Overview
We are an early stage blank
check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this report as
our initial business combination. While we may pursue an initial business combination target in any stage of its corporate evolution or
in any industry or sector, we are focusing our search on companies with favorable growth prospects and attractive returns on invested
capital.
Recent Developments
On January 8, 2021, we entered
into a Merger Agreement and Plan of Reorganization (the “Merger Agreement”) with Alpha First Merger Sub, Inc., a Delaware
corporation and our direct, wholly owned subsidiary (“First Merger Sub”), Alpha Second Merger Sub, LLC, a Delaware limited
liability company and our direct, wholly owned subsidiary (“Second Merger Sub”), and Celularity Inc., a Delaware corporation
(“Celularity”). Pursuant to the Merger Agreement, at the closing of the transactions contemplated by the Merger Agreement
(the “Closing”), and in accordance with the Delaware General Corporation Law, as amended (“DGCL”), (i) First Merger
Sub will merge with and into Celularity (the “First Merger”), with Celularity surviving the First Merger as our wholly owned
subsidiary (Celularity, in its capacity as the surviving corporation of the First Merger, is sometimes referred to as the “Surviving
Corporation”); and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger,
the Surviving Corporation will merge with and into Second Merger Sub (the “Second Merger” and, together with the First Merger,
the “Mergers”), with Second Merger Sub being the surviving entity of the Second Merger (Second Merger Sub, in its capacity
as the surviving entity of the Second Merger, is sometimes referred to herein as the “Surviving Entity”) (steps (i) and (ii)
collectively with the other transactions described in the Merger Agreement, the “Celularity Business Combination”).
The aggregate merger consideration
payable to stockholders of Celularity upon the Closing consists of up to 147,327,224 newly issued shares of our Class A common stock,
par value $0.0001 per share (“GX Class A Common Stock”) valued at approximately $10.15 per share.
Immediately prior to the effective
time of the First Merger (the “Effective Time”), Celularity will cause each share of preferred stock of Celularity, par value
$0.0001 per share, designated as Series A Preferred Stock, Series B Preferred Stock and Series X Preferred Stock, respectively (together,
“Celularity Preferred Stock”) that is issued and outstanding immediately prior to the Effective Time to be automatically converted
into a number of shares of common stock of Celularity, par value of $0.0001 per share (“Celularity Common Stock”) at the then-effective
conversion rate as calculated pursuant to the Amended and Restated Certificate of Incorporation of Celularity, dated March 16, 2020, as
may be amended, restated or otherwise modified from time to time (the “Celularity Charter”). All of the shares of Celularity
Preferred Stock converted into shares of Celularity Common Stock will no longer be outstanding and will cease to exist, and each holder
of shares of Celularity Preferred Stock will thereafter cease to have any rights with respect to such securities.
At the Effective Time, by
virtue of the First Merger and without any action on our part or on the part of First Merger Sub, Celularity or the holders of any of
the following securities:
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(a)
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each share of Celularity Common Stock (including shares of Celularity Common Stock resulting from the conversion of shares of Celularity Preferred Stock described above (including any shares of Celularity Preferred Stock issued for cash upon exercise of a warrant to purchase Celularity’s Series B Preferred Stock (each, a “Celularity Warrant”) prior to or in connection with the Closing)) that is issued and outstanding immediately prior to the Effective Time will be canceled and converted into the right to receive the number of shares of GX Class A Common Stock equal to the Exchange Ratio (as defined below) (the “Per Share Merger Consideration”);
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(b)
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each share of Celularity capital stock held in the treasury of Celularity will be cancelled without any conversion thereof and no payment or distribution will be made with respect thereto;
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(c)
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each share of First Merger Sub common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time will be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.0001 per share, of the Surviving Corporation;
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(d)
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each Celularity Warrant (as to which no notice of exercise has been delivered to Celularity prior to the Closing) that is outstanding immediately prior to the Effective Time (and which would otherwise be exercisable in accordance with its terms immediately following the Effective Time) will, to the extent consistent with the terms of such Celularity Warrant, represent the right to purchase shares of GX Class A Common Stock (and not Celularity Capital Stock) (each, a “Converted Warrant”) on the same terms and conditions (including exercisability terms) as were applicable to such Celularity Warrant immediately prior to the Effective Time, except that (A) each Converted Warrant will be exercisable for that number of shares of GX Class A Common Stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of Celularity Common Stock that would be issuable upon the exercise of a Celularity Warrant for cash and assuming the conversion of the Series B Preferred Stock underlying such outstanding Celularity Warrant into Celularity Common Stock (the “Celularity Warrant Shares”) subject to the Celularity Warrant immediately prior to the Effective Time and (2) the Exchange Ratio (as defined below); and (B) the per share exercise price for each share of GX Class A Common Stock issuable upon exercise of the Converted Warrant will be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (1) the per share exercise price for each share of Series B Preferred Stock issuable upon exercise of such Celularity Warrant immediately prior to the Effective Time by (2) the Exchange Ratio (as defined below);
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(e)
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each option to purchase Celularity Common Stock (each, a “Celularity Option”) that is outstanding immediately prior to the Effective Time will be assumed by us and converted into an option to purchase shares of GX Class A Common Stock (each, a “Converted Option”), except that the assumption and conversion of any such Celularity Options that are incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) will be effected in a manner that is intended to be consistent with the applicable requirements of Section 424 of the Code and the applicable regulations promulgated thereunder. Each Converted Option will have and be subject to the same terms and conditions (including vesting and exercisability terms) as were applicable to such Celularity Option immediately before the Effective Time, except that (x) each Celularity Option will be exercisable for that number of shares of GX Class A Common Stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of Celularity Common Stock subject to the Celularity Option immediately before the Effective Time and (2) the Exchange Ratio (as defined below); and (y) the per share exercise price for each share of GX Class A Common Stock issuable upon exercise of the Converted Option will be equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (1) the exercise price per share of Celularity Common Stock of such Celularity Option immediately before the Effective Time by (2) the Exchange Ratio (as defined below); except that the exercise price and the number of shares of GX Class A Common Stock purchasable under each Converted Option will be determined in a manner consistent with the requirements of Section 409A of the Code and the applicable regulations promulgated thereunder;
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(f)
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“Celularity Reference Share Value” means a dollar amount equal to (i) the sum of (a) $1,250,000,000 plus (b) the aggregate dollar amount payable to Celularity upon the exercise of all Celularity Options and Celularity Warrants (as to which no notice of exercise has been delivered to Celularity prior to the Closing) that are outstanding immediately prior to the Effective Time (and which would otherwise be exercisable in accordance with its terms immediately following the Effective Time), calculated by adding the sum of all exercise prices under such Celularity Options and Celularity Warrants (the “Aggregate Exercise Price”) divided by (ii) the number of Fully Diluted Celularity Shares;
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(g)
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“Exchange Ratio” means the quotient obtained by dividing (i) the Celularity Reference Share Value, by (ii) a dollar amount equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the trust account as of two business days prior to the Closing Date, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes by (b) the shares of GX Class A Common Stock issued and sold as part of Units in the IPO (as defined below) that remain outstanding as of two business days prior to the Closing Date; and
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(h)
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“Fully Diluted Celularity Shares” means, as of the Effective Time, a number of shares of Celularity Common Stock determined as follows without duplication, and expressed in each case on a fully diluted and as-converted to Celularity Common Stock basis: (i) the number of shares of Celularity Common Stock outstanding immediately prior to the Effective Time, (ii) the number of shares of Celularity Common Stock issuable in respect of all unexpired, issued and outstanding Celularity Options, (iii) the number of shares of Celularity Common Stock issuable upon the conversion of the Celularity Preferred Stock pursuant to the Merger Agreement (including in respect of any Celularity Warrant Shares issued upon the exercise of a Celularity Warrant prior to or in connection with the Closing) and (iv) the Celularity Warrant Shares to the extent the related Celularity Warrant remains outstanding immediately prior to the Effective Time and which would otherwise be exercisable in accordance with its terms immediately following the Effective Time.
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At the effective time of the
Second Merger (the “Second Effective Time”), by virtue of the Second Merger and without any action on our part or on the part
of the Surviving Corporation, Second Merger Sub or the holders of any of our securities or the securities of the Surviving Corporation
or the Second Merger Sub: (x) each share of common stock of the Surviving Corporation issued and outstanding immediately prior to
the Second Effective Time will be canceled and will cease to exist without any conversion thereof or payment therefor; and (y) each
membership interest in Second Merger Sub issued and outstanding immediately prior to the Second Effective Time will be converted into
and become one validly issued, fully paid and non-assessable membership interest in the Surviving Entity, which will constitute the only
outstanding equity of the Surviving Entity.
