Item 1.
Business
BUSINESS
Overview
We
are a 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. True Wind Capital Management, L.P. a technology focused
private investment firm, referred herein as True Wind Capital, is our advisor and the advisor of True Wind Capital, L.P.
True
Wind Capital
True
Wind Capital is a San Francisco-based private equity firm managing $558 million as of December 31, 2019 that is focused on investing
in leading technology companies in the lower middle-market and middle-market with a broad mandate including software, IT services,
internet, semiconductors, industrial technology, and hardware. True Wind Capital is a value-added partner, providing support and
expertise that is rooted in its teams’ 75+ years of collective investing experience. True Wind Capital currently has a team
of thirteen full-time investment professionals with deep technology investing expertise.
We
are a portfolio investment held in True Wind Capital’s sole investment fund, True Wind Capital, L.P., which provided all
of the risk capital to fund our launch. As such, we have utilized True Wind Capital’s platform to provide complete access
to its team, deal prospects, and network, along with any necessary resources to aid in the identification, diligence, and operational
support of a target for the initial business combination.
True
Wind Capital’s principals, including our Co-Chairmen and Co-Chief Executive Officers, Mr. Adam H. Clammer and Mr. James
H. Greene, Jr., who are also the founding partners of True Wind Capital, have fiduciary responsibility to dedicate substantially
all their business time to the affairs and portfolio companies of its investment fund and, as a portfolio investment within True
Wind Capital’s fund, we should receive substantial time and support from the True Wind Capital platform.
Business
Combination
On
January 5, 2020, we entered into a Business Combination Agreement (the “Merger Agreement”) with BRP Hold 11, Inc.,
a Delaware corporation (“Blocker”), the Blocker’s sole stockholder (the “Blocker Holder”), Nebula
Parent Corp., a Delaware corporation (“ParentCo”), NBLA Merger Sub LLC, a Texas limited liability company (“Merger
Sub LLC”), NBLA Merger Sub Corp., a Delaware corporation (“Merger Sub Corp”), Open Lending, LLC, a Texas limited
liability company (“Open Lending”), and Shareholder Representative Services LLC, a Colorado limited liability company,
as the Securityholder Representative. Open Lending is a lending enablement platform for the automotive finance market powered
by proprietary data, advanced decisioning analytics, an innovative insurance structure and scaled distribution. The platform enables
near-prime consumers, approximately 50% of borrowers today, to finance their vehicles at more attractive rates when compared to
traditional lending alternatives, while presenting a similar risk profile to the lender as that of a prime borrower. The Merger
Agreement provides for each of the following transactions to occur in the following order: (i) Merger Sub Corp will merge with
and into the Company (the “First Merger”), with the Company surviving the First Merger as a wholly owned subsidiary
of ParentCo (the “NAC Surviving Company”); (ii) immediately following the First Merger and prior to the Blocker Contribution
(as defined below), Blocker shall redeem a specified number of shares of Blocker common stock in exchange for cash (the “Blocker
Redemption”); (iii) immediately following the Blocker Redemption, ParentCo will acquire, and the Blocker Holder will contribute
to ParentCo the remaining shares of Blocker common stock after giving effect to the Blocker Redemption (the “Blocker Contribution”)
such that, following the Blocker Contribution, Blocker will be a wholly-owned subsidiary of the ParentCo; (iv) immediately following
the Blocker Contribution, Merger Sub LLC will merge with and into Open Lending (the “Second Merger”), with Open Lending
surviving the Second Merger as a wholly-owned subsidiary of ParentCo (the “Surviving Company”); (v) immediately following
the Second Merger, Blocker will acquire, and ParentCo will contribute to Blocker all common units of the Surviving Company directly
held by ParentCo after the Second Merger; and (vi) the NAC Surviving Company will acquire and ParentCo will contribute to the
NAC Surviving Company the remaining shares of Blocker common stock after giving effect to the Blocker Redemption and the Blocker
Contribution (the “ParentCo Blocker Contribution”) such that, following the ParentCo Blocker Contribution, Blocker
shall be a wholly-owned subsidiary of the NAC Surviving Company (together with the other transactions related thereto, the “Proposed
Transactions”). Following the Proposed Transactions, it is expected that ParentCo’s common shares will be listed on
the Nasdaq Capital Market.
Consummation
of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including
the approval of the Proposed Transactions by the Company’s stockholders in accordance with the Company’s amended and
restated certificate of incorporation and the completion of a redemption offer whereby the Company will be providing its public
stockholders with the opportunity to redeem their shares of Class A common stock for cash equal to their pro rata share of the
aggregate amount on deposit in the Company’s trust account.
In
connection with the Proposed Transactions, we have obtained commitments from interested investors (each a “Subscriber”)
to purchase shares of Class A common stock, which will be converted into shares of common stock of ParentCo (the “ParentCo
Common Shares”) in connection with the closing of the Proposed Transaction (the “PIPE Shares”), for a purchase
price of $10.00 per share, in a private placement (the “PIPE”). Several fundamental investors have committed $200
million to participate in the transaction through the PIPE anchored by our sponsor. Our sponsor has agreed to subscribe for $85,000,000
worth of PIPE Shares for a purchase price of $10.00 per share. Certain offering related expenses are payable by us, including
customary fees payable to the placement agents, Deutsche Bank Securities and Goldman Sachs & Co., LLC. Such commitments are
being made by way of the Subscription Agreements, by and among us, each Subscriber, Open Lending and ParentCo. The purpose of
the sale of the PIPE Shares is to raise additional capital for use in connection with the Proposed Transactions and to meet the
minimum cash requirements provided in the Merger Agreement.
Contemporaneously
with the execution of the Merger Agreement, certain unitholders of Open Lending entered into a Company Support Agreement (the
“Company Support Agreement”), pursuant to which such unitholders agreed to approve the Merger Agreement and the Proposed
Transactions.
Contemporaneously
with the execution of the Merger Agreement, certain of our stockholders entered into the Investor Support Agreement, pursuant
to which, among other things, certain holders agreed (i) to approve the Merger Agreement and the Proposed Transactions; (ii)
not to redeem any shares held by such stockholders in connection with the Proposed Transactions and (iii) to tender any warrants
to purchase Class A common stock held by such stockholder to us for cash consideration of $1.50 per whole warrant and to vote
all such warrants held by such stockholder in favor of any amendment to the terms of such warrants proposed by us, including the
Warrant Amendment.
Contemporaneously
with the execution of the Merger Agreement, the holders of our founder shares (including our sponsor) entered into the Founder
Support Agreement, pursuant to which, among other things:
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Such
holders agreed to approve the Merger Agreement and the Proposed Transactions.
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Such
holders agreed to forfeit (without consideration) all warrants held by them to the Company.
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Our
sponsor agreed that to the extent the NAC Expenses, as defined in the Founder Support
Agreement, shall exceed an amount equal to $25,000,000 plus the amount of cash as of
the Reference Time, as defined in the Founder Support Agreement, held by the Company
without restriction outside of the Company’s trust account and any interest earned
on the amount of cash held inside the Company’s trust account (collectively, the
“NAC Expense Cap”), then, our sponsor shall, on the closing date of the transaction,
in its sole option, either (a) pay any such amount in excess of the NAC Expense Cap to
the Company in cash, by wire transfer of immediately available funds to the account designated
by the Company, or (b) forfeit to the Company (for no consideration) such number of founder
shares (valued at $10.00 per founder share) held by our sponsor that would, in the aggregate,
have a value equal to such amount in excess of the NAC Expense Cap; provided, that
if Sponsor shall elect to forfeit founder shares and the number of founder shares available
for forfeiture shall be insufficient to satisfy our sponsor’s obligations to satisfy
such excess NAC Expenses, then Sponsor shall, satisfy any such additional in cash on
the closing date of the transaction.
