less attractive to them and, to the extent prospective target
businesses refuse to execute such a waiver, it may limit the field of potential target businesses that we might pursue.
Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a
waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a
result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust
account for any reason. Upon redemption of our public shares, if we have not completed an initial business combination within
24 months from the closing of the IPO, or upon the exercise of a redemption right in connection with our initial business
combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought
against us within the ten years following redemption. Accordingly, the per-share redemption amount received by public
stockholders could be less than the $10.00 per public share initially held in the trust account, due to claims of such
creditors. Pursuant to the letter agreement, our sponsors have agreed that they will be liable to us if and to the extent any
claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective
target business with which we have discussed entering into a transaction agreement, reduce the amounts in the trust account
to below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the trust account as of the
date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust
assets, in each case net of the interest that may be withdrawn to pay our taxes, if any, provided that such liability will
not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek
access to the trust account nor will it apply to any claims under our indemnity of the underwriters against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be
unenforceable against a third party, our sponsors will not be responsible to the extent of any liability for such third party
claims. However, we have not asked our sponsors to reserve for such indemnification obligations, nor have we independently
verified whether our sponsors have sufficient funds to satisfy its indemnity obligations and believe that our sponsors’
only assets are securities of our company. Therefore, we cannot assure you that our sponsors 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 or directors will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce
the indemnification obligations of our sponsors, 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 share and (ii) the actual amount per share held in the trust account as
of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets,
in each case net of the interest that may be withdrawn to pay our taxes, if any, and our sponsors assert 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 sponsors to enforce its indemnification obligations. While we currently expect that our
independent directors would take legal action on our behalf against our sponsors to enforce their indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may
choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations,
the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per
share.
We may not have sufficient funds
to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers
and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right, title,
interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for any
reason whatsoever (except to the extent they are entitled to funds from the trust account due to their ownership of public shares).
Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the
trust account or (ii) we complete an initial business combination. Our obligation to indemnify our officers and directors may discourage
stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also
may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an
action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification
provisions.
If, after we distribute the proceeds
in the trust account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or winding-up
petition is filed against us that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the
members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the
members of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds
in the trust account to our public stockholders, we file a bankruptcy or winding-up petition or an involuntary bankruptcy or
winding-up petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed
under applicable debtor/creditor and/or bankruptcy or insolvency laws as either a “preferential transfer” or a
“fraudulent conveyance.” As a result, a bankruptcy or insolvency court could seek to recover some or all amounts
received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our
creditors and/or having acted in bad faith, 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 or winding-up petition or an involuntary bankruptcy or winding-up
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 or winding-up petition or an involuntary bankruptcy or winding-up
petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy
or insolvency law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
restrictions on the nature of our investments;
and
restrictions on the issuance of securities,
each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us
burdensome requirements, including:
registration as an investment company;
adoption of a specific form of corporate
structure; and
reporting, record keeping, voting, proxy
and disclosure requirements and other rules and regulations.
In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily
in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a business combination and
thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with
a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust
account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of
the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the
investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses
for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we
intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. An
investment in our securities is not intended for persons who are seeking a return on investments in government securities or
investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of either:
(a) the completion of our initial business combination; (b) the redemption of any public shares properly tendered in
connection with a stockholder vote to amend our second amended and restated certificate of incorporation (i) to modify the
substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete an initial business combination within 24 months from the closing of the IPO
or (ii) with respect to any other provisions relating to the rights of holders of our Class A common stock; or (c) absent our
completing an initial business combination within 24 months from the closing of the IPO, 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 do not complete our initial
business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that
are available for distribution to public stockholders, 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, including our ability to negotiate and complete
our initial business combination and results of operations.
We are subject to laws and regulations
enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal
requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation and application may also change from time to time and those changes could have
a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our initial business combination, and results of operations.
If we have not completed an initial
business combination within 24 months from the closing of the IPO, our public stockholders may be forced to wait beyond such 24
months before redemption from our trust account.
If we have not completed an initial business
combination within 24 months from the closing of the IPO, the proceeds 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 taxes, if any (less up to $100,000 of
the interest to pay dissolution expenses), will be used to fund the redemption of our public shares, as further described herein.
Any redemption of public stockholders from the trust account will be effected automatically by function of our second amended and
restated certificate of incorporation prior to any voluntary winding up. If we are required to wind-up, liquidate the trust account
and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up,
liquidation and distribution must comply with the applicable provisions of the DGCL. In that case, investors may be forced to wait
beyond 24 months from the closing of the IPO before the redemption proceeds of our trust account become available to them, and
they receive the return of their pro rata portion of the proceeds from our trust account. We have no obligation to return funds
to investors prior to the date of our redemption or liquidation unless we complete our initial business combination prior thereto
and only then in cases where investors have sought to redeem their Class A common stock. Only upon our redemption or any liquidation
will public stockholders be entitled to distributions if we do not complete our initial business combination.