On January 8, 2021, concurrently
with the execution of the Merger Agreement, we entered into separate subscription agreements (the “Subscription Agreements”)
with investors (each, a “PIPE Investor”), pursuant to which the PIPE Investors agreed to purchase, and we agreed to sell to
the PIPE Investors, an aggregate of 8,340,000 shares of GX Class A Common Stock (the “PIPE Shares”), for a purchase price
of $10.00 per share and an aggregate purchase price of $83,400,000, in a private placement (the “PIPE Financing”), a portion
of which is expected to be funded by (i) existing Celularity investors and affiliates (the “Celularity-Related PIPE Investors”)
and (ii) certain additional investors. In comparison, the $10.00 per share purchase price of the PIPE Shares is equal to the price
per unit offered to our public stockholders to acquire Units in the IPO (as defined below); however, unlike the Units issued in our IPO,
the PIPE Shares do not include one-half of one redeemable warrant to acquire our Class A Common Stock or any redemption right, among other
things.
The PIPE Investors are entitled
to certain registration rights as fully described in our Registration Statement on Form S-4 filed with the SEC on January 25, 2021 (as
amended from time to time, the “S-4 Registration Statement”).
For additional information
regarding Celularity, the Merger Agreement and related agreements and the Celularity Business Combination, see the S-4 Registration Statement.
Significant Activities Since Inception
On May 23, 2019, we consummated
our initial public offering (“IPO”) of 28,750,000 units (the “Units”), including 3,750,000 Units issued pursuant
to the exercise in full of the underwriters’ over-allotment option. Each Unit consists of one share of GX Class A Common Stock,
and one-half of one warrant (“Public Warrant”), each whole warrant entitling the holder to purchase one share of GX Class
A Common Stock at $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $287,500,000.
Simultaneously with the consummation of the IPO and the sale of the Units, the Company consummated the private placement (“Private
Placement”) of an aggregate of 7,000,000 warrants (“Placement Warrants”) at a price of $1.00 per Placement Warrant,
generating total proceeds of $7,000,000.
A total of $287,500,000 million
of the net proceeds from the IPO and the Private Placement were deposited in a trust account established for the benefit of the Company’s
public shareholders.
Our units began trading on
May 21, 2019 on the Nasdaq Capital Market under the symbol GXGXU. Commencing on July 13, 2018, the securities comprising the units began
separate trading. The units, Class A Ordinary Shares, and warrants are trading on the Nasdaq Capital Market under the symbols “GXGXU,”
“GXGX” and “GXGXW,” respectively.
Business Strategy
Our strategy is to identify
a target that can benefit by becoming a publicly-listed company, with improved access to capital, and that we believe can be positively
impacted by our management team. We seek a target that we believe can grow revenue and earnings materially. This may include a target
that can benefit from capital injection to: (i) increase spending on capital or other projects that are expected to generate favorable
returns and which can accelerate revenue and earnings growth; (ii) invest in technology; or (iii) fundamentally restructure its business
operations.
Our management team has a
combined 90 years of experience setting and implementing strategies to grow revenues and improve profitability, including: helping to
develop growth initiatives; developing capital allocation strategies; reducing expenses to increase earnings or to redeploy capital into
more beneficial initiatives; pursuing add-on acquisitions and divestitures; engaging in capital markets and other financing or restructuring
activities; evaluating, changing or enhancing management when appropriate; and crafting other initiatives.
To execute our business strategy,
we:
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Utilize our management team’s extensive network of company owners, management teams, financial intermediaries and others to identify appropriate candidates for a possible business combination;
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Conduct rigorous research and analysis of various industries and companies to identify promising potential targets;
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Conduct a thorough due diligence review of one or more targets, including an analysis of overall industry and competitive conditions and of company-specific information;
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Arrange appropriate financing in connection with the business combination to provide the target company with adequate capital to execute its business plan;
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Complete a business combination at an attractive price relative to our view of intrinsic value and future potential;
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Implement an operational and financial business plan that we believe will accelerate growth and provide the company with financial and operational flexibility; and
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Seek further strategic acquisitions, divestitures or other transactions that we believe will further enhance shareholder value.
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Acquisition Criteria
We have identified the following
general criteria and guidelines that we believe are consistent with our acquisition philosophy and our management’s experience,
and that we believe are important in evaluating prospective target businesses. These criteria and guidelines include, among others:
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Having the potential to achieve favorable growth in revenue and earnings;
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Having the potential to generate favorable returns on invested capital, with identifiable projects that will allow the company to make investments that can increase earnings;
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Having an established customer relationships and sustainable margins;
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Being in a sector with favorable secular trends such as demographics, customer trends, technology developments or some other identifiable factor(s), and that exhibits significant barriers to entry by new competitors;
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Being less likely to be negatively affected by existing or new regulations;
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Having the potential to grow via add-on acquisitions;
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Appearing to be fundamentally misunderstood by investors, and therefore is undervalued;
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Needing additional strategic and managerial guidance to reposition the company, accelerate growth or refocus the business on strategies that will result in value creation; and
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Being expected to generate attractive risk-adjusted returns for our stockholders.
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These criteria are not intended
to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant,
on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. We used
the above criteria and guidelines in evaluating business combination opportunities, including the Celularity Business Combination and
believe that Celularity meets such criteria. However, in the event that the Celularity Business Combination is not consummated, we may
decide to enter into an alternative business combination with a target company that does not meet these criteria.
Our Acquisition, Investment and Post-Closing Process
In evaluating a prospective
target business, we conduct a thorough due diligence review that encompasses, among other things, an analysis of overall industry and
competitive conditions; meetings with incumbent management and employees; interaction with third-parties who are industry experts; document
reviews; inspection of facilities; and a review of available financial, operational, legal and other information.
As part of our due diligence
investigation, we evaluate the suitability of the target to become a public company. This includes an analysis of:
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the target’s financial prospects, including prospects for growth and variability of financial results;
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relevant revenue recognition and other accounting issues;
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actual and contingent liabilities;
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reliance upon key suppliers, customers and employees;
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other factors that may impact the target business once it is part of a public company.
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We believe that it is important
for any acquisition to achieve early success as a first step toward achieving longer-term objectives. Before completing a business combination,
we intend to work with the target’s management team and outside advisors to develop a formal 100 Day Plan that will set forth the
company’s key near-term objectives for management and employees of the target company, and will communicate to them the importance
of near-term execution. We believe that the 100 Day Plan will serve as the beginning of a strategic plan whose objective will be to increase
shareholder value.
While the 100 Day Plan will
be tailored specifically to deal with a company’s unique circumstances, we expect it to include objectives relating to the following:
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Determining the key drivers that will allow the company to increase shareholder value, and the factors that will make the company more valuable in the future;
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Developing key performance indicators, since we believe that “You can’t manage what you can’t measure”;
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Developing strategies to accelerate revenue growth, speed innovation and remove bottlenecks;
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Identifying potential high-return investments in the business, both operating and capital-related;
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Eliminating non-essential expenses and low-return capital expenditures;
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Developing a human resource strategy by optimizing the existing workforce, developing concrete plans to retain key talent and recruiting new talent and creating a compensation plan that aligns interests among investors, management and employees; and
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Developing an investor relations strategy by creating processes and disciplines around shareholder communication and relations with the analyst community.
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Following the execution of
the 100 Day Plan, our management team and board of directors will continue to work closely with management of the target company to implement
strategies that we believe will build shareholder value.
Despite the acquisition experience
of our management team, none of our officers or directors has had direct experience with special purpose acquisition companies. Any past
experience of our management team is not a guarantee either: (i) that we will be able to locate a suitable candidate for our initial business
combination; or (ii) of any results with respect to any initial business combination we may consummate. You should not rely on the historical
record of the performance of Trimaran Capital Partners, or Trimaran, or our management team as indicative of our future performance.
Our Business Combination Process
In evaluating prospective
business combinations, we conduct a thorough due diligence review process that encompasses, among other things, a review of historical
and projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities
and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate. We also utilize our expertise
analyzing target companies and evaluating operating projections, financial projections and determining the appropriate return expectations
given the risk profile of the target business.
