Item
1A. Risk Factors
Ownership
of our securities involves a high degree of risk. 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. This report also contains forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors,
including the risks described below.
In
addition to the risks and uncertainties set forth below, we face certain material risks and uncertainties related to the Proposed
Business Combination with FoA. If we succeed in effecting the Proposed Business Combination, we will face additional and different
risks and uncertainties related to the business of FoA. Such material risks are set forth in the Proxy Statement filed with the
SEC in connection with the General Meeting to approve the Proposed Business Combination, among other matters.
We
are a blank check company with no operating history and no revenues, and you have no basis on which to evaluate our ability to
achieve our business objective.
We
are a newly incorporated company established under the laws of the Cayman Islands with no operating results to date. Because we
lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing
our initial business combination with one or more target businesses. We may be unable to complete our initial business combination.
If we fail to complete our initial business combination, we will never generate any operating revenues.
Our
independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about
our ability to continue as a “going concern.”
As of December 31, 2020, we had approximately $850,000 outside of the trust account
and a working capital deficit of approximately $836,000. Further, we have incurred, expect to continue to incur, significant costs in
pursuit of our acquisition plans. Management’s plans to address this need for capital are discussed under “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” Our plans to raise capital and to consummate our initial
business combination, including the Proposed Business Combination, may not be successful. These factors, among others, raise substantial
doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this report do not include any
adjustments that might result from our inability to continue as a going concern.
Our
public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even though a majority of our public shareholders do not support such a combination.
We
may not hold a shareholder vote to approve our initial business combination unless the business combination would require shareholder
approval under applicable law or stock exchange rules or if we decide to hold a shareholder vote for business or other reasons.
For instance, the rules of the NYSE currently allow us to engage in a tender offer in lieu of a shareholder meeting, but
would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding
shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination
that required us to issue more than 20% of our issued and outstanding shares, we would seek shareholder approval of such business
combination. However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek shareholder
approval of a proposed business combination or will allow shareholders to sell their shares to us in a tender offer will be made
by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether
the terms of the transaction would otherwise require us to seek shareholder approval. Accordingly, we may consummate our initial
business combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the business
combination we consummate.
If
we seek shareholder approval of our initial business combination, our initial shareholders, officers and directors have agreed
to vote in favor of such initial business combination, regardless of how our public shareholders vote.
Unlike
many other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority
of the votes cast by the public shareholders in connection with an initial business combination, our initial shareholders have
agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with us, to vote
their founder shares and any public shares held by them in favor of our initial business combination. As a result, in addition
to our initial shareholders’ founder shares and the ordinary shares underlying the units that affiliates of our sponsor
purchased in our initial public offering, we would need 8,281,251, or 28.8%, of the 28,750,000 public shares sold in our initial
public offering to be voted in favor of a transaction (assuming all issued and outstanding shares are voted), subject to any higher
threshold as is required by Cayman Islands or other applicable law, in order to have such initial business combination approved.
Our directors and officers have entered into letter agreements similar to the one signed by our initial shareholders with respect
to public shares acquired by them, if any. We expect that our initial shareholders and their permitted transferees will own at
least 27% of our issued and outstanding ordinary shares at the time of any such shareholder vote. Accordingly, if we seek shareholder
approval of our initial business combination, it is more likely that the necessary shareholder approval will be received than
would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our
public shareholders.
Your
only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise
of your right to redeem your shares from us for cash, unless we seek shareholder approval of such business combination.
You
may not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since
our board of directors may complete a business combination without seeking shareholder approval, public shareholders may not have
the right or opportunity to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do
not seek shareholder approval, your only opportunity to affect the investment decision regarding a potential business combination
may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth
in our tender offer documents mailed to our public shareholders in which we describe our initial business combination.
The
ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public shareholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment
of the deferred underwriting commissions, to be less than $5,000,001 (so that we do not then become subject to the SEC’s
“penny stock” rules), or any greater net tangible asset or cash requirement that may be contained in the agreement
relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause
our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described
above, we would not proceed with such redemption and the related business combination and may instead search for an alternate
business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination
transaction with us.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many shareholders may exercise
their redemption rights and, therefore, we 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 is submitted for redemption than we initially expected, we may need to restructure the transaction
to reserve a greater portion of the cash in the trust account or arrange for third-party financing.
