Item
1. Business
Overview
We are a blank check
company formed on April 5, 2019 as a Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses. Throughout this Amendment we will refer to
this as our “initial business combination.” While our efforts to identify a target business have spanned many industries
and regions worldwide, we have focused our search for prospects within the software and internet technology industries. Our ability to
locate a potential target is and has been subject to the uncertainties discussed elsewhere in this Report.
Initial
Public Offering
On
September 19, 2019, the Company consummated the initial public offering of 35,000,000 units. In addition to one share of our public
shares, each unit also consists of one-half of one public warrant. Each whole public warrant entitles the holder to purchase one
share of Class A common stock at a price of $11.50 per share, subject to adjustment. The units were sold at an offering price
of $10.00 per unit, generating gross proceeds of $350,000,000. The Company had granted Cantor, the representative of the several
underwriters in the initial public offering, a 45-day option to purchase up to 4,575,000 additional units to cover over-allotments.
On September 19, 2019, Cantor partially exercised the option and purchased an additional 4,500,000 units at $10.00 per unit and
forfeited the option to exercise the remaining 75,000 units.
Simultaneously
with the closing of the initial public offering, the Company consummated the sale of 810,000 placement units at a price of $10.00
per placement unit in a private placement to the sponsor and Cantor, generating gross proceeds of $8,100,000. The sponsor purchased
657,500 placement units and Cantor purchased 152,500 placement units. Each placement unit consists of one placement share and
one-half of one placement warrant. Each whole placement warrant is exercisable to purchase one public share at a price of $11.50
per share. The proceeds from the placement units were added to the proceeds from the initial public offering held in the trust
account.
A
total of $350,000,000 from the net proceeds of the sale of the units in the initial public offering and the sale of the placement
units was placed in the trust account.
Our
units, public shares and public warrants are each traded on the Nasdaq Capital Market under the symbols “APXTU,” “APXT”
and “APXTW,” respectively. Our units commenced public trading on September 17, 2019, and our public shares and public
warrants commenced separate public trading on November 5, 2019.
AvePoint
Business Combination
On
November 23, 2020, we entered into the Business Combination Agreement with the Merger Subs and AvePoint, pursuant to which Merger
Sub 1 will be merged with and into AvePoint (the “First Merger”), with AvePoint surviving the First Merger as a wholly-owned
subsidiary of the Company, and promptly following the First Merger, AvePoint will be merged with and into Merger Sub 2 (the “Second
Merger,” together with the First Merger, the “Mergers”, and together with the other transactions related thereto,
the “Proposed Transactions”), with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of the Company
(“Surviving Company”).
Upon the consummation
of the Mergers, the aggregate consideration to be paid to AvePoint equityholders will be (i) an amount in cash of approximately
$262 million (the “Aggregate Cash Consideration”) and (ii) 143,261,093 shares of our public shares (such aggregate
amount, the “Aggregate Stock Consideration”). The Aggregate Cash Consideration may be subject to downward adjustment
based on the Cash Election (as defined below) and any cutback due to redemptions by stockholders of Apex and any such adjustment
shall be offset by an equivalent increase in the Aggregate Stock Consideration based on a value of $10.00 per public share. AvePoint’s
stockholders who hold shares of Series C Preferred Stock, par value $0.001 (“AvePoint Preferred Stock”) and certain
named executives (the “Named Executives”) will receive an aggregate amount of $135 million and $35 million in cash,
(subject to deduction for certain expenses) respectively, from the Aggregate Cash Consideration and will receive the balance of
their consideration in public shares from the Aggregate Stock Consideration. All holders of shares of common stock of AvePoint,
par value $0.001 per share (“AvePoint Common Stock”) other than the Named Executives will receive an aggregate amount
of between $75 million and approximately $92 million in cash (subject to deduction for certain expenses) based on an election (“Cash
Election”) from the balance of the Aggregate Cash Consideration and will receive the remainder of their consideration in
public shares from the Aggregate Stock Consideration. Each outstanding option to purchase AvePoint Common Stock (“AvePoint
Options”) other than certain options held by the Named Executives will be converted into or replaced with an option to purchase
public shares from the Aggregate Stock Consideration based on the exchange ratio set forth in the Business Combination Agreement.
The holders of AvePoint Preferred Stock, AvePoint Common Stock and AvePoint Options may be entitled to receive up to an additional
3,000,000 public shares contingent upon the achievement of certain milestones set forth in the Business Combination Agreement (the
“Contingent Consideration”).
The
obligations of AvePoint and Apex to consummate the Proposed Transactions, including the Mergers, are subject to the satisfaction
or waiver (where permissible) at or prior to the Closing (as defined below) of various conditions, including, among other things:
(i) the accuracy of the representations and warranties of Apex and AvePoint, respectively; (ii) the performance by Apex and AvePoint,
respectively, of its covenants and agreements; (iii) the absence of any material adverse effect that is continuing with respect
to Apex or AvePoint, respectively, between the date of the Business Combination Agreement and the date of the Closing, (iv) the
approval of AvePoint’s and Apex’s stockholders; (v) the effectiveness of the AvePoint Registration Statement and the
submission by Apex of the supplemental listing application to the Nasdaq Stock Market; (vi) the receipt of requisite government
approvals, including approval related to the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended; (vii) the consummation
by Apex of the Private Placements (as defined below); (viii) Apex having at least $5,000,001 of net tangible assets following
the exercise of redemption rights provided in accordance with the organizational documents of Apex; and (ix) as a condition to
AvePoint’s obligations, the total cash and cash equivalents of Apex at the Effective Time, after giving effect to the Merger
and the Private Placements, being no less than $300 million.
Simultaneously
with the execution of the Business Combination Agreement on November 23, 2020, the Named Executives entered into the Named Executive
Equity Agreements (the “Named Executive Equity Agreements”) pursuant to which the Named Executives will contribute
shares of AvePoint Common Stock to Apex immediately prior to the Effective Time in exchange for a portion of the Aggregate Cash
Consideration.
In
connection with the closing of the AvePoint Business Combination (the “Closing”), certain key stockholders of AvePoint
(the “Key AvePoint Stockholders”) will enter into agreements (the “Lock-Up Agreements”) providing that
they will not, subject to certain exceptions, sell or transfer any public shares or securities convertible into or exercisable
for public shares held by them immediately after the effective time of the First Merger (the “Effective Time”) until
180 days after the Closing (the “Lock-Up Period”).
Simultaneously
with the execution of the Business Combination Agreement on November 23, 2020, each of the sponsor, Jeff Epstein and Brad Koenig
entered into the Insider Letter Agreement (the “Insider Letter Agreement”) providing that such parties will not, subject
to certain exceptions, sell or transfer certain public shares held by the Sponsor on behalf of Jeff Epstein and Brad Koenig immediately
prior to the Effective Time (“Apex Founder Lock-Up Shares”) until 12 months after the Closing and will not sell or
transfer 50% of the Apex Founder Lock-Up Shares until 24 months after the Closing.
Simultaneously
with the execution of the Business Combination Agreement on November 23, 2020, the Key AvePoint Stockholders entered into the
Stockholder Support Agreement (the “Stockholder Support Agreement”) pursuant to which the Key AvePoint Stockholders
agreed to vote all of their shares of AvePoint Common Stock and AvePoint Preferred Stock in favor of the approval and adoption
of the Business Combination Agreement and the Proposed Transactions.
Simultaneously
with the execution of the Business Combination Agreement on November 23, 2020, the sponsor entered into the Sponsor Support Agreement
(the “Sponsor Support Agreement”) pursuant to which the sponsor agreed to vote all of public shares in favor of the
approval of the Business Combination Agreement and the Proposed Transactions and certain other proposals for approval by the stockholders
of Apex as set forth in the Business Combination Agreement.
Pursuant
to the Sponsor Support Agreement, the sponsor agreed to deposit 2,916,700 public shares (“Sponsor Earn-Out Shares”)
into escrow and that such shares will be subject to the vesting upon the occurrence, any time prior to or as of the seventh anniversary
of the Closing, of either: (i), the closing price of public shares is greater than or equal to $15.00 (as adjusted for share splits,
share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period;
or (ii) Apex consummates a change of control transaction.
Simultaneously
with the execution of the Business Combination Agreement on November 23, 2020, Apex entered into separate subscription agreements
(collectively, the “Subscription Agreements”) with a number of investors (collectively, the “PIPE Investors”),
pursuant to which the PIPE Investors agreed to purchase an aggregate of 14,000,000 public shares (the “PIPE Shares”),
at a purchase price of $10.00 per share for an aggregate purchase price of $140,000,000, in one or more private placement transactions
(the “Private Placements”). The closing of the Private Placements pursuant to the Subscription Agreements is contingent
upon, among other customary closing conditions, the concurrent consummation of the Proposed Transactions. The purpose of the Private
Placements is to raise additional capital for use by the combined company following the Closing.
