Overview
We are a blank check company formed as a
Delaware corporation for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses, which we refer to throughout this Report as our initial business combination.
We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale
of private placement warrants, our capital stock, debt or a combination of cash, stock and debt.
We seek to acquire and operate a business
in the consumer industry and we believe that our management team is well-suited to identify opportunities which have the potential
to generate attractive risk-adjusted returns for our stockholders. However, we are not limited to this industry, and we may pursue
a business combination opportunity in any business or industry we choose, including one outside of the United States.
Our executives have proven track records
in identifying undervalued companies and cultivating strategies to maximize their operating results and market potential, thereby
generating value for stockholders. Our management team is led by our Chairman, Alexander Coleman, our Chief Executive Officer,
Gary P. Smith, and our Chief Financial Officer, James Bradley.
Alexander Coleman has 20 years of institutional
private equity experience, focused predominantly on U.S. based middle market companies operating in the food and beverage, information
and business services and specialized manufacturing markets. Mr. Coleman currently serves as the chairman of New Providence Acquisition
Corp. II (“NPA II”) and New Providence Acquisition Corp. III (“NPA III”), both of which are special purpose
acquisition vehicles. Mr. Coleman is the founder and Managing Partner of Annex Capital Management LLC (“Annex Capital”),
a U.S. based private equity group founded in 2004. Annex Capital focuses on making control investments in middle market companies
in a broad array of industries, and also acquires distressed debt and direct equity in the secondary market. Concurrently with
Annex, Mr. Coleman was a co-Head and Managing Partner of Citicorp Venture Capital, Citi’s New York based leveraged buyout
fund. Mr. Coleman was also a Managing Partner of Sea Hunter, a specialized fund focused on the evolving global cannabis market
and a predecessor to Tilt Holdings. Prior to these positions, from 1996 through to 2004, Mr. Coleman was a Managing Investment
Partner and co-Head of Dresdner Kleinwort Capital LLC (“Dresdner”), Dresdner Bank’s North American merchant banking
group. While at Dresdner, Mr. Coleman oversaw the bank’s U.S. based private equity businesses, which included control and
minority equity investing, mezzanine, distressed senior debt and, for a period of time, a fund-of-funds program. From 1989 to 1995,
Mr. Coleman worked with several groups while at Citi, including the Media Group, the Restructuring Group and Citicorp Venture Capital.
Mr. Coleman received an MBA from the University of Cambridge and a BA in Economics from the University of Vermont. Mr. Coleman
has served as a Director and Chairman of the Board for numerous private and public companies, including Remy Inc., StackTeck Systems
Ltd., Maxcess International, TeleCorp PCS, Hypercube (f/k/a KMC Telecom), Mrs. Field’s Famous Brands Inc., Gardenburger Inc.,
NurseFinders Inc., Waddington International, Inc. and JAC Products, Inc.
Gary P. Smith has held senior management
positions at PepsiCo, Red Bull and Big Red, Inc. Mr. Smith currently serves as CEO of NPA II and NPA III. During his most recent
position as CEO of Big Red he built a diversified beverage company by acquiring numerous, complementary brands across many segments
of the market over a 10-year period, ultimately selling the business to Keurig Dr Pepper. He also led the buy side acquisition
and integration of All Sport, Nesbitt’s, NuGrape, Thomas Kemper, HyDrive Energy Water and XYIENCE Energy Drink. Prior to
Big Red, Mr. Smith joined Red Bull as the executive vice president of a three person board of directors each operating as the co-CEO.
He held direct responsibility for sales, trade marketing, motorsports marketing, finance, information systems, legal department,
supply chain, operations and human resources. Mr. Smith continued to serve as the senior board member and corporate secretary from
2000 to 2007 while leading all day to day efforts as the Chief Operating Officer. Before taking over the leadership role at Red
Bull, Mr. Smith enjoyed a successful career with PepsiCo, Inc. from 1986 to 2000. He began his career in Dallas with PepsiCo Food
Systems where he held positions with increasing responsibility that led up to his role as division president. In his last role
with PepsiCo, Mr. Smith led the West Florida Bottling Operations for Pepsi Bottling Group. Mr. Smith holds an M.B.A. degree with
a concentration in finance from The University of Dallas. He also holds a Bachelor of Business Administration degree in finance
from Mississippi State University. Mr. Smith serves on the board of Tilt Holdings and various philanthropic organizations including
the Dr Pepper Museum and the American Beverage Association.
James Bradley has over 25 years of finance
and accounting experience at Arthur Andersen, KPMG, and Big Red Group. Mr. Bradley currently serves as CFO of NPA II and NPA III.
Mr. Bradley has extensive experience working with companies in the consumer, energy, healthcare, and manufacturing industries.
Mr. Bradley spent nearly 10 years as CFO of Big Red until it was acquired by Keurig Dr Pepper in 2018. While at Big Red, Mr. Bradley
was instrumental in the sales transaction, four recapitalizations and three acquisitions. Mr. Bradley transformed Big Red’s
financial, accounting, tax and back office functions as the business grew from a simple family run business with a single brand
to a sponsor backed, diversified beverage company. Prior to joining Big Red, Mr. Bradley spent nearly 10 years in KPMG’s
Transaction Services practice leading buy-side and sell-side transactions ranging in size from a few million to several-billion
dollars in North America and Europe. Prior to KPMG, Mr. Bradley spent four years in investment banking in Arthur Andersen’s
Corporate Finance practice. Mr. Bradley earned a Bachelor’s of Business Administration in Finance from the University of
Texas in Austin, graduating with honors. Mr. Bradley is a Chartered Financial Analyst.
We believe that our management team is well-positioned
to identify an attractive target business within the consumer industry and that our proprietary deal sourcing network — including
fellow industry executives, private owners, private equity funds, and investment bankers — will enable us to pursue a broad
range of opportunities across the consumer industry landscape. We believe that our ability to identify and implement operating
improvements will be central to our differentiated acquisition strategy, and that our relationships in the industry and network
of past colleagues and associates will greatly assist our transaction due diligence and execution.
Proposed Business Combination
On December 15, 2020, we entered into an
equity purchase agreement (the “Equity Purchase Agreement”) with AST & Science LLC, a Delaware limited liability
company (“AST”), the existing equityholders of AST (the “Existing Equityholders”), New Providence Acquisition
Management LLC, a Delaware limited liability company (“sponsor”) and Abel Avellan (“Existing Equityholder Representative”)
in his capacity as Existing Equityholder Representative. The transactions contemplated by the Equity Purchase Agreement are referred
to herein as the “Business Combination.”
Following the closing of the Business Combination,
we will be organized as an umbrella partnership-C corporation structure, in which substantially all of the operating assets of
AST’s business will be held by AST, and our only assets will be its equity interests in AST. We will be renamed AST SpaceMobile,
Inc. (“SpaceMobile”) at closing.
The Equity Purchase Agreement, among other
things, provides that:
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we will amend and restate our amended and restated certificate of incorporation, dated as of September 12, 2019 to, among other
things, (i) change the name of NPA to AST SpaceMobile, Inc., (ii) convert all then-outstanding Class B common stock held
by our sponsor, excluding any stock subject to forfeiture by our sponsor, into Class A common stock and (iii) authorize
the issuance of Class B common stock and Class C common stock;
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the Existing Equityholders, SpaceMobile and AST will enter into the Fifth Amended and Restated Limited Liability Company Operating
Agreement of AST (the “A&R Operating Agreement”) which, among other things, will (i) restructure the capitalization
of AST to (a) authorize the issuance of units of ownership interest
in AST which entitle the holders thereof to the distributions, allocations, and other rights under the A&R Operating Agreement
(“AST Common Units”) to SpaceMobile, (b) reclassify the Existing AST Units, other than any Existing AST
Units authorized under AST’s incentive plans or subject an option (“Existing AST Prior Incentive Equity Units”),
held by the Existing Equityholders into the number of AST Common Units set forth in Schedule I of the Equity Purchase Agreement,
and (c) reclassify all of the Existing AST Prior Incentive Equity Units into AST Incentive Equity Units, concurrently with
and subject to adjustments to the options to purchase AST Common Units granted pursuant to the AST incentive plan (“AST Options”)
affecting the number of units and exercise price (as applicable) thereof, and (ii) appoint SpaceMobile as the managing member
of AST;
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we will replace the our bylaws, by adopting the bylaws of SpaceMobile;
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we have entered into various subscription agreements with certain third-party investors (the “PIPE Investors”)
pursuant to which the PIPE Investors have committed to make private investments in public equity in the form of Class A common
stock in the aggregate amount of $230 million, for which the PIPE Investors will receive an aggregate of 23 million shares of Class A
common stock; and
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without any action on the part of any holder of our warrant, each warrant that is issued and outstanding immediately prior
to the closing of the initial business combination with AST will become a SpaceMobile Warrant, exercisable for Class A common
stock in accordance with its terms.
