Item 1. Business
We are a blank check company incorporated
on January 28, 2015 as a Cayman Islands exempted company formed for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to
throughout this Report as our initial business combination. We will seek to capitalize on the substantial deal sourcing, investing
and operating expertise of our Sponsor and management team to identify and complete a business combination with one or more businesses
in the asset management industry, although we may pursue business combination opportunities in other industries. Our amended and
restated memorandum and articles of association prohibit us from effectuating a business combination with another blank check company
or similar company with nominal operations.
The registration statement for the Company’s
initial public offering (“Initial Public Offering”) was declared effective by the United States Securities and Exchange
Commission (the “SEC”) on May 19, 2015. On May 26, 2015, the Company consummated the Initial Public Offering of 17,250,000
units (the “Public Units”), with each Public Unit consisting of one ordinary share, $0.0001 par value per share (the
“Public Shares”), and one-half of one warrant (the “Warrants”). The Public Units were sold at an offering
price of $10.00 per Public Unit, generating total gross proceeds of $172,500,000.
Prior to the consummation of our initial
public offering, on March 2, 2015, our Sponsor purchased 4,312,500 ordinary shares (the “Founder Shares”) for an aggregate
purchase price of $25,000, or approximately $0.006 per share. The Founder Shares are identical to the ordinary shares included
in the Public Units except that the Founder Shares are subject to certain transfer restrictions, as described in more detail below.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 6,062,500 warrants (the “Private Placement Warrants”)
at a price of $1.00 per warrant in a private placement to the Company’s Sponsor, generating gross proceeds of $6,062,500.
Following the closing of the Initial Public Offering, an amount of $172,500,000 ($10.00 per share) from the net proceeds of the
sale of the Public Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account with Continental
Stock Transfer & Company acting as trustee (“Trust Account”) and invested in U.S. government securities, within
the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “1940 Act”), with
a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by
the Company meeting the conditions of paragraphs (c)(2), (c)(3) and (c)(4) of Rule 2a-7 of the 1940 Act, as determined by the Company,
until the earlier of: (i) the consummation of a business combination or (ii) the distribution of the Trust Account as described
below. As of December 31, 2015, no funds had been withdrawn from the Trust Account.
Effecting our Initial Business Combination
General
Other than searching for and evaluating
potential target companies, we are not presently engaged in, and we will not engage in, any operations for an indefinite period
of time. We intend to effect our initial business combination using cash from proceeds of our Initial Public Offering and the private
placement of the Private Placement Warrants, our capital stock, debt or a combination of these as the consideration to be paid
in our initial business combination. We may seek to complete our initial 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 stock or debt securities, or not all of the funds released from the Trust Account are used for payment of the consideration
in connection with our business combination or used for redemptions of purchases of our ordinary shares, we may apply the balance
of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
Selecting a Target Business and
Structuring our Initial Business Combination
Our initial business combination must occur
with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the
Trust Account (excluding the deferred underwriting commissions, advisory fees and taxes payable on the income earned on the Trust
Account) at the time of the agreement to enter into the initial business combination. The fair market value of the target or targets
will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such
as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair
market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm that is
a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”), with respect to the satisfaction of such criteria.
Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more
prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank
check company or a similar company with nominal operations.
We anticipate structuring our initial business
combination so that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the equity
interests or assets of the target business or businesses. We may, however, structure our initial business combination such that
the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet
certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or
otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the 1940 Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our
shareholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending
on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this
case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number
of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of our outstanding
shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business
or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or
acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one
target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses and we will treat
the target businesses together as the initial business combination in our proxy solicitation materials or tender offer documents,
as applicable.
To the extent we effect our initial business
combination with a company or business that may be financially unstable or in its early stages of development or growth we may
be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective target business,
we expect to conduct a due diligence review, which will include, as applicable, meetings with incumbent management and employees,
document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and other information
that will be made available to us.
The time required to select and evaluate
a target business and to structure and complete our initial business combination, and the costs associated with this process, are
not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation
of a prospective target business with which our business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination. In no event, however, will our Sponsor, our officers
or directors or their respective affiliates be paid any finder’s fee, consulting fee or other compensation prior to, or for
any services they render in order to effectuate, the closing of an initial business combination other than the reimbursement of
any out-of-pocket expenses or the repayment of loans that we may receive from time to time to fund our working capital needs.
Redemption Rights for
Public Shareholders upon Completion of our Initial Business Combination
We will provide our shareholders
with the opportunity to redeem all or a portion of their shares included in the Public Units sold in the Initial Public
Offering 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 our initial
business combination, including interest earned on the funds held in the Trust Account and not previously released to us to
pay our franchise and income taxes, divided by the number of then outstanding Public Shares, subject to the limitations
described herein. The amount in the Trust Account is anticipated to be approximately $10.00 per Public Share. The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting
commissions we will pay to the underwriters. There will be no redemption rights upon the completion of our initial business
combination with respect to our Warrants. Our initial shareholders have entered into letter agreements with us, pursuant to
which they have agreed to waive their redemption rights with respect to their Founder Shares and any Public Shares they may
acquire during or after our Initial Public Offering in connection with the completion of our business combination.
Manner of Conducting
Redemptions
We will provide our shareholders with the
opportunity to redeem all or a portion of their Public Shares upon the completion of our initial business combination either (i)
in connection with a shareholder meeting called to approve the initial business combination or (ii) by means of a tender offer.
The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will
be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction whether
the terms of the transaction would require us to seek shareholder approval by law or stock exchange listing requirement or whether
we were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under
SEC rules). Asset acquisitions and stock purchases would not typically require shareholder approval while direct mergers with our
Company where we do not survive and any transactions where we issue more than 20% of our outstanding ordinary shares or seek to
amend our amended and restated memorandum and articles of association would require shareholder approval. If we structure a business
combination transaction with a target company in a manner that requires shareholder approval, we will not have discretion as to
whether to seek a shareholder vote to approve the proposed business combination.
If a shareholder vote is not required and
we do not decide to hold a shareholder vote for business or other legal reasons, we will, pursuant to our amended and restated
memorandum and articles of association:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Securities Exchange Act of 1934 (the “Exchange
Act”), which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the
same financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our business
combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our Sponsor will terminate any plan established
in accordance with Rule 10b5-1 to purchase our ordinary shares in the open market, in order to comply with Rule 14e-5 under the
Exchange Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number
of Public Shares, which number will be based on the requirement that we may not redeem Public Shares in an amount that would cause
our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules)
or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If, however, shareholder approval of the
transaction is required by law or stock exchange listing requirements, or we decide to obtain shareholder approval for business
or other legal reasons, we will:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates
the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
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In the event that we seek shareholder approval,
we will complete our initial business combination only if a majority of the outstanding ordinary shares voted are voted in favor
of the business combination. In such case, our initial shareholders have entered into letter agreements with us to vote their Founder
Shares and any Public Shares purchased during or after our Initial Public Offering in favor of our initial business combination.