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Such
holders agreed to certain amendments to the lock up terms set forth in that certain letter
agreement, dated January 9, 2018, by and among the Company and such holders, pursuant
to which the lock up term will be extended for up to seven years following the closing
of the transaction for half the shares held by such holders, depending on the trading
price of the ParentCo Common Shares (and subject to forfeiture if such trading prices
are not reached).
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Such
holders waived any anti-dilution protections provided to holders of the founder shares
in the Company’s current certificate of incorporation.
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Such
holders will be issued up to 1,250,000 additional ParentCo Common Shares (the “Earn-Out
Shares”) as follows: (i) such holders will be entitled to an aggregate of 625,000
ParentCo Common Shares, if prior to or as of the second anniversary of the of the transaction,
the VWAP is greater than or equal to $12.00 over any 20 trading days within any 30-trading
day period; and (ii) such holders will be entitled to an aggregate of an additional
625,000 ParentCo Common Shares if, prior to or as of the second anniversary of the closing
of the transaction, the VWAP is greater than or equal to $14.00 over any 20 trading days
within any 30-trading day period. If a change of control of ParentCo occurs prior to
the second anniversary of the closing of the transaction, such holders will be entitled
to receive all unissued Earn-Out Shares prior to the consummation of such change of control.
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Additionally,
on January 9, 2020, the Company held a special meeting of stockholders (the “Meeting”). At the Meeting, our stockholders
approved an amendment (the “Charter Amendment”) to the Company’s amended and restated certificate of incorporation
to extend the date by which the Company has to consummate a business combination (the “Extension”) for an additional
five months, from January 12, 2020 to June 12, 2020. The purpose of the Charter Amendment is to allow the Company more time to
complete the Proposed Transactions. No shares of the Company’s common stock were redeemed in connection with the Extension.
The
Merger Agreement and related agreements are further described in the Form 8-K filed by the Company on January 6, 2020.
Other
than as specifically discussed, this report does not assume the closing of the Proposed Transactions.
Business
Strategy
Our
business strategy is to utilize True Wind Capital’s existing investment identification and evaluation platform to identify
and complete our initial business combination with a company that our management believes, with proper utilization of our network
and experience, has compelling potential for value creation through our involvement. Mr. Clammer and Mr. Greene, with the support
of the True Wind Capital team, have since our initial public offering leveraged their long-standing partnership, vast investment
experience, deep network and technology industry expertise to identify and generate attractive acquisition opportunities among
lower middle-market and middle-market technology companies with overall transaction values between $500 million and $2.5 billion.
To the extent the purchase price for any acquisition to be paid in cash exceeds the net proceeds available to us, we may issue
debt or equity to consummate the acquisition. Such additional financing may come in the form of bank financings or preferred equity,
common equity or debt offerings or a combination of the foregoing. We believe their experience and track record, along with True
Wind Capital’s disciplined direct sourcing and thematic research approach, are particularly differentiated, and will enable
us to successfully identify and execute an initial business combination. We have been leveraging True Wind Capital’s extensive
network of relationships, ranging from senior executives at public and private companies to financial advisory firms around the
globe, to assist in the identification of a target for the initial business combination. True Wind Capital intends to dedicate
its time and resources to conduct diligence in an effort to complete an initial business combination.
True
Wind Capital and our management team has experience in:
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Operating
companies, setting and changing strategies, and identifying, mentoring and recruiting exceptional talent;
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Developing
and growing companies, both organically and through strategic transactions and acquisitions, and expanding the product range
and geographic footprint of a number of target businesses;
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Investing
in leading private and public technology companies to accelerate their growth and maturation;
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Sourcing,
structuring, acquiring, and selling businesses;
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Accessing
the capital markets, including financing businesses and helping companies transition to public ownership; and
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Fostering
relationships with sellers, capital providers and target management teams.
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Market
Opportunity
We
intend to identify and acquire a business within the technology and technology-enabled services sectors with an overall transaction
value between $500 million and $2.5 billion. Further, we believe that the market landscape is both wide and deep, comprising over
6,000 potential target companies and divisions of large businesses across more than 300 independent, niche markets (defined as
individual subsectors with individual total addressable markets, market participants, industry trends, management teams, and companies)
within the technology industry in the United States alone. We believe that this large, fragmented ecosystem creates a compelling
opportunity for us to identify, build relationships with, and create opportunities to complete an initial business combination
with, very attractive companies. Additionally, we believe that technology has become, and will continue to be, a core component
of every economic sector. As technology continues to propagate across different functional departments within an organization,
the need for additional technology solutions will increase, expanding the addressable market for technology companies.
Acquisition
Criteria
We
will seek to identify companies that have compelling growth potential and a combination of the following characteristics. We will
use these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter our initial business combination
with a target business that does not meet these criteria and guidelines. We intend to acquire companies or assets that we believe
have the following attributes:
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Large
and growing market. We will focus on investments in industry segments that we believe demonstrate attractive long-term
growth prospects and reasonable overall size or potential;
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Attractive,
inherently profitable business with high operating leverage. We will seek to invest in companies that we believe possess
not only established business models and sustainable competitive advantages, but also inherently profitable unit economics;
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Strong
management teams. We will spend significant time assessing a company’s leadership and personnel and evaluating what
we can do to augment and/or upgrade the team over time if needed;
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Opportunity
for operational improvements. We will seek to identify businesses that we believe are stable but at an inflection point
and would benefit from our ability to drive improvements in the company’s processes, go-to-market strategy, product
or service offering, sales and marketing efforts, geographical presence and/or leadership team;
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Differentiated
products or services. We will evaluate metrics such as recurring revenues, product life cycle, cohort consistency, pricing
per product or customer, cross-sell success and churn rates to focus on businesses whose products or services are differentiated
or where we see an opportunity to create value by implementing best practices;
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Compelling
growth prospects. We view growth as an important driver of value and will seek companies whose growth potential can generate
meaningful upside;
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Minimal
technology risk. We will seek to invest in companies that have established market-tested product or service offerings;
and
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Appropriate
valuations. We will seek to be a disciplined and valuation-centric investor that will invest on terms that we believe
provide significant upside potential with limited downside risk.
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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 may deem relevant.
Our
Management Team
Our
management team is led by our Co-Chairmen and Co-Chief Executive Officers, Mr. Clammer and Mr. Greene, who are also the founding
partners of True Wind Capital, who have worked together for twenty five years and who, collectively, have more than 50 years of
private equity investing experience. We believe that they constitute one of the longest standing and most successful partnerships
in technology private equity investing. Prior to founding True Wind Capital, Mr. Clammer and Mr. Greene were founding partners
of the Kohlberg Kravis Roberts & Co. (“KKR”) Global Technology Group in 2004. At KKR, Mr. Clammer and Mr. Greene
played a major role in over 30 platform investments with total transaction values in excess of $75 billion and more than $15 billion
of invested equity, and were involved in investments across geographies, through a variety of different structures and amidst
diverse economic cycles. These investments included some of the largest and most complex private equity deals in the technology
industry. Success at this level requires the highest degree of diligence, financial and market analyses, process management, structuring
abilities, operational knowhow and investment acumen.
As
pioneers in the technology private equity industry, Mr. Clammer and Mr. Greene were required to build the KKR platform organically.