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AST is an innovative satellite designer
and manufacturer. AST and its global partners are building the first and only space-based cellular broadband network to be accessible
by standard smartphones. AST’s SpaceMobile low Earth orbit satellite network is expected to provide global direct mobile
broadband network to provide connectivity to any standard, unmodified, off-the-shelf mobile phone or 2G/3G/4G LTE/5G and IoT enabled
device.
Additional information regarding NPA, AST
and the Business Combination is available in the proxy statement/prospectus most recently filed by NPA with the SEC on February
16, 2021.
Business Strategy & Competitive Strengths
Our acquisition and value creation strategy
is to identify, acquire and, after the initial business combination, build a company in the consumer sector, which complements
the experience of our management team and which can benefit from their management and operating expertise. In addition to leveraging
our management team’s network of proprietary and public transaction sources, where we believe the combination of our relationships,
knowledge and experience could effect a positive transformation or augmentation of an existing business to improve its value proposition,
we also plan to use the following competitive strengths to our advantage in the search and combination process:
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extensive experience in both investing in and operating across the consumer sector;
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experience in sourcing, structuring, acquiring, operating, developing, growing, financing and selling businesses;
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relationships with sellers, financing providers and target management teams; and
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experience in executing transactions in the consumer sector under varying economic and financial market conditions.
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We expect these networks will continue to
provide our management team with a robust flow of acquisition opportunities. In addition, we anticipate that target business candidates
will continue to be brought to our attention from various unaffiliated sources, which may include investment market participants,
private equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Upon completion
of our initial public offering, members of our management team communicated with their networks of relationships to articulate
the parameters for our search for a target company and a potential business combination and began the process of pursuing and reviewing
potentially interesting leads.
Past performance of 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 identify a suitable candidate for our initial business combination. You should not rely on the historical performance record
of such parties as indicative of our future performance. Such parties have not had experience with blank check companies or special
purpose acquisition companies in the past. In addition, such parties may have conflicts of interest with other entities to which
they owe fiduciary or contractual obligations with respect to initial business combination opportunities. For a list of our executive
officers, directors and entities for which a conflict of interest may or does exist between such persons and the company, as well
as the priority and preference that such entity has with respect to performance of obligations and presentation of business opportunities
to us, please refer to the table and subsequent explanatory paragraph under “Item 10. Directors, Executive Officers and Corporate
Governance — Conflicts of Interest”.
Acquisition Strategy
We have identified the following general
criteria and guidelines which we believe are important in evaluating prospective target businesses. We seek to acquire a company
which:
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Has a market and/or cost leadership position and would benefit from our management expertise and extensive relationships (i.e.,
“rewards stellar management”);
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Occupies relatively fast-growing markets (i.e., “top line growth”);
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Has strong drivers of revenue and earnings growth and exhibits “barriers to competition”;
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Has the potential to generate strong and stable free cash flow;
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Is underperforming its operating potential and underutilizing its balance sheet; and
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By “creating strategic value” offers an attractive risk-adjusted return for our stockholders.
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These criteria are not intended to be exhaustive.
Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these
general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event
that we decide to enter into our initial business combination with a target business that, in our judgement, does not meet the
above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our stockholder communications
related to our initial business combination, which would be in the form of proxy solicitation materials or tender offer documents
that we would file with the U.S. Securities and Exchange Commission (the “SEC”).
Initial Business Combination
As required by NASDAQ rules, our initial
business combination will be approved by a majority of our independent directors. NASDAQ rules also require that we must complete
one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the
trust account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing a definitive agreement
in connection with our initial business combination. Our board of directors will make the determination as to the fair market value
of our initial business combination. If our board of directors is not able to independently determine the fair market value of
our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely
that our board of directors will not be able to make an independent determination of the fair market value of our initial business
combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there
is a significant amount of uncertainty as to the value of a target’s assets or prospects. In addition, we have agreed not
to enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
We anticipate structuring our initial business
combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own
or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction
company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives
of the target management team or stockholders, or for other reasons. However, we will only complete an initial business combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940, as amended, or the “Investment Company Act”. Even if the post-transaction company owns or acquires
50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively
own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business
combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all
of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However,
as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination
could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the
equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion
of such business or businesses that is owned or acquired is what will be taken into account for purposes of NASDAQ’s 80%
of fair market value test. If the initial business combination involves more than one target business, the 80% of fair market value
test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial
business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Our Business Combination Process
In evaluating prospective business combinations,
we expect to conduct a thorough due diligence review process that may encompass, among other things, a review of historical and
projected financial and operating data, meetings with management and their advisors (if applicable), on-site inspection of facilities
and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.
We will also leverage our operational and
capital allocation experience in order to:
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Assemble a team of industry and financial experts: For each potential transaction, we intend to assemble a team of industry
and financial experts to supplement our management’s efforts to identify and resolve key issues facing the company. We intend
to construct an operating and financial plan which optimizes the potential to grow shareholder value. With extensive experience
investing in both healthy and underperforming businesses, we expect that our management will be able to demonstrate to the target
business and its stakeholders that we have the resources and expertise to lead the combined company through complex and often turbulent
market conditions and provide the strategic and operational direction necessary to grow the business in order to maximize cash
flows and improve the overall strategic prospects for the business;
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Conduct rigorous research and analysis: Performing disciplined, bottom-up fundamental research and analysis is core
to our strategy, and we intend to conduct extensive due diligence to evaluate the impact that a transaction may have on the target
business;
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Acquire the target company at an attractive price relative to our view of its intrinsic value: Combining rigorous bottom-up
analysis as well as input from industry and financial experts, the management team intends to develop its view of the intrinsic
value of the potential business combination. In doing so, the management team will evaluate future cash flow potential, relative
industry valuation metrics and precedent transactions to inform its view of intrinsic value, with the intention of creating a business
combination at an attractive price relative to such view;
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Implement operating and financial structuring opportunities: We believe our management team has the ability to structure
and execute a business combination which will provide the combined business with a capital structure that will support growth in
shareholder value and give the combined company the flexibility needed to grow organically and/or through strategic acquisitions
or divestitures. We intend to also develop and implement strategies and initiatives to improve the business’s operating and
financial performance and create a platform for growth; and
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Seek follow-on strategic acquisitions and divestitures to further grow shareholder value: The management team intends
to analyze the strategic direction of the company and evaluate non-core asset sales to create financial and/or operating flexibility
needed for the company to engage in organic or inorganic growth. Specifically, the management team intends to evaluate opportunities
for industry consolidation in the company’s core lines of business as well as opportunities to vertically or horizontally
integrate with other industry participants.
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Following our initial business combination,
we intend to evaluate opportunities to enhance shareholder value, including developing and implementing corporate strategies and
initiatives to provide financial and operating runway such that the company can improve its profitability and long-term value.
In doing so, the management team anticipates evaluating corporate governance, opportunistically accessing capital markets and other
opportunities to enhance liquidity, identifying acquisition and divestiture opportunities, and properly aligning management and
board incentives with growing shareholder value.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete
our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee
of independent directors, will obtain an opinion from independent investment banking firm or another independent entity that commonly
renders valuation opinions that our initial business combination is fair to our company and our stockholders from a financial point
of view.
Members of our management team may directly
or indirectly own our founders shares, common stock and/or private placement warrants following our initial public offering, and,
accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with
which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest
with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors
were to be included by a target business as a condition to any agreement with respect to our initial business combination.