In
connection with the Closing, that certain registration rights agreement dated September 16, 2019 will be amended and restated
and Apex, certain persons and entities holding securities of Apex prior to the Closing (the “Initial Holders”) and
certain persons and entities receiving public shares pursuant to the AvePoint Business Combination (the “New Holders”
and together with the Initial Holders, the “Reg Rights Holders”) shall enter into an amended and restated registration
rights agreement at the Closing (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement,
Apex will agree that, within 15 business days after the Closing, Apex will file with the SEC (at Apex’s sole cost and expense)
a registration statement registering the resale of certain securities held by or issuable to the Reg Rights Holders (the “Resale
Registration Statement”), and Apex shall use reasonable best efforts to have the Resale Registration Statement declared
effective as soon as practicable after the filing thereof. In certain circumstances, the New Holders can demand up to two underwritten
offerings, and all of the Reg Rights Holders will be entitled to piggyback registration rights.
Other than as specifically
discussed, this Amendment does not assume the closing of the AvePoint Business Combination.
Our
Mission
Our
purpose is to complete a business combination with a leading software or internet company, like AvePoint, that is valued between
$650 million and $2 billion. We seek to effectively employ our management team’s industry skills and experience as well
as their extensive personal network to add substantial value to any acquired company. These benefits include the following:
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Expertise in
growing successful software and internet companies: Our management team has demonstrated consistent prowess in building,
investing, nurturing and leading software and internet companies. We believe they can spot unique ideas or disruptive business
models and grow them from local sensation to global ubiquity. We believe we can also recruit top talent and use that intellectual
capital to great competitive advantage;
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Ability to mentor
and support exceptional executives: Our Co-Chief Executive Officers, directors and advisors have served on more than 30
public and 100 private boards of directors in North America, Europe and Asia, both within and outside the software and internet
sectors. They have overseen more than 200 acquisitions, taken companies public, thrived amid complex governance dilemmas and
enhanced their companies’ global growth; and
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Maximizing the
value of becoming a publicly traded entity: As a public entity, we believe we offer a wide range of advantages to stakeholders.
These include but are not limited to: working with management and shareholders who aspire to have their company become a public
entity and generate substantial wealth creation; transitioning from a private to a public entity may include broader access
to debt and equity providers; provision of liquidity for employees and potential acquisitions; and expansion of branding in
the marketplace.
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Acquisition
Criteria
Our
intent has been to seek potential target companies globally. We have used a broad and global network of professional contacts
that has been developed by our management team and advisors over many years. This network encompasses private equity firms, venture
capitalists and entrepreneurs.
The
maturity and judgment skills accumulated by our management team and advisors has guided our acquisition process. When candidate
companies are being evaluated, we use the following, non-exclusive criteria listed below for determining opportunities.
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Size: We
have targeted entities whose enterprise value is between $650 million and $2 billion. These companies have an international
following, and we believe offer long-term risk-adjusted return potential;
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Focus: The
software industry and internet sector are domains in which we have an accomplished track record and “pattern recognition”
knowledge. Our management team and advisors’ multifaceted expertise in assessing a target’s technology and their
potential for disruption have been key in evaluating business transaction candidates swiftly and adequately;
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Management’s
maturity: We have sought companies with proven and accomplished management teams which are eager to march forward together
with and benefit from our management team’s expertise. We have devoted significant resources to analyzing and reaching
alignment among a target’s management and its stakeholders, a paramount element to successful execution of any business
plan;
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Operational maturity:
We have targeted companies that have the requisite compliance, financial controls and reporting processes in place and are
ready for the regulatory constraints of a public entity;
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Growth: We
have invested in software or internet companies that are on what we believe to be a promising growth path, driven by a sustainable
competitive advantage, resulting in strong unit economics;
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Strategic Initiatives:
We have sought management teams with the interest and ability to execute on strategic opportunities, including acquisitions
of companies that enhances shareholder value;
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Benefit from
being public: We are committed to working with management and shareholders who aspire to have their company become a public
entity and generate substantial wealth creation. The benefits of transitioning from a private to a public entity may include
a broader access to debt and equity providers, liquidity for employees and potential acquisitions, and expanded branding in
the marketplace;
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Reputation and
market acceptance: We have sought companies with a sizable market share in their segment and the opportunity to achieve
market leadership. They should also have defensible proprietary technology and intellectual property rights; and
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Appropriate valuations:
We are rigorous, disciplined, and valuation-centric investors, with a keen understanding of market value. We expect to enter
into a business combination only if it pairs significant upside potential with limited downside risks.
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These criteria are not
intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent
relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant.
In the event that we decide to enter into our initial business combination with a target business, such as AvePoint, 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, as discussed in this Amendment, would be in the form of proxy solicitation materials
or tender offer documents that we would file with the U.S. Securities and Exchange Commission.
We
may need to obtain additional financing either to complete our initial business combination or because we become obligated to
redeem a significant number of our public shares upon completion of our initial business combination. We intend to acquire a company
with an enterprise value significantly above the net proceeds of our initial public offering and the sale of the placement units.
Depending on the size of the transaction or the number of public shares we become obligated to redeem, we may potentially utilize
several additional financing sources, including but not limited to the issuance of additional securities to the sellers of a target
business, debt issued by banks or other lenders or the owners of the target, a private placement to raise additional funds, or
a combination of the foregoing. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial
business combination, if cash on hand is insufficient to meet our obligations or our working capital needs, we may need to obtain
additional financing.
Our
Search for Business Combination Opportunities
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
Our board of directors will make the determination as to the fair market value of our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able
to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if
it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects.
We
anticipate structuring our initial business combination either (i) in such a way 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,
or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the
target business in order to meet certain objectives of the target management team or stockholders, or for other reasons. However,
we will only complete an initial 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 initial business combination may collectively own
a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all
of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However,
as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business
combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than
100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company,
the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s
80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value
test will be based on the aggregate value of all of the transactions 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. Based on the valuation
analysis of our management and board of directors, we have determined that the fair market value of AvePoint was substantially
in excess of 80% of the funds in the trust account and that the 80% test was therefore satisfied.
Our
Business Combination Process
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers
or directors. While AvePoint is not affiliated with our sponsor, officers or directors, in the event we do not consummate the
AvePoint Business Combination and seek to complete our initial business combination with a company that is affiliated with our
sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions that our initial business combination is fair
to our company from a financial point of view.
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 were to be included by a target business as a condition to any
agreement with respect to our initial business combination.
Certain
of our officers and directors presently have fiduciary or contractual obligations to other entities pursuant to which such officer
or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers or directors
becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to
such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially
affect our ability to complete our initial business combination. Our amended and restated certificate of incorporation provides
that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly
offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are
legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent the director
or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our
officers have agreed not to become an officer or director of any other special purpose acquisition company with a class of securities
registered under the Exchange Act, until we have entered into a definitive agreement regarding our initial business combination,
such as the Business Combination Agreement, or we have liquidated the trust account.
Our
Management Team
Members
of our management team are not obligated to devote any specific number of hours to our matters but they devote as much of their
time as they, in the exercise of their respective business judgement, deem necessary to our affairs and intend to continue doing
so until we have completed our initial business combination. The amount of time that any member of our management team devotes
in any time period may vary based on whether a target business has been selected for our initial business combination and the
current stage of the business combination process. We do not have an employment agreement with any member of our management team.
We
believe our management team’s operating and transaction experience and relationships with companies provides us with a substantial
number of potential business combination targets. Over the course of their careers, the members of our management team have developed
a broad network of contacts and corporate relationships in the software and internet technology industry. This network has grown
through the activities of our management team sourcing, acquiring and financing businesses, our management team’s relationships
with sellers, financing sources and target management teams and the experience of our management team in executing transactions
under varying economic and financial market conditions.
Status
as a Public Company
We
believe our structure makes us an attractive business combination partner to target businesses. As a public company, we offer
a target business, like AvePoint, an alternative to the traditional initial public offering through a merger or other business
combination with us. Following an initial business combination, such as the AvePoint Business Combination, we believe the target
business would have greater access to capital and additional means of creating management incentives that are better aligned with
stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its profile
among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of
Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash,
allowing us to tailor the consideration to the specific needs of the sellers. See “AvePoint Business Combination”
above for more information regarding such exchange in the AvePoint Business Combination.
Although
there are various costs and obligations associated with being a public company, we believe target businesses, such as AvePoint,
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, marketing and road show efforts that may not be present to the same extent in connection with an initial business
combination with us.
Furthermore,
once a proposed initial 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. Following
an initial business combination, such as the AvePoint Business Combination, we believe the target business would then have greater
access to capital and 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 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 independent registered public accounting firm 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 September 19, 2024,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 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.
Financial
Position
With
funds available in our trust account for an initial business combination in the amount of $338,708,320 (as of December 31, 2020),
after payment of $13,150,000 of deferred underwriting fees, before fees and expenses associated with our initial business combination,
we offer a target business, such as AvePoint, a variety of options such as creating a liquidity event for its owners, providing
capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage
ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination
of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration
to be paid to the target business to fit its needs and desires. However, other than with regard to the Private Placements described
above, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting
Our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the
placement units, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to backstop
agreements we may enter into or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or
the owners of the target, or a combination of the foregoing. 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.