This included: (i) building an exceptional investment team; (ii) creating and fostering relationships with industry leaders and
bankers; (iii) formulating and executing new investment theses; (iv) developing and refining due diligence processes appropriate
for highly technical businesses and markets; and (v) building networks of operating executives and knowledgeable advisors to rely
on for investment input and portfolio management support. More recently, and without the benefit of the KKR brand, Mr. Clammer
and Mr. Greene launched True Wind Capital, creating another exceptional team and raising a $558 million first time fund. Holding
its final close in January 2017, True Wind Capital has already completed three control-stake and two minority-stake private equity
investments in both private and public technology companies to date.
Our
management team is supported by True Wind Capital’s team of investment professionals who each have meaningful technology-related
private equity investing experience and possess extensive experience in corporate finance, mergers and acquisitions, equity and
debt capital markets, strategic consulting, and operations. We believe that True Wind Capital’s operating expertise, transaction
experience, and relationships will provide us with a substantial number of attractive potential business combination targets.
The
past performance of our management team or of True Wind Capital 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 identify a suitable candidate for our initial business combination.
Our officers and directors have not had management experience with special purpose acquisition corporations in the past. You should
not rely on the historical record of our management’s performance as indicative of our future performance.
Initial
Business Combination
The
NASDAQ rules require that our initial business combination must occur with one or more target businesses that together have an
aggregate fair market value of at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions
and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.
If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain
an opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA,
or an independent accounting firm with respect to the satisfaction of such criteria. Our stockholders may not be provided with
a copy of such opinion, nor will they be able to rely on such opinion.
We
may, at our option, pursue an acquisition opportunity jointly with one or more entities affiliated with True Wind Capital and/or
one or more investors in funds managed by True Wind Capital, which we refer to as an “Affiliated Joint Acquisition.”
Any such parties may co-invest with us in the target business at the time of our initial business combination, or we could raise
additional proceeds to complete the acquisition by issuing to such parties a class of equity or equity-linked securities. We refer
to this potential future issuance, or a similar issuance to other specified purchasers, as a “specified future issuance”
throughout this prospectus. The amount and other terms and conditions of any such specified future issuance would be determined
at the time thereof. We are not obligated to make any specified future issuance and may determine not to do so. This is not an
offer for any specified future issuance. Pursuant to the anti-dilution provisions of our Class B common stock, any such specified
future issuance would result in an adjustment to the conversion ratio such that our initial stockholders and their permitted transferees,
if any, would retain their aggregate percentage ownership at 20% of the sum of the total number of all shares of common stock
outstanding plus all shares issued in the specified future issuance, unless the holders of a majority of the then-outstanding
shares of Class B common stock agreed to waive such adjustment with respect to the specified future issuance at the time thereof.
We cannot determine at this time whether a majority of the holders of our Class B common stock at the time of any such specified
future issuance would agree to waive such adjustment to the conversion ratio. If such adjustment is not waived, the specified
future issuance would not reduce the percentage ownership of holders of our Class B common stock, but would reduce the percentage
ownership of holders of our Class A common stock. If such adjustment is waived, the specified future issuance would reduce the
percentage ownership of holders of both classes of our common stock.
We
anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure
our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets
of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons,
including an Affiliated Joint Acquisition as described above. However, we will only complete such business combination if the
post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target or assets sufficient for the post-transaction company not to be required to register as an investment
company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company
owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business
combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange
for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target.
However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial
business combination could own less than a majority of our outstanding shares subsequent to our initial business combination.
If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction
company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of
net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based
on the aggregate value of all of the target businesses and we will treat the target businesses together as the initial business
combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Our
Acquisition Process
We
believe that conducting comprehensive due diligence on prospective investments is particularly important within the technology
industry. We have and will continue to utilize the diligence, rigor, and expertise of True Wind Capital’s platform to evaluate
potential targets’ strengths, weaknesses, and opportunities to identify the relative risk and return profile of any potential
target for our initial business combination. Given our management team’s extensive tenure investing in technology companies,
we are often familiar with the prospective target’s end-market, competitive landscape and business model.
In
evaluating an initial business combination, we conduct a thorough diligence review that will encompass, among other things, meetings
with incumbent management and employees, document reviews, inspection of facilities, financial analyses and technology reviews,
as well as a review of other information that will be made available to us.
We
are not prohibited from pursuing an initial business combination with a company that is affiliated with True Wind Capital, our
sponsor, our officers, or our directors, subject to certain approvals and consents. In the event we seek to complete our initial
business combination with a company that is affiliated with True Wind Capital, our sponsor, officers or directors, we, or a committee
of independent directors, will obtain an opinion from an independent investment banking firm which is a member of FINRA or an
independent accounting firm that our initial business combination is fair to us from a financial point of view.
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. In addition, we may, at our option, pursue an Affiliated Joint
Acquisition opportunity with an entity to which an officer or director has a fiduciary or contractual obligation. Any such entity
may co-invest with us in the target business at the time of our initial business combination, or we could raise additional proceeds
to complete the acquisition by making a specified future issuance to any such entity. 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.
Our
sponsor and officers have agreed not to become an officer or director of any other special purpose acquisition company with a
class of securities registered under the 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 June 12, 2020.
Status
as a Public Company
We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company,
we offer a target business an alternative to the traditional initial public offering through a merger or other business combination.
In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of
our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs
of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses
will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering.
In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts
that may not be present to the same extent in connection with a business combination with us.
Furthermore,
once a proposed business combination is completed, the target business will have effectively become public, whereas an initial
public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions,
which could delay or prevent the offering from occurring or could have negative valuation consequences. Once public, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent
with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new
customers and vendors and aid in attracting talented employees.
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other
public companies that are not “emerging growth companies” including, but not limited to, not being required to comply
with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory
vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors
find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of
our securities may be more volatile.
In
addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We
will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary
of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or
(c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held
by non-affiliates exceeds $700 million as of the 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
As
of December 31, 2019, we had funds available for a business combination in the amount of approximately $271.6 million, after payment
of $9,625,000 of deferred underwriting fees and before fees and expenses associated with our initial business combination. With
these funds we can 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 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, there can be no assurance that third party financing will be available
to us.
Significant
Activities Since Inception
On
January 12, 2018, the Company consummated its IPO of 27,500,000 units (the “Units”), including the partial exercise
of the underwriters’ 3,750,000 unit over-allotment option, of which 2,500,000 units were exercised (the “Over-Allotment
Units”; collectively with the Initial Units, the “Units”). Each Unit consists of one share of Class A common
stock, $0.0001 par value per share (“Class A Common Stock”), and one-third of one warrant (“Public Warrant”),
each whole warrant entitling the holder to purchase one share of 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 $275,000,000. As a result of the underwriters’ partial
exercise of the over-allotment option, the Company’s sponsor, Nebula Holdings, LLC (the “Sponsor”), forfeited
312,500 shares of Class B Common Stock. 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 5,000,000 warrants (“Placement Warrants”)
at a price of $1.50 per Placement Warrant, generating total proceeds of $7,500,000.
A
total of $275 million of the net proceeds from our initial public offering (including the partial over-allotment) and the
private placement with the sponsor were deposited in a trust account established for the benefit of the Company’s public
stockholders.
Our
units began trading on January 10, 2018 on the NASDAQ Capital Market under the symbol NEBU.U. Commencing on March 2, 2018, the
securities comprising the units began separate trading. The units, common stock, and warrants are trading on the NASDAQ Capital
Market under the symbols “NEBU.U,” “NEBU” and “NEBU.W,” respectively.