Raising
additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable
levels. The above considerations may limit our ability to complete the most desirable business combination available to us or
optimize our capital structure.
The
ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your shares.
If
our 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
increases. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In
either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our
redemption until we liquidate or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses
leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential
business combination targets, in particular 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 shareholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination by April 8, 2021, unless we obtain the approval of our shareholders to amend our amended
and restated memorandum and articles of association to extend the date by which we must complete our initial business combination.
Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not
complete our initial business combination with that particular target business, we may be unable to complete our initial business
combination with any target business. This risk will increase as we get closer to the end of the prescribed time frame. 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
shareholders may receive only $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire
worthless.
Our
sponsor, officers and directors have agreed that we must complete our initial business combination by April 8, 2021, unless
we obtain the approval of our shareholders to amend our amended and restated memorandum and articles of association to extend
the date by which we must complete our initial business combination. We may not be able to complete the Proposed Business Combination
or find another suitable target business and complete our initial business combination within such time period. Our ability to
complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and
debt markets and the other risks described herein. For example, the coronavirus (COVID-19) pandemic persists both in
the U.S. and globally and, while the extent of the impact of the COVID-19 pandemic on us will depend on future developments, it
could limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased
market liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the COVID-19 pandemic
and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) may negatively
impact businesses we may seek to acquire.
If
we have not completed our initial business combination within such time period, we will: (1) cease all operations except
for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 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 (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable),
divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’
rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law;
and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, wind up our affairs and subsequently dissolve, subject in each case to our obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. In such case, our public shareholders
may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares, and our warrants will expire
worthless. 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 shareholders may be less than $10.00 per share” and other risk factors herein.
If
we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates
may elect to purchase shares from public shareholders, which may influence a vote on a proposed business combination and reduce
the public “float” of our ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or any of their affiliates
may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of
our initial business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement
that such shareholder, 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 any of their affiliates
purchase shares in privately negotiated transactions from public shareholders who have already elected to exercise their redemption
rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The price per share
paid in any such transaction may be different than the amount per share a public shareholder would receive if it elected to redeem
its shares in connection with our initial business combination. The purpose of such purchases could be to vote such shares in
favor of our initial business combination and thereby increase the likelihood of obtaining shareholder approval of our 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. This 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 ordinary shares and the number of beneficial holders
of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our
securities on a national securities exchange.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our 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 shareholder fails to receive our tender offer or proxy
materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares. In addition, the tender
offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our
initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem
public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate
your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public shareholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (1) the
completion of our initial business combination, and then only in connection with those ordinary shares that such shareholder properly
elected to redeem, subject to the limitations described elsewhere in this report, (2) the redemption of any public shares
properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association
(A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial
business combination by April 8, 2021 (or such later date as may be approved by our shareholders in accordance with our amended
and restated memorandum and articles of association) or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity and (3) the redemption of our public shares if we are unable to complete
our initial business combination by April 8, 2021 (or such later date as may be approved by our shareholders in accordance
with our amended and restated memorandum and articles of association), subject to applicable law and as further described elsewhere
in this report. In no other circumstances will a public shareholder 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.
The
NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in
our securities and subject us to additional trading restrictions.
Our
units, ordinary shares and warrants are currently listed on the NYSE. We cannot assure you that our securities will continue to
be listed on the NYSE in the future or prior to our initial business combination. In order to continue listing our securities
on the NYSE prior to our initial business combination, we must maintain certain financial, distribution and share price levels.
Generally, we must maintain a minimum number of holders of our securities. Additionally, in connection with our initial business
combination, we will be required to demonstrate compliance with the NYSE’s initial listing requirements, which are more
rigorous than the NYSE’s continued listing requirements, in order to continue to maintain the listing of our securities
on the NYSE. For instance, our share price would generally be required to be at least $4 per share. We cannot assure you that
we will be able to meet those initial listing requirements at that time.