We
may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of
our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather
than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with
the net proceeds of our initial public offering and the sale of the placement units, and may as a result be required to seek additional
financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would
expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of
an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents
disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek
stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately, or through loans in
connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any
third party with respect to raising any additional funds through the sale of securities or otherwise.
See
“AvePoint Business Combination” above for more information regarding the financing of and agreements related to the
AvePoint Business Combination.
Sources
of Target Businesses
Target
business candidates are brought to our attention from various unaffiliated sources, including investment bankers and investment
professionals. Target businesses are brought to our attention by such unaffiliated sources as a result of being solicited by us
by calls or mailings. These sources also introduce us to target businesses in which they think we may be interested on an unsolicited
basis, since many of these sources will have read our public filings and know what types of businesses we are targeting. Our officers
and directors, as well as our sponsor and their affiliates, also bring to our attention target business candidates that they become
aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as
attending trade shows or conventions. In addition, we 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 and our sponsor and their
affiliates. 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, advisory 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 finders’ fees
is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust
account. In no event, however, will our sponsor or any of our existing officers, directors or advisors be paid any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to,
or in connection with any services rendered 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 sponsor, executive officers, directors or
advisors, 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 initial business combination except as set
forth herein.
We
pay an affiliate of our sponsor a total of $15,000 per month for office space, utilities and secretarial and administrative support
and to reimburse our sponsor and our officers, directors and advisors for any out-of-pocket expenses related to identifying, investigating
and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements
with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements
will not be used as a criterion in our selection process of an initial business combination candidate.
We
are not prohibited from pursuing an initial business combination with a target that is affiliated with our sponsor, officers or
directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor,
officers or directors. While AvePoint is not affiliated with our sponsor, officers or directors, in the event we do not consummate
the AvePoint Business Combination and we seek to complete our initial business combination with a target that is affiliated with
our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions that such an initial business combination
is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
If
any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business
of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such
business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers
and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties
to us.
Selection
of a Target Business and Structuring of our Initial Business Combination
Nasdaq
rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of
the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest
earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
The fair market value of our initial business combination will be determined by our board of directors based upon one or more
standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading
multiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable
businesses. If our board of directors is not able to independently determine the fair market value of our initial business combination,
we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation
opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not
be able to make an independent determination of the fair market value of our initial business combination, it may be unable to
do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty
as to the value of a target’s assets or prospects. We do not intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. Subject to this requirement, our management has virtually unrestricted flexibility
in identifying and selecting one or more prospective target businesses, although we are not permitted to effectuate our initial
business combination with another blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets
of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction
company is what will be taken into account for purposes of Nasdaq’s 80% fair market value test.
To
the extent we effect our initial business combination with a company or business that may be financially unstable or in its early
stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective business target, such as AvePoint, we have conducted, and will continue to conduct a thorough due diligence
review, which encompasses, among other things, meetings with incumbent management and employees, document reviews, interviews
of customers and suppliers, inspection of facilities, as well as a review of financial and other information that will be made
available to us.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately
completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business
combination in a single industry. By completing our 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 have closely scrutinized the management of a prospective target business, including the management of AvePoint, when evaluating
the desirability of effecting our initial business combination with that business, and plan to continue to do so if the AvePoint
Business Combination is not consummated and we seek other business combination opportunities, our assessment of the target business’
management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or
abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business
cannot presently be stated with any certainty. 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, including the
AvePoint Business Combination in which Jeff Epstein will serve as a director and Brad Koenig will serve as an observer of the
combined company post-Closing, 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
an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target
business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will
have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders
May Not Have the Ability to Approve Our Initial Business Combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder
approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business
or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we
may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
Type
of Transaction
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Whether
Stockholder Approval is Required
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Purchase
of assets
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No
|
Purchase
of stock of target not involving a merger with the company
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No
|
Merger
of target into a subsidiary of the company
|
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No
|
Merger
of the company with a target
|
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Yes
|
Under
Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares
of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then
outstanding;
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any of our directors,
officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively
have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and
the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power
of 5% or more; or
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the issuance or
potential issuance of common stock will result in our undergoing a change of control.
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See
“AvePoint Business Combination” above for more information regarding the requisite approvals needed in the AvePoint
Business Combination.
Permitted
Purchases of our Securities
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, 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. There is no limit on the number of shares our initial stockholders,
directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law
and Nasdaq rules. In connection with the Private Placements, each of Brad Koenig and Jeff Epstein agreed to purchase 50,000 shares
of Apex Common Stock. There are currently no other commitments, plans or intentions by our initial stockholders, directors, officers,
advisors or their affiliates to engage in such transactions and have not formulated any terms or conditions for any such transactions.
If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic
information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not
currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the
Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers
determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such
rules. 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. None of the funds held in the trust account will be used to purchase shares or public
warrants in such transactions prior to completion of our initial business combination.
The
purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby
increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition
in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial
business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of
public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted
to the warrantholders 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. In addition, if such purchases
are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor,
officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly
or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder
has already submitted a proxy with respect to our initial business combination. Our sponsor, officers, directors, advisors or
their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal
securities laws.
Any
purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the
Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchases are subject to such reporting requirements.
See
“AvePoint Business Combination” above for more information regarding such purchases in the AvePoint Business Combination.
Redemption
Rights for Public Stockholders upon Completion of our Initial Business Combination
We will provide our
public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion
of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account as of two business days prior to the consummation of the initial business combination, such as the AvePoint Business
Combination, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes,
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account
as of December 31, 2020 is approximately $10.05 per public share. The per-share amount we will distribute to investors who properly
redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor,
officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to any founder shares and (along with Cantor) placement shares and any public shares held by them in connection
with the completion of our initial business combination.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock
upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve
the initial business combination, as in the AvePoint Business Combination, or (ii) by means of a tender offer if the AvePoint
Business Combination is not consummated. The decision as to whether we will seek stockholder approval of a proposed initial business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under
the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically
require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue
more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require
stockholder approval. If we structure an initial business combination with a target company in a manner that requires stockholder
approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination.
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval
is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal
reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we are required to comply with such rules.
If
a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will,
pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions
pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer
documents with the SEC prior to completing our initial business combination which contain substantially the same financial
and other information about the initial business combination and the redemption rights as is required under Regulation 14A
of the Exchange Act, which regulates the solicitation of proxies.
|
Upon
the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance
with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through
a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not
tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on
the requirement that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be
at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of
underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any
greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination.
If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain
stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions
in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation
of proxies, and not pursuant to the tender offer rules, and
|
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|
file proxy materials
with the SEC.
|
In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of
common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders
present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power
of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count
toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder
shares and placement shares and any public shares purchased (including in open market and privately negotiated transactions) in
favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common
stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a
result, in addition to our initial stockholders’ founder shares and placement shares, we would need only 12,720,001, or
36.3%, of the 35,000,000 public shares sold in our initial public offering to be voted in favor of an initial business combination
(assuming all outstanding shares are voted) in order to have our initial business combination approved. We intend to give approximately
30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which
a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements
of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder
may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our
amended and restated certificate of incorporation provides that we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target
or its equityholders, as is the case with the AvePoint Business Combination (ii) cash to be transferred to the target for working
capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the
terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay
for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions
pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will
not complete the initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption
will be returned to the holders thereof.
See
“AvePoint Business Combination” above for more information regarding the requisite approvals needed in the AvePoint
Business Combination.
Limitation
on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation
provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder
is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking
redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer
to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. 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 initial 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 an aggregate of 15% of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current
market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares
sold in our initial public offering 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 an
initial 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.
See
“AvePoint Business Combination” above for more information regarding the requisite approvals needed in the AvePoint
Business Combination.
Tendering
Stock Certificates in Connection with Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights (which requirement is applicable in the Business
Combination Agreement), whether they are record holders or hold their shares in “street name,” to either tender their
certificates to our transfer agent up to two business days prior to the vote on the proposal to approve the initial business combination,
or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s Deposit/Withdrawal
At Custodian (“DWAC”) System, at the holder’s option. The proxy materials that we will furnish to holders of
our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders
to satisfy such delivery requirements. Accordingly, a public stockholder would have up to two days prior to the vote on the initial
business combination to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise
period, it is advisable for stockholders to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date of the stockholder meeting. Furthermore,
if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides
prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return
the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares
electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If
our proposed initial business combination is not completed, we may continue to try to complete an initial business combination
with a different target until September 19, 2021.
Redemption
of Public Shares and Liquidation if no Initial Business Combination
Our
amended and restated certificate of incorporation provides that we have until September 19, 2021 to complete our initial business
combination. If we are unable to complete our initial business combination by September 19, 2021, 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 (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clauses (ii) and (iii)
above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail
to complete our initial business combination by September 19, 2021.