On
November 8, 2019, the Board appointed Rufina Adams as a Class III director of the Company, effective immediately.
On
January 5, 2020, the Company entered into the Merger Agreement. Please see the section of this report entitled “Business—Business
Combination” for additional information.
On
January 9, 2020, the Company held the Meeting at which stockholders approved the Charter Amendment to allow for the Extension
to provide the Company more time to complete the Proposed Transactions. No shares of the Company’s common stock were redeemed
in connection with the Extension.
Effecting
our Initial Business Combination
We
are not presently engaged in, and we will not engage in, any operations until we consummate our initial business combination.
We intend to complete our initial business combination using cash from the proceeds of our initial public offering and the private
placement of the private placement warrants, our capital stock, debt or a combination of these as the consideration to be paid
in our initial business combination. We may seek to complete our initial business combination with a company or business that
may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent
in such companies and businesses.
If
our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust
account are used for payment of the consideration in connection with our business combination or used for redemptions of 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 assets, 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 (which may include a specified future issuance), and we may complete our initial business combination
using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable
securities laws, we would expect to complete such financing only simultaneously with the completion of our business combination.
In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents
or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law,
we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately, including
pursuant to any specified future issuance, or through loans in connection with our initial business combination.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed
will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Sources
of Target Businesses
We
expect to receive a number of proprietary transaction opportunities to originate as a result of the business relationships, direct
outreach, and deal sourcing activities of True Wind Capital, our officers, and our directors. In addition to the proprietary deal
flow, we anticipate that target business candidates will continue to be brought to our attention from various unaffiliated sources,
including investment banking firms, consultants, accounting firms, private equity groups, large business enterprises, and other
market participants. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited
basis. True Wind Capital, our officers, and our directors, as well as their affiliates, also bring to our attention target business
candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions
they have, as well as attending trade shows or conventions. Some of our officers and directors may enter into employment or consulting
agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees
or arrangements will not be used as a criterion in our selection process of an acquisition candidate. In no event will our sponsor
or any of our existing officers or directors, or any entity with which they are affiliated, be paid any finder’s fee, consulting
fee or other compensation prior to, or for any services they render in order to effectuate, the completion of our initial business
combination (regardless of the type of transaction that it is).
We
are not prohibited from pursuing an initial business combination with a business combination target that is affiliated with True
Wind Capital, our sponsor, officers or directors or making the acquisition through a joint venture or other form of shared ownership
with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a business combination
target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an
opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that such an
initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion
in any other context. If any of our officers or directors becomes aware of a business combination opportunity that falls within
the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be
required to present such business combination opportunity to such entity prior to presenting such business combination opportunity
to us. Any such entity may co-invest with us in the target business at the time of our initial business combination, or we could
raise additional proceeds to complete the acquisition by making a specified future issuance to any such entity.
Lack
of Business Diversification
For
an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend
entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations
with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations
and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business
combination in a single industry. By completing our business combination with only a single entity, our lack of diversification
may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact
on the particular industry in which we operate after our initial business combination, and
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cause
us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited
Ability to Evaluate the Target’s Management Team
Although
we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting
our 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 or of our board, if any, in the target business cannot presently
be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with
us following our business combination, it is presently unknown if any of them will devote their full efforts to our affairs subsequent
to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business. The determination as to whether any members of our
board of directors will remain with the combined company will be made at the time of our initial business combination.
Following
a business combination, to the extent that we deem it necessary, we may seek to recruit additional managers to supplement the
incumbent management team 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
In
the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such
transactions. They will not make any such purchases when they are in possession of any material non-public information not disclosed
to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual
acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof
and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their
affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise
their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under
the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers
determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such
rules.
The
purpose of such purchases would be to (i) vote such shares in favor of the business combination and thereby increase the likelihood
of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement with a target
that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it
appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may
not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial
holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading
of our securities on a national securities exchange.
Our
sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor,
officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly
or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with
our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into
a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem
their shares for a pro rata share of the trust account or vote against the business combination. Our sponsor, officers, directors,
advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the
other federal securities laws.
Any
purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the
Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act.
Redemption
Rights for Public Stockholders upon Completion of our Initial Business Combination
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest
earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes and for
working capital purposes, divided by the number of then outstanding public shares, subject to the limitations described herein.
The amount in the trust account as of December 31, 2019 was $10.23 per public share. The per-share amount we will distribute to
investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive
their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion
of our business combination.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business
combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under
the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder
approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our
outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval.
If we structure a business combination transaction with a target company in a manner that requires stockholder approval, we will
not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We intend to conduct
redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by
law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. 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 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 that we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20
business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business
combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders
not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based
on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon completion of our initial business combination (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and
not complete the initial business combination.
If,
however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain
stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the
solicitation of proxies, and not pursuant to the tender offer rules, and
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file
proxy materials with the SEC.
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In
the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection
therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business
combination.
If
we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of
common stock voted are voted in favor of the business combination. A quorum for such meeting will consist of the holders present
in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all
outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward
this quorum and have agreed to vote their founder shares and any public shares purchased during or after our initial public offering
in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common
stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a
result, in addition to our initial stockholders’ founder shares, we would need 10,312,500 , or 37.5%, of the 27,500,000
public shares sold in our initial public offering to be voted in favor of a transaction (assuming all outstanding shares are voted)
in order to have our initial business combination approved. We intend to give approximately 30 days (but not less than 10 days
nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our initial
business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more
likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares
irrespective of whether they vote for or against the proposed transaction.
Our
amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. For example, the proposed business combination may require: (i) cash consideration to be paid to the target or its
owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention
of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate
cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption
plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate
amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of Class A
common stock submitted for redemption will be returned to the holders thereof.
Limitation
on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding
the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection
with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides
that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the
“Excess Shares.” We believe this restriction will discourage stockholders from accumulating large blocks of shares,
and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination
as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or
on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold
in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased
by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’
ability to redeem no more than 15% of the shares sold in our initial public offering, we believe we will limit the ability of
a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly
in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. However, our amended and restated certificate of incorporation does not restrict our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our business combination.
Tendering
Stock Certificates in Connection with a Tender Offer or Redemption Rights
We
may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their
shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in
the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal
to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent
electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s
option. The tender offer or proxy materials, as applicable, 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 tender offer materials until the close of the tender
offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable,
to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is
advisable for stockholders to use electronic delivery of their public shares.
There
is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering
them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker
whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not
we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of
exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The
foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection
with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote
on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on
the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was
approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership.
As a result, the stockholder then had an “option window” after the completion of the business combination during which
he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he
or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation.
As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would
become “option” rights surviving past the completion of the business combination until the redeeming holder delivered
its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s
election to redeem is irrevocable once the business combination is approved.
Any
request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials
or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share
delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable
date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically
or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their
shares will be distributed promptly after the completion of our business combination.
If
our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise
their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In
such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If
our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different
target until June 12, 2020.
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 June 12, 2020 to complete our initial
business combination. If we are unable to complete our business combination by June 12, 2020, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income
taxes (less up to $500,000 of interest released to us for working capital purposes, which was withdrawn by us in December 2019,
and $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be
no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our business combination by June 12, 2020.
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 June 12, 2020. However, if our sponsor, officers or directors acquire public shares after our
initial public offering, they will be entitled to liquidating distributions from the trust account with respect to such public
shares if we fail to complete our initial business combination by June 12, 2020.