We are not prohibited from
pursuing an initial business combination with a company that is affiliated with Trimaran or our sponsor, officers or directors. In the
event we seek to complete our initial business combination with a company that is affiliated with Trimaran or our sponsor, officers or
directors, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm or another
independent entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial
point of view.
Members of our management
team directly or indirectly own our founders shares and/or private placement warrants, and, accordingly, may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination
if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement
with respect to our initial business combination.
All of the members of our
management team are employed by Trimaran. Trimaran is regularly made aware of potential business opportunities, one or more of which we
may desire to pursue for an initial business combination; we have not, however, selected any specific business combination target and
we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination
target.
Trimaran and each of our officers
and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities
pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of
our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity
to such entity. We believe, however, that the fiduciary duties or contractual obligations of Trimaran and our officers or directors will
not materially affect our ability to complete our initial business combination, as we believe any such opportunities presented would be
smaller than what we are interested in, in different fields than what we would be interested in, or to entities that are not themselves
in the business of engaging in business combinations. Our amended and restated certificate of incorporation provides that we renounce
our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person
solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that
opportunity to us without violating another legal obligation.
Our officers and directors
have agreed not to participate in the formation of, or become an officer or director of any other special purpose acquisition company
with a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, until we have entered
into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination
by May 23, 2021.
Our Management Team
Members of our management
team are not obligated to devote any specific number of hours to our matters, but they devote as much of their time as they deem necessary
to our affairs until we have completed our initial business combination. The amount of time that any member of our management team devotes
in any time period varies based on whether a target business has been selected for our initial business combination and the current stage
of the business combination process. We believe our management team’s operating and transaction experience and relationships with
companies provides us with a substantial number of potential business combination targets. Over the course of their careers, the members
of our management team have developed a broad network of contacts and corporate relationships in many industries. This network has grown
through the activities of our management team sourcing, acquiring and financing businesses, our management team’s relationships
with sellers, financing sources and target management teams and the experience of our management team in executing transactions under
varying economic and financial market conditions.
Status as a Public Company
We believe our structure makes
us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that are better
aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its
profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class
A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing us to
tailor the consideration to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and
cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process
takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not
be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriter’s ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed
initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging
growth companies” including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive
compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities
less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more
volatile.
In addition, Section 107 of
the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided
in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period. We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO, (b) in which we have total annual
gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of
our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have
issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With funds available for an
initial business combination in the amount of $291,797,144 (as of December 31, 2020) after payment of up to $10,812,500 of deferred underwriting
fees and before fees and expenses associated with our initial business combination, we offer a target business a variety of options such
as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening
its balance sheet by reducing its debt or leverage ratio. Because we are able to complete our initial business combination using our cash,
debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will
allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps
to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial business combination
using cash from the proceeds of our IPO and the private placement of the private placement warrants, the proceeds of the sale of our shares
in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into),
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages
of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the
cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the
post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination,
to fund the purchase of other companies or for working capital.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and
we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we are targeting businesses larger than we could acquire with the net proceeds of our IPO and the sale of the private
placement warrants, and may as a result be required to seek additional financing to complete such proposed initial business combination.
Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion
of our initial business combination. In the case of an initial business combination funded with assets other than the trust account assets,
our proxy materials or tender offer documents disclosing the initial business combination would disclose the terms of the financing and,
only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds
privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or
understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
Target business candidates
are brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses
may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources
may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read our public filings and know what types of businesses we are targeting. Our officers and directors, as well as our sponsor
and their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts
as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition,
we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result
of the business relationships of our officers and directors and our sponsor and their respective industry and business contacts as well
as their affiliates. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize
in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay
a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on
the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring
opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction
that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of
a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor
or any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s
fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection
with any services rendered for any services they render in order to effectuate, the completion of our initial business combination (regardless
of the type of transaction that it is). Although none of our sponsor, executive officers or directors, or any of their respective affiliates,
will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in
connection with a contemplated initial business combination, we do not have a policy that prohibits our sponsor, executive officers or
directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business.
We have agreed to pay an affiliate of our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative
support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business
combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following
our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection
process of an initial business combination candidate.
We are not prohibited from
pursuing an initial business combination with an initial business combination target that is affiliated with our sponsor, officers or
directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with an initial business combination target that is affiliated
with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm or from another independent entity that commonly renders valuation opinions that such an initial business combination is
fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.
If any of our officers or
directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he
or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity
to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant
fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring
of our Initial Business Combination
Nasdaq rules require that
we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held
in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at
the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial
business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial
community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation
based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able to independently
determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking
firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we
consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our
initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target
or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase
multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management
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 either (i) in such a way so that the post-transaction company in which our public stockholders own shares
will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the
target management team or stockholders. However, we will only complete an initial business combination if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the
“Investment Company Act”. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the
target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company,
depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we
would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our
stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken
into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target
business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target
businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective
business target, we conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial and
other information that will be made available to us.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses
and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. In addition, we are focusing our search for an initial business combination in a single industry. By completing
our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that
business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial business
combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure
you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial Business
Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under Nasdaq’s listing
rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding;
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any of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
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Permitted Purchases of our Securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public
warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may
purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments,
plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they
engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not
disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that
such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that
the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section
13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held
in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business
combination.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have
a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement
would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.
Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been
possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may
be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the
quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors
and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates
may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted
by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor,
officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling
stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial
business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination.
Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under
the Exchange Act and the other federal securities laws.
Any purchases by our sponsor,
officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made
to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with
in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make
purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be
reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two
business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account
and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations
described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share. The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we
will pay to the underwriter. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they
have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with
the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial
business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by
means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction
and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement.
Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with
our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend
our amended and restated certificate of incorporation would require stockholder approval. If we structure an initial business combination
with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder
vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender
offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder
approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required
to comply with such rules.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement
of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase
shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer
period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public
shares which are not purchased by our sponsor, which number will be based on the requirement that we will only redeem our public shares
so long as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriter’s fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If, however, stockholder approval
of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
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In the event that we seek
stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our
public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of
outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the
company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter agreement,
our sponsor, officers and directors have agreed to vote their founder shares and any public shares in favor of our initial business combination.
For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the
approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder
shares, we would need only 10,781,251, or 37.5%, of the 28,750,000 public shares sold in our IPO to be voted in favor of an initial business
combination (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any public shares) in order
to have our initial business combination approved. We intend to give approximately 30 days (but not less than 10 days nor more than 60
days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination.
These quorums and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate
our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for
or against the proposed transaction.
Our amended and restated certificate
of incorporation provides that we will only redeem our public shares so long as (after such redemption) our net tangible assets will be
at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriter’s
fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed initial
business combination may require: (i) cash consideration to be paid to the target or its 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 initial business combination. In the event the aggregate cash consideration we would be required to pay for
all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the
initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to
the holders thereof.
Limitation on Redemption upon Completion of our Initial Business
Combination if we Seek Stockholder Approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in our IPO, which we refer to as the “Excess Shares.” Such restriction shall also be applicable
to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts
by such holders to use their ability to exercise their redemption rights against a proposed initial business combination as a means to
force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable
terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in our IPO could threaten
to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to the then-current
market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold
in our IPO without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to
block our ability to complete our initial business combination, particularly in connection with an initial business combination with a
target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Stock Certificates in Connection with Redemption Rights
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the meeting held to approve a proposed initial business combination
by a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer agent electronically using
The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The proxy materials
that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are
requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send
out our proxy materials until the date set forth in such proxy materials to tender its shares if it wishes to seek to exercise its redemption
rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated
with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer
agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming
holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender
their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery
must be effectuated.
The foregoing is different
from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations,
many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a
holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating such holder was
seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact such
stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an
“option window” after the completion of the initial business combination during which he or she could monitor the price of
the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open
market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders
were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion
of the initial business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery
prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the initial business combination is
approved.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials. Furthermore, if a holder of a public
share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date
not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically).
It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed
promptly after the completion of our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates
delivered by public holders who elected to redeem their shares.
If our Business Combination
with Celularity is not completed, we may continue to try to complete an alternative initial business combination with a different target
until May 23, 2021.