Our
sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights
to liquidating distributions from the trust account with respect to any founder shares and) along with Cantor) placement shares
held by them if we fail to complete our initial business combination by September 19, 2021. However, if our sponsor, officers
or directors acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to
such public shares if we fail to complete our initial business combination by September 19, 2021.
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation (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 our initial business
combination by September 19, 2021 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class
A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us
to pay our taxes divided by the number of then outstanding public shares. However, we will only redeem our public shares so long
as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject
to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive
number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed
with the amendment or the related redemption of our public shares at such time.
If
we do not consummate the AvePoint Business Combination or any other initial business combination by the deadline set forth in
our amended and restated certificate of incorporation, 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 $197,628
of proceeds held outside the trust account (as of December 31, 2020), although we cannot assure you that there will be sufficient
funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any
tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing
our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes on interest
income earned on the trust account balance, we may request the trustee to release to us an additional amount of up to $100,000
of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the placement units, other than the proceeds
deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption
amount received by 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 have sought and will continue to seek to have all vendors, service providers (other than our independent auditor), prospective
target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee
that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims
against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement
waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available
to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such
third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to
execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. Withum, our independent
registered public accounting firm, and Cantor, the underwriters of the offering, 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. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services
rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent,
confidentiality or similar agreement or business combination agreement, reduce the amount of funds 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, less
taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed
a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it
apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including
liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations,
nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that
our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor 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 (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it
is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce
its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may
choose not to do so if, for example, the cost of such legal action is deemed by the independent directors to be too high relative
to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked
our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy
those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption
price will not be less than $10.00 per public share.
We
seek to reduce the possibility that our Sponsor has to indemnify the trust account due to claims of creditors by endeavoring to
have all vendors, service providers (other than our independent auditor), prospective target businesses or other entities with
which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in
the trust account. Our Sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial
public offering against certain liabilities, including liabilities under the Securities Act. We have access to up to approximately
$197,628 of the proceeds held outside the trust account (as of December 31, 2020) with which to pay any such potential claims
(including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately
$100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient,
stockholders who received funds from our trust account could be liable for claims made by creditors.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial business combination by September 19, 2021 may be considered
a liquidating distribution under Delaware law. Delaware law provides that 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.
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 by September 19, 2021, 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 are unable to complete our initial business combination by September
19, 2021, 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 (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding
public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right
to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in the case of clauses (ii) and (iii) above 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 September 19, 2021 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could
potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders
may extend well beyond the third anniversary of such date.
Because
we are 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
are 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, and auditors) or prospective target businesses. As described above, pursuant to the obligation
contained in our underwriting agreement, we have sought and will continue to seek to have all vendors, service providers (other
than our independent auditor), 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 of our initial public offering against certain liabilities, including liabilities under the
Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not
be responsible to the extent of any liability for such third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held
in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to
the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the
trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we
file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover 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, 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 upon the earlier to occur of: (i) the completion
of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder
vote to amend any provisions of our 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 our initial business combination by September 19, 2021 or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public
shares if we are unable to complete our business combination by September 19, 2021, subject to applicable law. 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 initial business combination
alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account.
Such stockholder must have also exercised its redemption rights as described above. These provisions of our amended and restated
certificate of incorporation, like all provisions of our 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, such as AvePoint, we have encountered,
and may continue to encounter intense competition from other entities having a business objective similar to ours, including other
blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations.
Many of these entities are well established and have extensive experience identifying and effecting business combinations directly
or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than
we do. Our ability to acquire larger target businesses is limited by our available financial resources. This inherent limitation
gives others an advantage in pursuing the initial business combination 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.
Facilities
Our
executive offices are located at 533 Airport Blvd, Suite 400, Burlingame, CA 94010, and our telephone number is (619) 736-6855.
Our executive offices are provided to us by our sponsor. We pay an affiliate of our sponsor a total of $15,000 per month for office
space, utilities and secretarial and administrative support. We consider our current office space adequate for our current operations.
Employees
We
currently have two officers. These individuals are not obligated to devote any specific number of hours to our matters but they
devote as much of their time as they deem necessary and intend to continue doing so, in the exercise of their respective business
judgement, to our affairs until we have completed our initial business combination. The amount of time they 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
initial 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, including the AvePoint Business Combination. We do not have an employment agreement with any member
of our management team.
Periodic
Reporting and Financial Information
Our units, public shares
and public warrants are registered under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, this Amendment contains financial
statements audited and reported on by our independent registered public accountants.
We
will provide stockholders with audited financial statements of the prospective target business, such as AvePoint, as part of the
tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In
all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP or IFRS, depending
on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of
the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination
with 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 cannot assure you that
any particular target business identified by us as a potential business combination candidate will have financial statements prepared
in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with
the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed
target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation
will be material.
We
are required to evaluate our internal control procedures for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer an emerging growth
company, will we be required to have our internal control procedures audited. A target company may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such
business combination.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following September 19, 2024,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated
filer, which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 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 during the prior three-year period.
Item 1A.
Risk Factors.
You should carefully
consider all of the following risk factors and all of the other information contained in this Amendment, including the financial statements.
If any of the following risks occur, our business, financial condition or results of operations may be materially and adversely affected.
In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risk factors
described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to us and our business.
For risks relating to AvePoint and the AvePoint Business Combination, please see the AvePoint Registration Statement.
Risks Relating to Restatement of Our Previously Issued Financial
Statements
Our warrants are accounted for as liabilities
and the changes in value of our warrants could have a material effect on our financial results.
On
April 12, 2021, the SEC Staff issued the SEC Staff Statement, wherein the SEC Staff expressed its view that certain terms and conditions
common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to being
treated as equity. Specifically, the SEC Staff Statement focused on certain settlement terms and provisions related to certain tender
offers following a business combination, which terms are similar to those contained in the warrant agreement governing our warrants.
As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our warrants, and pursuant to the guidance in ASC
815, Derivatives and Hedging (“ASC 815”), determined the warrants should be classified as derivative liabilities measured
at fair value on our balance sheet, with any changes in fair value to be reported each period in earnings on our statement of operations.
As a result of the recurring
fair value measurement, our financial statements may fluctuate quarterly, based on factors, which are outside of our control. Due to
the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period
and that the amount of such gains or losses could be material.
Warrants that are accounted for as a warrant liability will
be recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect
on the market price of our common stock and/or may make it more difficult for us to consummate an initial business combination.
We account for the 17,905,000
warrants issued in connection with the initial public offering (including the 17,500,000 warrants sold as part of the units in the initial
public offering and the 405,000 private placement warrants) in accordance with the guidance contained in Derivatives and Hedging —
Contracts in Entity’s Own Equity (ASC 815-40). Such guidance provides that because the warrants do not meet the criteria for equity
treatment thereunder, each warrant must be recorded as a liability. Accordingly, we will classify each warrant as a liability at its
fair value. This liability is subject to re-measurement at each balance sheet date. With each such remeasurement, the warrant liability
will be adjusted to fair value, with the change in fair value recognized in our statement of operations and therefore our reported earnings.
The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock. In addition, potential
targets may seek a SPAC that does not have warrants that are accounted for as a warrant liability, which may make it more difficult for
us to consummate an initial business combination with a target business.
We have identified a material weakness
in our internal control over financial reporting as of December 31, 2020. If we are unable to maintain an effective system of internal
control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely
affect investor confidence in us and materially and adversely affect our business and operating results.
Following the issuance
of the SEC Staff Statement, our management and our audit committee concluded that, in light of the SEC Staff Statement, it was appropriate
to restate our previously issued audited financial statements as of and for the period ended December 31, 2020 (the “Restatement”).
In connection with the foregoing development and as a result of the Restatement, we identified a material weakness in our internal controls
over financial reporting.
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 and corrected on a timely basis.
Effective internal controls
are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material
weakness. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately
have the intended effects.
If we identify any new
material weaknesses in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement
of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case,
we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable
stock exchange listing requirements, investors may lose confidence in our financial reporting and our stock price may decline as a result.
We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid
potential future material weaknesses.
Risks
Related to Our Business and Corporate Structure
We
are a blank check 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 blank check company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate
our ability to achieve our business objective of completing our initial business combination with one or more target businesses.
We may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will
never generate any operating revenues.
There
are risks related to the software and internet technology industries to which we may be subject.