Our
sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation that would 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 June 12, 2020, unless we provide our public
stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds
held in the trust account and not previously released to us to pay our franchise and income taxes and for working capital purposes
divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would
cause our net tangible assets to be less than $5,000,001 upon completion of our initial business combination (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.
We
expect to use the amounts held outside the trust account (approximately $1.3 million as of December 31, 2019) to pay for all costs
and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, although we cannot assure
you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses
associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not
required to pay franchise and income taxes on interest income earned on the trust account balance, we may request the trustee
to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If
we were to expend all of the net proceeds of our initial public offering and the sale of the private placement warrants, other
than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account,
the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited
in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims
of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not
be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against
us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These
claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend
to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’
claims.
Although
we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other
entities with which we do business execute agreements with us waiving any right, title, interest and claim of any kind in or to
any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute
such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account
including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims
challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies
held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into
an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement
would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third
party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or
in cases where management is unable to find a service provider willing to execute a waiver.
In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our
independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public share or
(ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due
to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as
to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor
will not be responsible to the extent of any liability for such third party claims We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company. We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you
that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully made against the
trust account, the funds available for our initial business combination and redemptions could be reduced to less than $10.00 per
public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers will indemnify us for claims by
third parties including, without limitation, claims by vendors and prospective target businesses.
In
the event that the proceeds in the trust account are reduced below (i) $10.00 per public share or (ii) such lesser amount per
public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the
trust assets, in each case net of the amount of interest which may be withdrawn to pay 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
will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring
to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities
with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held
in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of our initial
public offering against certain liabilities, including liabilities under the Securities Act. We may have access to amounts held
outside of the trust account (approximately $1.3 million as of December 31, 2019) to pay any such potential claims (including
costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000)
but these amounts may be spent on expenses incurred as a result of being a public company or due diligence expenses on prospective
business combination candidates. In the event that we liquidate and it is subsequently determined that the reserve for claims
and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our business combination, by June 12, 2020, may be considered a liquidating
distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended
to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party
claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and
an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or
the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of
the dissolution.
Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our business combination by June 12, 2020, is not considered a liquidating distribution under Delaware
law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations
for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the
case of a liquidating distribution. If we are unable to complete our business combination by June 12, 2020, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our
franchise and income taxes (less up to $500,000 of interest released to us for working capital purposes, which was withdrawn by
us in December 2019, and $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 June 12, 2020 and,
therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the
third anniversary of such date.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us
at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained
in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective
target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made
against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust
account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account
are not reduced below (i) $10.00 per public share or (ii) such lesser amount per public share held in the trust account as of
the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount
of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of our initial
public offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver
is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such
third-party claims.
If
we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held
in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to
the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the
trust account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we
file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions
received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential
transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts
received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders
from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against
us for these reasons.
Our
public stockholders will be entitled to receive funds from the trust account only (i) in the event of the redemption of our public
shares if we do not complete our business combination by June 12, 2020, subject to applicable law, (ii) in connection with a stockholder
vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our
obligation to redeem 100% of our public shares if we have not consummated an initial business combination by June 12, 2020 or
(iii) our completion of an initial business combination, and then only in connection with those shares of our common stock that
such stockholder properly elected to redeem, subject to the limitations described in this prospectus. In no other circumstances
will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval
in connection with our initial business combination, a stockholder’s voting in connection with the business combination
alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account.
Such stockholder must have also exercised its redemption rights as described above.
Competition
In
identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from
other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged
buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors
possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will
be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition
of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption
rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future
dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place
us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We
currently have three executive officers. True Wind Capital’s principals, including our Co-Chief Executive Officers Mr. Clammer
and Mr. Greene, have fiduciary responsibility to dedicate substantially all their business time to the affairs and portfolio companies
of its investment fund and, as a portfolio investment within True Wind Capital’s fund, we should receive substantial time
and support from the True Wind Capital platform. However, this responsibility does not require any of our officers or directors
to commit his or her full time to our affairs in particular and, accordingly, each of them may have conflicts of interest in allocating
his or her time among various business activities.
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 will contain financial statements audited and reported on by our independent registered public accountants.
We
will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials
or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these
financial statements will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business
selected by us as a potential acquisition candidate will have financial statements prepared in accordance with GAAP or that the
potential target business will be able to prepare its financial statements in accordance with GAAP. To the extent that this requirement
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition
candidates, we do not believe that this limitation will be material.
We
are required to evaluate our internal control procedures for the fiscal year ending December 31, 2019 as required by the Sarbanes-Oxley
Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer 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 acquisition.
Item 1A.
Risk Factors
RISK
FACTORS
You
should carefully consider all of the risks described below, together with the other information contained in this report, including
the financial statements. If any of the following risks occur, our business, financial condition or operating results may be materially
and adversely affected. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your
own investigation with respect to us and our business. For risk factors related to Open Lending and the Proposed Transactions,
please review the preliminary and definitive proxy statements to be filed by the Company.
We
are an early stage company with limited operating history and no revenues, and you have little basis on which to evaluate our
ability to achieve our business objective.
We
are an early stage company with limited operating results and no revenues. Because we lack significant operating history, you
have little basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination
with one or more target businesses. We may be unable to complete our business combination. If we fail to complete our business
combination, we will never generate any operating revenues.
Our
public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even though a majority of our public stockholders do not support such a combination.
We
may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder
approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or
other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval of a proposed business
combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion,
and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would
otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders
of a majority of our public shares do not approve of the business combination we complete.
If
we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such
initial business combination, regardless of how our public stockholders vote.
Our
initial stockholders have agreed to vote their founder shares, as well as any public shares purchased after our initial public
offering, in favor of our initial business combination. Our initial stockholder own shares representing 20% of our outstanding
shares of common stock as of the date of this report. As a result, in addition to our initial stockholders’ founder shares,
we would need 10,312,500, or 37.5%, of the 27,500,000 public shares sold in our initial public offering to be voted in favor of
a transaction (assuming all outstanding shares are voted) in order to have our initial business combination approved. Accordingly,
if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval
will be received than would be the case if our initial stockholders agreed to vote their founder shares in accordance with the
majority of the votes cast by our public stockholders.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek stockholder approval of the business combination.
You
may not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board
of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right
or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, if we do not seek stockholder
approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to
exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender
offer documents mailed to our public stockholders in which we describe our initial business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon completion of our initial business combination (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less
than $5,000,001 upon completion of our initial business combination or such greater amount necessary to satisfy a closing condition
as described above, we would not proceed with such redemption and the related business combination and may instead search for
an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a business combination transaction with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust
account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion
of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number
of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater
portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount
of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in
connection with a business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption
rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held
by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your stock.
If
our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would 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 a business combination and may decrease our ability to conduct due diligence on potential business
combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination
on terms that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination by June 12, 2020. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business,
we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer
to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all
operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public
stockholders may only receive $10.23 per share (as of December 31, 2019), 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 June 12,
2020. We may not be able to find a suitable target business and complete our initial business combination within such time period.
Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in
the capital and debt markets and the other risks described herein. If we have not completed our initial business combination within
such time period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not
previously released to us to pay our franchise and income taxes (less up to $500,000 of interest released to us for working capital
purposes, which was withdrawn by us in December 2019, and $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 $10.23 per share based on the balance
of our trust account (as of December 31, 2019), and our warrants will expire worthless.