For purposes of seeking approval of the majority of our outstanding ordinary shares, non-votes will have no effect on the approval
of our initial business combination once a quorum is obtained. 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. Each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or
against the proposed business combination, provided that a public shareholder must in fact vote for or against a proposed business
combination in order to have his, her or its ordinary shares redeemed. In addition, our initial shareholders have entered into
letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares
and Public Shares in connection with the completion of a business combination.
We may require our public shareholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either
(a) tender their certificates to our transfer agent or (b) deliver their shares to the transfer agent electronically, in each case
prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days
prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials. We believe that
this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action
from the redeeming public shareholders, which could delay redemptions and result in additional administrative cost. If the proposed
business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered,
or shares tendered electronically, by public shareholders who elected to redeem their shares.
Our amended and restated memorandum and
articles of association provide that in no event will we redeem our Public Shares in an amount that would cause our net tangible
assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater
net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. For
example, the proposed business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash
to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy
other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration
we would be required to pay for all ordinary shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us,
we will not complete the business combination or redeem any shares, and all ordinary shares submitted for redemption will be returned
to the holders thereof.
Limitation on Redemption
upon Completion of our Initial Business Combination if We Seek Shareholder Approval
Notwithstanding the foregoing redemption
rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with
our business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide
that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its
shares with respect to more than an aggregate of 20% of the shares sold in our Initial Public Offering. We believe the restriction
described above will discourage shareholders from accumulating large blocks of shares, and subsequent attempts by such holders
to use their ability to redeem their shares 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 shareholder holding more
than an aggregate of 20% of the shares sold in our Initial Public Offering could threaten to exercise its redemption rights against
a business combination 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 shareholders’ ability to redeem to no more than 20% of the shares
sold in our Initial Public Offering, we believe we will limit the ability of a small group of shareholders to unreasonably attempt
to block our ability to complete our business combination, particularly in connection with a business combination with a target
that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting
our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than
20% of the shares sold in our Initial Public Offering) for or against our initial business combination.
Redemption of Public
Shares and Liquidation if No Initial Business Combination
Our Sponsor, executive officers and directors
have agreed that we will have only 24 months from the closing of our Initial Public Offering to complete our initial business combination.
If we are unable to complete our initial business combination within such 24-month period, we will: (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the
Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption
rights or liquidating distributions with respect to our Warrants, which will expire worthless if we fail to complete our business
combination within the 24-month time period.
Our initial shareholders have entered into
letter agreements with us, pursuant to which they have waived their rights to liquidating distributions from the Trust Account
with respect to their Founder Shares if we fail to complete our initial business combination within 24 months from the closing
of our Initial Public Offering. However, if our initial shareholders acquire Public Shares after our Initial Public Offering, they
will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to complete
our initial business combination within the allotted 24-month time frame. Such events might delay distribution of some or all of
our assets to our public shareholders.
The underwriters have agreed to waive their
rights to their deferred underwriting commission held in the Trust Account in the event we do not complete our initial business
combination within 24 months from the closing of our Initial Public Offering.
Our Sponsor, executive officers and directors
have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated memorandum
and articles of association that would affect the substance or timing of our obligation to redeem 100% of our Public Shares if
we do not complete our initial business combination within 24 months from the closing of our Initial Public Offering, unless we
provide our public shareholders with the opportunity to redeem their ordinary shares upon approval of such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then
outstanding Public Shares. However, we may not redeem our Public Shares in an amount that would cause our net tangible assets to
be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules).
Competition
In identifying, evaluating and selecting
a target business for our initial business combination, we may encounter intense competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying
and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than us. While we believe there may be numerous potential target businesses that we could
acquire, our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation
gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection
with our public shareholders who exercise their redemption rights may reduce the resources available to us for our initial business
combination and our outstanding Warrants, and the future dilution they potentially represent, may not be viewed favorably by certain
target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business
combination.
Employees
We currently have two executive officers.
Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote
as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount
of time that any member of our management team will devote in any time period will vary based on whether a target business has
been selected for our initial business combination and the current stage of the business combination process. We do not intend
to have any full time employees prior to the closing of an initial business combination.
Available Information
We are required to file Annual Reports on
form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required to disclose certain material events
(e.g. changes in corporate control, acquisitions or dispositions of a significant amount of assets other than in the ordinary course
of business and bankruptcy) in a Current Form on Form 8-K. The public may read and copy the materials that we file with the SEC
at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet website that contains reports,
proxy and information statement and other information regarding issuers that file electronically with the SEC. The SEC’s
internet website is located at http://www.sec.gov.
Item 1A. Risk Factors
An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks and uncertainties described below, together with the other
information contained in this Report, before making a decision to invest in our securities. If any of the following events occur,
our business, financial condition and operating results may be materially adversely affected. In that event, the trading price
of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described below
are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not
material, may also become important factors that adversely affect our business or results of operations.
We are an early stage 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 an early stage blank check company
established under the laws of the Cayman Islands with no operating results, and we did not commence operations until obtaining
funding through our Initial Public Offering. Because we have no operating history and no operating results, 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 have no current plans, arrangements or understandings with any prospective target business concerning a business
combination and may be unable to complete our business combination. If we fail to complete our business combination, we will never
generate any operating revenues.
We have no operating history and are
subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that we will be unable to continue
as a going concern and consummate an initial business combination.
We are an early stage blank check company,
and as we have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement, there is
a risk that we will be unable to consummate an initial business combination. If we do not complete
an initial business combination by May 19, 2017, we will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be
net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding
Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right
to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other
applicable law. In addition if we fail to complete an initial business combination by May 19, 2017, there will be no redemption
rights or liquidating distributions with respect to our Warrants, which will expire worthless.
Our public shareholders may not be afforded
an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even
though a majority of our public shareholders do not support such a combination.
We may not hold a shareholder vote to approve
our initial business combination unless the business combination would require shareholder approval under applicable Cayman Islands
law or the rules of NASDAQ or if we decide to hold a shareholder vote for business or other reasons. For instance, the NASDAQ rules
currently allow us to engage in a tender offer in lieu of a shareholder meeting but would still require us to obtain shareholder
approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business
combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding
shares, we would seek shareholder approval of such business combination. However, except as required by law, the decision as to
whether we will seek shareholder approval of a proposed business combination or will allow shareholders to sell their shares to
us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing
of the transaction, whether the terms of the transaction would otherwise require us to seek shareholder approval or whether we
were deemed to be a foreign private issuer (which would require a tender offer rather than seeking shareholder approval under SEC
rules). Accordingly, we may consummate our initial business combination even if holders of a majority of the outstanding ordinary
shares do not approve of the business combination we consummate.