Business
combinations with companies with operations in the software and internet technology industries entail special considerations and
risks. If we are successful in completing a business combination with a target business with operations in the software and internet
technology industries, we will be subject to, and possibly adversely affected by, the following risks, including but not limited
to:
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if we do not develop
successful new products or improve existing ones, our business will suffer;
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we may invest in
new lines of business that could fail to attract or retain users or generate revenue;
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we will face significant
competition and if we are not able to maintain or improve our market share, our business could suffer;
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disruption or failure
of our networks, systems, platform or technology that frustrate or thwart our users’ ability to access our products
and services, may cause our users, advertisers, and partners to cut back on or stop using our products and services altogether,
which could seriously harm our business;
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mobile malware,
viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm our business
and reputation;
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if we are unable
to successfully grow our user base and further monetize our products, our business will suffer;
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if we are unable
to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business
may be seriously harmed;
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we may be subject
to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or require us
to change our business practices in a way that could seriously harm our business; and
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components used
in our products may fail as a result of a manufacturing, design, or other defect over which we have no control, and render
our devices inoperable.
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Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to the software and internet technology industries. Accordingly, if we acquire
a target business in another industry, these risks will likely not affect us and we will be subject to other risks attendant with
the specific industry in which we operate or target business which we acquire, none of which can be presently ascertained.
You
will not be entitled to protections normally afforded to investors of some other blank check companies.
Since
the net proceeds of our initial public offering and the sale of the placement units are intended to be used to complete an initial
business combination with a target business that has not been identified, we may be deemed to be a “blank check” company
under the United States securities laws. However, because we have net tangible assets in excess of $5,000,000, we are exempt from
rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors are not afforded
the benefits or protections of those rules. Among other things, this means that we have a longer period of time to complete our
business combination than do companies subject to Rule 419. Moreover, if our initial public offering were subject to Rule 419,
that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds
in the trust account were released to us in connection with our completion of an initial business combination.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make
it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds
$700 million as of any June 30 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.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
will be to identify and complete an initial 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 principal activities subject us to the Investment Company Act. To this end, the proceeds held in the trust
account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the
Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the
trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds
to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than
on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an
“investment company” within the meaning of the Investment Company Act. The trust account is intended as a holding
place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption
of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of
incorporation (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 our initial business combination by September 19, 2021
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity;
or (iii) absent an initial business combination by September 19, 2021, 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 an initial business combination or may result in our liquidation. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust
account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, 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 are required to comply
with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult,
time consuming and costly.
Those
laws and regulations and their interpretation and application may also change from time to time and those changes could have a
material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to
negotiate and complete our initial business combination and results of operations.
Our
initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you
do not support.
Our
initial stockholders own shares representing approximately 21.5% of our issued and outstanding shares of common stock (including
the placement shares). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially
in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval
of major corporate transactions. If our initial stockholders purchase any additional shares of common stock in the aftermarket
or in privately negotiated transactions, this would increase their control. Factors that would be considered in making such additional
purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors,
whose members were elected by our initial stockholders, is divided into three classes, each of which generally serves for a term
of three years with only one class of directors being elected in each year. As a consequence of our “staggered” board
of directors, not all directors will be considered for election at our annual meetings of stockholders prior to the consummation
of our initial business combination and our initial stockholders, because of their ownership position, will have considerable
influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion
of our initial business combination.
Provisions
in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the
price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our
amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that
stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability
of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
We
are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these
provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment
of a premium over prevailing market prices for our securities.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar
actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the
effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar
actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder
bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action
(A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to
the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court
of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum
other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any
action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of
Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of
our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate
of incorporation. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum
that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage
lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal
securities laws and the rules and regulations thereunder. Alternatively, if a court were to find the choice of forum provision
contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur
additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results
and financial condition.
Our
amended and restated certificate of incorporation provides that the exclusive forum provision will be applicable to the fullest
extent permitted by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought
to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive
forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim
for which the federal courts have exclusive jurisdiction.
Risks
Related to Our Initial Business Combination
If
the AvePoint Business Combination is not consummated, our public stockholders may not be afforded an opportunity to vote on our
proposed initial business combination, which means we may complete our initial business combination even if a majority of our
public stockholders do not support such a combination.
If
the AvePoint Business Combination is not consummated and we seek to enter into a business combination with other target companies,
we may choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination
would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder
vote for business or other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval
of a proposed initial business combination or will allow stockholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial
business combination even if holders of a majority of our public shares do not approve of the initial business combination we
complete.
If
we seek stockholder approval of our initial business combination, after approval of our board, our initial stockholders have agreed
to vote in favor of such initial business combination, regardless of how our public stockholders vote.
Pursuant
to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and placement shares, as
well as any public shares purchased after our initial public offering (including in open market and privately negotiated transactions),
in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares and placement
shares, we would need only 12,720,001, or 36.3%, of the 35,000,000 public shares sold in our initial public offering to be voted
in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business
combination approved. Our initial stockholders own shares representing approximately 21.5% of our outstanding shares of common
stock. Accordingly, if we seek stockholder approval of our initial business combination, after approval of our board, the agreement
by our initial stockholders 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.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek stockholder approval of the initial business combination.
At
the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our
initial business combination. Although we are seeking stockholder approval of the AvePoint Business Combination, if such transaction
is not consummated and we seek to enter into a business combination with other target companies, our Board of Directors may complete
such business combination without seeking stockholder approval. Under such circumstances, public stockholders may not have the
right or opportunity to vote on the initial business combination, unless we seek such stockholder vote. Accordingly, if we do
not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination
may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set
forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. In particular, the Business Combination Agreement provides for an
aggregate cash consideration of $300 million in cash, including funds in the trust account and from any equity financing as a
closing condition for the AvePoint Business Combination, and we may have to satisfy a higher minimum cash closing condition if
the AvePoint Business Combination is not consummated and we seek to enter into a business combination with other target companies.
Under those circumstances, 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 initial business combination. Furthermore, we will only
redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly
submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary
to satisfy a closing condition, each as described above, we would not proceed with such redemption and the related business combination
and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may
be reluctant to enter into an initial business combination 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 (including the Business Combination Agreement), 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 initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for
third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may
need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing.
Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than
desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common
stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock
at the time of our business combination. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure. The 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 per-share value of shares held by non-redeeming stockholders will reflect
our obligation to pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your stock.
If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open
market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either
situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption
until we liquidate or you are able to sell your stock in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating an initial business combination and may decrease our ability to conduct due diligence on potential
business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial
business combination on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning an initial business combination will be aware that
we must complete our initial business combination by September 19, 2021. Consequently, such target business may obtain leverage
over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with
that particular target business, we may be unable to complete our initial business combination with any target business. This
risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence
and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire
worthless.
Our
amended and restated certificate of incorporation provides that we must complete our initial business combination by September
19, 2021. We may not be able to complete the AvePoint Business Combination or find another suitable target business and complete
our initial business combination by such date. If we have not completed our initial business combination by such date, 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 (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to
receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in the case of clauses (ii) and (iii) above to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. In such case, our public stockholders may only receive $10.00 per share, and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their
shares.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination
and reduce the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination (such as the AvePoint Business Combination) and we do not conduct
redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors, officers,
advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination, although they are under
no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have
not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase
shares or public warrants in such transactions.
Such
a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is
no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor,
directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders
who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior
elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial business
combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at
the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose
of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such purchases
of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are
subject to such reporting requirements.
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 the quotation, listing or trading
of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial
business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials,
as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or
tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders
or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date
set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to
approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer
agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be
redeemed.
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 15% or more of our Class A common stock, you will
lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a
public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to an aggregate of 15% or more of the shares sold in our initial public offering without our prior consent,
which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to
vote all of their shares (including Excess Shares) for or against our 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
stock in open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on our redemption of our public shares, or less than such amount in certain circumstances,
and our warrants will expire worthless.
We
have encountered and expect to continue 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 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
industry knowledge than we do, and our financial resources are relatively limited when contrasted with those of many of these
competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial
public offering and the sale of the placement units, our ability to compete with respect to the acquisition of certain target
businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses. Furthermore, because we are obligated to pay cash for the
shares of Class A common stock which our public stockholders redeem in connection with our initial business combination, target
companies will be aware that this may reduce the resources available to us for our initial business combination. This may place
us at a competitive disadvantage in successfully negotiating an initial business combination. If we are unable to complete our
initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our
trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than
$10.00 per share upon our liquidation.
If
the net proceeds of our initial public offering and the sale of the placement units not being held in the trust account are insufficient
to allow us to operate until September 19, 2021, we may be unable to complete our initial business combination, in which case
our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants
will expire worthless.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until September 19, 2021, 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 as of December 31, 2020 of $197,628 are sufficient to allow us to operate until September 19, 2021; however,
we cannot assure you that our estimate is accurate. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If
the net proceeds of our initial public offering and the sale of the placement units not being held in the trust account are insufficient,
it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination
and we will depend on loans from our sponsor or management team to fund our search for an initial business combination, to pay
our taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be unable to complete
our initial business combination.