If
we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates
may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce
the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares
in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such
stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not
to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares
in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such
selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could
be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval
of the business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would
otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our Class A common stock and the number of beneficial
holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading
of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business
combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as
applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders
or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date
set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote
on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to
the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares
may not be redeemed. See the section of this report entitled “Business—Redemption Rights for Public Stockholders upon
Completion of our Initial Business Combination—Tendering Stock Certificates in Connection with a Tender Offer or Redemption
Rights.”
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 our common stock that such stockholder properly
elected to redeem, subject to the limitations described in this prospectus, (ii) the redemption of any public shares properly
submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation 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 June
12, 2020 and (iii) the redemption of our public shares if we are unable to complete an initial business combination by June 12,
2020, subject to applicable law and as further described herein. In addition, if we are unable to complete an initial business
combination by June 12, 2020 for any reason, compliance with Delaware law may require that we submit a plan of dissolution to
our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case,
public stockholders may be forced to wait beyond June 12, 2020 before they receive funds from our trust account. In no other circumstances
will a public stockholder have any right or interest of any kind in the trust account. Accordingly, to liquidate your investment,
you may be forced to sell your public shares or warrants, potentially at a loss.
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
units, Class A common stock and warrants are listed on NASDAQ. We cannot assure you that our securities will continue to be listed
on NASDAQ in the future or prior to our initial business combination. In order to continue listing our securities on NASDAQ prior
to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must
maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities
(generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate
compliance with NASDAQ’s initial listing requirements, which are more rigorous than NASDAQ’s continued listing requirements,
in order to continue to maintain the listing of our securities on NASDAQ. For instance, our stock price would generally be required
to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would
be required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a
market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements
at that time
If
NASDAQ delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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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”. Since our units, Class A common stock
and warrants are listed on NASDAQ, they 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.
Our
stockholders 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 selected, we may be deemed to be a “blank check”
company under the United States securities laws. However, because we had net tangible assets in excess of $5,000,000 at the time
of our initial public offering, we are exempt from rules promulgated by the SEC to protect investors in blank check companies,
such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things,
this means our securities are tradable and we have a longer period of time to complete our business combination than do companies
subject to Rule 419. Moreover that rule would prohibit the release of any interest earned on funds held in the trust account to
us unless and until the funds in the trust account were released to us in connection with our completion of an initial business
combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you
will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a
public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in
concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the
“Excess Shares.” However, our amended and restated certificate of incorporation does not restrict our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem
the Excess Shares will reduce your influence over our ability to complete our business combination and you could suffer a material
loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption
distributions with respect to the Excess Shares if we complete our business combination. And as a result, you will continue to
hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open
market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.23 per share] (as of December 31, 2019) on our redemption of our public shares, or less than
such amount in certain circumstances, and our warrants will expire worthless.
We
have encountered intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of 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 will be limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses.
Furthermore,
because we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection
with our initial business combination, target companies will be aware that this may reduce the resources available to us for our
initial business combination. This may place us at a competitive disadvantage in successfully negotiating a business combination.
If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.23 per
share (as of December 31, 2019) on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances,
our public stockholders may receive less than $10.00 per share upon our liquidation.
If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account
are insufficient to allow us to operate until June 12, 2020, we may be unable to complete our initial business combination, in
which case our public stockholders may only receive $10.23 per share (as of December 31, 2019), or less than such amount in certain
circumstances, and our warrants will expire worthless.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until June 12, 2020, assuming
that our initial business combination is not completed during that time. We cannot assure you that, the funds available to us
outside of the trust account will be sufficient to allow us to operate until June 12, 2020. We plan to use a portion of the funds
available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of
the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements
designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable
to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention
to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a
target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.23 per share (as of December
31, 2019) on the liquidation of our trust account and our warrants will expire worthless.
Funds
available to us outside of the trust account could limit the amount available to fund our search for a target business or businesses
and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search
for a business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
As
of December 31, 2019, we had approximately $1.3 million held outside the trust account that is available to us to fund working
capital requirements. If we are required to seek additional capital, we would need to withdraw interest from the trust account
as described elsewhere in this prospectus (i.e. for our franchise and income taxes and for working capital) and/or or borrow funds
from our sponsor, management team or other third parties to operate, or we 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. 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
$10.23 per share (as of December 31, 2019) on our redemption of our public shares, and our warrants will expire worthless.
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. Even though these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In
addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
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 have sought and will continue to seek to have all vendors,
service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account
for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements
they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement,
breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in
each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account.
If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management
will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has
not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to
us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less attractive
to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential target
businesses that we might pursue.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide
for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially
held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and to the
extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have
discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (i) $10.00 per public
share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account
due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes. This
liability will not apply with respect to any claims by a third party who executed a waiver of any and all rights to seek access
to the trust account and except as to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed
to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third
party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations
and believe that our sponsor’s only assets are securities of our company. We have not asked our sponsor to reserve for such
indemnification obligations. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a
result, if any such claims were successfully made against the trust account, the funds available for our initial business combination
and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial
business combination, and you would receive such lesser amount per share in connection with any redemption of your public shares.
None of our officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
Our
independent directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the
amount of funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share or (ii) such lesser
amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is
unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable
or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce
these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders
may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and
our board may be exposed to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under
applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors
may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself
and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities, each of which may make it difficult for us to complete our business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for
the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to
buy unrelated businesses or assets or to be a passive investor.
We
do not believe that our principal activities will subject us to the Investment Company Act. To this end, the proceeds held in
the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16)
of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions under
Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant
to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of
the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term
(rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being
deemed an “investment company” within the meaning of the Investment Company Act. The trust account is intended as
a holding place for funds pending the earliest to occur of: (i) the completion of our primary business objective, which is a business
combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended
and restated certificate of incorporation 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 June 12, 2020; or (iii) absent a business combination, our return of
the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest
the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject
to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which
we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial
business combination, our public stockholders may receive only approximately $10.23 per share (as of December 31, 2019) on the
liquidation of our trust account and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and
results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from
time to time and those changes could have a material adverse effect on our business, investments and results of operations. In
addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect
on our business and results of operations.
Our
stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
Under
the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption
of our public shares, in the event we do not complete our initial business combination by June 12, 2020, 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 June 12, 2020
in the event we do not complete our business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because
we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us
at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against
us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company,
and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise
would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution
complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited
to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability
of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third
anniversary of such date. Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon
the redemption of our public shares in the event we do not complete our initial business combination by June 12, 2020 is not considered
a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section
174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidating distribution.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus
precluding such investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants
to expire worthless.
We
have not registered the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any
state securities laws at this time. However, under the terms of the warrant agreement, we will use our reasonable best efforts
to file, and within 60 business days following our initial business combination to have declared effective, a registration statement
under the Securities Act covering such shares and 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 above,
if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that
it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option,
require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section
3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration
statement, but we will be required to use 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. If the issuance of the
shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder
of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such
event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for
the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our
redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all
applicable state securities laws.
The
grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination,
and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant
to the 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 their founder shares, after those shares convert to our
Class A common stock at the time of our initial business combination. In addition, holders of our private placement warrants and
their permitted transferees can demand that we register the private placement warrants and the Class A common stock issuable upon
exercise of the private placement warrants, and holders of warrants that may be issued upon conversion of working capital loans
may demand that we register such warrants or the 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 shareholders
of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset
the negative impact on the market price of our Class A common stock that is expected when the common stock owned by our initial
stockholders, holders of our private placement warrants or holders of our working capital loans or their respective permitted
transferees are registered.