Redemption of Public Shares and Liquidation if no Initial Business
Combination
Our amended and restated certificate
of incorporation provides that we will have only until May 23, 2021 to complete our initial business combination. If we are unable to
complete the Celularity Business Combination, and if we are unable to complete an alternative initial business combination within such
period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by May
23, 2021.
Our sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from
the trust account with respect to any founder shares held by them if we fail to complete our initial business combination by May 23, 2021.
However, if our sponsor, officers or directors acquire public shares in or after our IPO, 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
time period.
Our sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation (i) 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 by May 23, 2021 or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common
stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes divided
by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after such redemption) our
net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and
after payment of underwriter’s fees and commissions (so that we are not subject to the SEC’s “penny stock” rules).
If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net
tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our public shares at
such time.
We expect that all costs and
expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining
out of the $314,696 of proceeds held outside the trust account (as of December 31, 2020) (not including operating expenses subsequent
to December 31, 2020, and including costs and expenses incurred in connection with our liquidation, currently estimated to be no more
than approximately $100,000), although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient
interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not
sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest
accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee
to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of our IPO and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and
without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon
our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims
of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share
redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution
must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are
sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders.
While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’
claims.
Although we seek to have all
vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from
bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other
similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect
to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will
only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that
refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable
to find a service provider willing to execute a waiver. Marcum LLP, our independent registered public accounting firm, and the underwriter
of our IPO will not execute agreements with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will be liable
to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business
with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce
the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share
held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the
value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriter of our IPO against certain liabilities, including liabilities under
the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets
are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our
officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
In the event that the proceeds
in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account
as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount
of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations
or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take
legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the
independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor
would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the
per-share redemption price will not be less than $10.00 per public share.
We seek to reduce the possibility
that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers,
prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest
or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity
of the underwriter of our IPO against certain liabilities, including liabilities under the Securities Act. We have access to up to $314,696
of proceeds held outside of the trust account (as of December 31, 2020) with which to pay any such potential claims (not including operating
expenses subsequent to December 31, 2020, and including costs and expenses incurred in connection with our liquidation, currently estimated
to be no more than approximately $100,000). In the event that we liquidate, and it is subsequently determined that the reserve for claims
and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by May 23, 2021 may be considered a liquidating distribution under Delaware law. If
the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination by May 23, 2021, is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances
that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be
six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are
unable to complete the Celularity Business Combination or an alternative initial business combination by May 23, 2021, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and
our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors
and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible
following May 23, 2021 and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be
liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well
beyond the third anniversary of such date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However,
because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective
target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or
prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we have sought
and will continue to 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. As a result of this obligation, the claims that could be made against us are significantly limited
and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may
be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share
or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions
in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims
under our indemnity of the underwriter of our IPO against certain liabilities, including liabilities under the Securities Act. In the
event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of
any liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some, or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of
punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you
that claims will not be brought against us for these reasons.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination,
(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended
and restated certificate of incorporation (A) to modify the substance or timing of our obligation to offer redemption rights in connection
with any proposed initial business combination or to redeem 100% of our public shares if we do not complete the Celularity Business Combination
or an alternative initial business combination by May 23, 2021 or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete
our business combination by May 23, 2021, subject to applicable law. In no other circumstances will a stockholder have any right or interest
of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination,
a stockholder’s voting in connection with the initial business combination alone will not result in a stockholder’s redeeming
its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights
as described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and
restated certificate of incorporation, may be amended with a stockholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses
seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human
and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our
obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be
viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating
an initial business combination.
Employees
We currently have four officers.
These individuals are not obligated to devote any specific number of hours to our matters, but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote
in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of
the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial
business combination.
Periodic Reporting and Financial Information
We have registered our units,
Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual,
quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports, including this
report, contain financial statements audited and reported on by our independent registered public accountants.
We have included Celularity’s
audited financial statements for fiscal years 2019 and 2018 and unaudited financial statements for the nine-months ended September 30,
2020 and September 30, 2019 in the S-4 Registration Statement and will include such financial statements as part of the proxy materials
that will be sent to our stockholders to assist them in assessing the Celularity Business Combination. If the Celularity Business Combination
is not consummated, we cannot assure you that any other particular target business identified by us as a potential business combination
candidate will have financial statements prepared in accordance with U.S. GAAP or IFRS, depending on the circumstances, or that the potential
target business will be able to prepare its financial statements in accordance U.S. GAAP or IFRS or have its financial statements audited
in accordance with the PCAOB. To the extent that these requirements cannot be met, we may not be able to acquire a proposed target business
within the prescribed time frame to complete our initial business combination. These financial statement requirements may also 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.
However, we do not believe that this limitation will be material.
We are required to evaluate
our internal control procedures for the fiscal year ended December 31, 2020 as required by the Sarbanes-Oxley Act. Only in the event we
are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required
to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act
regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with
the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. We have filed a Registration
Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we are subject
to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting
or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our IPO,
(b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer,
which means the market value of our shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the prior
June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
Summary of Risk Factors
Our business is subject to
numerous risks and uncertainties, including those highlighted in the section title “Risk Factors,” that represent challenges
that we face in connection with the successful implementation of our strategy. The occurrence of one or more of the events or circumstances
described in the section titled “Risk Factors,” alone or in combination with other events or circumstances, may adversely
affect our ability to effect a business combination, and may have an adverse effect on our business, cash flows, financial condition and
results of operations. Such risks include, but are not limited to:
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recently formed company without an operating history;
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issuance of equity and/or debt securities to complete a business combination;
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lack of working capital;
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third-party claims reducing the per-share redemption price;
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our stockholders being held liable for claims by third parties against us;
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failure to enforce our sponsor’s indemnification obligations;
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dependence on key personnel;
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conflicts of interest of our sponsor, officers and directors;
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dependence on a single target business with a limited number of products or services;
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shares being redeemed and warrants becoming worthless;
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our competitors with advantages over us in seeking business combinations;
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ability to obtain additional financing;
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our initial stockholders controlling a substantial interest in us;
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warrants’ and founder shares’ adverse effect on the market price of our common stock;
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disadvantageous timing for redeeming warrants;
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adverse effect of registration rights on the market price of our common stock;
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impact of COVID-19 and related risks;
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business combination with a company located in a foreign jurisdiction;
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changes in laws or regulations; tax consequences to business combinations; and
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exclusive forum provisions in our amended and restated certificate of incorporation.
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Risk Factors
An investment in our securities
involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this report, including the financial statements, before making a decision to invest in our units. If any of the following events occur,
our business, financial condition and operating results may be materially and adversely affected. In that event, the trading price of
our securities could decline, and you could lose all or part of your investment. The risk factors described below are not necessarily
exhaustive and you are encouraged to perform your own investigation with respect to us and our business. For risks relating
to Celularity and the Celularity Business Combination, see our Registration Statement on Form S-4 initially filed on January 25, 2021
and as amended from time to time.
Risks Relating to our Search for, Consummation
of, or Inability to Consummate, a Business Combination and Post-Business Combination Risks
Our search for a business combination, and
any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus
(COVID-19) outbreak.
The outbreak of COVID-19 has
resulted in a widespread health crisis that adversely affected the economies and financial markets worldwide, and potentially the business
of potential target companies, including Celularity, with which we consummate a business combination could be materially and adversely
affected. Furthermore the continued concerns relating to COVID-19 has restricted travel, limited our ability to have meetings with
potential investors or the target company’s personnel, vendors and services providers, which further affects our ability to negotiate
and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend
on future developments, which are highly uncertain and cannot be predicted. If the disruptions posed by COVID-19 or other matters of global
concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target company
with which we ultimately consummate a business combination, may be materially adversely affected.
If the Celularity Business Combination is not
consummated and we seek to negotiate an alternative business combination, our public stockholders may not be afforded an opportunity to
vote on our proposed initial business combination, which means we may complete our initial business combination if a majority of our public
stockholders do not support such a combination.
If the Celularity Business
Combination is not consummated and we seek to negotiate an alternative business combination, we may choose not to hold a stockholder vote
to approve our initial business combination unless the initial business combination would require stockholder approval under applicable
law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required
by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination or will allow stockholders
to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors,
such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval.
Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve of the
initial business combination we complete.
The financial statements included in this Report
do not take into account the consequences of a failure to complete our initial business combination by May 23, 2021.