Of
the net proceeds of our initial public offering and the sale of the placement units, only approximately $197,628 (as of December
31, 2020) will be available to us outside the trust account to fund our working capital requirements. If we are required to seek
additional capital, we would need to borrow funds from our sponsor, management team or other third parties to operate in addition
to the $0 loans outstanding as of December 31, 2020 or may be forced to liquidate. None of our sponsor, members of our management
team nor any of their affiliates is under any obligation to advance additional funds to us in such circumstances. Any such additional
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 units, at a price of $10.00 per unit at the option
of the lender, upon consummation of our initial business combination. The units would be identical to the placement units. Prior
to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an
affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any
and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we may be unable to complete
our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders
may only receive approximately $10.00 per share on our redemption of our public shares, and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.
Subsequent
to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
our stock price, which could cause you to lose some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
surface all material issues that may be present inside a particular target business, that it would be possible to uncover all
material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our
control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure
our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. Although 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 debt financing to partially finance the initial
business combination. Accordingly, any stockholders who choose to remain stockholders following the initial 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 initial business combination constituted an actionable
material misstatement or omission.
The
grant of registration rights to our initial stockholders, as well as sellers and investors in connection with our initial business
combination, may make it more difficult to complete our initial business combination, and the future exercise of such rights may
adversely affect the market price of our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial
stockholders and their permitted transferees can demand that we register the placement warrants, the shares of Class A common
stock issuable upon exercise of the placement warrants, the shares of Class A common stock issuable upon conversion of the
founder shares, the shares of Class A common stock included in the placement units and holders of unit that may be issued upon
conversion of working capital loans may demand that we register such Class A common stock, warrants or the Class A common stock
issuable upon exercise of such units and warrants. In connection with the closing of the AvePoint Business Combination, that agreement
will be amended and restated, and the combined company, our sponsor, Cantor and certain stockholders of the combined company will
enter into an amended and restated registration rights agreement (the “Registration Rights Agreement”), pursuant to
which the combined company will agree that, within 15 business days after the closing of the AvePoint Business Combination, the
combined company will be required to file a resale registration statement, which registers for resale certain securities of the
combined company held by our sponsor, the subscribers in the Private Placements and holders of our warrants. The combined company
will be required to use commercially reasonable efforts to have such resale registration statement declared effective as soon
as practicable after the filing thereof. Additionally, each of (i) certain entities affiliated with Sixth Street and (ii) the
other Key Company Stockholders (as defined in the AvePoint Business Combination Agreement), may demand registration of their registrable
securities by the combined company up to twice a year. Each such group of demanding holders may request to sell all or any portion
of their registrable securities in an underwritten offering as long as the total offering price is expected to exceed, in the
aggregate, $10 million. Parties subject to the Registration Rights Agreement will be entitled to unlimited piggyback registration
rights.
We
will bear the cost of registering these securities. The registration and availability of such a significant number of securities
for trading in the public market may have an adverse effect on the market price of our Class A common stock.
Because
we are neither 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
will seek to complete an initial business combination with companies in the technology industry but may also pursue other business
combination opportunities, except that we are not, under our amended and restated certificate of incorporation, permitted to effectuate
our initial business combination with another blank check company or similar company with nominal operations. Because we have
not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate
the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity,
financial condition or prospects. 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.
If
the AvePoint Business Combination is not consummated, we may seek business combination opportunities in industries or sectors
which may or may not be outside of our management’s area of expertise.
As of March 8, 2021,
we have been focusing on business combination opportunities with software and internet technology companies. Even if the AvePoint Business
Combination is not consummated, we intend to continue to focus on identifying business combination opportunities with software and internet
technology companies. However, we will consider an initial business combination outside of our management’s area of expertise if
an initial business combination candidate is presented to us and we determine that such candidate offers an attractive business combination
opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded a reasonable amount
of time and effort in an attempt to do so. 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, especially
risks in connection with target businesses in industries outside of our management’s area of expertise. We also cannot assure you
that an investment in our securities will not ultimately prove to be less favorable to investors than a direct investment, if an opportunity
were available, in an initial business combination candidate.
In
the event we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s
expertise may not be directly applicable to its evaluation or operation, and the information contained herein regarding the areas
of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result,
our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly, any stockholders
who choose to remain stockholders following our initial business combination could suffer a reduction in the value of their shares.
Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business, such as AvePoint, with which we enter into our initial business combination will not have all of these attributes. If
we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval
of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may
be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet
our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may
receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In
certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of
revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining
key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we
combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although
our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to
properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that
those risks will adversely impact a target business.
We
are not required to obtain a fairness opinion and consequently, you may have no assurance from an independent source that the
price we are paying for the business is fair to our company from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market
value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm
or another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from
a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors,
who will determine fair market value based on standards generally accepted by the financial community. Such standards used will
be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion
of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of
the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute
the interest of our stockholders and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock,
par value $0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred
stock, par value $0.0001 per share. As of December 31, 2020, there are 46,285,000 and 1,250,000 authorized but unissued shares
of Class A common stock and Class B common stock, respectively, available for issuance, which amount takes into account the shares
of Class A common stock reserved for issuance upon exercise of outstanding warrants but not the shares of Class A common stock
issuable upon conversion of Class B common stock. There are currently no shares of preferred stock issued and outstanding. Shares
of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject
to adjustment as set forth herein, including in certain circumstances in which we issue Class A common stock or equity-linked
securities related to our initial business combination.
We
may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination
or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate
of incorporation provides that we may not issue securities that can vote with common stockholders on matters related to our pre-initial
business combination activity). We may also issue shares of Class A common stock upon conversion of the Class B common stock at
a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained
in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation provides,
among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would
entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These
provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate
of incorporation, may be amended with the approval of our stockholders. However, our executive officers, directors and director
nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our 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 our initial business combination by
September 19, 2021 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity, unless we provide our public stockholders with the opportunity to redeem their shares of 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 (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
The
issuance of additional shares of common or preferred stock:
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may
significantly dilute the equity interest of investors;
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may
subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common
stock;
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could
cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of
our present officers and directors; and
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may
adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Resources
could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on
the liquidation of our trust account and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up
to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to
a specific target business, we may fail to complete our initial business combination for any number of reasons including those
beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business
combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and
our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share on
the redemption of their shares.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel
could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of
our key personnel in the target business, however, may not presently be ascertained. Although some of our key personnel may remain
with the target business in senior management positions, directorships, or advisory roles 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 employ after our initial business combination, we cannot assure you that our assessment of these individuals
will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC,
which could cause us to have to expend time and resources helping them become familiar with such requirements. In addition, the
officers and directors of an initial business combination candidate may resign upon completion of our initial business combination.
The departure of an initial business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an initial business combination candidate’s key personnel upon the completion
of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an initial
business combination candidate’s management team will remain associated with the initial business combination candidate
following our initial business combination, it is possible that members of the management of an initial business combination candidate
will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination. These agreements may provide for them to receive compensation following our initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the initial business combination. Such negotiations would
take place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receive
compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the
initial business combination. The personal and financial interests of such individuals may influence their motivation in identifying
and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of
our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with
any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the
completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management
or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the
time of our initial business combination.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may effect our initial
business combination with a target business whose management may not have the skills, qualifications or abilities to manage a
public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the
value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Our
officers and directors allocate their time to other businesses thereby causing conflicts of interest in their determination as
to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our
initial business combination.
Our
officers and directors are not required to, and do not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for an initial business combination and their other
businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each
of our officers is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers
are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve
as officers or board members for other entities. If our officers’ and directors’ other business affairs require them
to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability
to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their
time and determining to which entity a particular business opportunity should be presented.
Until
we consummate our initial business combination, we will continue to engage in the business of identifying and combining with one
or more businesses. Our sponsor and officers and directors are, and may in the future become, affiliated with entities (such as
operating companies or investment vehicles) that are engaged in a similar business, although they may not become an officer or
director of, any other special purpose acquisition companies with a class of securities registered under the Exchange Act until
we have entered into a definitive agreement regarding our initial business combination or we have liquidated the trust account.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities to which they owe certain fiduciary or contractual duties.
Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These
conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us. Our amended and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity
offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as
a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would
otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to
us without violating another legal obligation.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into an initial business combination with a target business that is
affiliated with our sponsor, our directors or officers, although we do not intend to do so. We do not have a policy that expressly
prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly,
such persons or entities may have a conflict between their interests and ours.
We
may engage in an initial business combination with one or more target businesses that have relationships with entities that may
be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers or directors. Our directors also serve as officers and board members for other entities.
Such entities may compete with us for business combination opportunities. Despite our agreement to obtain an opinion from an independent
investment banking firm that is a member of FINRA or another independent entity that commonly renders valuation opinions, regarding
the fairness to our stockholders from a financial point of view of an initial business combination with one or more businesses
affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result,
the terms of the initial business combination may not be as advantageous to our public stockholders as they would be absent any
conflicts of interest.
Since
our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed,
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
In
June 2019, our sponsor purchased an aggregate of 7,187,500 founder shares for an aggregate purchase price of $25,000, or approximately
$0.004 per share. In August and September 2019, we effected a 1.1 for 1 stock dividend and a 1.109091 for 1 stock dividend, respectively,
for each share of Class B common stock outstanding, resulting in our sponsor holding an aggregate of 8,768,750 founder shares.