Corporate Information
Our executive offices are located at 10900
Research Blvd, Ste 160C PMB 1081. Our telephone number is (561) 231-7070 and email is info@npa-corp.com.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (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 of 2002, or 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 this 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 30, 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. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Value Creation Philosophy Post-Merger
After the initial business combination,
our management team intends to apply a rigorous approach to enhancing shareholder value, including evaluating the experience and
expertise of incumbent management and making changes when appropriate, examining opportunities for revenue enhancement, cost savings,
operating efficiencies and strategic acquisitions and divestitures, and accessing the financial markets to optimize the company’s
capital structure. Our management team intends to pursue post-merger initiatives through participation on the board of directors,
through direct involvement with company operations and/or calling upon former managers and advisors when necessary. We currently
expect these initiatives to include the following:
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Corporate governance and oversight: Actively participating as board members can include many activities: (i) monthly
or quarterly board meetings; (ii) chairing standing (compensation, audit or investment committees) or special committees; (iii)
replacing or supplementing company management teams when necessary; (iv) adding outside directors with industry expertise which
may or may not include members of our own board of directors; (v) providing guidance on strategic and operational issues including
revenue enhancement opportunities, cost savings, operating efficiencies, reviewing and testing annual budgets, reviewing acquisitions
and divestitures; and (vi) assisting in accessing capital markets to further optimize financing costs and fund expansion. As active
members on the board of directors of the company, our management team members also intend to evaluate the suitability of the incumbent
organization leaders;
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Direct operations involvement: The management team members, through ongoing board service or direct leadership within
the business combination, intend to actively engage with company management to effect positive changes in the organization. These
activities may include: (i) establishing an agenda for management and instilling a sense of accountability and urgency; (ii) aligning
the interests of management with growing shareholder value; (iii) providing strategic planning and management consulting assistance,
particularly as regards re-invested capital and growth capital in order to grow revenues, achieve more optimal operating scale,
and eliminate unnecessary costs; and (iv) establishing measurable key performance metrics and accretive internal processes;
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M&A expertise and add-on acquisitions: Our management team has expertise in identifying, acquiring and integrating
both synergistic and margin-enhancing businesses. We intend to, wherever possible, utilize M&A as a strategic tool to strengthen
both the financial profile of the business we acquire and its competitive positioning. We would only enter into accretive business
combinations where our management team or the acquired company’s management team can seamlessly transition to working together
as one organization and team; and
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Access to portfolio company managers and advisors: Over their collective history of investing in and controlling businesses,
our management team members have developed strong professional relationships with former successful company managers and advisors.
When appropriate, we intend to bring in outside directors, managers and consultants to assist in corporate governance and operating
turnaround activities.
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Status as a Public Company
We believe our structure will make us an
attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that
are better aligned with stockholders’ interests than it would as a private company. A target business can further benefit
by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a business combination
transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target business
for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A common
stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.
Although there are various costs and obligations
associated with being a public company, we believe target businesses will find this method a more expeditious and cost-effective
method to becoming a public company than the typical initial public offering. The typical initial public offering process takes
a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that
may not be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed initial business
combination is completed, the target business will have effectively become public, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or
prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we
believe the target business would then have greater access to capital and an additional means of providing management incentives
consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company
can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
While we believe that our structure and
our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view
our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any
proposed initial business combination, negatively.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain
exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth
companies” including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (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, 2020 we had $232,196,027
held in the trust account, excluding $8,050,000 of deferred underwriting commissions payable to the underwriters, in each case
before fees and expenses associated with our initial business combination. With the funds available, we offer a target business
a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion
of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because we are able to complete our
initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility
to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its
needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be
available to us.
Effecting Our Initial Business Combination
We are not presently engaged in, and we
will not engage in, any operations for an indefinite period of time following our initial public offering. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private
placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward
purchase agreements or backstop agreements we may enter into following the consummation of our initial public offering or otherwise),
shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of
the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable
or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid
for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance
of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional funds through
a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may
effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust
account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of our initial public offering
and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such proposed
initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing
only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded
with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business
combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such
financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business
combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising
any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target business candidates
will continue to be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals.
Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or
mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis,
since many of these sources will have read this Report or the final prospectus relating to our initial public offering and know
what types of businesses we are targeting. Our officers and directors, as well as our sponsor and their affiliates, may also bring
to our attention target business candidates that they become aware of through their business contacts as a result of formal or
informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive
a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business
relationships of our officers and directors and our sponsor and their respective industry and business contacts as well as their
affiliates. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize
in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may
pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation
based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder
may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with
a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily
tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no
event will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated,
be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation
by the company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion
of our initial business combination (regardless of the type of transaction that it is). Although none of our sponsor, executive
officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees
or consulting fees from a prospective business combination target in connection with a contemplated initial business combination,
we do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from
negotiating for the reimbursement of out-of-pocket expenses by a target business. We have agreed to pay an affiliate of our sponsor
a total of $10,000 per month for office space, utilities and secretarial and administrative support and to reimburse our sponsor
for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our
officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial
business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection
process of an initial business combination candidate.
We are not prohibited from pursuing an initial
business combination with a company that is affiliated with our sponsor, officers or directors, or their respective affiliates.
In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers
or directors, or their respective affiliates, we, or a committee of independent directors, will obtain an opinion from an independent
investment banking firm or another independent entity that commonly renders valuation opinions that our initial business combination
is fair to our company and our stockholders from a financial point of view. We are not required to obtain such an opinion in any
other context.
If any of our officers or directors becomes
aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has
pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to
such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain
relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring of our Initial
Business Combination
As required by NASDAQ rules, our initial
business combination will be approved by a majority of our independent directors. NASDAQ rules also require that we must complete
one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the
trust account (excluding the deferred underwriting commissions and taxes payable) at the time of our signing a definitive agreement
in connection with our initial business combination. The fair market value of our initial business combination will be determined
by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash
flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based on the financial metrics
of M&A transactions of comparable businesses. If our board of directors is not able to independently determine the fair market
value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent
entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely
that our board of directors will not be able to make an independent determination of the fair market value of our initial business
combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there
is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to purchase multiple
businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management
will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we
will not be permitted to effectuate our initial business combination with another blank check company or a similar company with
nominal operations.
In any case, we will only complete an initial
business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire
a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion
of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account for
purposes of NASDAQ’s 80% of fair market value test. There is no basis for investors in our initial public offering to evaluate
the possible merits or risks of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our initial business
combination with a company or business that may be financially unstable or in its early stages of development or growth we may
be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective business target,
we expect to conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to select and evaluate
a target business and to structure and complete our initial business combination, and the costs associated with this process, are
not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation
of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another business combination.
In addition, we have agreed not to enter
into a definitive agreement regarding an initial business combination without the prior consent of our sponsor.
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 focus our search for an initial business combination in a single industry.
By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse
impact on the particular industry in which we operate after our initial business combination, and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
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Limited Ability to Evaluate the Target’s Management
Team
Although we intend to closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future
management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role
of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination
as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial
business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following
our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our
initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience
or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key
personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any
of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you
that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial
Business Combination
We may conduct redemptions without a stockholder
vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable
stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table
below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is
currently required under Delaware law for each such transaction.
Type of Transaction
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Whether Stockholder Approval is Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under NASDAQ’s listing rules, stockholder
approval would be required for our initial business combination if, for example:
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we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common
stock then outstanding;
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any of our directors, officers or substantial security holders (as defined by NASDAQ rules) has a 5% or greater interest, directly
or indirectly, in the target business or assets to be acquired and if the number of shares of common stock to be issued, or if
the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either (a) 1% of the
number of shares of common stock or 1% of the voting power outstanding before the issuance in the case of any of our directors
and officers or (b) 5% of the number of shares of common stock or 5% of the voting power outstanding before the issuance in the
case of any substantial security holders; or
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
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Permitted Purchases of our Securities
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public
warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their
affiliates may purchase in such transactions, subject to compliance with applicable law and NASDAQ rules. However, they have no
current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any
such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any
material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange
Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules
under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the
purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply
with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such
purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares
or public warrants in such transactions prior to completion of our initial business combination.
The purpose of any such purchases of shares
could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to
have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that
such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number
of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection
with our initial business combination. Any such purchases of our securities may result in the completion of our initial business
combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float”
of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be
reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
Our sponsor, officers, directors and/or
their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates
may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests
submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the
extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and
contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the
trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with
respect to our initial business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase
shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, officers,
directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the
extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation
under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied
with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will
not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases
will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting
requirements.
Redemption Rights for Public Stockholders upon Completion
of our Initial Business Combination
We will provide our public stockholders
with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business
combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two
business days prior to the consummation of the initial business combination including interest earned on the funds held in the
trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding
public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately
$10.00 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced
by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that
a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder
shares and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders
with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business
combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means
of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct
a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the
transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange
listing requirement. Under NASDAQ rules, asset acquisitions and stock purchases would not typically require stockholder approval
while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding
common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. If we structure
an initial business combination with a target company in a manner that requires stockholder approval, we will not have discretion
as to whether to seek a stockholder vote to approve the proposed initial business combination. We may conduct redemptions without
a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange
listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain
a listing for our securities on NASDAQ, we are required to comply with such rules.
If a stockholder vote is not required and
we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated
certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers,
and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the
same financial and other information about the initial business combination and the redemption rights as is required under Regulation
14A of the Exchange Act, which regulates the solicitation of proxies.
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Upon the public announcement of our initial
business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of
our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule
14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant
to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number
of public shares which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny
stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our
initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the
tender offer and not complete the initial business combination.