The financial statements included
in this report have been prepared assuming that we would continue as a going concern. As discussed in Note 1 to our financial statements
for the year ended December 31, 2020, we are required to complete a business combination by May 23, 2021. The possibility of our initial
business combination not being consummated raises come doubt as to our ability to continue as a going concern and the financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
If we seek stockholder approval of our initial
business combination, after approval by our board, our initial stockholders have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.
Pursuant to the letter agreement
executed in connection with our IPO, our sponsor, officers and directors have agreed to vote their founder shares, as well as any public
shares purchased during or after the initial public offering (including in open market and privately negotiated transactions), in favor
of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need only 10,781,251,
or 37.5%, of the 28,750,000 public shares sold in our initial public offering to be voted in favor of an initial business combination
approved (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any public shares) in order
to have our initial business combination approved. Our initial stockholders currently own shares representing 20% of our outstanding shares
of common stock. Accordingly, if we seek stockholder approval of our initial business combination, after approval by our board, the agreement
by our initial stockholders to vote in favor of our initial business combination will increase the likelihood that we will receive the
requisite stockholder approval for such initial business combination.
Your only opportunity to affect the investment
decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the initial business combination.
At the time of your investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since
our board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may not
have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not
seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited
to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer
documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into an initial business combination with a target.
We may seek to enter into
an initial business combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing
condition and, as a result, would not be able to proceed with the initial business combination. Furthermore, we will only redeem our public
shares so long as (after such redemption) our net tangible assets will be at least $5,000,001 as described above upon consummation of
our initial business combination and after payment of underwriter’s fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible
assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition, each as described above, we would not
proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into an initial business combination with us.
The ability of our public stockholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or
optimize our capital structure.
At the time we enter into
an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such
requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially
expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third
party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher
than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common
stock results in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the
time of our business combination. The above considerations may limit our ability to complete the most desirable business combination available
to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted
for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to stockholders
who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions,
the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination
agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If
you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade
at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment
or lose the benefit of funds expected in connection with our redemption until we liquidate, or you are able to sell your stock in the
open market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating an initial
business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our
dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value
for our stockholders.
Any potential target business
with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business
combination by May 23, 2021. Consequently, such target business may obtain leverage over us in negotiating an initial business combination,
knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above.
In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would
have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less
than such amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated certificate
of incorporation provides that we must complete our initial business combination by May 23, 2021. We may not be able to close the Celularity
Business Combination or find an alternative suitable target business and complete our initial business combination by such date. If we
have not completed our initial business combination by such date, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the
trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided
by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. In such case, our public stockholders may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances,
our public stockholders may receive less than $10.00 per share on the redemption of their shares.
If we seek stockholder approval of our initial
business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or warrants from public
stockholders, which may influence a vote on a proposed initial business combination and reduce the public “float” of our Class
A common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination
thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage
in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account
will be used to purchase shares or public warrants in such transactions.
Such a purchase may include
a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner
thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their
affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption
rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases
could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial business combination, or to satisfy a closing condition in an agreement with a target that requires us to have
a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement
would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding
or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination.
Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been
possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers
are subject to such reporting requirements.
In addition, if such purchases
are made, the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities
exchange.
If a stockholder fails to receive notice of
our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender
offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our
compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may
not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two
business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other
procedures, its shares may not be redeemed.
You will not have any rights or interests in
funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to
sell your public shares or warrants, potentially at a loss.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination,
and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the
limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend
our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination by May 23, 2021, or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our public shares if we are unable
to complete an initial business combination by May 23, 2021, subject to applicable law and as further described herein. In no other circumstances
will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to
the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell
your public shares or warrants, potentially at a loss.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of
our initial public offering and the sale of the private placement warrants are intended to be used to complete an initial business combination
with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC
to protect investors in blank check companies, such as Rule 419.
Accordingly, investors are
not afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we
will have a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, if our
initial public offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust
account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business
combination.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 (as of December
31, 2020) per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire
worthless.
We have encountered and expect
to continue to encounter competition from other entities having a business objective similar to ours, including private investors (which
may be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses we
intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess similar technical, human and other resources to ours, 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 private placement warrants, our ability to compete with respect to the acquisition
of certain target businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives
others an advantage in pursuing the acquisition of certain target businesses. Furthermore, because we are obligated to pay cash for the
shares of Class A common stock which our public stockholders redeem in connection with our initial business combination, target companies
will be aware that this may reduce the resources available to us for our initial business combination. This may place us at a competitive
disadvantage in successfully negotiating an initial business combination. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.15 (as of December 31, 2020) per share on the liquidation of our trust account
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 (as of December
31, 2020) per share upon our liquidation.
If the net proceeds of our initial public offering
and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available
to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from
our sponsor or management team to fund our search for an initial business combination, to pay our taxes and to complete our initial business
combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of the net proceeds of our
initial public offering and the sale of the private placement warrants, only approximately 314,696 (as of December 31, 2020) is available
to us outside the trust account to fund our working capital requirements. If we are required to seek additional capital, we would need
to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of 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. Up to $1,500,000 of such loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant
at the option of the lender. Prior to the completion of our initial business combination, we do not expect to seek loans from parties
other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide
a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we may be unable
to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient
funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may
only receive approximately $10.15 (as of December 31, 2020) per share on our redemption of our public shares, and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.15 (as of December 31, 2020) per share on the redemption
of their shares.
Subsequent to the completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some
or all of your investment.
Even if we conduct extensive
due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that
may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these
factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that
could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise, and
previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Although these charges may be non-cash
items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market
perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which
we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to
partially finance the initial business combination. Accordingly, any stockholders who choose to remain stockholders following the initial
business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of
care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy
solicitation or tender offer materials, as applicable, relating to the initial business combination constituted an actionable material
misstatement or omission.
If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share.
Our placing of funds in the
trust account may not protect those funds from third-party claims against us. Although we seek to have all vendors, service providers,
prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest
or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute
such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the
enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds
held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account,
our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that
has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us
than any alternative. Marcum LLP, our independent registered public accounting firm, and the underwriter of our initial public offering,
will not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible instances
where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in
connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public
stockholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors. Our sponsor
has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us,
or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business
combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the
actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per
share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims
by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether
or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriter of our initial public offering
against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such
indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations
and believe that our sponsor’s only assets are securities of our company. Therefore, it is unlikely that our sponsor would be able
to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation,
claims by vendors and prospective target businesses.
Our directors may decide not to enforce the
indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public stockholders.
In the event that the proceeds
in the trust account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per share held in the trust
account as of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust
assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect
that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose
not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too
high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent
directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution
to our public stockholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy indemnification claims
of our directors and executive officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive (and any other
persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title,
interest or claim of any kind in or to any monies in the trust account and not to seek recourse against the trust account for any reason
whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside
of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may
discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action,
if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.
If, after we distribute the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek
to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public
stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the
trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that
is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed upon us burdensome
requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete an initial business combination and
thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view
to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
principal activities subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested
in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity
of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which
invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in
other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted
at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or
private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company
Act. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business
combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and
restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we
do not complete our initial business combination by May 23, 2021 or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity; or (iii) absent an initial business combination by May 23, 2021, our return of the
funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds
as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company
Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may
hinder our ability to complete an initial business combination or may result in our liquidation. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.10 (as of December 31, 2019) per share on the liquidation
of our trust account and our warrants will expire worthless.
Our stockholders may be held liable for claims
by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination by May 23, 2021 may be considered a liquidating distribution under Delaware law. If
a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision
for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation,
a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating
distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser
of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably
possible following May 23, 2021 in the event we do not complete our initial business combination and, therefore, we do not intend to comply
with the foregoing procedures.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for
our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our
dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers
and auditors) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of
stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim
or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary
of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such,
our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability
of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed
to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination by
May 23, 2021 is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful
(potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown),
then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution.
The grant of registration rights to our initial
stockholders may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely
affect the market price of our Class A common stock.