Because
we are not limited to a particular industry, sector or any specific target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’ operations.
Although
we have focused our search for a target business in the technology industry, we may seek to complete a business combination with
an operating company in any industry or sector. However, we will not, under our amended and restated certificate of incorporation,
be permitted to complete our business combination with another blank check company or similar company with nominal operations.
To the extent we complete our business combination, we may be affected by numerous risks inherent in the business operations with
which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of
revenues or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all 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 the business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Past
performance by True Wind Capital, 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, True Wind Capital and its affiliates is presented for informational purposes
only. Past performance by True Wind Capital, 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. Our officers and directors did not have management experience with special purpose acquisition corporations prior
to our initial public offering. You should not rely on the historical record of True Wind Capital’s or our management team’s
performance as indicative of our future performance of an investment in us or the returns we will, or are likely to, generate
going forward. Furthermore, an investment in us is not an investment in True Wind Capital.
We
may seek acquisition opportunities in industries or sectors which may or may not be outside of our management’s area of
expertise.
We
will consider a business combination outside of our management’s area of expertise if a business combination candidate is
presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our
management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you
that we will adequately ascertain or assess all the significant risk factors. We also cannot assure you that an investment in
our securities will not ultimately prove to be less favorable than a direct investment, if an opportunity were available, in a
business combination candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information
contained in this report regarding the areas of our management’s expertise would not be relevant to an understanding of
the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all the significant
risk factors. Accordingly, any stockholders who choose to remain stockholders following our business combination could suffer
a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these criteria and 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 $10.23 per share (as of December 31, 2019), or less in certain circumstances, on the liquidation of
our trust account and our warrants will expire worthless.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings, which could subject us to volatile revenues or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with an early stage company, 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 investing in a business without a proven business model and with limited historical
financial data, 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 the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these
risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely
impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our
company from a financial point of view.
Unless
we complete our business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that
is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion
of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of
the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute
the interest of our stockholders and likely present other risks.
Our
amended and restated certificate of incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock,
par value $0.0001 per share, 10,000,000 shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred
stock, par value $0.0001 per share. As of February 14, 2020, there are 72,500,000 and 3,125,000 authorized but unissued shares
of Class A common stock and Class B common stock, respectively, available for issuance, which amount does not take into account
the shares of Class A common stock reserved for issuance upon exercise of any outstanding warrants or the shares of Class A common
stock issuable upon conversion of Class B common stock. There are no shares of preferred stock issued and currently 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 in the prospectus for our initial public offering, 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
(including pursuant to a specified future issuance) 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. The issuance of additional shares of common or preferred stock:
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may
significantly dilute the equity interest of investors in our initial public offering;
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may
subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common
stock;
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could
cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of
our present officers and directors; and
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may
adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.23 per share (as of December 31, 2019), or less than such amount in certain circumstances,
on the liquidation of our trust account and our warrants will expire worthless.
The
investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments requires substantial management time and attention and substantial costs for accountants, attorneys
and others. The cost incurred up to the point that we decide not to complete a specific initial business combination 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 $10.23 per share (as of December 31, 2019) on the liquidation of our trust account and our warrants will expire
worthless.
Our
ability to successfully complete our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of members of our management team, some of whom may join us following our initial business combination. The loss of
such people could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully complete our business combination is dependent upon the efforts of members of our management team. The
role of members of our management team in the target business, however, cannot presently be ascertained. Although some members
of our management team may remain with the target business in senior management or advisory positions following our business combination,
it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize
any individuals we engage after our initial business combination, we cannot assure you that our assessment of these individuals
will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC,
which could cause us to have to expend time and resources helping them become familiar with such requirements.
Members
of our management team may negotiate employment or consulting agreements with a target business in connection with a particular
business combination. These agreements may provide for them to receive compensation following our business combination and as
a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Members
of our management team may be able to remain with the company after the completion of our business combination only if they are
able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target
business. However, we believe the ability of such individuals to remain with us after the completion of our business combination
will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination.
There is no certainty, however, that any members of our management team will remain with us after the completion of our business
combination. We cannot assure you that any members of our management team will remain in senior management or advisory positions
with us. The determination as to whether any members of our management team will remain with us will be made at the time of our
initial business combination.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s
management team will remain associated with the acquisition candidate following our initial business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may complete 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 business combination could suffer a reduction in the value of
their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Our
officers and directors will allocate their time to other businesses, thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete
our initial business combination.
True
Wind Capital’s principals, including our Co-Chief Executive Officers Mr. Clammer and Mr. Greene, have fiduciary responsibility
to dedicate substantially all their business time to the affairs and portfolio companies of its investment fund and, as a portfolio
investment within True Wind Capital’s fund, we should receive substantial time and support from the True Wind Capital platform.
However, this responsibility does not require any of our officers or directors to commit his or her full time to our affairs in
particular, which may result in a conflict of interest in allocating their time between our operations and our search for a business
combination and their other businesses, including other business endeavors for which he or she may be entitled to substantial
compensation. We do not intend to have any full-time employees prior to the completion of our initial business combination. In
addition, certain of our officers and directors are employed by or affiliated with True Wind Capital, which makes investments
in securities or other interests of or relating to companies in industries we may target for our initial business combination.
Our independent directors also serve as officers or board members for other entities. If our officers’ and directors’
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment
levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our ability to complete
our initial business combination.
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 intend 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.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities in the future 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.
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 (subject to certain approvals and consents) we may enter into a business combination
with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so, or
we may acquire a target business through an Affiliated Joint Acquisition with one or more affiliates of True Wind Capital and/or
one or more investors in funds managed by True Wind Capital. We do not have a policy that expressly prohibits any such persons
from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities
may have a conflict between their interests and ours.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our sponsor, officers or directors. Our directors also serve as officers and board members for other entities.
Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue
such a transaction if we determined that such affiliated entity met our criteria for a business combination and such transaction
was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment
banking firm that is a member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial
point of view of a business combination with one or more domestic or international businesses affiliated with our officers, directors
or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may
not be as advantageous to our public stockholders as they would be absent any conflicts of interest. In order to satisfy applicable
regulatory or other legal requirements applicable to an Affiliated Joint Acquisition, our business combination may be effected
on less favorable terms than otherwise would apply if the business combination were not an Affiliated Joint Acquisition.
Moreover,
we may, at our option, pursue an Affiliated Joint Acquisition opportunity with an entity affiliated with True Wind Capital and/or
one or more investors in funds managed by True Wind Capital. Any such parties may co-invest with us in the target business at
the time of our initial business combination, or we could raise additional proceeds to complete the acquisition by making a specified
future issuance to any such parties.
Since
our sponsor, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business
combination.
As
of the date of this report, our sponsor and independent directors own an aggregate of 6,875,000 shares of Class B common stock,
which founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has purchased
an aggregate of 5,000,000 warrants each exercisable for one share of our Class A common stock at $11.50 per share, which will
also be worthless if we do not complete a business combination. Holders of founder shares have agreed (A) to vote any shares owned
by them in favor of any proposed business combination and (B) not to redeem any founder shares in connection with a stockholder
vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our
sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation
in identifying and selecting a target business combination, completing an initial business combination and influencing the operation
of the business following the initial business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
We
may choose to incur substantial debt to complete our business combination. We have agreed that we will not incur any indebtedness
unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in
the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account.
Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our
debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our
inability to pay dividends on our common stock;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund
other general corporate purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government
regulation;
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and
execution of our strategy; and
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other
disadvantages compared to our competitors who have less debt.