Our stockholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 24 months from the closing of the IPO may be considered a liquidating
distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and
an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or
the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month
from the closing of the IPO in the event we do not complete our initial business combination and, therefore, we do not intend to
comply with the foregoing procedures.
Because we will not be complying with
Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will
provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10
years following our dissolution. However, because we are a blank check company, rather than an operating company, and our
operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would
be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited
to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any
liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that
we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be
liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may
extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to
our public stockholders upon the redemption of our public shares in the event we do not complete our initial business
combination within 24 months from the closing of the IPO is not considered a liquidating distribution under Delaware law and
such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party
may bring or due to other circumstances that are currently unknown), 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 completion of our initial business combination.
In accordance with the NYSE corporate governance
requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following
our listing on the NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders
for the purposes of electing directors in accordance with our amended and restated 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 our Class A common stock
will not be entitled to vote on any appointment 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 appointment of directors. Holders of our public shares will
not be entitled to vote on the appointment 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 completion of an initial business combination.
We did not register the shares
of our Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws, 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 did not register the shares of our
Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws. However, under the terms of the warrant agreement, we have agreed to use our commercially reasonable efforts to file a
registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the shares
of our 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 of our Class A common stock
issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise
their warrants on a cashless basis, in which case the number of shares of our Class A common stock that you will receive upon cashless
exercise will be based on a formula subject to a maximum number of shares equal to 0.361 shares of our Class A common stock per
warrant (subject to adjustment).
However, no such 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, unless an exemption from state registration is available.
Notwithstanding the above, if the shares
of our Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that
it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option,
require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section
3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration
statement, but we will be required to use our 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 the Securities Act or 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 will not be entitled to exercise such
warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part
of a purchase of units will have paid the full unit purchase price solely for the shares of our Class A common stock included
in the units. There may be a circumstance where an exemption from registration exists for holders of our Private Placement
Warrants to exercise their warrants while a corresponding exemption does not exist for holders of the warrants included as
part of units sold in the IPO. In such an instance, our sponsors and their transferees (which may include our directors and
executive officers) would be able to sell the common stock underlying their warrants while holders of our public warrants
would not be able to exercise their warrants and sell the underlying common stock. 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.
Our ability to require holders of
our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption or if there is no effective
registration statement covering the shares of our Class A common stock issuable upon exercise of these warrants will cause holders
to receive fewer shares of our Class A common stock upon their exercise of the warrants than they would have received had they
been able to pay the exercise price of their warrants in cash.
If we call the warrants for
redemption, we will have the option, in our sole discretion, to require all holders that wish to exercise warrants to do so
on a cashless basis in certain circumstances. If we choose to require
holders to exercise their warrants on a cashless basis or if holders elect to do so when there is no effective registration
statement, the number of shares of our Class A common stock received by a holder upon exercise will be fewer than it would
have been had such holder exercised his or her warrant for cash. For example, if the holder is exercising 875 public warrants
at $11.50 per share through a cashless exercise when the shares of our Class A common stock have a fair market value of
$17.50 per share when there is no effective registration statement, then upon the cashless exercise, the holder will receive
300 shares of our Class A common stock. The holder would have received 875 shares of our Class A common stock if the exercise
price was paid in cash. This will have the effect of reducing the potential “upside” of the holder’s
investment in our company because the warrant holder will hold a smaller number of shares of our Class A common stock upon a
cashless exercise of the warrants they hold.
The warrants may become exercisable
and redeemable for a security other than the shares of our Class A common stock, and you will not have any information regarding
such other security at this time.
In certain situations, including if we
are not the surviving entity in our initial business combination, the warrants may become exercisable for a security other than
the shares of our Class A common stock. As a result, if the surviving company redeems your warrants for securities pursuant to
the warrant agreement, you may receive a security in a company of which you do not have information at this time. Pursuant to the
warrant agreement, the surviving company will be required to use commercially reasonable efforts to register the issuance of the
security underlying the warrants within twenty business days of the closing of an initial business combination.
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 the shares of our Class A common stock.
Pursuant to an agreement
entered into concurrently with the issuance and sale of the securities in the IPO, our initial stockholders and their
permitted transferees can demand that we register the shares of our Class A common stock into which founder shares are
convertible, the private placement warrants and the shares of our Class A common stock issuable upon exercise of the private
placement warrants, and warrants that may be issued upon conversion of working capital loans and the shares of our Class A
common stock issuable upon conversion of such warrants. The registration rights are exercisable with respect to the
founder shares and the private placement warrants and the shares of our Class A common stock issuable upon exercise of such
private placement warrants. Pursuant to the forward purchase agreements, we have agreed to use our reasonable best efforts
(i) to file within 30 days after the closing of the initial business combination a resale shelf registration statement with
the SEC for a secondary offering of the forward purchase shares and the forward purchase warrants (and underlying Class A
common shares), (ii) to cause such registration statement to be declared effective promptly thereafter, (iii) to maintain
the effectiveness of such registration statement until the earliest of (A) the date on which Cannae Holdings or THL FTAC, or
their respective assignees cease to hold the securities covered thereby, and (B) the date all of the securities covered
thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (iv) after such
registration statement is declared effective, cause us to conduct underwritten offerings, subject to certain limitations. In
addition, the forward purchase agreements provide for certain ‘‘piggy-back’’ registration rights to
the holders of forward purchase securities to include their securities in other registration statements filed by us. 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 their permitted transferees are registered.