Because the underwriters of our initial public offering did not exercise their over-allotment option in full, 18,750 of such shares
were forfeited in September 2019. The founder shares will be worthless if we do not complete an initial business combination.
Our
sponsor and Cantor purchased an aggregate of 810,000 placement units at a price of $10.00 per unit (657,500 placement units by
our sponsor and 152,500 placement units by Cantor), for an aggregate purchase price of $8,100,000. Each placement unit consists
of one share of Class A common stock and one-half of one warrant. Each whole warrant is exercisable to purchase one whole share
of common stock at $11.50 per share. These securities will also be worthless if we do not complete an initial business combination.
Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination
and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination.
In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director.
The
personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target
business combination, completing an initial business combination and influencing the operation of the business following the initial
business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial business combination, which
may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment
in us.
Although we have no commitments
As of March 8, 2021 to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial
debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from
the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance
of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could
have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our
debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our
inability to pay dividends on our common stock;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund
other general corporate purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government
regulation;
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and
execution of our strategy; and
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other
disadvantages compared to our competitors who have less debt.
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We
may only be able to complete one business combination with the proceeds of our initial public offering, the sale of the placement
units, which will cause us to be solely dependent on a single business which may have a limited number of services and limited
operating activities. This lack of diversification may negatively impact our operating results and profitability.
Of
the net proceeds from our initial public offering and the sale of the placement units, $351,809,163 is available to complete our
initial business combination and pay related fees and expenses (which includes up to $13,150,000 for the payment of deferred underwriting
commissions). In addition, in connection with the AvePoint Business Combination, we entered into subscription agreements with
certain accredited investors, pursuant to which we have agreed to issue and sell to such investors an aggregate of 14,000,000
shares of our common stock at a price of $10.00 per share in a private placement transaction.
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. In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly,
the prospects for our success may be:
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solely
dependent upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products, processes or services.
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This
lack of diversification may subject us to numerous economic, competitive and regulatory 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. We do not, however, intend
to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in an initial business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately
held company. Very little public information generally exists about private companies, and we could be required to make our decision
on whether to pursue a potential initial business combination on the basis of limited information, which may result in an initial
business combination with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination.
We
may structure an 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 the 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
initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100%
interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders
immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such
transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss
of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete an initial business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except we will only
redeem our public shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately
prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement
which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete
our initial business combination even if a substantial majority of our public stockholders do not agree with the transaction and
have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions
in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated
agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate
cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed
the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, all
shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for
an alternate business combination.
In
order to effectuate 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 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 an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have
amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial
business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged
for cash and/or other securities. Amending our 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 a majority of
the public warrants (which may include public warrants acquired by our sponsor or its affiliates in our initial public offering
or thereafter in the open market). In addition, our 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 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 our initial business combination
by September 19, 2021 or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account), including an amendment to permit
us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation
is substantially reduced or eliminated, may be amended with the approval of holders of 65% of our common stock, which is a lower
amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and
restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination
that some of our stockholders may not support.
Our
amended and restated certificate of incorporation provides that any of its provisions related to pre-initial business combination
activity (including the requirement to deposit proceeds of our initial public offering and the private placement of warrants into
the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders
as described herein and including to permit us to withdraw funds from the trust account such that the per share amount investors
will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders
of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release
of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In
all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding
common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may
not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation. Our initial
stockholders, who will collectively beneficially own approximately 21.5% of our common stock, will participate in any vote to
amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any
manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation
which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase
our ability to complete an initial business combination with which you do not agree. Our stockholders may pursue remedies against
us for any breach of our amended and restated certificate of incorporation.
Our
sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our 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 our initial business
combination by September 19, 2021 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class
A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account, net of taxes payable, divided by the number of then outstanding public shares. These agreements
are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not
parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against
our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders
would need to pursue a stockholder derivative action, subject to applicable law.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination.
We
intend to target businesses larger than we could acquire with the net proceeds of our initial public offering and the sale of
the placement units. As a result, we may be required to seek additional financing to complete such proposed initial business combination.
We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure
the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the
amount of additional financing we may be required to obtain could increase as a result of future growth capital needs for any
particular transaction, the depletion of the available net proceeds in search of a target business, the obligation to repurchase
for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination
and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are
unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share plus
any pro rata interest earned on the funds held in the trust account 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 are unable to complete our initial business combination, our public stockholders
may only receive approximately $10.00 per share on the liquidation of our trust account, and our warrants will expire worthless.
Our
sponsor paid an aggregate of $25,000 for the founder shares, or approximately $0.003 per founder share. As a result of this low
initial price, our sponsor, its affiliates and our management team and advisors stand to make a substantial profit even if an
initial business combination subsequently declines in value or is unprofitable for our public stockholders.
As
a result of the low acquisition cost of our founder shares, our sponsor, its affiliates and our management team and advisors could
make a substantial profit even if we select and consummate an initial business combination with an acquisition target that subsequently
declines in value or is unprofitable for our public stockholders. Thus, such parties may have more of an economic incentive for
us to enter into an initial business combination with a riskier, weaker-performing or financially unstable business, or an entity
lacking an established record of revenues or earnings, than would be the case if such parties had paid the full offering price
for their founder shares.
Unlike
many other similarly structured blank check companies, our initial stockholders will receive additional shares of Class A common
stock if we issue shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A common stock at the time of our initial business combination, on a one-for-one
basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked
securities convertible or exercisable for Class A common stock, are issued or deemed issued in excess of the amounts offered in
our initial public offering and related to the closing of the initial business combination, the ratio at which founder shares
shall convert into Class A common stock will be adjusted so that the number of Class A common stock issuable upon conversion of
all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of all outstanding shares of
common stock upon completion of the initial business combination, excluding the placement shares and any shares or equity-linked
securities issued, or to be issued, to any seller in the business combination and any private placement-equivalent warrants issued
to our sponsor or its affiliates upon conversion of loans made to us. This is different from most other similarly structured blank
check companies in which the initial stockholder will only be issued an aggregate of 20% of the total number of shares to be outstanding
prior to the initial business combination. Additionally, the aforementioned adjustment will not take into account any shares of
Class A common stock redeemed in connection with the business combination. Accordingly, the holders of the founder shares could
receive additional shares of Class A common stock even if the additional shares of Class A common stock, or equity-linked securities
convertible or exercisable for Class A common stock, are issued or deemed issued solely to replace those shares that were redeemed
in connection with the business combination. The foregoing may make it more difficult and expensive for us to consummate an initial
business combination.
Our
warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult
to effectuate our initial business combination.
We
issued warrants to purchase 17,500,000 shares of our Class A common stock as part of the units offered in our initial public offering
and, simultaneously with the closing of our initial public offering, we issued an aggregate of 405,000 placement warrants. Our
initial stockholders currently own an aggregate of 8,750,000 founder shares. The founder shares are convertible into shares of
Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor makes any
working capital loans, up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit at the option
of the lender, upon consummation of our initial business combination. The units would be identical to the placement units. To
the extent we issue shares of Class A common stock to effectuate an initial business combination, the potential for the issuance
of a substantial number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could
make us a less attractive business combination vehicle to a target business. Any such issuance will increase the number of issued
and outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete
the initial business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate an initial
business combination or increase the cost of acquiring the target business.
The
placement warrants included in the placement units are identical to the warrants sold as part of the units in our initial public
offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by
us, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination
and (iii) they may be exercised by the holders on a cashless basis.
Because
each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than
units of other blank check companies.
Each
unit contains one-half of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only
whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole
warrant. This is different from other offerings similar to ours whose units include one share of common stock and one warrant
to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect
of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for
one half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we
believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth
less than if they included a warrant to purchase one whole share.
A
provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.
Unlike
most blank check companies, if
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(i)
|
we
issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with
the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share;
|
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(ii)
|
the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the consummation of our initial business combination (net
of redemptions), and
|
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(iii)
|
the
Market Value is below $9.20 per share,
|
then
the exercise price of the warrants will be adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued
Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher
of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination
with a target business.