Pursuant to an agreement entered
into concurrently with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted
transferees can demand that we register the private placement warrants, the shares of Class A common stock issuable upon conversion of
the founder shares and exercise of the private placement warrants held, or to be held, by them and holders of warrants that may be issued
upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise
of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number
of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition,
the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because
the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our initial
stockholders or holders of working capital loans or their respective permitted transferees are registered.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We are not limited to completing
an initial business combination in any industry or geographical region, although we will not, under our amended and restated certificate
of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with
nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination,
there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations,
cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business
or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations
of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or
that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us
with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that
an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were
available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such reduction
in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of
care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy
solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement
or material omission.
We may seek business combination opportunities
in industries or sectors which may or may not be outside of our management’s area of expertise.
Although we intend to focus
on identifying companies in sectors where we have experience, we will consider an initial business combination outside of our management’s
area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers an attractive
business combination opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded
a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in
any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors than
a direct investment, if an opportunity were available, in an initial business combination candidate. In the event we elect to pursue a
business combination outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable
to its evaluation or operation, and the information contained herein regarding the areas of our management’s expertise would not
be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain
or assess all of the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction
in value.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial business combination will not have all of these positive attributes. If we complete our initial business combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target
that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may
make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain
amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval
for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination
if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination,
our public stockholders may receive only approximately $10.15 (as of December 31, 2020) per share on the liquidation of our trust account
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.15 (as of December
31, 2020) per share on the redemption of their shares.
We may seek business combination opportunities
with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject
us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete
our initial business combination with a financially unstable business or an entity lacking an established record of revenues or earnings,
we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues
or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the
risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors
and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave
us with no ability to control or reduce the chances that those risks will adversely impact a target business.
Subject to certain exceptions, we are not required
to obtain a fairness opinion, and consequently, you may have no assurance from an independent source that the price we are paying for
the business is fair to our company from a financial point of view.
Unless we complete our initial
business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business
or businesses, we are not required to obtain an opinion from an independent investment banking firm or from another independent entity
that commonly renders valuation opinions that the price we are paying is fair to our company from a financial point of view. If no opinion
is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on
standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer
documents, as applicable, related to our initial business combination.
Resources could be wasted in researching business
combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10
(as of December 31, 2020) per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments
will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we
decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely
would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial
business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related
costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we
are unable to complete our initial business combination, our public stockholders may receive only approximately $10.15 (as of December
31, 2020) per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public
stockholders may receive less than $10.15 per share on the redemption of their shares.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial
condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments
as of 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 initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained
from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no
issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt
could have a variety of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
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other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business
combination with the proceeds of our initial public offering 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 services and limited operating activities. This lack of diversification
may negatively impact our operating results and profitability.
Of the net proceeds from our
initial public offering and the sale of the private placement warrants, $290,984,644 (as of December 31, 2020) is available to complete
our initial business combination and pay related fees and expenses (which excludes up to $10,812,500 for the payment of deferred underwriting
commissions).
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. In addition, we intend to focus our search for an initial business combination in
a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business
combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise
to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay
our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers)
and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies
in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results
of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in an initial business combination with
a company that is not as profitable as we suspected, if at all.
In pursuing our initial business
combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in an initial business combination with a company that is not as profitable
as we suspected, if at all.
Our management may not be able to maintain
control of a target business after our initial business combination.
We may structure an initial
business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity
interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or
acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders
prior to the initial business combination may collectively own a minority interest in the post business combination company, depending
on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we
issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In
this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares
of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common
stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a
single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it
more likely that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon
loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete an initial business combination with which
a substantial majority of our stockholders do not agree.
Our amended and restated certificate
of incorporation does not provide a specified maximum redemption threshold, except that we will only redeem our public shares so long
as (after such redemption) our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our
initial business combination and after payment of underwriter’s fees and commissions (such that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating
to our initial business combination. As a result, we may be able to complete our initial business combination even if a substantial majority
of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their
affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are
validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business
combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares,
all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an
alternate business combination.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation
or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders
may not support.
In order to effectuate an
initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified
governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to
their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. To the extent
we seek to amend our organizational documents in a way that would be deemed to fundamentally change the nature of any securities offered
through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot
assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination
in order to effectuate our initial business combination.
The provisions of our amended and restated
certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account), may be amended with the approval of holders of 65% of our common stock, which is a lower
amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our
stockholders may not support.
Our amended and restated certificate
of incorporation provides that any of its provisions related to pre-initial business combination activity (including the requirement to
deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release such amounts
except in specified circumstances, and to provide redemption rights to public stockholders as described herein and including to permit
us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation is
substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock entitled to vote thereon, and corresponding
provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of
our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended
by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable
stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation.
Our initial stockholders, who collectively beneficially own 20% of our common stock, will participate in any vote to amend our amended
and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a
result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-initial business
combination behavior more easily than some other blank check companies, and this may increase our ability to complete an initial business
combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate
of incorporation.
Our sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares on a business combination
if we do not complete our initial business combination by May 23, 2021, or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares
of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the trust account, net of taxes payables, divided by the number of then outstanding public shares. These agreements are
contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to,
or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor,
officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue
a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We intend to target businesses
larger than we could acquire with the net proceeds of our initial public offering and the sale of the private placement warrants. As a
result, we may be required to seek additional financing to complete such proposed initial business combination. In connection with the
Celularity Business Combination, on January 8, 2021, we entered into separate Subscription Agreements with investors, pursuant to which
the investors agreed to purchase, and we agreed to sell to the investors, an aggregate of 8,340,000 shares of our Class A common stock
for an aggregate purchase price of $83,400,000, in a private placement to finance the Celularity Business Combination. However, we cannot
assure you that the aforementioned private placement will be consummated or any alternative financing will be available on acceptable
terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target
business candidate. Further, the amount of additional financing we may be required to obtain could increase as a result of future growth
capital needs for any particular transaction, the depletion of the available net proceeds in search of a target business, the obligation
to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination
and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are unable to
complete our initial business combination, our public stockholders may receive only approximately $10.15 (as of December 31, 2020) per
share plus any pro rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes on the
liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete
our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to
secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of
our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination.
If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.15 (as of December
31, 2020) per share on the liquidation of our trust account, and our warrants will expire worthless.
Our initial stockholders may exert a substantial
influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Our initial stockholders own
shares representing 20% of our issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions
requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate
of incorporation and approval of major corporate transactions. If our initial stockholders purchase any additional shares of common stock
in the aftermarket or in privately negotiated transactions, this would increase their control. Factors that would be considered in making
such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board
of directors, whose members were elected by our initial stockholders, is divided into three classes, each of which serves for a term of
three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new
directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office
until at least the completion of the initial business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of
their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue
to exert control at least until the completion of our initial business combination.
Because we must furnish our stockholders with
target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require
that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include
historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure
in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS,
depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to
disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time
frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley
Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year
ended December 31, 2020. Because we are not deemed to be a large accelerated filer or an accelerated filer, and still qualify as an emerging
growth company, we are not required to comply with the independent registered public accounting firm attestation requirement on our internal
control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with
the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that
we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target company with which we seek to complete our initial business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of
any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business
combination.
If we effect our initial business combination with a company with
operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact
our operations.
If we effect our initial business
combination with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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tax issues, including but not limited to tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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cultural and language differences;
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employment regulations;
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changes in industry, regulatory or environmental standards within the jurisdictions where we operate;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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We may not be able to adequately address these additional risks. If
we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition.
Risks Relating to our Sponsor
and Management Team
Our ability to successfully effect our initial
business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may
join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with
such requirements. In addition, the officers and directors of an initial business combination candidate may resign upon completion of
our initial business combination. The departure of an initial business combination target’s key personnel could negatively impact
the operations and profitability of our post-combination business. The role of an initial business combination candidate’s key personnel
upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members
of an initial business combination candidate’s management team will remain associated with the initial business combination candidate
following our initial business combination, it is possible that members of the management of an initial business combination candidate
will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
We are dependent upon our executive officers and directors and their
departure could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends
on the continued service of our executive officers and directors, at least until we have completed our initial business combination. We
do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected
loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our key personnel may negotiate employment
or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with a target business in connection with a particular
business combination. These agreements may provide for them to receive compensation or reimbursement for out-of-pocket expenses, if any,
following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular
business combination is the most advantageous.