Because we are not limited to evaluating
a target business in a particular industry sector, you will be unable to ascertain the merits or risks of any particular target
business’s operations.
We may pursue business combination opportunities
in any sector, except that we will not, under our second amended and restated certificate of incorporation, be permitted to effectuate
our initial business combination with another blank check company or similar company with nominal operations. To the extent we
complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which
we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales
or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate
time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to
control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment
in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available,
in a business combination target. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their securities. 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 them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable
material misstatement or material omission.
We may seek acquisition opportunities
in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business combination
outside of our management’s area of expertise if a business combination candidate is presented to us and we determine that
such candidate offers an attractive acquisition opportunity for our company. Although our management will endeavor to evaluate
the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or
assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove
to be less favorable to investors than a direct investment, if an opportunity were available, in a business combination
candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s
expertise may not be directly applicable to its evaluation or operation, and the information contained in the prospectus 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 stockholder 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 and our strategy will be to identify,
acquire and build a company in our target investment area, 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 and our strategy will be to identify, acquire and build a company in
our target investment area, it is possible that a target business with which we enter into our initial business combination will
not have attributes consistent with our general criteria and guidelines. 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 do not complete
our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account
that are available for distribution to public stockholders, and our warrants will expire worthless.
We are not required to obtain an
opinion from an independent accounting or investment banking firm, and consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we complete our initial business
combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or independent
investment banking firm which is a member of FINRA that the price we are paying is fair to our stockholders 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
proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We may issue additional shares of
our Class A common stock or preferred stock to complete our initial business combination or under an employee incentive plan after
completion of our initial business combination. We may also issue shares of our Class A common stock upon the conversion of the
founder shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
provisions contained in our second amended and restated certificate of incorporation. Any such issuances would dilute the interest
of our stockholders and likely present other risks.
Our second amended and restated
certificate of incorporation authorizes the issuance of up to 400,000,000 shares of our Class A common stock, par value
$0.0001 per share, 40,000,000 shares of our 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 296,500,000 and 14,125,000 authorized but
unissued shares of our Class A common stock and Class B common stock, respectively, available for issuance which amount does
not take into account shares reserved for issuance upon exercise of outstanding warrants and the forward purchase warrants,
shares issuable upon conversion of the shares of the Class B common stock or shares issued upon the sale of the forward
purchase shares. The Class B common stock is automatically convertible into Class A common stock at the time of our initial
business combination as described herein and in our second amended and restated certificate of incorporation. No shares of
preferred stock issued and outstanding.
We may issue a substantial number of additional
shares of our Class A common stock or shares of 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 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 second amended and restated certificate of incorporation. However, our second amended and restated certificate of incorporation
provides, among other things, that prior to or in connection with our initial business combination, we may not issue additional
shares that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business
combination or on any other proposal presented to stockholders prior to or in connection with the completion of an initial business
combination. These provisions of our second amended and restated certificate of incorporation, like all provisions of our second
amended and restated certificate of incorporation, may be amended with a stockholder vote. The issuance of additional shares of
common stock or shares of preferred stock:
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may significantly dilute the equity interest of investors in the IPO;
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may subordinate the rights of holders of our Class A common stock if share of preferred stock are issued with rights senior to
those afforded our Class A common stock;
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could cause a change in control if a substantial number of shares of our Class A common stock is 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;
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants; and
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will not result in adjustment to the exercise price of our warrants.
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Unlike most other similarly structured
blank check companies, our initial stockholders will receive additional shares of our Class A common stock if we issue shares to
complete an initial business combination.
The founder shares will automatically convert
into shares of our Class A common stock on the first business day following the completion of our initial business combination
at a ratio such that the number of shares of our Class A common stock issuable upon conversion of all founder shares will equal,
in the aggregate, on an as-converted basis, 20% of the sum of (i) the total number of shares of our common stock issued and outstanding
upon completion of the IPO, plus (ii) the sum of (a) the total number of shares of our common stock issued or deemed issued or
issuable upon conversion or exercise of any equity-linked securities or deemed issued by the Company in connection with or in relation
to the completion of the initial business combination (including the forward purchase shares, but not the forward purchase warrants),
excluding (1) any shares of our Class A common stock or equity-linked securities exercisable for or convertible into shares of
our Class A common stock issued, or to be issued, to any seller in the initial business combination and (2) any private placement
warrants issued to our sponsors or any of their affiliates upon conversion of working capital loans, minus (b) the number of public
shares redeemed by public stockholders in connection with our initial business combination. In no event will the shares of our
Class B common stock convert into shares of our Class A common stock at a rate of less than one to one. This is different than
most other similarly structured blank check companies in which the initial stockholders will only be issued an aggregate of 20%
of the total number of shares to be outstanding prior to the initial business combination.