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 an initial business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP, or
international financial reporting standards as issued by the IFRS, depending on the circumstances and the historical financial
statements may be required to be audited in accordance with the standards of the PCAOB. These financial statements may also be
required to be prepared in accordance with GAAP in connection with our current report on Form 8-K announcing the closing of our
initial business combination within four business days following such closing. These financial statement requirements may limit
the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require
substantial financial and management resources, and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with the Original Filing. Since we are not deemed
to be a large accelerated filer or an accelerated filer based on such evaluation, will we not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we
remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation
requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements
of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we
seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy
of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such business combination.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to a variety of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company with operations or opportunities outside of the United States, we would
be subject to any special considerations or risks associated with companies operating in an international setting, including any
of the following:
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______
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higher
costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal
requirements of overseas markets;
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______
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rules
and regulations regarding currency redemption;
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______
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complex
corporate withholding taxes on individuals;
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______
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laws
governing the manner in which future business combinations may be effected;
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______
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tariffs
and trade barriers;
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______
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regulations
related to customs and import/export matters;
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______
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longer
payment cycles and challenges in collecting accounts receivable;
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______
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tax
issues, including but not limited to tax law changes and variations in tax laws as compared to the United States;
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______
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currency
fluctuations and exchange controls;
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______
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rates
of inflation;
|
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______
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cultural
and language differences;
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______
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employment
regulations;
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______
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crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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______
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deterioration
of political relations with the United States; and
|
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______
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government
appropriations of assets.
|
We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may
adversely impact our results of operations and financial condition.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the recent coronavirus (COVID-19) outbreak.
In
December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread
throughout other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared
the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January
31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to
aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized
the outbreak as a “pandemic.” COVID-19 has resulted in a widespread health crisis that has adversely affected the
economies and financial markets worldwide. The business of any potential target business with which we consummate a business combination
could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent
to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain
COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for
an extended period of time, our ability to consummate a business combination, or the operations of a target business with which
we ultimately consummate a business combination, may be materially adversely affected.
As
the number of special purpose acquisition companies evaluating targets increases, attractive targets may become scarcer and there
may be more competition for attractive targets. This could increase the cost of our initial business combination and could even
result in our inability to find a target or to consummate an initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many potential
targets for special purpose acquisition companies have already entered into an initial business combination, and there are still
many special purpose acquisition companies seeking targets for their initial business combination, as well as many such companies
currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, more
effort and more resources to identify a suitable target and to consummate an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with
available targets, the competition for available targets with attractive fundamentals or business models may increase, which could
cause targets companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such
as economic or industry sector downturns, geopolitical tensions, or increases in the cost of additional capital needed to close
business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate
or frustrate our ability to find and consummate an initial business combination, and may result in our inability to consummate
an initial business combination on terms favorable to our investors altogether.
Risks
Related to Our Trust Account
The
securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the
value of the assets held in trust such that the per-share redemption amount received by public stockholders may be less than $10.00
per share.
The
proceeds held in the Trust Account are invested only in U.S. government treasury obligations with a maturity of 180 days or less
or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct
U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of
interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest
rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that
it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business
combination or make certain amendments to our Amended and Restated Certificate of Incorporation, our public stockholders are entitled
to receive their pro-rata share of the proceeds held in the Trust Account, plus any interest income not released to us, net of
taxes payable. Negative interest rates could impact the per-share redemption amount that may be received by public stockholders.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate
your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion
of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder
properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public
shares if we do not complete our initial business combination by September 19, 2021 from the closing of our initial public offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity
and (iii) the redemption of our public shares if we are unable to complete an initial business combination by September 19, 2021,
subject to applicable law and as further described herein. 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.
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 seek to have
all vendors, service providers, 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.
Withum, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with
us waiving such claims to the monies held in the trust account.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required
to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following
redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share
initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and
to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with
which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement,
reduce the amount of funds 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, less taxes payable, provided that such liability will not apply to any claims
by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account
(whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial
public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor
to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to
satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we
cannot assure you that our sponsor 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.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per 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 which may be withdrawn to pay taxes, and our sponsor
asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim,
our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent
directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the
trust account available for distribution to our public stockholders may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and
our board may be exposed to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under
applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
Risks
Related to Our Common Stock and the Securities Market
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our
securities and subject us to additional trading restrictions.
Our
securities are currently listed on Nasdaq. However, we cannot assure you that our securities will continue to be, listed on Nasdaq
in the future or prior to our initial business combination. In order to continue listing our securities on Nasdaq prior to our
initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain
a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally
300 round-lot holders with at least 50% of such round lot holders holding securities with a market value of at least $2,500).
Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s
initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue
to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least
$4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required
to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value
of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at
that time.
If
Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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______
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a
limited availability of market quotations for our securities;
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|
______
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reduced
liquidity for our securities;
|
|
______
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a
determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class
A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary
trading market for our securities;
|
|
______
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a
limited amount of news and analyst coverage; and
|
|
______
|
a
decreased ability to issue additional securities or obtain additional financing in the future.
|
The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because our units, our Class A common
stock and warrants are listed on Nasdaq, our units, Class A common stock and our warrants are covered securities. Although the
states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies
if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale
of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict
the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view
blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered
securities and we would be subject to regulation in each state in which we offer our securities, including in connection with
our initial business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least a majority of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased,
the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant
could be decreased, all without your approval.
Our
warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the
then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants
(which may include public warrants acquired by our sponsor or its affiliates in our initial public offering or thereafter in the
open market). Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least
a majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public
warrants with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock,
shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per
share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within a 30 trading-day period commencing once the warrants become exercisable and ending on the third trading day prior to the
date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants
become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the
warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such
registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue
sky laws of the state of residence in those states in which the warrants were offered by us in our initial public offering. Redemption
of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it
may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise
wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called
for redemption, is likely to be substantially less than the market value of your warrants. None of the placement warrants will
be redeemable by us so long as they are held by the sponsor or its permitted transferees.
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 by September 19, 2021 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
September 19, 2021 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, and auditors) 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
by September 19, 2021 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
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus
precluding such investor from being able to exercise its warrants except on a cashless basis. If the issuance of the shares upon
exercise of warrants is not registered, 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.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants issued in our initial public offering
under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have
agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination,
we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the
shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same
to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating
to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the
provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise
which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements
contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable
upon exercise of the warrants issued in our initial public offering are not registered under the Securities Act, we will be required
to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless
basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of
the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an
exemption from registration is available. Notwithstanding the foregoing, if a registration statement covering the Class A common
stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial
business combination, warrant holders may, until such time as there is an effective registration statement and during any period
when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the
exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or
another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. We will use our
best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In
no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants
in the event that we are unable to register or qualify the shares underlying the warrants issued in our initial public offering
under applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the
warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be
entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common
stock included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption right if the
issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable
state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or
qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were
offered by us in our initial public offering. However, there may be instances in which holders of our public warrants may be unable
to exercise such public warrants but holders of our placement warrants may be able to exercise such placement warrants.
If
you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from
such exercise than if you were to exercise such warrants for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First,
if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective
by the 60th business day after the closing of our initial business combination, warrant holders may, until such time
as there is an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the
Securities Act or another exemption. Second, if a registration statement covering the Class A common stock issuable upon exercise
of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant
holders may, until such time as there is an effective registration statement and during any period when we shall have failed to
maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section
3(a)(9) of the Securities Act, provided that such exemption is available; if that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. Third, if we call the public warrants for redemption,
our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the
event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that
number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of
Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the
“fair market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value”
is the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior
to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the
holders of warrants, as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than
if you were to exercise such warrants for cash.
A
market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price
of our securities.
The
price of our securities may vary significantly due to one or more potential business combinations and general market or economic
conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained.
You may be unable to sell your securities unless a market can be established and sustained.
General
Risk Factors
We
may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek
recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied
by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers
or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative
litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our officers and directors pursuant to these indemnification provisions.
Past
performance by our management team and advisors may not be indicative of future performance of an investment in us.
Past
performance by our management team and advisors is not a guarantee either (i) of success with respect to any business combination
we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should
not rely on the historical record of our management team’s or advisors’ performance as indicative of the future performance
of an investment in the company or the returns the company will, or is likely to, generate going forward. Additionally, in the
course of their respective careers, members of our management team have been involved in businesses and deals that were unsuccessful.
Our officers and directors have not had experience with blank check companies or special purpose acquisition companies in the
past.
We
are dependent upon our executive officers and directors and their departure, or any illness contracted as a result of COVID-19
or otherwise, 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 executive officers and directors, at least until we have completed
our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of, any of our
directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers and/or
advisors including due to disease (such as COVID-19), disability or death, could have a detrimental effect on us.
The
occurrence of natural disasters may adversely affect our business, financial condition and results of operations following our
business combination.
The
occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely
affect our business, financial condition or results of operations following our business combination. The potential impact of
a natural disaster on our results of operations and financial position is speculative and would depend on numerous factors. The
extent and severity of these natural disasters determines their effect on a given economy. Although the long-term effect of diseases
such as the COVID-19 “coronavirus,” H5N1 “avian flu,” or H1N1, the “swine flu,” cannot currently
be predicted, previous occurrences of avian flu and swine flu had an adverse effect on the economies of those countries in which
they were most prevalent. An outbreak of a communicable disease in our market could adversely affect our business, financial condition
and results of operations, and timely reporting obligations under Regulation S-X and Regulation S-K following our business combination.
We cannot assure you that natural disasters will not occur in the future or that our business, financial condition and results
of operations will not be adversely affected.
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.