Our key personnel may be able
to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the initial business combination. Additionally, they may negotiate reimbursement of any out-of-pocket expenses
incurred on our behalf prior to the consummation of our initial business combination, should they choose to do so. Such negotiations would
take place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the initial business combination,
or as reimbursement for such out-of-pocket expenses. The personal and financial interests of such individuals may influence their motivation
in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion
of our initial business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential
business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial
business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us.
The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the
management of a prospective target business and, as a result, may affect our initial business combination with a target business whose
management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the
value of our stockholders’ investment in us.
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore,
may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following
the initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy
for such reduction in value.
Our officers and directors allocate their time
to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict
of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and do not, commit their full time to our affairs, which may result in a conflict of interest in allocating their
time between our operations and our search for an initial business combination and their other businesses. We do not intend to have any
full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors
for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours
per week to our affairs. In particular, all of our officers and certain of our directors are employed by Trimaran, which make investments
in securities or other interests of or relating to companies in industries we may target for our initial business combination. Our independent
directors may also serve as officers or board members for other entities. If our officers’ and directors’ other business affairs
require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their
ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination.
Certain of our officers and directors are now,
and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity should be presented.
Until we consummate our initial
business combination, we will continue to engage in the business of identifying and combining with one or more businesses. Our sponsor
and officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles)
that are engaged in a similar business, although they may not participate in the formation of, or become an officer or director of, any
other special purpose acquisition companies with a class of securities registered under the Exchange Act until we have entered into a
definitive agreement regarding our initial business combination or we have failed to complete our initial business combination by May
23, 2021, or such later period as may be approved by our stockholders.
Our officers and directors
also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe
certain fiduciary or contractual duties.
Accordingly, they may have
conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be
resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended
and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company
and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue,
and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our officers, directors, security holders and
their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy
that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial
interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact,
we may enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or officers,
although we do not intend to do so. We do not have a policy that expressly prohibits any such persons from engaging for their own account
in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests
and ours.
We may engage in an initial business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors
or existing holders which may raise potential conflicts of interest.
In light of the involvement
of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor,
officers or directors. Our directors also serve as officers and board members for other entities. Such entities may compete with us for
business combination opportunities. Despite our agreement to obtain an opinion from an independent investment banking firm or from another
independent entity that commonly renders valuation opinions, regarding the fairness to our stockholders from a financial point of view
of an initial business combination with one or more businesses affiliated with our officers, directors or existing holders, potential
conflicts of interest still may exist and, as a result, the terms of the initial business combination may not be as advantageous to our
public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will
lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining
whether a particular business combination target is appropriate for our initial business combination.
In September 2018, our sponsor
purchased an aggregate of 8,625,000 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In April
2019, our sponsor forfeited 1,437,500 founder shares, leaving it with an aggregate of 7,187,500 founder shares. 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. The founder shares will be worthless if we do not complete an initial business combination. In addition, our
sponsor purchased an aggregate of 7,000,000 private placement warrants, each exercisable for one share of our Class A common stock at
$11.50 per share, for a purchase price of $7,000,000, or $1.00 per warrant, that will also be worthless if we do not complete an initial
business combination. Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business
combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination.
In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests
of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an
initial business combination and influencing the operation of the business following the initial business combination.
Risks Relating to Our Securities
Nasdaq may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
Our securities are currently
listed on Nasdaq. Although we meet the initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that
our securities will be, or will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order
to continue listing our securities on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution
and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum
number of holders of our securities (generally 300 round-lot holders with at least 50% of such round lot holders holding securities with
a market value of at least $2,500). Additionally, in connection with our initial business combination, we will be required to demonstrate
compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to
be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million. 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 Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities Markets
Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities.” Because our units, our Class A common stock and warrants are listed on Nasdaq, our
units, Class A common stock and warrants are covered securities. Although the states are preempted from regulating the sale of our securities,
the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent
activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having
used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain
state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder
the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would
not be covered securities and we would be subject to regulation in each state in which we offer our securities, including in connection
with our initial business combination.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders
are deemed to hold 15% or more of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our
Class A common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the
shares sold in our initial public offering without our prior consent, which we refer to as the “Excess Shares.” However, we
would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally,
you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as
a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to
sell your stock in open market transactions, potentially at a loss.
We have not registered the shares of Class
A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration
or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire
worthless.
We have not registered the
shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time.
However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business
days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement
for the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter
will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and
to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of
the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example,
any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus,
the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If
the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to
exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not
be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is
registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available.
Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is
not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such
time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration
statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933,
as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available,
holders will not be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the shares
under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant,
or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares
underlying the warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares upon
exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock
included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares
of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or
we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common
stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in our initial public
offering. However, there may be instances in which holders of our public warrants may be unable to exercise such public warrants, but
holders of our private warrants may be able to exercise such private warrants.
If you exercise your public warrants on a “cashless
basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for
cash.
There are circumstances in
which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if a registration statement
covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the
closing of our initial business combination, warrant holders may, until such time as there is an effective registration statement, exercise
warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if a registration
statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following
the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement
and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis
pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available; if that exemption,
or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Third, if we call the
public warrants for redemption, our management will have the option to require all holders that wish to exercise warrants to do so on
a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants
for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of
Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair
market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value” is the average
reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which
the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for
cash.
We may issue additional common stock or preferred
stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at
the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate
of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate
of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0001 per share, 10,000,000
shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. There
are currently 49,875,000 and 2,812,500 authorized but unissued shares of Class A common stock and Class B common stock, respectively,
available for issuance, which amount takes into account the shares of Class A common stock reserved for issuance upon exercise of outstanding
warrants but not the shares of Class A common stock issuable upon conversion of Class B common stock. There are no shares of preferred
stock issued and outstanding. Shares of Class B common stock are convertible into shares of our Class A common stock initially at
a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue Class A common
stock or equity-linked securities related to our initial business combination. Shares of Class B common stock are also convertible at
the option of the holder at any time.
We may issue a substantial
number of additional shares of common or preferred stock to complete our initial business combination or under an employee incentive plan
after completion of our initial business combination (although our amended and restated certificate of incorporation provides that we
may not issue securities that can vote with common stockholders on matters related to our pre-initial business combination activity).
We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the
time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate
of incorporation. However, our amended and restated certificate of incorporation provides, among other things, that prior to our initial
business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds
from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of incorporation,
like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However,
our executive officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to
our amended and restated certificate of incorporation (A) 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 by May 23, 2021, or (B) with respect to any other provision relating to
stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity
to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number
of then outstanding public shares.
The issuance of additional
shares of common or preferred stock:
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may significantly dilute the equity interest of investors in our initial public offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Our initial stockholders will receive additional
shares of Class A common stock if we issue shares to consummate an initial business combination.
The founder shares will automatically
convert into Class A common stock at the time of our initial business combination, or earlier at the option of the holders, on a one-for-one
basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities
convertible or exercisable for Class A common stock, are issued or deemed issued in excess of the amounts offered in our initial public
offering and related to the closing of the initial business combination, the ratio at which founder shares shall convert into Class A
common stock will be adjusted so that the number of shares of Class A common stock issuable upon conversion of all founder shares will
equal, in the aggregate, on an as-converted basis, 20% of the total number of all outstanding shares of common stock upon completion of
the initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business
combination and any private placement-equivalent warrants issued to our sponsor or its affiliates upon conversion of loans made to us.
Additionally, the aforementioned adjustment will not take into account any shares of Class A common stock redeemed in connection with
the business combination. Accordingly, the holders of the founder shares could receive additional shares of Class A common stock even
if the additional shares of Class A common stock, or equity-linked securities convertible or exercisable for Class A common stock, are
issued or deemed issued solely to replace those shares that were redeemed in connection with the business combination. The foregoing may
make it more difficult and expensive for us to consummate an initial business combination.
We may amend the terms of the warrants in a
manner that may be adverse to holders of public warrants with the approval by the holders of at least 65% of the then outstanding public
warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of
shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant
agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any
defective provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants
in a manner adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although
our ability to amend the terms of the public warrants with the consent of at least 65% of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants
into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise
of a warrant.
We may redeem your unexpired warrants prior
to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third
trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and
when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise
of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such
registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws
of the state of residence in those states in which the warrants were offered by us in our initial public offering. Redemption of the outstanding
warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for
you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii)
to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially
less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held
by the sponsor or its permitted transferees.