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 do not complete our initial business combination, our public stockholders may only receive their pro
rata portion of the funds in the trust account that are available for distribution to public stockholders, 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 do not complete our initial business combination, our public stockholders may only receive their pro
rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will
expire worthless.
We are dependent upon our executive
officers and directors and their loss could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the
continued service of our officers and directors, at least until we have completed our initial business combination. In addition,
our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will
have conflicts of interest in allocating their time among various business activities, including identifying potential business
combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors
or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental
effect on us.
Our ability to successfully effect
our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel,
some of whom may join the resulting company following our initial business combination. The loss of key personnel could negatively impact the operations
and profitability of our post-combination business.
Our ability to successfully effect our
initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management,
director or advisory positions following our initial business combination, it is likely that some or all of the management of the
target business will remain in place. While we intend to closely scrutinize any individuals we engage after our initial business
combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar
with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping
them become familiar with such requirements.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination, and a particular business
combination may be conditioned on the retention or resignation of such key personnel. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key personnel may be able to join
the resulting company after the completion of our initial business combination only if they are able to negotiate employment
or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with
the negotiation of the business combination and could provide for such individuals to receive compensation in the form of
cash payments and/or our securities for services they would render after the completion of the business combination. Such
negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The
personal and financial interests of such individuals may influence their motivation in identifying and selecting a target
business, subject to his or her fiduciary duties under Delaware law. However, we believe the ability of such individuals to
join the resulting company 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.
We may have a limited ability to
assess the management of a prospective target business and, as a result, may affect our initial business combination with a target
business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target business’s
management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
Should the target business’s management not possess the skills, qualifications or abilities necessary to manage a public
company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders
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 them, or if they are able
to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable,
relating to the business combination contained an actionable material misstatement or material omission.
The officers and directors of an
acquisition candidate may resign upon completion of our initial business combination. The loss of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate
that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not
wish to remain in place.
Our executive 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 executive 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 executive officers and directors
is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our executive officers
and directors are not obligated to contribute any specific number of hours per week to our affairs. In particular, certain of our
executive officers and directors are employed by affiliates of Trasimene Capital, which is an external manager of Cannae Holdings.
Our independent directors also serve as officers and board members for other entities. If our executive 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.
Our officers and directors presently
have, and any of them in the future may have additional, fiduciary or contractual obligations to other entities, including another
blank check company, 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 complete our initial business
combination, we intend to engage in the business of identifying and combining with one or more businesses. 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 to such entity,
subject to his or her fiduciary duties under Delaware law.
In particular, certain of our
officers and directors have fiduciary and contractual duties to other blank check companies, Foley Trasimene Acquisition
Corp. II ("Foley Trasimene II"), Trebia Acquisition Corp. ("Trebia"), Austerlitz Acquisition Corporation I ("Austerlitz I")
and Austerlitz Acquisition Corporation II ("Austerlitz II"). Foley Trasimene II and Trebia may seek to complete a business
combination in any location and are focusing on the financial technology industry for a business combination. Further, Mr.
Foley our Chairman serves as a director of Foley Trasimene II, Trebia, Austerlitz I and Austerlitz II. In addition, Mr.
Massey, our Chief Executive Officer and director nominee, serves as the Chief Executive Officer and as a director of Foley
Trasimene II and a Director Nominee of Austerlitz I and Austerlitz II. Mr. Coy, our Chief Financial Officer, serves as the
Chief Financial Officer of Foley Trasimene II, Austerlitz I and Austerlitz II. Mr. Ducommun, our Executive Vice President of Corporate Finance, serves as an
Executive Vice President of Corporate Finance of Foley Trasimene II and as President of Austerlitz I and Austerlitz II.
Michael L. Gravelle, our General Counsel and Corporate Secretary, serves as General Counsel and Corporate Secretary of Foley
Trasimene II, Austerlitz I and Austerlitz II."
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, subject to their fiduciary duties under Delaware
law. However, we do not believe that any potential conflicts would materially affect our ability to complete our initial business
combination.
In addition, our founder and our directors
and officers, Trasimene Capital and Bilcar Limited Partnership or their affiliates may in the future become affiliated with other
blank check companies that may have acquisition objectives that are similar to ours. 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 such other blank check companies prior to its presentation to us, subject
to our officers’ and directors’ fiduciary duties under Delaware law. Our second amended and restated certificate of
incorporation provides that we renounce our interest in any business combination 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 the Company
and it is an opportunity that we are able to complete on a reasonable basis.