If, however, stockholder approval of the
transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business
or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates
the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
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In the event that we seek stockholder approval
of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders
with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will
complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares
of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock
of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter
agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during
or after our initial public offering (including in open market and privately negotiated transactions) in favor of our initial business
combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have
no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial
stockholders’ founder shares, we would need only 8,625,001, or 37.5%, of the 23,000,000 public shares sold in our initial
public offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to
have our initial business combination approved. We intend to give 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 upon consummation of our initial business combination and after payment of underwriters’ fees
and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset
or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed
initial business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred
to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions
in accordance with the terms of the proposed initial business combination. In the event the aggregate cash consideration we would
be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to
satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash
available to us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock
submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial
Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing, if we seek
stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than
an aggregate of 15% of the shares sold in our initial public offering (the “Excess Shares”). Such restriction shall
also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large blocks of
shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial
business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of
the shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are
not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting
our stockholders’ ability to redeem no more than 15% of the shares sold in our initial public offering without our prior
consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to
complete our initial business combination, particularly in connection with an initial business combination with a target that requires
as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’
ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
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 initial vote on the proposal to approve the initial business combination
in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using the Depository
Trust Company’s Deposit/Withdrawal At Custodian (“DWAC”) 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, which will include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares. 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 initial 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 initial business combination and check a box on the proxy card indicating such holder
was seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact
such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder
then had an “option window” after the completion of the initial business combination during which he or she could monitor
the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or
her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption
rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option”
rights surviving past the completion of the initial business combination until the redeeming holder delivered its certificate.
The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem
is irrevocable once the initial business combination is approved.
Any request to redeem such shares, once
made, may be withdrawn at any time up to the date set forth in the 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 initial business combination.
If our initial business combination is not
approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any
certificates delivered by public holders who elected to redeem their shares.
If our initial proposed initial business
combination is not completed, we may continue to try to complete an initial business combination with a different target until
18 months from the closing of our initial public offering. At our annual meeting of stockholders, to be held on March 12, 2021,
our stockholders will be asked to consider and vote upon a special proposal to amend the Company’s amended and restated certificate
of incorporation to extend the date by which we must consummate an initial business combination from March 15, 2021 to June 15,
2021.
Redemption of Public Shares and Liquidation if no Initial
Business Combination
Our amended and restated certificate of
incorporation provides that we will have only 18 months from the closing of our initial public offering to complete our initial
business combination. If we are unable to complete our initial business combination within such 18-month period, we will: (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise
and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public
shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive
further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such
redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in
each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we
fail to complete our initial business combination within the 18-month time period.
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 within 18
months from the closing of our initial public offering. However, if our sponsor, officers or directors acquire public shares in
or after our initial public offering, they will be entitled to liquidating distributions from the trust account with respect to
such public shares if we fail to complete our initial business combination within the allotted 18-month time period.
Our sponsor, officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination within 18 months from the closing of our initial public offering or (ii) with respect to any other
provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders
with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the
trust account and not previously released to us to pay our franchise and income taxes divided by the number of then outstanding
public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon consummation of our initial business combination and after payment of underwriters’ fees and commissions
(so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised
with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement (described
above), we would not proceed with the amendment or the related redemption of our public shares at such time.
We expect that all costs and expenses associated
with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the
$131,151 of proceeds held outside the trust account (as of December 31, 2020), although we cannot assure you that there will be
sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account
to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with
implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay
taxes on interest income earned on the trust account balance, we may request the trustee to release to us an additional amount
of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds
of our initial public offering and the sale of the 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 General Corporation Law of Delaware, as amended (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, prospective target businesses or other entities with which we do business execute agreements with us waiving
any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented
from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility
or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage
with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute
an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives
available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes
that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant
whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that
would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering will not execute agreements
with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee that
such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will
be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective
target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination
agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.00 per public share and (ii) the actual
amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00 per
share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any
claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust
account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of
our initial public offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked
our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore,
we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers, directors or members of
our sponsor 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,
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 will have access to up to $131,151 of proceeds held outside the trust account (as of December 31, 2020) with which to pay
any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be
no more than approximately $100,000). In the event that we liquidate and it is subsequently determined that the reserve for claims
and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 18 months from the closing of our initial public offering may be considered
a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of
the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any
claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share
of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third
anniversary of the dissolution.
Furthermore, if the pro rata portion of
our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within 18 months from the closing of our initial public offering, is not considered a liquidating
distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of
legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174
of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution,
instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination
within 18 months from the closing of our initial public offering, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds
held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public 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 our 18th month and, therefore, we do not intend to comply with those procedures.
As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more)
and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section
280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our
payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years.
However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business
execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.
As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any
claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the
extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.00 per public share or (ii) such
lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions
in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any
claims under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities
under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims.
If we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able
to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable
debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.”
As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board
of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing
itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing
the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled
to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination,
(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our
amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our
public shares if we do not complete our initial business combination within 18 months from the closing of our initial public offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity,
and (iii) the redemption of all of our public shares if we are unable to complete our business combination within 18 months from
the closing of our initial public offering, subject to applicable law. In no other circumstances will a stockholder have any right
or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business
combination, a stockholder’s voting in connection with the initial business combination alone will not result in a stockholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its
redemption rights as described above. These provisions of our amended and restated certificate of incorporation, like all provisions
of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Competition
In identifying, evaluating and selecting
a target business for our initial business combination, we may encounter competition from other entities having a business objective
similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses
seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying
and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available
financial resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target
business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights
may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution
they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a
competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Due to COVID-19, we have become a virtual
company. Our mailing address is 10900 Research Blvd, Ste 160C PMB 1081, Austin, Texas 78759 and our telephone number is (561) 231-7070
and email is info@npa-corp.com. Our executive offices are provided to us by our sponsor. Commencing on the date our securities
were first listed on NASDAQ, we have agreed to pay an affiliate of our sponsor a total of $10,000 per month for secretarial and
administrative support. We consider our current office space adequate for our current operations.
Employees
We currently have three officers. These
individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. We do not intend to have any
full-time employees prior to the completion of our initial business combination.
Periodic Reporting and Financial Information
Our units, Class A common stock and warrants
are registered under the Exchange Act. We are required to file annual, quarterly and current reports with the SEC.
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, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements
may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the
pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such
statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential
business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business
will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements
cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business
combination candidates, we do not believe that this limitation will be material.
We have evaluated our internal control procedures
for the fiscal year ending December 31, 2020 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large
accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our
internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. On September 10, 2019,
we filed a registration statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange
Act. As a result, we are subject to the rules and regulations promulgated under the Exchange Act. We have no current intention
of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation
of our initial business combination.
We are an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business
Startups Act of 2012, or 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 shares of Class A common stock that are held by non-affiliates exceeds $700
million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during
the prior three-year period.
Additionally, we are a “smaller reporting
company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced
disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of common stock held
by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our shares of common stock held by non-affiliates exceeds $700 million as of the prior June
30.
An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this Annual Report on Form 10-K and the prospectus associated with our initial public offering, before making a decision to
invest in our securities. If any of the following events occur, our business, financial condition and operating results may be
materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part
of your investment. For risk factors related to the Business Combination, see the proxy statement initially filed by NPA on
December 23, 2020.
We have no operating history and no revenues, and you have
no basis on which to evaluate our ability to achieve our business objective.
We have no operating results, and we will
not commence operations until obtaining funding through our initial public offering. Because we lack an operating history, you
have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination
with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning
an initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial
business combination, we will never generate any operating revenues.
Our public stockholders may not be afforded an opportunity
to vote on our proposed initial business combination, which means we may complete our initial business combination even though
a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder
vote to approve our initial business combination unless the initial business combination would require stockholder approval under
applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons.
Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination
or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will
be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority
of our public shares do not approve of the initial business combination we complete.
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.
Pursuant to the letter agreement, our sponsor,
officers and directors have agreed to vote their founder shares, as well as any public shares purchased during or after our initial
public offering (including in open market and privately negotiated transactions), in favor of our initial business combination.
As a result, in addition to our initial stockholders’ founder shares, we would need only 8,625,001, or 37.5%, of the 23,000,000
public shares sold in our initial public offering to be voted in favor of an initial business combination (assuming all outstanding
shares are voted) in order to have our initial business combination approved. Our initial stockholders own shares representing
20% of our outstanding shares of common stock immediately following the completion of our initial public offering. Accordingly,
if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders to vote in favor
of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such
initial business combination.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the initial business combination.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our
board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may not
have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not seek stockholder
approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to
exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer
documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their
shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into an initial business combination with a target.