If we seek shareholder approval of our
initial business combination, our initial shareholders have entered into letter agreements with us to vote in favor of such initial
business combination, regardless of how our public shareholders vote.
Unlike many other blank check companies
in which the initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public
shareholders in connection with an initial business combination, our initial shareholders have entered into letter agreements to
vote their Founder Shares, as well as any Public Shares purchased during or after our Initial Public Offering, in favor of our
initial business combination. Our initial shareholders own 20% of our outstanding ordinary shares. Accordingly, if we seek shareholder
approval of our initial business combination, it is more likely that the necessary shareholder approval will be received than would
be the case if our initial shareholders agreed to vote their founder shares in accordance with the majority of the votes cast by
our public shareholders.
Your only opportunity to affect the
investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares
from us for cash, unless we seek shareholder approval of the business combination.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board
of directors may decide to complete a business combination without seeking shareholder approval, public shareholders may not have
the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not
seek shareholder approval, your only opportunity to affect the investment decision regarding a potential business combination may
be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in
our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
The ability of our public shareholders
to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which
may make it difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the business combination. Furthermore, in no event will we redeem our Public
Shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s
“penny stock” rules). Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would
not proceed with such redemption and the related business combination and may instead search for an alternate business combination.
Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with
us.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business
combination or optimize our capital structure.
At the time we enter into an agreement for
our initial business combination, we will not know how many shareholders may exercise their redemption rights, and therefore will
need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our business combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to
meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account
or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable
business combination available to us or optimize our capital structure.
The ability of our public shareholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business
combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our business combination agreement requires
us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash
at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination
is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account. If you
are in need of immediate liquidity, you could attempt to sell your shares in the open market; however, at such time our shares
may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your shares in the open market.
The requirement that we complete our
initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating
a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach
our dissolution deadline, which could undermine our ability to complete our business combination on terms that would produce value
for our shareholders.
Any potential target business with which
we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within 24 months from the closing of our Initial Public Offering. Consequently, such target business may obtain leverage over us
in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase
as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter
into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding
up and we would redeem our Public Shares and liquidate the Trust Account, in which case our public shareholders may only receive
approximately $10.00 per share and our Warrants will expire worthless.
Our Sponsor, executive officers and directors
have agreed that we must complete our initial business combination within 24 months from the closing of our Initial Public Offering.
We may not be able to find a suitable target business and complete our initial business combination within such time period. If
we have not completed our initial business combination within such time period, we will: (i) cease all operations except for the
purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public
Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest
earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up
to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption
will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public
shareholders may only receive approximately $10.00 per share and our Warrants will expire worthless.
If we seek shareholder approval of our
initial business combination, our Sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares
from public shareholders, which may influence a vote on a proposed business combination and reduce the public “float”
of our ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer
rules, our Sponsor, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions
or in the open market either prior to or following the completion of our initial business combination, although they are under
no obligation to do so. Any such purchases may include an agreement with a selling shareholder that such shareholder, for so long
as it remains the record holder of the shares in question, will not exercise its redemption rights with respect to the shares so
purchased. In the event that our Sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately
negotiated transactions from public shareholders who have already elected to exercise their redemption rights, such selling shareholders
would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares
in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of the business combination,
or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount
of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may
result in the completion of our business combination that may not otherwise have been possible.
In addition, if such purchases are made,
the public “float” of our ordinary shares and the number of beneficial holders of our securities may be reduced, possibly
making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice
of our offer to redeem our Public Shares in connection with our business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules
or proxy rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance
with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not
become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable,
that we will furnish to holders of our Public Shares in connection with our initial business combination will describe the various
procedures that must be complied with in order to validly tender or redeem Public Shares. For example, we may require our public
shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to either tender their certificates to our transfer agent or deliver their shares to the transfer agent electronically,
in each case prior to the expiration date set forth in the tender offer documents or the vote on the proposal to approve the business
combination. In the event that a shareholder fails to comply with these or any other procedures, its shares may not be redeemed.
You will not have any rights or interests
in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be
forced to sell your Public Shares or Warrants, potentially at a loss.
Our public shareholders 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 of our ordinary shares that such shareholder properly elected to redeem, subject to the
limitations described herein, (ii) a shareholder vote to amend our amended and restated memorandum and articles of association
to modify the substance or timing of our obligation to redeem 100% of our Public Shares if we do not complete our initial business
combination within 24 months from the closing of our Initial Public Offering, and then only in connection with those of our ordinary
shares that such shareholder properly elected to redeem, and (iii) the redemption of our Public Shares if we are unable to complete
an initial business combination within 24 months from the closing of our Initial Public Offering, subject to applicable law and
as further described herein. In no other circumstances will a public shareholder have any right or interest of any kind in the
Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your Public Shares or Warrants, potentially
at a loss.
NASDAQ may delist our securities from
trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional
trading restrictions.
Our Public Units, ordinary shares and Warrants
are listed on NASDAQ. Although we were able to meet the minimum initial listing standards set forth in the NASDAQ listing standards,
we cannot assure you that our securities will continue to be listed on NASDAQ 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 share price levels. Generally, we must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a
minimum number of holders of our ordinary shares (generally 300 public holders). Additionally, in connection with our initial business
combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous
than NASDAQ’s continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For
instance, our share price would generally be required to be at least $4.00 per share, our shareholders’ equity would generally
be required to be at least $5.0 million and we would need to have a minimum number of holders of our ordinary shares (generally
300 round lot holders). We cannot assure you that we will be able to meet those initial listing requirements at that time.
If NASDAQ delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could
be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our ordinary shares are a “penny stock” which will require brokers trading in our ordinary
shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market
for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets Improvement
Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Our Public Units, ordinary shares and Warrants are listed on NASDAQ and as
a result, 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, 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.
You are not entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds of our Initial Public
Offering and the sale of the Private Placement Warrants are intended to be used to complete an initial business combination with
a target business 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 $5,000,001 and have filed a Current Report on Form 8-K,
including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors
in blank check companies, such as Rule 419. Accordingly, investors are not afforded the benefits or protections of those rules.
Among other things, this means 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 had been subject to Rule 419, that rule would have prohibited the release of
any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us
in connection with our completion of an initial business combination.
If we seek shareholder approval of our
initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of shareholders are deemed to hold in excess of 20% of our ordinary shares, you will lose the ability to redeem all such shares
in excess of 20% of our ordinary shares.