Our executive 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, executive 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 sponsors, our directors or
executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from
engaging for their own account in business activities of the types conducted by us, including the formation or participation in
one or more other blank check companies. Accordingly, such persons or entities may have a conflict between their interests and
ours.
The personal and financial interests of
our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable
target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular
business combination are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach
of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals
for infringing on our stockholders’ rights. However, we might not ultimately be successful in any claim we may make against
them for such reason.
We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsors, executive officers,
directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our
sponsors, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated
with our sponsors, executive officers, directors or existing holders. Our directors also serve as officers and board members
for other entities. Our founder and our directors and officers, Trasimene Capital and Bilcar Limited Partnership or their
affiliates may sponsor, form or participate in other blank check companies similar to ours during the period in which we are
seeking an initial business combination. Such entities may compete with us for business combination opportunities. Our
sponsors, officers and directors are not currently aware of any specific opportunities for us to complete our initial
business combination with any entities with which they are affiliated, and there have been no substantive discussions
concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or
targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such
affiliated entity met our criteria for a business combination and such transaction was approved by a majority of our
independent and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking
firm which 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
sponsors, executive 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 sponsors, executive officers
and directors will lose their entire investment in us if our initial business combination is not completed (other than with respect
to public shares they may acquire), a conflict of interest may arise in determining whether a particular business combination target
is appropriate for our initial business combination.
On April 7, 2020, the sponsors paid an
aggregate of $25,000, or approximately $0.001 per share, to cover certain of our offering costs in consideration of 21,562,500
shares of our Class B common stock, par value $0.0001. On May 26, 2020, we effected a stock dividend with respect to our Class
B common stock of 4,312,500 shares thereof, resulting in our initial stockholders holding an aggregate of 25,875,000 founder shares.
Prior to the initial investment in the company of $25,000 by the sponsors, the company had no assets, tangible or intangible. The
number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding
shares after the IPO. On May 19, 2020, our sponsors transferred 25,000 founder shares to each of our independent director nominees
at their original purchase price. The founder shares will be worthless if we do not complete an initial business combination. In
addition, our sponsors have committed, pursuant to a written agreement, to purchase an aggregate of 15,133,333 private placement
warrants, each exercisable to purchase one share of our Class A common stock at $11.50 per share, for a purchase price of approximately
$22,700,000, or $1.50 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 sponsors, affiliates of our sponsors or an officer or director, and we may pay our sponsors, officers, directors
and any of their respective affiliates fees and expenses in connection with identifying, investigating and completing an initial
business combination.
The personal and financial interests of
our executive officers and directors may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following the initial business combination.
This risk may become more acute as the 24-month anniversary of the closing of the IPO nears, which is the deadline for our completion
of an initial business combination.
We may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and
financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we currently have no commitments
to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to
complete our initial business combination. We and our officers 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 Class A 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 Class A 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; and
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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 other purposes and other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one
business combination with the proceeds of the IPO and the sale of the private placement warrants, which will cause us to be solely
dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively
impact our operations and profitability.
Of the net proceeds from the IPO and
the sale of the private placement warrants and the sale of the forward purchase securities, $1,299,624,267 will be available
to complete our business combination and pay related fees and expenses (which excludes up to approximately $36,225,000), after taking into account the deferred underwriting commissions being held in the trust account
and the estimated expense of the IPO of deferred underwriting costs).
We may effectuate our initial business
combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors,
including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements
with the SEC that present operating results and the financial condition of several target businesses as if they had been operated
on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may
subject us to numerous economic, competitive and regulatory 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. Accordingly, the prospects
for our success may be:
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solely dependent upon the performance of a single business, property or asset; or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject
us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously
complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business
combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence (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 generally exists about private companies, and we could be required to make our decision on whether to pursue a
potential initial business combination on the basis of limited information, which may result in a business combination with a
company that is not as profitable as we suspected, if at all.
Our management may not be able to
maintain control of a target business after our initial business combination. Upon the loss of control of a target business, new
management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to our initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares of our Class A common stock in exchange for all of the outstanding capital
stock, shares or other equity interests 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 our Class A common stock, our stockholders immediately prior
to such transaction could own less than a majority of our issued and outstanding Class A 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 shares than we initially acquired. Accordingly, this may make it more likely that our management
will not be able to maintain control of the target business.
We may seek business combination
opportunities with a high degree of complexity that require significant operational improvements, which could delay or prevent
us from achieving our desired results.
We may seek business combination opportunities
with large, highly complex companies that we believe would benefit from operational improvements. While we intend to implement
such improvements, to the extent that our efforts are delayed or we are unable to achieve the desired improvements, the business
combination may not be as successful as we anticipate.
To the extent we complete our initial business
combination with a large complex business or entity with a complex operating structure, we may also be affected by numerous risks
inherent in the operations of the business with which we combine, which could delay or prevent us from implementing our strategy.