We may seek to enter into an initial business
combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the initial business combination. Furthermore, 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 consummation of our initial
business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s
“penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause
our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination and after payment of underwriters’
fees and commissions 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 an initial business combination with us.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure.
At the time we enter into an agreement for
our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will
need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If
our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account
to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account
or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution
provisions of the Class B common stock result in the issuance of Class A shares on a greater than one-to-one basis upon conversion
of the Class B common stock at the time of our business combination. The above considerations may limit our ability to complete
the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting
commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business
combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be
reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming
stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock
may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your stock in the open market.
The requirement that we complete our initial business combination
within the prescribed time frame may give potential target businesses leverage over us in negotiating an initial business combination
and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution
deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for
our stockholders.
Any potential target business with which
we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business
combination within 18 months from the closing of our initial public offering. Consequently, such target business may obtain leverage
over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with
that particular target business, we may be unable to complete our initial business combination with any target business. This risk
will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence
and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate, in which case our public stockholders may only receive $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated certificate of
incorporation provides that we must complete our initial business combination within 18 months from the closing of our initial
public offering. We may not be able to find a suitable target business and complete our initial business combination within such
time period. If we have not completed our initial business combination within such time period, we will: (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including
interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption
will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating
distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders
may only receive $10.00 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may
receive less than $10.00 per share on the redemption of their shares. See “— 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” and other risk factors below.
Our search for a business combination, and any target business
with which we ultimately consummate a business combination, may be materially adversely affected by the recent COVID-19 outbreak.
In December 2019, a novel strain of coronavirus
was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world,
including the United States. On January 30, 2020, the World Health Organization declared the outbreak of COVID-19 a “Public
Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II
declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on
March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. A significant outbreak of
COVID-19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and
financial markets worldwide, and the business of any potential target business with which we consummate a business combination
could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns
relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s
personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent
to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain
and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain
COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for
an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which
we ultimately consummate a business combination, may be adversely affected in a material way.
If we seek stockholder approval of our initial business
combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or warrants from public
stockholders, which may influence a vote on a proposed initial business combination and reduce the public “float” of
our Class A common stock.
If we seek stockholder approval of our initial
business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender
offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares or public warrants or a combination
thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business
combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to
engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the
trust account will be used to purchase shares or public warrants in such transactions.
Such a purchase may include a contractual
acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof
and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their
affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their
redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose
of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood
of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be
to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for
approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to
Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases are made,
the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive notice of our offer to
redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will comply with the tender offer rules
or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance
with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that
we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares, which will include the requirement that a beneficial
holder must identify itself. For example, we may require our public stockholders seeking to exercise their redemption rights, whether
they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer
agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the
initial vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver
their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures,
its shares may not be redeemed. See the section of this prospectus entitled “Item 1. 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 Class A common stock that such stockholder properly elected to redeem, subject
to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to
redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of our
initial public offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business
combination activity and (iii) the redemption of our public shares if we are unable to complete an initial business combination
within 18 months from the closing of our initial public offering, subject to applicable law and as further described herein. In
no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants
will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your
investment, you may be forced to sell your public shares or warrants, potentially at a loss.
NASDAQ may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our securities are currently listed on NASDAQ.
However, we cannot assure you that our securities will continue to be listed on NASDAQ in the future or prior to our initial business
combination. In order to continue listing our securities on NASDAQ prior to our initial business combination, we must maintain
certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity
(generally $2,500,000) and a minimum number of holders of our securities (300 round-lot 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
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.” Because our units, Class A common stock and warrants are listed on NASDAQ,
our units, Class A common stock and warrants are covered securities. Although the states are preempted from regulating the sale
of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if
there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check
companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might
use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further,
if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation in
each state in which we offer our securities, including in connection with our initial business combination.
You will not be entitled to protections normally afforded
to investors of many other blank check companies.
Since the net proceeds of our initial public
offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with
a target business that has not been identified, we may be deemed to be a “blank check” company under the United States
securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of our
initial public offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an
audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other
things, this means our units will have a longer period of time to complete our initial business combination than do companies subject
to Rule 419. Moreover, if our initial public offering were subject to Rule 419, that rule would prohibit the release of any interest
earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection
with our completion of an initial business combination.
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 the Excess Shares. However,
we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against
our initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete
our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open
market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete
our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order
to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition
for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are
unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on
our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We have encountered and continue to expect
to encounter competition from other entities having a business objective similar to ours, including private investors (which may
be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying
and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many
of these competitors possess similar technical, human and other resources to ours, and our financial resources are relatively limited
when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially
acquire with the net proceeds of our initial public offering and the sale of the private placement warrants, our ability to compete
with respect to the acquisition of certain target businesses that are sizable are limited by our available financial resources.
This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore,
because we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection
with our initial business combination, target companies will be aware that this may reduce the resources available to us for our
initial business combination. This may place us at a competitive disadvantage in successfully negotiating an initial business combination.
If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per
share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.00 per share upon our liquidation. See “— 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” and other risk factors below.
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 for at least
18 months from the closing of our initial public offering, we may be unable to complete our initial business combination, in which
case our public stockholders may only receive $10.00 per share, or less than such amount in certain circumstances, and our warrants
will expire worthless.
The funds available to us outside of the
trust account may not be sufficient to allow us to operate for 18 months from the closing of our initial public offering, assuming
that our initial business combination is not completed during that time. We believe that, upon the closing of our initial public
offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for 18 months from the
closing of our initial public offering; however, we cannot assure you that our estimate is accurate. Of the funds available to
us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent 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 initial 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 $10.00 per share on the liquidation of our trust account and our warrants will expire worthless. In certain
circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation. See “— 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” and other risk factors below.
If the net proceeds of our initial public offering and
the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available
to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans
from our sponsor or management team to fund our search for an initial business combination, to pay our franchise and income taxes
and to complete our initial business combination. If we are unable to obtain these loans, we may be unable to complete our initial
business combination.
Of the net proceeds of our initial public
offering and the sale of the private placement warrants, only approximately $750,000 will be available to us initially outside
the trust account to fund our working capital requirements. If we are required to seek additional capital, we would need to borrow
funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, members
of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such
advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial
business combination. Up to $1,500,000 of such loans may be convertible into private placement-equivalent warrants at a price of
$1.00 per warrant at the option of the lender. Prior to the completion of our initial business combination, we do not expect to
seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing
to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable
to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial
business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate
the trust account. Consequently, our public stockholders may only receive approximately $10.00 per share on our redemption of our
public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than
$10.00 per share on the redemption of their shares. See “— 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” and other risk factors below.
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 debt financing to partially finance the initial business combination. Accordingly,
any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the value
of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them,
or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials,
as applicable, relating to the initial business combination constituted an actionable material misstatement or omission.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00
per share.
Our placing of funds in the trust account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective
target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or
claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not
execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust
account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well
as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against
our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims
to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only
enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s
engagement would be significantly more beneficial to us than any alternative. Marcum LLP, our independent registered public accounting
firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust
account.
Examples of possible instances where we
may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise
or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver
or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations,
contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public
shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of
a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of
creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share
redemption amount received by public stockholders could be less than the $10.00 per share initially held in the trust account,
due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third
party for services rendered or products sold to us, or a prospective target business with which we have entered into a written
letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust
account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account
as of the date of the liquidation of the trust account, if less than $10.00 per share due to reductions in the value of the trust
assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business
who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against certain liabilities,
including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations,
nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that
our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to
satisfy those obligations. None of our officers, directors or members of our sponsor will indemnify us for claims by third parties
including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to
our public stockholders.
In the event that the proceeds in the trust
account are reduced below the lesser of (i) $10.00 per share and (ii) the actual amount per share held in the trust account as
of the date of the liquidation of the trust account if less than $10.00 per share due to reductions in the value of the trust assets,
in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine
whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent
directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible
that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do
so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high
relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent
directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution
to our public stockholders may be reduced below $10.00 per share.
We may not have sufficient funds to satisfy indemnification
claims of our directors and executive officers.
We have agreed to indemnify our officers
and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive (and any other persons
who may become an officer or director prior to the initial business combination will also be required to waive) any right, title,
interest or claim of any kind in or to any monies in the trust account and not to seek recourse against the trust account for any
reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient
funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers
and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary
duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors,
even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s
investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors
pursuant to these indemnification provisions.
If, after we distribute the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.
If, after we distribute the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages,
by paying public stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account
to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not
dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount
that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent
any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection
with our liquidation may be reduced.