If we seek shareholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as
defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 20% of the shares sold in our Initial Public Offering, which we refer to as the “Excess Shares.” However, we would
not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our business combination.
And as a result, you will continue to hold that number of shares exceeding 20% and, in order to dispose of such shares, would be
required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and
the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business
combination. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.00 per share on our redemption of our Public Shares and our Warrants will expire worthless.
We may encounter intense competition from
other entities having a business objective similar to ours, including private investors (which may be individuals or investment
partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying
and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Some
of these competitors may possess greater technical, human and other resources or more local industry knowledge than we do and our
financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there
are numerous target businesses we could potentially acquire with the net proceeds of our Initial Public Offering and the sale of
the Warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited
by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition
of certain target businesses. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.00 per share on the liquidation of our Trust Account and our Warrants will expire worthless.
If the net proceeds of our Initial Public Offering not
being held in the Trust Account are insufficient to allow us to operate until May 19, 2017, and we are unable to obtain additional
capital, we may be unable to complete our initial business combination, in which case our public shareholders may only receive
$10.00 per share, 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 May 19, 2017, 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 will be sufficient to allow
us to operate until May 19, 2017; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we
could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms
more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any
current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target
business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have
sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
If we are required to seek additional capital,
we would need to borrow funds from our Sponsor, management team or other third parties to operate or may be forced to liquidate.
Neither our Sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us
in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from funds released
to us upon completion of our initial business combination. If we are unable to 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 shareholders
may only receive approximately $10.00 per share on our redemption of our Public Shares, and our Warrants will expire worthless.
Subsequent to our completion of our
initial business combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or
other charges that could have a significant negative effect on our financial condition, results of operations and our share price,
which could cause you to lose some or all of your investment.
Even if we conduct due diligence on a target
business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present
inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due
diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges
that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may
arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these
charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature
could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to
violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business
or by virtue of our obtaining post-combination debt financing. Accordingly, any shareholders who choose to remain shareholders
following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have
a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our
officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private
claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an
actionable material misstatement or material omission.
If third parties bring claims against
us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.00 per share.
Our placing of funds in the Trust Account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other
than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with
us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, 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 advantage with respect to
a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it
and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third
party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we
may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise
or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver
or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption of our Public
Shares, if we are unable to complete our business combination within the prescribed time frame, or upon the exercise of a redemption
right in connection with our business combination, we will be required to provide for payment of claims of creditors that were
not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public shareholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such
creditors. In order to protect the amounts held in the Trust Account, our Sponsor has agreed to be liable to us if and to the extent
any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect
to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held
in the Trust Account or to any claims under our indemnity of the underwriters of our Initial Public Offering against certain liabilities,
including liabilities under the Securities Act. Moreover, even in the event that an executed waiver is deemed to be unenforceable
against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. We have
not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and we have not asked
our Sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our Sponsor would be able to
satisfy those obligations. None of our officers will indemnify us for claims by third parties including, without limitation, claims
by vendors and prospective target businesses.
Additionally, if we are forced to file a
bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if we otherwise enter compulsory
or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any bankruptcy claims deplete the Trust Account, we may not be able to return to our public shareholders $10.00 per
share.
Our directors may decide not to enforce
the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available
for distribution to our public shareholders.
In the event that the proceeds in the Trust
Account are reduced and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce
its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf
against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising
their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the independent directors
to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely.
If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account
available for distribution to our public shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds
in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and 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 shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing it and us to claims of punitive damages,
by paying public shareholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims
will not be brought against us for these reasons.
If, before distributing the proceeds
in the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and
the per share amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in
the Trust Account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our shareholders. To the extent
any bankruptcy claims deplete the Trust Account, the per share amount that would otherwise be received by our shareholders in connection
with our liquidation may be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities,
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each of which may make it difficult for us
to complete our business combination.
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 a business combination
and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets
with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may only be invested
in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having
a maturity of 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. Our securities are not intended for persons who are seeking a return on investments
in government securities or investment securities. The Trust Account is intended as a holding place for funds pending the earliest
to occur of: (i) the completion of our primary business objective, which is a business combination; (ii) a shareholder vote to
amend our amended and restated memorandum and articles of association to modify the substance or timing of our obligation to redeem
100% of our Public Shares if we do not complete our initial business combination within 24 months from the closing of our Initial
Public Offering; and (iii) absent a business combination, our return of the funds held in the Trust Account to our public shareholders
as part of our redemption of the Public Shares and liquidation. If we do not invest the proceeds as discussed above, we may be
deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with
these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability
to complete a business combination. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.00 per share on the liquidation of our Trust Account and our warrants will expire worthless.
If we are unable to consummate our initial
business combination, our public shareholders may be forced to wait up to 24 months after the closing of our Initial Public Offering
before redemption from our Trust Account.
If we are unable to consummate our initial
business combination within 24 months from the closing of our Initial Public Offering, we will distribute the aggregate amount
then on deposit in the Trust Account (less up to $100,000 of the net interest earned thereon to pay dissolution expenses), pro
rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs,
as further described herein. Any redemption of public shareholders from the Trust Account shall be effected automatically by function
of our memorandum and articles of association prior to any voluntary winding up. If we are required to wind-up, liquidate the Trust
Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding
up, liquidation and distribution must comply with the applicable provisions of the Companies Law. In that case, investors may be
forced to wait beyond 24 months before the redemption proceeds of our Trust Account become available to them, and they receive
the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to return funds to investors
prior to the date of our redemption or liquidation unless we consummate our initial business combination prior thereto and only
then in cases where investors have sought to redeem their ordinary shares. Only upon our redemption or any liquidation will public
shareholders be entitled to distributions if we are unable to complete our initial business combination.
Our shareholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent
liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately
following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course
of business. As a result, a liquidator could seek to recover all amounts received by our shareholders. Furthermore, our directors
may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby
exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing the claims
of creditors. We cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers
who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were
unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to
a fine of $15,000 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual meeting of
shareholders until after the consummation of our initial business combination, which could delay the opportunity for our shareholders
to elect directors.
In accordance with NASDAQ corporate governance
requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing
on NASDAQ. There is no requirement under the Companies Law for us to hold annual or general meetings or elect directors. Until
we hold an annual meeting of shareholders, public shareholders may not be afforded the opportunity to elect directors and to discuss
company affairs with management.
We have not registered the ordinary
shares issuable upon exercise of the Warrants under the Securities Act or any state securities laws, and such registration may
not be in place when an investor desires to exercise Warrants, thus precluding such investor from being able to exercise its Warrants
and causing such Warrants to expire worthless.