Although our management team will endeavor to evaluate the risks inherent in a particular target business and its operations, we
may not be able to properly ascertain or assess all of the significant risk factors until we complete our business combination.
If we are not able to achieve our desired operational improvements, or the improvements take longer to implement than anticipated,
we may not achieve the gains that we anticipate. Furthermore, some of these risks and complexities may be outside of our control
and leave us with no ability to control or reduce the chances that those risks and complexities will adversely impact a target
business. Such combination may not be as successful as a combination with a smaller, less complex organization.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete our initial business combination
with which a substantial majority of our stockholders do not agree.
Our second 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 (such that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. As a result, we may be able to complete our initial business combination even though
a substantial majority of our public 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 sponsors, officers,
directors, advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all
shares of our 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 our 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 an initial
business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing
instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our second 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 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 governing instruments, including
their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption
thresholds, changed industry focus and, with respect to their warrants, amended their warrant agreements to require the warrants
to be exchanged for cash and/or other securities. Amending our second amended and restated certificate of incorporation will require
the approval of holders of 65% of our common stock, and amending our warrant agreement will require a vote of holders of at least
65% of the public warrants. In addition, our second amended and restated certificate of incorporation requires us to provide
our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our second amended
and restated certificate of incorporation that would affect the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not complete an initial business combination
within 24 months from the closing of the IPO or with respect to any other provisions relating to stockholders’ rights or
pre-initial business combination activity. To the extent any of such amendments would be deemed to fundamentally change the nature
of any of the securities offered in our IPO, we would register, or seek an exemption from registration
for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend
the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our second 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 at least 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 second amended and restated certificate of incorporation 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 typically requires approval by 90% of the company’s stockholders attending and voting at the meeting. Our second 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 the IPO 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 at least 65% of our common stock entitled to vote thereon. In all other instances, our second amended and restated
certificate of incorporation may be amended by holders of a majority of our outstanding shares of common stock entitled to vote
thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders and their permitted
transferees, if any, who will collectively beneficially own, on an as converted basis, 20% of our Class A common stock upon the
closing of the IPO (assuming they do not purchase any units in the IPO), will participate in any vote to amend our second 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 second 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 second
amended and restated certificate of incorporation.
Our sponsors, executive officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our second
amended and restated certificate of incorporation that would affect the substance or timing of our obligation to allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
an initial business combination within 24 months from the closing of the IPO, unless we provide our public stockholders with
the opportunity to redeem their 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 taxes, if any (less up to $100,000 of interest to pay dissolution
expenses) divided by the number of then outstanding public shares. These agreements are contained in letter agreements that
we have entered into with our sponsors, directors and each member of our management team. 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 sponsors, executive 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. If we do not complete our initial business combination, our public
stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution to public
stockholders, and our warrants will expire worthless.
Although we believe that our capital
resources will be sufficient to allow us to complete our initial business combination, we cannot be certain that we will be
able to satisfy the capital requirements for any particular transaction. If our capital resources prove to be insufficient,
either because of the size of our initial business combination, the depletion of the available net proceeds in search of a
target business, the obligation to redeem for cash a significant number of shares from stockholders who elect redemption in
connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection
with our initial business combination, we may be required to seek additional financing or to abandon the proposed business
combination. We cannot assure you that such financing will be available on acceptable terms, if at all. The current economic
environment may make it difficult for companies to obtain acquisition financing. 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 do not complete our initial business combination, our public stockholders may only receive their pro rata
portion of the funds in the trust account that are available for distribution to public stockholders and not previously
released to us to pay our 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 initial business combination, we may require such financing to
fund the operations or growth of the target business. The failure to secure additional financing could have a material
adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders
is required to provide any financing to us in connection with or after our initial business combination. If we do not
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 control
a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder vote, potentially in
a manner that you do not support.
Upon closing of the IPO, our initial stockholders
will own, on an as-converted basis, 20% of our issued and outstanding Class A common stock (assuming they do not purchase any units
in the IPO). 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 second amended and restated certificate of incorporation. If our initial stockholders
purchases any units in the IPO or if our initial stockholders purchase any additional shares of our Class A common stock in the
aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to
our knowledge, any of our officers or directors, have any current intention to purchase additional securities. Factors that would
be considered in making such additional purchases would include consideration of the current trading price of our Class A common
stock. In addition, our board of directors, whose members were elected by our sponsors, is and will be divided into three classes,
each of which will generally serve for a terms for 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 initial 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. Accordingly, our initial stockholders will
continue to exert control at least until the completion of our initial business combination.