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We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private
placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products
or services. This lack of diversification may negatively impact our operations and profitability.
As
of December 31, 2019, $281.2 million was available in our trust account for completing our initial business combination and pay
related fees and expenses (which includes up to approximately $9,625,000 for the payment of deferred underwriting commissions).
We may complete our business combination with a single target business or multiple target businesses simultaneously or within
a short period of time. However, we may not be able to complete our business combination with more than one target business because
of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if
they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack
of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able
to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which
may have the resources to complete several business combinations in different industries or different areas of a single industry.
In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly, the prospects
for our success may be:
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solely
dependent upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products, processes or services.
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This
lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may
have a substantial adverse impact upon the particular industry in which we may operate subsequent to our business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to complete 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 a business combination
with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination. We 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
may structure a business combination so that the post-transaction company in which our public stockholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if
the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target sufficient for the post-transaction company not to be required to register as an investment company
under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the
business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares
of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100%
interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders
immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such
transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or
group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely
that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon loss
of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our stockholders do not agree.
Our
amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no
event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon completion
of our initial business combination (such that we are not subject to the SEC’s “penny stock” rules). As a result,
we may be able to complete our business combination even though a substantial majority of our public stockholders do not agree
with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and
do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into privately
negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the
aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for
redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed
the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of
Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate
business combination.
In
order to complete our initial business combination, we may seek to amend our amended and restated certificate of incorporation
or other governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete our initial
business combination but that our stockholders or warrant holders may not support.
In
order to complete a business combination, blank check companies have, in the recent past, amended various provisions of their
charters and governing instruments, including their warrant agreement. For example, blank check companies have amended the definition
of business combination, increased redemption thresholds, changed industry focus and, with respect to their warrants, amended
their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you that we
will not seek to amend our charter or other governing instruments or change our industry focus in order to complete our initial
business combination.
The
provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and
corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval
of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It
may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate
the completion of an initial business combination that some of our stockholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-business combination activity, without approval by a certain percentage of the company’s
stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s
public stockholders. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business
combination activity (including the requirement to deposit proceeds of our initial public offering and the private placement of
warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights
to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock entitled to vote
thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended
if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate
of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to
applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities that can vote on
amendments to our amended and restated certificate of incorporation or in our initial business combination. 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-business combination
behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination
with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate
of incorporation.
Our
sponsor, officers and directors have agreed, pursuant to a letter agreement with us, that they will not propose any amendment
to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination by June 12, 2020, 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 (which interest
shall be net of taxes payable and working capital amounts released to us), 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.
If
the net proceeds of our initial public offering and the sale of the private placement warrants prove to be insufficient, either
because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business,
the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with
our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure
you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction
or abandon that particular business combination and seek an alternative target business candidate. If we are unable to complete
our initial business combination, our public stockholders may receive only approximately $10.00 per share plus any pro rata interest
earned on the funds held in the trust account (and not previously released to us to pay our franchise and income taxes or for
working capital purposes) on the liquidation of our trust account and our warrants will expire worthless. In addition, even if
we do not need additional financing to complete our business combination, we may require such financing to fund the operations
or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued
development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing
to us in connection with or after our initial business combination. If we are unable to complete our initial business combination,
our public stockholders may only receive approximately $10.23 (as of December 31, 2019) 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 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 certain other major corporate transactions. If our initial stockholders purchase
any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control.
Factors that would be considered in making such additional purchases would include consideration of the current trading price
of our Class A common stock. In addition, our board of directors, whose members were elected by our initial stockholders, is and
will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors
being elected in each year. 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 business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased,
the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant
could be decreased, all without your approval.
Our
warrants are issued in registered form under a warrant agreement between American Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then
outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the
consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments
to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period
or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem 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 exercise our redemption
right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a
time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might
otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants
are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement
warrants will be redeemable by us so long as they are held by 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 complete our business combination.
We
issued warrants to purchase 9,166,667 shares of our Class A common stock, at a price of $11.50 per share (subject to adjustment
as provided herein), as part of the units sold in our initial public offering and simultaneously with the closing of our initial
public offering, we issued private placement warrants to purchase an aggregate of 5,000,000 shares of Class A common stock at
a price of $11.50 per share. Our initial stockholders currently own 6,875,000 founder shares. The founder shares are convertible
into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth in our amended and restated articles
of incorporation. 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 $1.50 per warrant at the option of the lender. Such warrants would be identical to the private
placement warrants, including as to exercise price, exercisability and exercise period.
To
the extent we issue shares of Class A common stock to complete a business combination, the potential for the issuance of a substantial
number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less
attractive acquisition vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares
of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the business combination.
Therefore, our warrants and founder shares may make it more difficult to complete a business combination or increase the cost
of acquiring the target business.
The
private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that,
so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (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.
A
market for our securities may not fully develop or be sustained, 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 not be sustained. You may be unable to sell your securities
unless a market can be fully developed and sustained.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include target historical and/or pro forma financial statement disclosure. 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 financial statements in accordance with federal proxy
rules and complete our initial business combination within the prescribed time frame.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make
it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds
$700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following
December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our
securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading
prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We
have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has
different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard
at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accountant standards used.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to complete our initial business combination, require
substantial financial and management resources, and increase the time and costs of completing an acquisition.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with this Annual
Report on Form 10-K. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required
to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are
a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target company with which we seek to complete our business combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
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.
Provisions
in our amended and restated certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against
our directors and officers.
Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against directors, officers and employees 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 such suit
will be deemed to have consented to service of process on such stockholder’s counsel. This provision may have the effect
of discouraging lawsuits against our directors and officers.
If
we complete 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 complete our initial business combination with a company with operations or opportunities outside of the United States, we
would be subject to any special considerations or risks associated with companies operating in an international setting, including
any of the following:
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higher
costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal
requirements of overseas markets;
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rules
and regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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longer
payment cycles and challenges in collecting accounts receivable;
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tax
issues, such as tax law changes and variations in tax laws as compared to the United States;
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currency
fluctuations and exchange controls;
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cultural
and language differences;
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employment
regulations;
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crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration
of political relations with the United States; and
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government
appropriations of assets.
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We
may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may
adversely impact our results of operations and financial condition.
There
are risks related to the technology industry to which we may be subject.
Business
combinations with companies with operations in the technology industry entail special considerations and risks. If we are successful
in completing a business combination with a target business with operations in the technology industry, we will be subject to,
and possibly adversely affected by, the following risks:
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if
we do not develop successful new products or improve existing ones, our business will suffer;
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we
may invest in new lines of business that could fail to attract or retain users or generate revenue;
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we
will face significant competition and if we are not able to maintain or improve our market share, our business could suffer;
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the
loss of one or more members of our management team, or our failure to attract and retain other highly qualified personnel
in the future, could seriously harm our business;
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if
our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users’ ability to
access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services
altogether, which could seriously harm our business;
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mobile
malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm
our business and reputation;
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if
we are unable to successfully grow our user base and further monetize our products, our business will suffer;
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if
we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished,
and our business may be seriously harmed;
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we
may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs
or require us to change our business practices in a way that could seriously harm our business; and
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components
used in our products may fail as a result of a manufacturing, design, or other defect over which we have no control, and render
our devices inoperable.
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Any
of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying
prospective target businesses will not be limited to the technology industry. Accordingly, if we acquire a target business in
another industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry
in which we operate or target business which we acquire, none of which can be presently ascertained.