We have not registered the ordinary shares
issuable upon exercise of the Warrants under the Securities Act or any state securities laws. However, under the terms of the warrant
agreement, we have agreed to use our best efforts to file a registration statement under the Securities Act covering such shares
and to maintain a current prospectus relating to the ordinary shares issuable upon exercise of the Warrants, until the expiration
of the Warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so
if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration
statement or prospectus relating thereto, the financial statements contained or incorporated by reference therein are not current
or correct or the SEC issues a stop order. If the shares issuable upon exercise of the Warrants are not registered under the Securities
Act, we will be required to permit holders to exercise their Warrants on a cashless basis. However, no warrant will be exercisable
for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their Warrants,
unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder, unless an exemption is available. Notwithstanding the above, if our ordinary shares are at the time of any exercise of
a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security”
under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public Warrants who exercise their Warrants
to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect,
we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky
laws. In no event will we be required to net cash settle any Warrant, or issue securities or other compensation in exchange for
the Warrants in the event that we are unable to register or qualify the shares underlying the Warrants under the Securities Act
or applicable state securities laws. If the issuance of the shares upon exercise of the Warrants is not so registered or qualified
or exempt from registration or qualification, the holder of such Warrant shall not be entitled to exercise such Warrant and such
Warrant may have no value and expire worthless. In such event, holders who acquired their Warrants as part of a purchase of Public
Units will have paid the full unit purchase price solely for the ordinary shares included in the Public Units. If and when the
Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying
ordinary shares for sale under all applicable state securities laws.
The grant of registration rights to
our initial shareholders and holders of our Private Placement Warrants 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 ordinary shares.
Pursuant to an agreement that we entered
into concurrently with the issuance and sale of the securities in our Initial Public Offering, our initial shareholders and their
permitted transferees can demand that we register the Founder Shares, holders of our Private Placement Warrants and their permitted
transferees can demand that we register the Private Placement Warrants and the ordinary shares of issuable upon exercise of the
Private Placement Warrants and holders of Warrants that may be issued upon conversion of working capital loans may demand that
we register such Warrants or the ordinary shares issuable upon conversion of such Warrants. The registration rights will be exercisable
with respect to the Founder Shares and the Private Placement Warrants and the ordinary shares issuable upon exercise of such Private
Placement Warrants. We will bear the cost of registering these securities. The registration and availability of such a significant
number of securities for trading in the public market may have an adverse effect on the market price of our ordinary shares. In
addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude.
This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for
more cash consideration to offset the negative impact on the market price of our ordinary shares that is expected when the securities
owned by our initial shareholders, holders of our Private Placement Warrants or their respective permitted transferees are registered.
Because we are not limited to a particular
industry, sector or any specific target businesses with which to pursue our initial business combination, you will be unable to
ascertain the specific merits or risks of any particular target business’ operations.
We may seek to complete a business combination
in any industry or sector, but we will not be permitted to effectuate our business combination with another blank check company
or similar company with nominal operations. Accordingly, 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 business combination, we may be affected by numerous risks inherent in the industry or sector in
which the target business operates or in the operations of the particular target business. 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 Public Units will ultimately prove to be more favorable
to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any shareholders
who choose to remain shareholders following the business combination could suffer a reduction in the value of their shares. Such
shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able
to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the
business combination contained an actionable material misstatement or material omission.
We may seek investment opportunities
in industries or sectors which may or may not be outside of our management’s areas of expertise.
We will consider a business combination
outside of our management’s areas of expertise if a business combination candidate is presented to us and we determine that
such candidate offers an attractive investment opportunity for our company. In the event we elect to pursue an investment outside
of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation
or operation, and the information contained in this Report regarding the areas of our management’s expertise would not be
relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately
ascertain or assess all of the significant risk factors. Accordingly, any shareholders who choose to remain shareholders following
our business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy
for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim
under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable
material misstatement or material omission.
Although we identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business
combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter
into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have all of these positive attributes. If we complete our initial business combination with
a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a
business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if approval of the transaction is required by law, or we decide to obtain shareholder
approval for business or other legal reasons, it may be more difficult for us to attain shareholder approval of our initial business
combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial
business combination, our public shareholders may receive only approximately $10.00 per share on the liquidation of our Trust Account
and our Warrants will expire worthless.
We may seek investment opportunities
with a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject us
to volatile revenues or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business
combination with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected
by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings
and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks
inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors
and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and
leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion
from an independent investment banking or accounting firm, and consequently, you may have no assurance from an independent source
that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our business combination
with an affiliated entity, we are not required to obtain an opinion from an independent investment banking or accounting firm that
the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our shareholders will
be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial business combination.
We may issue additional ordinary or
preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination, which would dilute the interest of our shareholders and likely present other risks.
Our amended and restated memorandum and
articles of association authorizes the issuance of up to 400,000,000 ordinary shares, par value $0.0001 per share, and 20,000,000
preferred shares, par value $0.0001 per share. There are 363,750,000 authorized but unissued ordinary shares available for issuance
including shares reserved for issuance upon exercise of outstanding Warrants. We may issue a substantial number of additional ordinary
or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination, provided that, under our amended and restated memorandum and articles of association, we may not, prior to
our initial business combination, issue additional shares that would entitle the holders thereof to (i) receive funds from the
Trust Account or (ii) vote on our initial business combination. The issuance of additional ordinary or preferred shares
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may significantly dilute the equity interest of investors;
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may subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded
our ordinary shares;
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could cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present
officers and directors; and
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may adversely affect prevailing market prices for our Public Units, ordinary shares and/or Warrants.
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Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.00 per share on the liquidation of our Trust Account and our Warrants will expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial business combination for any number of reasons including those beyond our control. Any such event will result in a
loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.00 per share on the liquidation of our Trust Account and our Warrants will expire worthless.
We may be a passive foreign investment
company, or “PFIC,” which could result in adverse United States federal income tax consequences to U.S. investors.
If we are determined to be a PFIC for any
taxable year (or portion thereof) that is included in the holding period of a U.S. Holder (as defined in the section of the prospectus
associated with our Initial Public Offering captioned “Taxation — Certain United States Federal Income Tax Considerations
— General”) of our ordinary shares or Warrants, the U.S. Holder may be subject to certain adverse United States federal
income tax consequences and may be subject to additional reporting requirements. Our actual PFIC status for our current taxable
year ending December 31, 2015 may depend on whether we qualify for the PFIC start-up exception (see the section of the prospectus
associated with our Initial Public Offering captioned “Taxation — Certain United States Federal Income Tax Considerations
— U.S. Holders — Passive Foreign Investment Company Rules”). If we do not complete our initial business combination
by the end of our current taxable year, and we have gross income for our current taxable year, we likely will be a PFIC for our
current taxable year unless we complete our initial business combination in or prior to our taxable year ending December 31, 2016
and are not treated as a PFIC for either of our taxable years ending December 31, 2016 or December 31, 2017. Our actual PFIC status
for any taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no
assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. If we determine we
are a PFIC for any taxable year, we will endeavor to provide to a U.S. Holder such information as the Internal Revenue Service
(“IRS”) may require, including a PFIC annual information statement, in order to enable the U.S. Holder to make and
maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required
information, and such election would be unavailable with respect to our Warrants in all cases. We urge U.S. investors to consult
their own tax advisors regarding the possible application of the PFIC rules.