We may amend the terms of the warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding
public warrants and forward purchase 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 have been issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and
us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to
cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public
warrants and forward purchase warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a
holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our ability to
amend the terms of the public warrants and forward purchase warrants with the consent of at least 65% of the then outstanding
public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise
price of the warrants, convert the warrants into cash, 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 the outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, if, among other
things, the Reference Value equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations,
recapitalizations and the like). 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 as described above could force you to (i) exercise your warrants and pay the exercise price therefor
at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might
otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are
called for redemption, we expect would be substantially less than the Market Value of your warrants. None of the private placement
warrants will be redeemable by us so long as they are held by our sponsors or their permitted transferees.
In addition, we have the ability to
redeem the outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.10
per warrant if, among other things, the Reference Value equals or exceeds $10.00 per share (as adjusted for stock splits,
stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like). In such a case, the
holders will be able to exercise their warrants prior to redemption for a number of shares of our Class A common stock
determined based on the redemption date and the fair market value of our Class A common stock. The value received upon
exercise of the warrants (1) may be less than the value the holders would have received if they had exercised their warrants
at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the
warrants, including because the amount of common stock received is capped at 0.361 shares of our Class A common stock
per warrant (subject to adjustment) irrespective of the remaining life of the warrants.
Our warrants and founder shares may
have an adverse effect on the market price of the shares of our Class A common stock and make it more difficult to effectuate our
initial business combination.
We issued warrants to purchase
34,500,000 of our Class A common stock as part of the units offered in our Initial Public Offering and we issued in a private
placement an aggregate of 15,133,333 private placement warrants, each exercisable to purchase one share of our Class A common
stock at $11.50 per share. We also expect to issue 10,000,000 forward purchase warrants concurrently with the closing of the
Business Combination. Our sponsors and our independent directors currently collectively own an aggregate of 25,875,000 shares
of Class B common stock. The founder shares are convertible into Class A common stock on a one-for-one basis, subject to
adjustment. In addition, if our sponsors make any working capital loans, up to $1,500,000 of such loans may be converted into
warrants, at the price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private
placement warrants, including as to exercise price, exercisability and exercise period. Our public warrants are also
redeemable by us for shares of our Class A common stock.
To the extent we issue Class A common stock
for any reason, including to effectuate a business combination, the potential for the issuance of a substantial number of additional
shares of our Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive acquisition
vehicle to a target business. Such warrants when exercised will increase the number of issued and outstanding shares of our Class
A common stock and reduce the value of the shares of our Class A common stock issued to complete the business transaction. Therefore,
our warrants and founder shares may make it more difficult to effectuate a business transaction or increase the cost of acquiring
the target business.
The private placement warrants are
identical to the warrants sold as part of the units in the IPO except that, so long as they are held by our sponsors or their
permitted transferees, (i) they will not be redeemable by us, (ii) they (including the shares of our Class A common stock
issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by
our sponsors until 30 days after the completion of our initial business combination, (iii) they may be exercised by the
holders on a cashless basis and (iv) are subject to registration rights.
Because each unit contains one-third
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-third of one warrant.
Pursuant to the warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will
trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon
exercise, round down to the nearest whole number the number of shares of our Class A common stock to be issued to the warrant holder.
This is different from other offerings similar to ours whose units include one common share and one warrant to purchase one whole
share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon
completion of a business combination since the warrants will be exercisable in the aggregate for one third of the number of shares
compared to units that each contain a whole warrant to purchase one 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 it included a warrant
to purchase one whole share.
A provision of our warrant agreement
may make it more difficult for us to complete an initial business combination.
Unlike most blank check companies, if
(i) we issue additional common stock or equity-linked securities for capital raising purposes in connection with the closing
of our initial business combination at an issue price or effective issue price of less than $9.20 per share (with such issue
price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of
any such issuance to the Sponsors or their affiliates, without taking into account any Founder Shares held by the Sponsors or
such affiliates, as applicable, prior to 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 completion of our initial business combination (net of
redemptions), and (iii) the volume weighted average trading price of the Company’s Class A common stock during the 20
trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such
price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted to
be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption
trigger prices will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the
Newly Issued Price, respectively. This may make it more difficult for us to complete an initial business combination with a
target business.
We have identified a material weakness
in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our
results of operations and financial condition accurately and in a timely manner.
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Our management is likewise
required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material
weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of
deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement
of our annual or interim financial statements will not be prevented or detected on a timely basis.
As described elsewhere in this Annual Report
on Form 10-K/A, we identified a material weakness in our internal control over financial reporting related to the accounting for a
significant and unusual transaction related to the warrants we issued and forward purchase agreements we entered into in connection
with our initial public offering in May 2020. As a result of this material weakness, our management concluded that our internal
control over financial reporting was not effective as of December 31, 2020. This material weakness resulted in a material
misstatement of our warrant liabilities, FPA liabilities, change in fair value of warrant liabilities, additional paid-in capital,
accumulated deficit and related financial disclosures for the affected periods.