If we are deemed to be an investment company under the
Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company
under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
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In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily
in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S.
government securities and cash items) on an unconsolidated basis. Our business is to identify and complete an initial business
combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses
or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive
investor.
We do not believe that our anticipated principal
activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested
in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having
a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment
Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not
permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having
a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in
the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within
the meaning of the Investment Company Act. Our securities are not intended for persons who are seeking a return on investments
in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest
to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted
in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance
or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18
months from the closing of our initial public offering or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity; or (iii) absent an initial business combination within 18 months from the
closing of our initial public offering, our return of the funds held in the trust account to our public stockholders as part of
our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the
Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory
burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial
business combination or may result in our liquidation. If we are unable to complete our initial business combination, our public
stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire
worthless.
Changes in laws or regulations, or a failure to comply
with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business
combination and results of operations.
We are subject to laws and regulations enacted
by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements.
Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation
and application may also change from time to time and those changes could have a material adverse effect on our business, investments
and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could
have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination
and results of operations.
Our stockholders may be held liable for claims by third
parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held
liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The
pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 18 months from the closing of our initial public offering may be considered
a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the
DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which
any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share
of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third
anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following
the 18th month from the closing of our initial public offering in the event we do not complete our initial business combination
and, therefore, we do not intend to comply with the foregoing procedures.
Because we will not be complying with Section
280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our
payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our
dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited
to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers,
investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL,
any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro
rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred
after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially
brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received
by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore,
if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in
the event we do not complete our initial business combination within 18 months from the closing of our initial public offering
is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially
due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then
pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful
redemption distribution, instead of three years, as in the case of a liquidating distribution.
Holders of Class A common stock will not be entitled to
vote on any election of directors we hold prior to our initial business combination.
Prior to our initial business combination,
only holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will
not be entitled to vote on the election of directors during such time. In addition, prior to the completion of an initial business
combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. Accordingly,
you may not have any say in the management of our company prior to the consummation of an initial business combination.
We have not registered the shares of Class A common stock
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt
from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may
have no value and expire worthless.
We have not registered the shares of Class
A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However,
under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days
after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement
for the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and
thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business
combination and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until
the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be
able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the
registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or
correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities
Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable
for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants,
unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising
holder, or an exemption from registration is available. If that exemption, or another exemption, is not available, holders will
not be able to exercise their warrants on a cashless basis. In no event will we be required to net cash settle any warrant, or
issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the
shares underlying the warrants under applicable state securities laws and there is no exemption available. If the issuance of the
shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder
of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such
event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for
the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may not exercise
our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or
qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our
best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states
in which the warrants were offered by us in our initial public offering. However, there may be instances in which holders of our
public warrants may be unable to exercise such public warrants but holders of our private warrants may be able to exercise such
private warrants.
If you exercise your public warrants on a “cashless
basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants
for cash.
There are circumstances in which the exercise
of the public warrants may be required or permitted to be made on a cashless basis. First, if a registration statement covering
the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing
of our initial business combination, warrant holders may, until such time as there is an effective registration statement, exercise
warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if a registration
statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following
the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration
statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on
a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available;
if that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Third, if we call the public warrants for redemption, our management will have the option to require all holders that wish to exercise
warrants to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise
price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing
(x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair
market value” (as defined in the next sentence) over the exercise price of the warrants by (y) the fair market value. The
“fair market value” is the average reported last sale price of the Class A common stock for the 10 trading days ending
on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice
of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of Class A common
stock from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial stockholders
may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect
the market price of our Class A common stock.
Pursuant to an agreement entered into concurrently
with the issuance and sale of the securities in our initial public offering, our initial stockholders and their permitted transferees
can demand that we register the private placement warrants, the shares of Class A common stock issuable upon exercise of the founder
shares and the private placement warrants held, or to be held, by them and holders of warrants that may be issued upon conversion
of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants.
We will bear the cost of registering these securities. The registration and availability of such a significant number of securities
for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence
of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the
stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our
initial stockholders or holders of working capital loans or their respective permitted transferees are registered.
Because we are neither limited to evaluating a target business
in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
We will seek to complete an initial business
combination with companies in the consumer sector but may also pursue other business combination opportunities, except that we
will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination
with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any
specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of
any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations
with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development
stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business,
we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate
time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to
control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment
in our securities will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available,
in a business combination target. Accordingly, any stockholders who choose to remain stockholders following our initial business
combination could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such
reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors
of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities
laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable
material misstatement or material omission.
Past performance by our management team, may not be indicative
of future performance of an investment in the Company.
Information regarding performance by, or
businesses associated with our management team and their affiliates is presented for informational purposes only. Past performance
by our management team is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii)
that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical
record of our management team’s or their affiliates’ performance as indicative of the future performance of an investment
in the company or the returns the company will, or is likely to, generate going forward. Our officers and directors have not had
experience with blank check companies or special purpose acquisition companies in the past.
We may seek business combination opportunities in industries
or sectors which may or may not be outside of our management’s area of expertise.
Although we focus on identifying companies
in the consumer sector, we will consider an initial business combination outside of our management’s area of expertise if
an initial business combination candidate is presented to us and we determine that such candidate offers an attractive business
combination opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded
a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent
in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to
investors in our initial public offering than a direct investment, if an opportunity were available, in an initial business combination
candidate. In the event we elect to pursue a business combination outside of the areas of our management’s expertise, our
management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this
prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that
we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk
factors. Accordingly, any stockholders who choose to remain stockholders following our initial business combination could suffer
a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with
a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have all of these positive attributes. If we complete our initial business combination with
a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a
business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide
to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval
of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation
of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less
than $10.00 per share on the redemption of their shares. See “— 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” and other risk factors below.
We may seek business combination opportunities with a financially
unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile
revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business
combination with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be
affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues
or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk
factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain 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 or the stockholders from a financial point of view.
Unless we complete our initial business
combination with an affiliated entity or our board cannot independently determine the fair market value of the target business
or businesses, we are not required to obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions that the price we are paying is fair to our company from a financial point of view. If
no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market
value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials
or tender offer documents, as applicable, related to our initial business combination.
We may issue additional common stock or preferred stock
to complete our initial business combination or under an employee incentive plan after completion of our initial business combination.
We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one
at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated
certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of
incorporation authorizes the issuance of up to 100,000,000 shares of Class A common stock, par value $0.0001 per share, 10,000,000
shares of Class B common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share.
Immediately after our initial public offering, there will be 77,000,000 and 4,250,000 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 outstanding warrants but not the shares of Class A common stock
issuable upon conversion of Class B common stock. Immediately after the consummation of our initial public offering, there will
be no shares of preferred stock issued and outstanding. Shares of Class B common stock are convertible into shares of our Class
A common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances
in which we issue Class A common stock or equity-linked securities related to our initial business combination. Shares of Class
B common stock are also convertible at the option of the holder at any time.
We may issue a substantial number of additional
shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion
of our initial business combination (although our amended and restated certificate of incorporation provides that we may not issue
securities that can vote with common stockholders on matters related to our pre-initial business combination activity). We may
also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the
time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate
of incorporation. However, our amended and restated certificate of incorporation provides, among other things, that prior to our
initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i)
receive funds from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated
certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with
the approval of our stockholders. However, our executive officers, directors and director nominees have agreed, pursuant to a written
agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify
the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination
within 18 months from the closing of our initial public offering or (B) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their
shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number
of then outstanding public shares.
The issuance of additional shares of common
or preferred stock:
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may significantly dilute the equity interest of investors in our initial public offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our
common stock;
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could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our
present officers and directors; and
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
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Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire
or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive
only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account
and our warrants will expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys, consultants
and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may
fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event
will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate
and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.
In certain circumstances, our public stockholders may receive less than $10.00 per share on the redemption of their shares. See
“— 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” and other risk factors below.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join
us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully effect our initial
business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our initial business combination, it is likely that some or all of the management of the target
business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination,
we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with
the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping
them become familiar with such requirements. In addition, the officers and directors of an initial business combination candidate
may resign upon completion of our initial business combination. The departure of an initial business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an initial
business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an initial business combination candidate’s management team
will remain associated with the initial business combination candidate following our initial business combination, it is possible
that members of the management of an initial business combination candidate will not wish to remain in place. The loss of key personnel
could negatively impact the operations and profitability of our post-combination business.