Our warrants and founder shares may have an
adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase
14,375,000 shares of Class A common stock as part of the units offered in our initial public offering and, simultaneously with the closing
of our initial public offering, we issued in a private placement warrants to purchase an aggregate of 7,000,000 shares of Class A common
stock at $11.50 per share. Our initial stockholders currently own an aggregate of 7,187,500 founder shares. The founder shares are convertible
into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor makes
any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option
of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and
exercise period.
To the extent we issue shares
of Class A common stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional
shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive business combination
vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock
and reduce the value of the shares of Class A common stock issued to complete the initial business combination. Therefore, our warrants
and founder shares may make it more difficult to effectuate an initial business combination or increase the cost of acquiring the target
business.
The private placement warrants
are identical to the warrants sold as part of the units in our initial public offering except that, so long as they are held by our sponsor
or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise
of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after
the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
Because each unit contains one-half of one
redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half
of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly,
unless you purchase at least two units, you will not be able to receive or trade a whole warrant. This is different from other offerings
similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components
of the units in this way in order to reduce the dilutive effect of the warrants upon completion of an initial business combination since
the warrants will be exercisable in the aggregate for one half of the number of shares compared to units that each contain a warrant to
purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit
structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult
for use to consummate an initial business combination.
Unlike some other blank check companies, if
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we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share;
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(ii)
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the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and
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(iii)
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the Market Value is below $9.20 per share,
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then the exercise price of the warrants will be
adjusted to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger
price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial business combination with a target business.
A market for our securities may not develop, which would adversely
affect the liquidity and price of our securities.
The price of our securities
may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active
trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities
unless a market can be established and sustained.
Provisions in our amended and restated certificate
of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future
for our Class A common stock and could entrench management.
Our amended and restated certificate
of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms
of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that
otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover
provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our
securities.
Our amended and restated certificate of incorporation
requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers,
other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in
the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service
of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other
employees or stockholders.
Our amended and restated certificate
of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors,
officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery
in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service
of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines
that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent
to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive
jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction,
or (D) any action arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District
of Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital
stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such
claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations
thereunder. We cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were
to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable
in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business,
operating results and financial condition.
Our amended and restated certificate
of incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange
Act or the rules and regulations thereunder. As a result, the exclusive forum provision does not apply to suits brought to enforce any
duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
General Risk Factors
We are a recently formed blank check company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a recently formed blank
check company with no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to
achieve our business objective of completing our initial business combination with one or more target businesses. We may be unable to
complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating
revenues.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination and results of operations.
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal
requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our
business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business
combination and results of operations.
Past performance by Trimaran, including our
management team, may not be indicative of future performance of an investment in the Company.
Information regarding performance
by, or businesses associated with, Trimaran and its affiliates is presented for informational purposes only. Past performance by Trimaran,
including our management team, is not a guarantee either (i) of success with respect to any business combination we may consummate or
(ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical record
of Trimaran’s or our management team’s performance as indicative of our future performance of an investment in the company
or the returns the company will, or is likely to, generate going forward. Additionally, in the course of their respective careers, members
of our management team have been involved in businesses and transactions that were not successful. Our officers and directors have not
had experience with blank check companies or special purpose acquisition companies in the past.
Cyber incidents or attacks directed at us could result in information
theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
We are an emerging growth company within the
meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth
companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with
other public companies.
We are an “emerging
growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth
company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our
Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer
be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive
because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions,
the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities
and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an
emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may
make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Risks Relating to Change in Accounting Treatment
of Our Securities and Restatement of Our Previously Issued Financial Statements in Connection Therewith
Our warrants are accounted for as a liability and the change
in value of our warrants or any other similar derivative liabilities could have a material effect on our financial results.
On April 12, 2021, the
SEC’s Acting Director of the Division of Corporation Finance and Acting Chief Accountant together issued guidance regarding the
accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement
on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (the “SEC Guidance”).
Specifically, the SEC Guidance focused on certain settlement terms and provisions related to certain partial tender offers following
a business combination, which terms are similar to those contained in the warrant agreement governing our warrants. As a result of the
SEC Guidance, we reevaluated the accounting treatment of our 14,375,000 public warrants and 7,000,000 private placement warrants, and
concluded that the warrants should be classified as a liability measured at fair value, with changes in fair value each period reported
in earnings.
Subsequent to the completion
of the audit of our financial statements for the period ended December 31, 2020 and in light of the SEC Guidance, our management reevaluated
the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC
Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants,
and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s
common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant
require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based
on management’s reevaluation, our audit committee, in consultation with management and after discussion with our independent registered
public accounting firm, concluded that our warrants are not indexed to our common shares in the manner contemplated by ASC Section 815-40-15
because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based
on such reevaluation, our audit committee, in consultation with management and after discussion with our independent registered public
accounting firm, concluded the tender offer provision included in the warrant agreement fails the “classified in shareholders’
equity” criteria as contemplated by ASC Section 815-40-25. Based on the foregoing analysis, we should have classified the warrants
as derivative liabilities in our previously issued financial statements. Under this accounting treatment, we are required to measure
the fair value of the warrants at the end of each reporting period and recognize changes in the fair value from the prior period in our
operating results for the current period. As a result of the recurring fair value measurement of our warrants and any subsequent changes
in fair value from a prior period, our results of operations in our financial statements may fluctuate quarterly based on factors which
are outside of our control. Due to this recurring fair value measurement, we expect that we will recognize non-cash gains or losses on
our warrants each reporting period and that the amount of such gains or losses could be material.
We have identified a material weakness
in our internal control over financial reporting as of December 31, 2020. If we are unable to develop and maintain an effective system
of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which
may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Our
internal control over financial reporting are designed to provide reasonable assurance to our management and board of directors regarding
the preparation and fair presentation of published financial statements. A material weakness is a deficiency, or a combination of deficiencies,
in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or
interim financial statements will not be prevented, or detected and corrected on a timely basis.
Following the issuance
of the SEC Guidance, our audit committee, in consultation with our management and after discussions with our independent registered public
accounting firm, concluded that we should have classified our warrants as derivative liabilities in our previously issued financial statements,
and, for the purposes of properly reflecting such treatment in our financial statements, it was appropriate to restate our previously
issued audited financial statements as of and for the periods ended December 31, 2020 and 2019 (the “Restatement”). See “—Our
warrants are accounted for as a liability and the change in value of our derivative liabilities could have a material effect on our financial
results.” As part of such process, our management, including our principal executive officers and principal financial officer,
have evaluated the effectiveness of our internal control over financial reporting and concluded that we did not maintain effective internal
control over financial reporting as of December 31, 2020 because of a material weakness in our internal control over financial reporting
solely related to the accounting for the warrants we issued in connection with our Initial Public Offering and concurrent private placement.
To respond to this material weakness, we have devoted, and plan to continue to devote, effort and resources to the remediation and improvement
of our internal control over financial reporting. While we have processes to identify and apply applicable accounting requirements, we
plan to enhance these processes, including providing enhanced access to accounting literature and research materials and increased communication
among our personnel and third-party professionals with whom we consult regarding complex accounting applications. These elements of our
remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended
effects.
If the Celularity Business
Combination is not consummated and we identify any new material weaknesses in the future, any such newly identified material weakness
could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement
of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements
regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence
in our financial reporting and our stock price may decline as a result. If the Celularity Business Combination is not consummated, we
cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential
future material weaknesses. If the Celularity Business Combination is consummated, Celularity’s internal controls and procedures
over financial reporting will instead be established and maintained following the closing of the Celularity Business Combination, and
we can provide no assurance that Celularity’s internal controls and procedures over financial reporting will be effective.
We may face litigation and other risks
as a result of the material weakness in our internal control over financial reporting.
As a result of material
weakness described above, the Restatement, the change in accounting for the warrants, and other matters raised publicly by the SEC, we
face potential for litigation or other disputes which may include, among others, claims under federal and state securities laws, contractual
claims or other claims arising from the Restatement and material weaknesses in our internal control over financial reporting and the
preparation of our financial statements. As of the date of this Amendment, we have no knowledge of any such litigation or dispute. However,
we can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful
or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete
the proposed Cecularity Business Combination.