We may reincorporate in another jurisdiction
in connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business
combination and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the
target company or business is located. The transaction may require a shareholder to recognize taxable income in the jurisdiction
in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend
to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes or other taxes
with respect to their ownership of us after the reincorporation.
After our initial business combination,
it is possible that a majority of our directors and officers will live outside the United States and all of our assets will be
located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal
rights.
It is possible that after our initial business
combination, a majority of our directors and officers will reside outside of the United States and all of our assets will be located
outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the United States
to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United
States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
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 or the hiring of ineffective personnel
after the business combination could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our business
combination is dependent upon the efforts of our key personnel with regard to our selection of a target company. The role of our
key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with
the target business in senior management or advisory positions following our business combination, it is likely that some or all
of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage
after our business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals
may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time
and resources helping them become familiar with such requirements.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination. These agreements may provide
for them to receive compensation following our business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain
with the Company after the completion of our business combination only if they are able to negotiate employment or consulting agreements
in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business
combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for
services they would render to us after the completion of the business combination. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such
individuals to remain with us after the completion of our business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key
personnel will remain with us after the completion of our business combination. We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain
with us will be made at the time of our initial business combination.
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 shareholders’ investment in us.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’ management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any shareholders who choose to remain
shareholders following the business combination could suffer a reduction in the value of their shares. Such shareholders are unlikely
to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach
by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring
a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained
an actionable material misstatement or material omission.
Our executive officers and directors
will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to
devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our executive officers and directors are
not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a business combination and their other businesses. We presently expect each
of our employees to devote such amount of time as he reasonably believes is necessary to our business. However, each of our executive
officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and our executive
officers are not obligated to contribute any specific number of hours per week to our affairs. In particular, our executive officers
and directors are employed by GP Investments, which is the investment manager to various private investment funds and other types
of investments. Our independent directors also serve as officers and board members for other entities. If our executive officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their
current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our
ability to complete our initial business combination.
Certain of our executive 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 intend to engage in the business of identifying and combining with one or more businesses. Our executive officers
and directors are, and may in the future become, affiliated with entities that are engaged in a similar business.
Our officers and directors also may become
aware of business opportunities that 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 executive officers, directors, security
holders and their respective affiliates may have competing pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial
interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
In fact, we may enter into a business combination with a target business that is affiliated with our Sponsor, our directors or
executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from
engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have
a conflict between their interests and ours.
The personal and financial interests of
our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable
target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular
business combination are appropriate and in our shareholders’ best interest. If this were the case, it would be a breach
of their fiduciary duties to us as a matter of Cayman Islands law and we or our shareholders might have a claim against such individuals
for infringing on our shareholders’ rights. However, we might not ultimately be successful in any claim we may make against
them for such reason.
We may engage in a business combination
with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, executive officers,
directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our Sponsor,
executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor,
executive officers and directors. Our directors also serve as officers and board members for other entities. Such entities may
compete with us for business combination opportunities. Our Sponsor, officers and directors are not currently aware of any specific
opportunities for us to complete our business combination with any entities with which they are affiliated, and there have been
no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically
focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that
such affiliated entity met our criteria for a business combination and such transaction was approved by a majority of our disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm regarding the fairness to our
company from a financial point of view of a business combination with one or more domestic or international businesses affiliated
with our executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the
terms of the business combination may not be as advantageous to our public shareholders as they would be absent any conflicts of
interest.
Since our Sponsor, executive officers
and directors will lose their entire investment in us if our business combination is not completed, a conflict of interest may
arise in determining whether a particular business combination target is appropriate for our initial business combination.
On March 2, 2015, our Sponsor purchased
4,312,500 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.006 per share. The number of Founder Shares
issued was determined based on the expectation that such Founder Shares would represent 20% of the outstanding shares after our
Initial Public Offering. Our Sponsor sold 20,000 Founder Shares at their original purchase price to each of our independent directors.
The Founder Shares will be worthless if we do not complete an initial business combination. In addition, our Sponsor purchased
an aggregate of 6,062,500 Private Placement Warrants, each exercisable for one ordinary share at $11.50 per share, for a purchase
price of $6,062,500, or $1.00 per warrant, which will also be worthless if we do not complete a business combination. The Founder
Shares are identical to the ordinary shares included in the Public Units being sold in our Initial Public Offering. However, the
holders have entered into letter agreements with us, pursuant to which they have agreed (A) to vote any shares owned by them in
favor of any proposed business combination and (B) not to redeem any shares in connection with a shareholder vote to approve a
proposed initial business combination. The personal and financial interests of our executive officers and directors may influence
their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing
the operation of the business following the initial business combination.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial
condition and thus negatively impact the value of our shareholders’ investment in us.
Although we have no commitments as of the
date of this Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur
substantial debt to complete our business combination. We have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such,
no issuance of debt will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence
of debt could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay
our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we
breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our inability to pay dividends on our ordinary shares;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available
for dividends on our ordinary shares 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 and the sale of the Private Placement Warrants, which will
cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification
may negatively impact our operations and profitability.
The net proceeds from our Initial Public
Offering and the sale of Private Placement Warrants provided us with $172.5 million that we may use to complete our business combination
(excluding an aggregate of approximately $6.0 million of deferred underwriting commissions and other fees being held in the Trust
Account).
We may effectuate our business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not
be able to effectuate our business combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present
operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may result in numerous economic,
competitive and regulatory consequences to us. Further, we would not be able to diversify our operations or benefit from the possible
spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations
in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may have a
substantial adverse impact upon our operations and profitability.
Changes in laws or regulations, or a
failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments and NASDAQ. In particular, we are required to comply with certain SEC, NASDAQ and other
legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult,
time consuming and costly. Those laws, regulations and rules 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, regulations or rules, as interpreted and applied, could have a material adverse effect
on our business and results of operations.
The officers and directors of a business
combination target may resign upon completion of our initial business combination. The loss of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business.