To respond to this material weakness, we have devoted, and plan
to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial
reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these
processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our
consolidated financial statements. Our plans at this time include providing enhanced access to accounting literature, research
materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding
complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no
assurance that these initiatives will ultimately have the intended effects. For a discussion of management’s consideration of
the material weakness identified related to our accounting for a significant and unusual transaction related to the Warrants we
issued in connection with the August 2020 initial public offering, see “Note 2—Restatement of Previously Issued
Financial Statements” to the accompanying consolidated financial statements, as well as Part II, Item 9A: Controls and
Procedures included in this Annual Report on Form 10-K/A.
Any failure to maintain such internal control could adversely impact our ability to
report our financial position and results from operations on a timely and accurate basis. If our financial statements are not
accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on
a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the
SEC or other regulatory authorities. In either case, there could result a material adverse effect on our business. Failure to timely
file will cause us to be ineligible to utilize short form registration statements on Form S-3, which may impair our ability to
obtain capital in a timely fashion to execute our business strategies or issue shares to effect an acquisition. Ineffective internal
controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on
the trading price of our stock.
We can give no assurance that the measures we have taken and plan
to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of
financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial
reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures,
in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the
fair presentation of our consolidated financial statements.
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 the proxy statement. 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 (“GAAP”), or international financial reporting standards as issued by the International Accounting
Standards Board (“IFRS”), depending on the circumstances and the historical financial statements may be required to
be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”).
These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may
be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete
our initial business combination within the prescribed time frame.
We are an emerging growth company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare
our performance with other public companies.
We are an “emerging growth
company” within the meaning of the Securities Act, as modified by the JOBS Act, and we intend to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and
proxy statements, and exemptions from the requirements of holding a 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 equals or exceeds $700.0 million as of any June 30th 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.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to effectuate a business combination, require substantial financial and management
resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify
as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we
will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control
over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley
Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete
our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its
internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Provisions in our second 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 shares of our Class A common stock and could entrench management.
Our second 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 stock, and the fact that prior to the completion of our initial business combination
only holders of shares of our Class B common stock, which have been issued to our sponsors, are entitled to vote on the appointment
of directors, which may make more difficult the removal of management and may discourage transactions that otherwise could involve
payment of a premium over prevailing market prices for our securities.
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.
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.
Since only holders of our founder
shares will have the right to vote on the appointment of directors, the NYSE considers us to be a ‘controlled company’
within the meaning of the NYSE rules and, as a result, we qualify for exemptions from certain corporate governance requirements.
Only holders of our Founder Shares have
the right to vote on the appointment of directors. As a result, we qualify as a ‘controlled company’ within the meaning
of the NYSE corporate governance standards. Under the NYSE corporate governance standards, a company of which more than 50% of
the voting power is held by an individual, group or another company is a ‘controlled company’ and may elect not to
comply with certain corporate governance requirements, including the requirements that:
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we have a board that includes a majority of ‘independent directors,’ as defined under the rules of the NYSE;
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we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing
the committee’s purpose and responsibilities; and
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we have a nominating and corporate governance committee of our board that is comprised entirely of independent directors with
a written charter addressing the committee’s purpose and responsibilities.
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We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of the NYSE, subject to applicable phase-in rules. However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.
We would be subject to a second level
of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (a “PHC”),
for U.S. federal income tax purposes.
A U.S. corporation generally will be classified
as a PHC for U.S. federal income tax purposes in a given taxable year if (i) at any time during the last half of such taxable year,
five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain
entities such as certain tax exempt organizations, pension funds and charitable trusts) own or are deemed to own (pursuant to certain
constructive ownership rules) more than 50% of the stock of the corporation by value and (ii) at least 60% of the corporation’s
adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income
(which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).
Depending on the date and size of our initial
business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed
above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor
and certain tax exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be
owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last half of a taxable year. Thus,
no assurance can be given that we will not become a PHC following the IPO or in the future. If we are or were to become a PHC in
a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally
includes our taxable income, subject to certain adjustments.
If we pursue a target company with
operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in
connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business
combination, we would be subject to a variety of additional risks that may negatively impact our operations.
If we pursue a target a company with operations
or opportunities outside of the United States for our initial business combination, we would be subject to risks associated with
cross-border business combinations, including in connection with investigating, agreeing to and completing our initial business
combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments, regulators
or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial business combination
with such a company, we would be subject to any special considerations or risks associated with companies operating in an international
setting, including any of the following:
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costs and difficulties inherent in managing cross-border
business operations and complying with 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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exchange listing and/or delisting requirements;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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local or regional economic policies and market conditions;
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unexpected changes in regulatory requirements;
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tax issues, such as tax law changes and variations in
tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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underdeveloped or unpredictable legal or regulatory systems;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances;
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regime changes and political upheaval;
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terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United
States; and
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government appropriation of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, we may be unable to complete such initial business combination, or, if we
complete such combination, our operations might suffer, either of which may adversely impact our business, financial condition
and results of operations.