We are dependent upon our executive officers and directors
and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively
small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the
continued service of our executive officers and directors, at least until we have completed our initial business combination. We
do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The
unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our key personnel may negotiate employment
or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with a target business in connection with
a particular business combination. These agreements may provide for them to receive compensation or reimbursement for out-of-pocket
expenses, if any, following our initial business combination and as a result, may cause them to have conflicts of interest in determining
whether a particular business combination is the most advantageous.
Our key personnel may be able to remain
with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting
agreements in connection with the initial business combination. Additionally, they may negotiate reimbursement of any out-of-pocket
expenses incurred on our behalf prior to the consummation of our initial business combination, should they choose to do so. Such
negotiations would take place simultaneously with the negotiation of the initial business combination and could provide for such
individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after
the completion of the initial business combination, or as reimbursement for such out-of-pocket expenses. The personal and financial
interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe
the ability of such individuals to remain with us after the completion of our initial business combination will not be the determining
factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however,
that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you
that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any
of our key personnel will remain with us will be made at the time of our initial business combination. In addition, pursuant to
an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our sponsor,
upon consummation of an initial business combination, will be entitled to nominate three individuals for election to our board
of directors.
We may have a limited ability to assess the management
of a prospective target business and, as a result, may affect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value
of our stockholders’ investment in us.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’ management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain
stockholders following the initial business combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value.
Our officers and directors will allocate their time to
other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This
conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required
to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between
our operations and our search for an initial business combination and their other businesses. We do not intend to have any full-time
employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors
for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of
hours per week to our affairs. Our independent directors may also serve as officers or board members for other entities. If our
officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs
in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative
impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’
other business affairs, please see the section of this prospectus entitled “Item 10. Directors, Executive Officers and Corporate
Governance — Directors and Executive Officers.”
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.
Following the completion of our initial
public offering and until we consummate our initial business combination, we intend to engage in the business of identifying and
combining with one or more businesses. Our officers and directors are, and may in the future become, affiliated with entities (such
as operating companies or investment vehicles) that are engaged in a similar business, although Mr. Coleman and Mr. Smith may not
participate in the formation of, or become an officer or director of, any other special purpose acquisition companies with a class
of securities registered under the Exchange Act until we have entered into a definitive agreement regarding our initial business
combination or we have failed to complete our initial business combination within 18 months after the closing of our initial public
offering.
Our officers and directors also may become
aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain
fiduciary or contractual duties. Any such companies may present additional conflicts of interest in pursuing an acquisition target.
Accordingly, they may have conflicts of
interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved
in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and
restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of
our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another
legal obligation.
For a complete discussion of our officers’
and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the
sections of this prospectus entitled “Item 10. Directors, Executive Officers and Corporate Governance— Directors and
Executive Officers,” “Item 10. Directors, Executive Officers and Corporate Governance — Conflicts of Interest”
and “Item 13. Certain Relationships and Related Transactions, and Director Independence.”
Our officers, directors, security holders and their respective
affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest
in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact,
we may enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or
officers, although we do not intend to do so. We do not have a policy that expressly prohibits any such persons from engaging for
their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict
between their interests and ours.
We may engage in an initial business combination with one
or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or
existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor,
officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers
or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described
under the section of this prospectus entitled “Item 10. Directors, Executive Officers and Corporate Governance — Conflicts
of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors
are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with
which they are affiliated, and there have been no preliminary discussions concerning an initial business combination with any such
entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities,
we would pursue such a transaction if we determined that such affiliated entity met our criteria for an initial business combination
as set forth in the section of this prospectus entitled “Item 1. Business — Selection of a Target Business and Structuring
of our Initial 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 or another independent entity that commonly renders
valuation opinions, regarding the fairness to our stockholders from a financial point of view of an initial business combination
with one or more 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 initial business combination may not be as advantageous to our public
stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their
entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether
a particular business combination target is appropriate for our initial business combination.
In June 2019, our sponsor purchased an aggregate
of 3,593,750 founder shares for an aggregate purchase price of $25,000, or approximately $0.007 per share. In August 2019, the
Company effected a stock split resulting in an increase in the total number of shares of Class B common stock outstanding from
3,593,750 to 5,750,000, such that the total number of founder shares would represent 20% of the total number of shares of common
stock outstanding upon completion of our initial public offering. Subsequent to such stock split, in August 2019, our sponsor transferred
10,000 founder shares to each of Mr. Bradley, our Chief Financial Officer, and Messrs. Gannon, Ginsberg and Mazer, our independent
directors. These 40,000 shares are not subject to forfeiture in the event the underwriters’ overallotment option is not exercised.
The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the
outstanding shares after our initial public offering. The founder shares will be worthless if we do not complete an initial business
combination. In addition, our sponsor purchased an aggregate of 6,100,000 at a price of $1.00 per warrant ($6,100,000 in the aggregate),
that will also be worthless if we do not complete an initial business combination. Holders of founder shares have agreed (A) to
vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any founder shares in
connection with a stockholder vote to approve a proposed initial business combination. In addition, we may obtain loans from our
sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors
may influence their motivation in identifying and selecting a target business combination, completing an initial business combination
and influencing the operation of the business following the initial business combination.
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the
date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following our initial
public offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will
not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind
in or to the monies held in the trust account.
As such, no issuance of debt will affect
the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety
of negative effects, including:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay
our debt obligations;
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we
breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation
of that covenant;
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available
for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund
other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in
government regulation;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
and execution of our strategy; and
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other disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business combination
with the proceeds of our initial public offering and the sale of the private placement warrants which will cause us to be solely
dependent on a single business which may have a limited number of services and limited operating activities. This lack of diversification
may negatively impact our operating results and profitability.
Of the net proceeds from our initial public
offering and the sale of the private placement warrants, $232,196,027 was available in our trust account and $131,151 was available
in our working capital account to complete our initial business combination and pay related fees and expenses as of December 31,
2020 (which includes up to $8,050,000 for the payment of deferred underwriting commissions).
We may effectuate our initial business combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not
be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the
SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined
basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to
numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several
business combinations in different industries or different areas of a single industry. In addition, we focus our search for an
initial business combination in a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance of a single business, property or asset, or
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dependent upon the development or market acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject
us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses
in unrelated industries in conjunction with our initial business combination. With multiple business combinations, we could also
face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations
and services or products of the acquired companies in a single operating business. If we are unable to adequately address these
risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination
with a private company about which little information is available, which may result in an initial business combination with a
company that is not as profitable as we suspected, if at all.
In pursuing our initial business combination
strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information
generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial
business combination on the basis of limited information, which may result in an initial business combination with a company that
is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a
target business after our initial business combination.
We may structure an initial business combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to the initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue
a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding
capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of
a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than
a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may
subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock
than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control
of the target business. We cannot provide assurance that, upon loss of control of a target business, new management will possess
the skills, qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete an initial business combination with which a
substantial majority of our stockholders do not agree.
Our amended and restated certificate of
incorporation does not provide a specified maximum redemption threshold, except that 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 consummation of our initial business combination
and after payment of underwriters’ fees and commissions (such that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. As a result, we may be able to complete our initial business combination even 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 initial business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors,
advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class
A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms
of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial
business combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the
holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including
their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation
or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders
may not support.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their
warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our
amended and restated certificate of incorporation requires the approval of holders of 65% of our common stock, and amending our
warrant agreement requires a vote of holders of at least 65% of the public warrants and, solely with respect to any amendment to
the terms of the private placement warrants or any provision of the warrant agreement with respect to the private placement warrants,
50% of the number of the then outstanding private placement warrants. In addition, our amended and restated certificate of incorporation
requires us to provide our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment
to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100%
of our public shares if we do not complete our initial business combination within 18 months from the closing of our initial public
offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination
activity. To the extent any such amendments would be deemed to fundamentally change the nature of any securities offered through
this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot
assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business
combination in order to effectuate our initial business combination.
The provisions of our amended and restated certificate
of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account such
that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may
be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other
blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the
trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of
incorporation provides that any of its provisions related to pre-initial business combination activity (including the requirement
to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and not release
such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein and
including to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any
redemption or liquidation is substantially reduced or eliminated) may be amended if approved by holders of 65% of our common stock
entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended
and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote
thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities
that can vote on amendments to our amended and restated certificate of incorporation. Our initial stockholders, who collectively
beneficially own up to 20% of our common stock upon the closing of our initial public offering, will participate in any vote to
amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any
manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation
which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase
our ability to complete an initial business combination with which you do not agree. Our stockholders may pursue remedies against
us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers and directors have
agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial business combination within 18 months from the closing of our initial public offering or (ii) with respect to any other
provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders
with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the trust account, 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.