The role of a business combination target’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate
that certain members of a business combination target’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of a business combination target will
not wish to remain in place.
We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if
there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services
or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could
negatively impact our profitability and results of operations.
We may attempt to complete our initial
business combination with a private company about which little information is available, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we
may seek to effectuate our initial business combination with a privately held company. By definition, very little public information
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in a business combination with a company that is not as profitable
as we suspected, if at all.
Our management may not be able to maintain
control of a target business after our initial business combination.
We may structure a business combination
so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our shareholders prior to the business combination may collectively own a minority interest in the post business combination company,
depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new ordinary shares in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new
ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our outstanding ordinary
shares subsequent to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting
in a single person or group obtaining a larger share of the company’s shares 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 in connection with our initial business combination. The absence of such a redemption threshold may make it possible
for us to complete a business combination with which a substantial majority of our shareholders do not agree.
Our amended and restated memorandum and
articles of association do not provide a specified maximum redemption threshold in connection with our initial business combination,
except that in no event will we redeem our Public Shares in an amount that would cause our net tangible assets to be less than
$5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement that may be contained in the agreement relating to our initial business combination. As a result, we may be
able to complete our business combination even though a substantial majority of our public shareholders do not agree with the transaction
and have redeemed their shares or, if we seek shareholder approval of our initial business combination and do not conduct redemptions
in connection with our 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 ordinary shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us,
we will not complete the business combination or redeem any shares, all ordinary shares submitted for redemption will be returned
to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate our initial business
combination, we may seek to amend our amended and restated memorandum and articles of association or governing instruments in a
manner that will make it easier for us to complete our initial business combination but that our shareholders may not support.
In order to effectuate a business combination,
blank check companies have, in the past, amended various provisions of their charters and modified governing instruments. For example,
blank check companies have amended the definition of business combination, increased redemption thresholds and changed industry
focus. We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing
instruments in order to effectuate our initial business combination though amending our amended and restated memorandum and articles
of association will require at least a special resolution of our shareholders as a matter of Cayman Islands law.
The provisions of our amended and restated
memorandum and articles of association that relate to our pre-business combination activity (and corresponding provisions of the
agreement governing the release of funds from our Trust Account) may be amended with the approval of holders of a majority of at
least two-thirds of our ordinary shares who attend and vote in a general meeting, which is a lower amendment threshold than that
of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated memorandum and articles
of association and the trust agreement to facilitate the completion of an initial business combination that some of our shareholders
may not support.
Some other blank check companies have a
provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s
pre-business combination activity, without approval by a certain percentage of the company’s shareholders. In those companies,
amendment of these provisions requires approval by between 90% and 100% of the company’s public shareholders. Our amended
and restated memorandum and articles of association provide that any of its provisions related to pre-business combination activity
(including the requirement to deposit proceeds of our Initial Public Offering and the private placement of Warrants into the Trust
Account and not release such amounts except in specified circumstances, and to provide redemption rights to public shareholders
as described herein) may be amended if approved by holders of a majority of at least two-thirds of our ordinary shares who attend
and vote in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our Trust
Account may be amended if approved by holders of 65% of our ordinary shares. In all other instances, our amended and restated memorandum
and articles of association may be amended by holders of a majority of at least two-thirds of our outstanding ordinary shares who
attend and vote in a general meeting, subject to applicable provisions of the applicable stock exchange rules. Our initial shareholders,
beneficially own 20% of our ordinary shares, will participate in any vote to amend our amended and restated memorandum and articles
of association and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able
to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-business combination
behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination
with which you do not agree. Our shareholders may pursue remedies against us for any breach of our amended and restated memorandum
and articles of association.
We may be unable to obtain additional
financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel
us to restructure or abandon a particular business combination.
Although we believe that the net proceeds
of our Initial Public Offering and the sale of the Private Placement Warrants will be sufficient to allow us to complete our initial
business combination, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of our Initial
Public Offering and the sale of the Private Placement Warrants prove to be insufficient, either because of the size of our initial
business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase
for cash a significant number of shares from shareholders who elect redemption in connection with our initial business combination
or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required
to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be
available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete
our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business
combination and seek an alternative target business candidate. If we are unable to complete our initial business combination, our
public shareholders may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held in the
Trust Account and not previously released to us to pay our franchise and income taxes on the liquidation of our Trust Account and
our Warrants will expire worthless. In addition, even if we do not need additional financing to complete our business combination,
we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing
could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors
or shareholders is required to provide any financing to us in connection with or after our business combination. If we are unable
to complete our initial business combination, our public shareholders may only receive approximately $10.00 per share on the liquidation
of our Trust Account and our Warrants will expire worthless.
Our initial shareholders control a substantial
interest in us and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that
you do not support.
Our initial shareholders own 20% of our
issued and outstanding ordinary shares. Accordingly, they may exert a substantial influence on actions requiring a shareholder
vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles
of association. If our initial shareholders purchase any additional ordinary shares, this would increase their control. Neither
our initial shareholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional
securities, other than as disclosed in this Report. One factor to be considered in making such additional purchases would be a
consideration of the current trading price of our ordinary shares. In addition, our board of directors, whose members were elected
by our initial shareholders, is divided into three classes, each of which will generally serve for a term of three years with only
one class of directors being elected in each year. We may not hold an annual meeting of shareholders to elect new directors prior
to the completion of our business combination, in which case all of the current directors will continue in office until at least
the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board
of directors, only a minority of the board of directors will be considered for election and our initial shareholders, because of
their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial shareholders will continue
to exert control at least until the completion of our business combination.
We may amend the terms of the Warrants
in a manner that may be adverse to holders of public Warrants with the approval by the holders of at least 50% of the then outstanding
public Warrants. As a result, the exercise price of your Warrants could be increased, the exercise period could be shortened and
the number of our ordinary shares purchasable upon exercise of a warrant could be decreased, all without your approval.
Our Warrants have been issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 50% of the then outstanding public Warrants to make any change
that adversely affects the interests of the registered holders of public Warrants. Accordingly, we may amend the terms of the public
Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public Warrants approve of such amendment.
Although our ability to amend the terms of the public Warrants with the consent of at least 50% of the then outstanding public
Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the
warrants, shorten the exercise period or decrease the number of our ordinary shares 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 ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day
period ending on the third trading day prior to the date on which we send the notice of redemption to the Warrant holders. If and
when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the
underlying securities for sale under all applicable state securities laws. Redemption of the outstanding Warrants could force you
(i) to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii)
to sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants or (iii) to accept the
nominal redemption price which, at the time the outstanding Warrants are called for redemption, is likely to be substantially less
than the market value of your Warrants. None of the Private Placement Warrants will be redeemable by us so long as they are held
by their initial purchasers or their permitted transferees.
Our Warrants may have an adverse effect
on the market price of our ordinary shares and make it more difficult to effectuate our business combination.
We issued Warrants to purchase 8,625,000
of our ordinary shares
as part of the Public Units sold in our Initial Public Offering and,
simultaneously with the closing of our Initial Public Offering, we issued in a private placement an aggregate of 6,062,500 Private
Placement Warrants, each exercisable to purchase one ordinary share at $11.50 per share. In addition, if our Sponsor makes any
working capital loans, it may convert those loans into up to an additional 1,000,000 Private Placement Warrants, at the price of
$1.00 per warrant. To the extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance
of a substantial number of additional ordinary shares upon exercise of these Warrants could make us a less attractive acquisition
vehicle to a target business. Such Warrants, when exercised, will increase the number of issued and outstanding ordinary shares
and reduce the value of the ordinary shares issued to complete the business transaction. Therefore, our Warrants may make it more
difficult to effectuate a business transaction or increase the cost of acquiring the target business.
The Private Placement Warrants are identical
to the Warrants sold as part of the Public Units in our Initial Public Offering except that, so long as they are held by their
initial purchasers or their permitted transferees, (i) they will not be redeemable by us, (ii) they (including the ordinary shares
issuable upon exercise of these Warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by their
initial purchasers or their permitted transferees 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 Public Unit contains one-half
of one warrant and only a whole warrant may be exercised, the Public
Units may be worth less than units of other
blank check companies.
Each Public Unit contains one-half of one
warrant. Because, pursuant to the warrant agreement, the Warrants may only be exercised for a whole number of shares, only a whole
warrant may be exercised at any given time. A holder of our public Warrants will not be able to exercise any one-half of one warrant
unless it is combined with another one-half of one warrant. This is different from other offerings similar to ours whose units
include one ordinary share and one warrant to purchase one whole share. We have established the components of the Public Units
in this way in order to reduce the dilutive effect of the Warrants upon completion of a business combination since the Warrants
will be exercisable in the aggregate for 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 Public Units to be worth less than if it included a warrant to purchase one whole share.
Because we must furnish our shareholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy rules require that a proxy
statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or
pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection
with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may
be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America (“GAAP”), or international financing reporting standards (“IFRS”), depending on the circumstances
and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (“PCAOB”). These financial statement requirements may limit the pool of potential target
businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements
in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We are an emerging growth company within
the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging
growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance
with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved. As a result, our shareholders may not have access to certain information they may deem important. We could be an emerging
growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our ordinary shares 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.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our business combination, require substantial financial and management resources,
and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending
December 31, 2016. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required
to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are
a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target company with which we seek to complete our business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
Because we are incorporated under the
laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through
the U.S. Federal courts may be limited.
We are an exempted company incorporated
under the laws of the Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United
States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors
or officers.
Our corporate affairs will be governed by
our amended and restated memorandum and articles of association, the Companies Law (as the same may be supplemented or amended
from time to time) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions
by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent
governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited
judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority,
but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our
directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions
in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States,
and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition,
Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.
We have been advised by our Cayman Islands
legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of
the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability
provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions
are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained
in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of
competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes
upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For
a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and
must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter,
impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice
or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public
shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the
board of directors or controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated
memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to
pay in the future for our ordinary shares and could entrench management.
Our amended and restated memorandum and
articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to
be in their best interests. These provisions include 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 more difficult the removal of management and may
discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Risks Associated with Acquiring and Operating
a Business in Foreign Countries
If we effect our initial business combination
with a company located outside of the United States, we would be subject to a variety of additional risks that may adversely affect
us.
If we effect our initial business combination
with a company located outside of the United States, we would be subject to any special considerations or risks associated with
companies operating in the target business’s home jurisdiction, including any of the following:
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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exchange listing and/or delisting requirements;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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local or regional economic policies and market conditions;
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unexpected changes in regulatory requirements;
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challenges in managing and staffing international operations;
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tax issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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underdeveloped or unpredictable legal or regulatory systems;
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protection of intellectual property;
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social unrest, crime, strikes, riots and civil disturbances;
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regime changes and political upheaval;
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terrorist attacks and wars; and
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deterioration of political relations with the United States.
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We may not be able to adequately address
these additional risks. If we were unable to do so, our business, financial condition and results of operations may be adversely
affected.
If any dividend is declared in the future
and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually
ultimately receive.
If you are a U.S. Holder of our ordinary
shares, you will be taxed on the U.S. dollar value of your dividends, if any, at the time you receive them, even if you actually
receive a smaller amount of U.S. dollars when the payment is in fact converted into U.S. dollars. Specifically, if a dividend is
declared and paid in a foreign currency, the amount of the dividend distribution that you must include in your income as a U.S.
holder will be the U.S. dollar value of the payments made in the foreign currency, determined at the spot rate of the foreign currency
to the U.S. dollar on the date the dividend distribution is includible in your income, regardless of whether the payment is in
fact converted into U.S. dollars. Thus, if the value of the foreign currency decreases before you actually convert the currency
into U.S. dollars, you will be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will actually ultimately
receive.
If our management following our initial
business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar
with such laws, which could lead to various regulatory issues.
Following our initial business combination,
our management will likely resign from their positions as officers of the Company and the management of the target business at
the time of the business combination will remain in place. Management of the target business may not be familiar with United States
securities laws. If new management is unfamiliar with United States securities laws, they may have to expend time and resources
becoming familiar with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which
may adversely affect our operations.
After our initial business combination,
substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our
operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the
economic, political and legal policies, developments and conditions in the country in which we operate.
The economic, political and social conditions,
as well as government policies, of the country in which our operations are located could affect our business. Economic growth could
be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If
in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand
for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect
our ability to find an attractive target business with which to consummate our initial business combination and if we effect our
initial business combination, the ability of that target business to become profitable.
Exchange rate fluctuations and currency
policies may cause a target business’ ability to succeed in the international markets to be diminished.
In the event we acquire a non-U.S. target,
all revenues and income would likely be received in a foreign currency, and the dollar equivalent of our net assets and distributions,
if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our target
regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative
value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation
of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates
in value against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured
in dollars will increase, which may make it less likely that we are able to consummate such transaction.
We may reincorporate in another jurisdiction
in connection with our initial business combination, and the laws of such jurisdiction may govern some or all of our future material
agreements and we may not be able to enforce our legal rights.
In connection with our initial business
combination, we may relocate the home jurisdiction of our business from the Cayman Islands to another jurisdiction. If we determine
to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the
enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States.
The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business,
business opportunities or capital.