Although we believe that the net proceeds
of our initial public offering and the sale of the private placement warrants are sufficient to allow us to complete our initial
business combination, because we have not yet entered into a definitive agreement with any prospective target business we cannot
ascertain the capital requirements for any particular transaction. If the net proceeds of our initial public offering and the sale
of the private placement warrants prove to be insufficient, either because of the size of our initial business combination, the
depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number
of shares from 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 intend to target businesses larger than we could acquire with the net proceeds
of our initial public offering and the sale of the private placement warrants. As a result, we may be required to seek additional
financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on
acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial
business combination, we would be compelled to either restructure the transaction or abandon that particular business combination
and seek an alternative target business candidate. Further, the amount of additional financing we may be required to obtain could
increase as a result of future growth capital needs for any particular transaction, the depletion of the available net proceeds
in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect
redemption in connection with our initial business combination and/or the terms of negotiated transactions to purchase shares in
connection with our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only approximately $10.00 per share plus any pro rata interest earned on the funds held in the trust account and not
previously released to us to pay our franchise and income taxes on the liquidation of our trust account and our warrants will expire
worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a
material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders
is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete
our initial business combination, our public stockholders may only receive approximately $10.00 per share on the liquidation of
our trust account, and our warrants will expire worthless. Furthermore, as described in the risk factor entitled “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,” under certain circumstances our public stockholders may receive less
than $10.00 per share upon the liquidation of the trust account.
Our initial stockholders may exert a substantial influence
on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of our initial public offering,
our initial stockholders own shares representing 20% of our issued and outstanding shares of common stock. Accordingly, they may
exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including
amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial
stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would
increase their control. Factors that would be considered in making such additional purchases would include consideration of the
current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our initial
stockholders, is 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. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders and
only holders of our founder shares will have the right to vote on the election of directors prior to our initial business combination.
In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the prior
consent of our sponsor. Accordingly, our initial stockholders will continue to exert control at least until the completion of our
initial business combination.
We may amend the terms of the warrants in
a manner that may be adverse to holders of public warrants with the approval by the holders of at least 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 Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 50% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public
warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding public warrants approve of such amendment.
Although our ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public
warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the
warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A
common stock purchasable upon exercise of a warrant.
A provision of our warrant agreement may make it more difficult
for us to consummate an initial business combination.
Unlike most blank check companies, if
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we issue additional shares of common stock or equity-linked
securities for capital raising purposes in connection with the closing of our initial business combination at a newly issued price
of less than $9.20 per share (the “Newly Issued Price”);
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the aggregate gross proceeds from such issuances represent
more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination
on the date of the consummation of our initial business combination (net of redemptions), and
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the market value is below $9.20 per share,
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then the exercise price of the warrants will be adjusted to
be equal to 115% of the higher of the market value and the Newly Issued Price, and the $18.00 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to 180% of the higher of the market value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial business combination with a target business.
We may redeem your unexpired warrants prior to their exercise
at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the
third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are
met. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common
stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we
are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common
stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in our initial
public offering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price
therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price
when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding
warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private
placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.
Our warrants and founder shares may have an adverse effect
on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We issued warrants to purchase 11,500,000
shares of our Class A common stock as part of the units offered in our initial public offering and, simultaneously with the closing
of our initial public offering, we issued in a private placement warrants to purchase an aggregate of 6,100,000 shares of Class
A common stock at $11.50 per share. Our initial stockholders currently own an aggregate of 5,750,000 founder shares. The founder
shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In
addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the
price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including
as to exercise price, exercisability and exercise period.
To the extent we issue shares of Class A
common stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional
shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive business combination
vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common
stock and reduce the value of the shares of Class A common stock issued to complete the initial business combination. Therefore,
our warrants and founder shares may make it more difficult to effectuate an initial business combination or increase the cost of
acquiring the target business.
The private placement warrants are identical
to the warrants sold as part of the units in our initial public offering except that, so long as they are held by our sponsor or
its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise
of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days
after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
Because each unit contains one-half of one redeemable warrant
and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable
warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless
you purchase at least two units, you will not be able to receive or trade a whole warrant. This is different from other offerings
similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established
the components of the units in this way in order to reduce the dilutive effect of the warrants upon completion of an initial business
combination since the warrants will be exercisable in the aggregate for one half of the number of shares compared to units that
each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses.
Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
The requirements of being a public company may strain our
resources and divert management’s attention.
As a public company, we are subject to the
reporting requirements of the Exchange Act, the Sarbanes Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the listing requirements of NASDAQ and other applicable securities rules and regulations. Compliance with these rules and regulations
increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand
on our systems and resources, particularly after we are no longer an “emerging growth company.” The Sarbanes-Oxley
Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial
reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial
reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s
attention may be diverted from other business concerns, which could adversely affect our business and operating results. We may
need to hire more employees in the future or engage outside consultants to comply with these requirements, which will increase
our costs and expenses.
A market for our securities may not develop, which would
adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly
due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market
for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless
a market can be established and sustained.
Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that a proxy
statement with respect to a vote on an initial business combination meeting certain financial significance tests include historical
and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in
connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards
Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance
with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination
within the prescribed time frame.
We are an emerging growth company within the meaning of
the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies,
this could make our securities less attractive to investors and may make it more difficult to compare our performance with other
public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging
growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market
value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case
we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find
our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive
as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be,
there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act
exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
Compliance obligations under the Sarbanes-Oxley Act may
make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the Sarbanes-Oxley Act requires
that we evaluate and report on our system of internal controls beginning with this Report. 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 initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such business combination.
Provisions in our amended and restated certificate of incorporation
and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for
our Class A common stock and could entrench management.
Our amended and restated certificate of
incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their
best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage
transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions
under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management
more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices
for our securities.
Our amended and restated certificate of incorporation requires,
to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other
employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in
the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to
service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors,
officers, other employees or stockholders.
Our amended and restated certificate of
incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our
directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only
in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be
deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court
of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court
of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days
following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery,
(C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) any action arising under the Securities Act,
as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice
of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision
may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any
of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although
our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation
to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other
jurisdictions, which could harm our business, operating results and financial condition.
Our amended and restated certificate of
incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law.
Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created
by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits
brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive
jurisdiction.
Cyber incidents or attacks directed at us could result
in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including
information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive
or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently
protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate
any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse
consequences on our business and lead to financial loss.
If we effect our initial business combination with a company
with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively
impact our operations.
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to any special considerations
or risks associated with companies operating in an international setting, including any of the following:
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higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial
and legal requirements of overseas markets;
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rules and regulations regarding currency redemption;
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complex corporate withholding taxes on individuals;
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laws governing the manner in which future business combinations may be effected;
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tariffs and trade barriers;
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regulations related to customs and import/export matters;
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longer payment cycles and challenges in collecting accounts receivable;
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tax issues, including but not limited to tax law changes and variations in tax laws as compared to the United States;
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currency fluctuations and exchange controls;
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cultural and language differences;
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employment regulations;
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changes in industry, regulatory or environmental standards within the jurisdictions where we operate;
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crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration of political relations with the United States; and
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government appropriations of assets.
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We may not be able to adequately address
these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.
We may face risks related to consumer sector companies.
Business combinations with companies in
the consumer sector entail special considerations and risks. If we are successful in completing a business combination with such
a target business, we may be subject to, and possibly adversely affected by, the following risks:
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An inability to compete effectively in a highly competitive environment with many incumbents having substantially greater resources;
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An inability to manage rapid change, increasing consumer expectations and growth;
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An inability to build strong brand identity and improve customer satisfaction and loyalty;
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Limitations on a target business’ ability to protect its intellectual property rights, including its trade secrets, that
could cause a loss in revenue and any competitive advantage;
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The high cost or unavailability of materials, equipment, supplies and personnel that could adversely affect our ability to
execute our operations on a timely basis;
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An inability to attract and retain customers;
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An inability to license or enforce intellectual property rights on which our business may depend;
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Seasonality and weather conditions that may cause our operating results to vary from quarter to quarter;
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An inability by us to successfully anticipate changing consumer preferences and buying trends and manage our product line and
inventory commensurate with customer demand;
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Potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of
materials that we may distribute;
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Dependence of our operations upon third-party suppliers whose failure to perform adequately could disrupt our business;
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Our operating results may be adversely affected by changes in the cost or availability of raw materials and energy;
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We may be subject to production-related risks which could jeopardize our ability to realize anticipated sales and profits;
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Changes in the retail industry and markets for consumer products affecting our customers or retailing practices could negatively
impact customer relationships and our results of operations; and
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Our business could involve the potential for product recalls, product liability and other claims against us, which could affect
our earnings and financial condition.
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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 consumer sector. 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.