On
August 15, 2019, we received the Notice from the staff of NYSE Regulation of the NYSE indicating that we were not then in compliance
with Section 802.01B of the Manual, which requires us to maintain a minimum of 300 public shareholders on a continuous basis.
Pursuant to the Notice, we were subject to the procedures set forth in Sections 801 and 802 of the Manual. We submitted a business
plan that demonstrated how we expected to return to compliance with the minimum public shareholders requirement within 18 months
of receipt of the Notice. On October 24, 2019, we were notified by the staff of NYSE Regulation that the NYSE’s Listings
Operations Committee agreed to accept our business plan, and we were subject to quarterly monitoring for compliance with such
plan. On November 5, 2020, we were notified by the staff of NYSE Regulation that we are a “company back in compliance”
with Section 802.01B of the Manual. Our ordinary shares, warrants and units, which trade under the symbols “RPLA,”
“RPLA WS” and “RPLA.U,” respectively, continue to be listed and traded on the NYSE and no longer bear
the indicator “.BC” on the consolidated tape to indicate noncompliance with the NYSE’s continued listing standards.
If
the NYSE delists any of our securities from trading on its exchange and we are not able to list our securities on another national
securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could
face significant material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our ordinary shares are a “penny stock” which will require brokers trading in our ordinary
shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary
trading market for our securities;
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limited amount of news and analyst coverage; and
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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, ordinary shares
and warrants are listed on the NYSE, our units, ordinary shares and warrants are covered securities under such statute. 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 the NYSE, our securities would not qualify as
covered securities under such statute and we would be subject to regulation in each state in which we offer our securities.
Our
security holders are not entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete
an initial business combination with a target business that has not been identified, we may be deemed to be a “blank check”
company under the U.S. securities laws. However, because we had net tangible assets in excess of $5,000,000 upon the completion
of our initial public offering and the private placement and filed a Current Report on Form 8-K, including an audited
balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check
companies, such as Rule 419. Accordingly, our security holders are not afforded the benefits or protections of those rules.
Among other things, this means our units were immediately tradable upon consummation of our initial public offering and we have
a longer period of time to complete our initial business combination than do companies subject to Rule 419. Moreover, offerings
subject to Rule 419 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 shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our ordinary shares, you will
lose the ability to redeem all such shares in excess of 15% of our ordinary shares.
If
we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide
that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking
redemption rights with respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer
to as the “Excess Shares.” However, we would not be restricting our shareholders’ ability to vote all of their
shares (including Excess Shares) for or against our initial business combination. Your inability to redeem the Excess Shares will
reduce your influence over our ability to complete our 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 shares in open market
transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares, and our
warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public
offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target
businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses. Furthermore, in the event we seek shareholder approval
of our initial business combination and we are obligated to pay cash for our ordinary shares, it will potentially reduce the resources
available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully
negotiating a business combination. If we are unable to complete our initial business combination, our public shareholders may
receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our
warrants will expire worthless. 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 shareholders may be less than $10.00 per share” and other
risk factors herein.
If
the funds not being held in the trust account are insufficient to allow us to operate until April 8, 2021, we may be unable
to complete our initial business combination.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until April 8, 2021, assuming
that our initial business combination is not completed during that time. We expect to incur significant costs in pursuit of our
acquisition plans. Management’s plans to address this need for capital and potential loans from certain of our affiliates
are discussed in the section of this report titled “Management’s Discussion and Analysis of Financial Condition and
Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able
to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively
impact the analysis regarding our ability to continue as a going concern at such time.
We
believe that the funds available to us outside of the trust account, will be sufficient to allow us to operate until April 8,
2021; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the
funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion
of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep
target businesses from “shopping” around for transactions with other companies or investors on terms more favorable
to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention
to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and
were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient
funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete our
initial business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account and our warrants will expire worthless. 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 shareholders
may be less than $10.00 per share” and other risk factors herein.
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, to pay our taxes
and to complete our initial business combination. Our sponsor is not obligated to fund such loans.
As
of December 31, 2020, we had approximately $850,000 outside of the trust account and a working capital deficit of approximately
$836,000. If we are required to seek additional capital, we would need to borrow funds from our sponsor, management team or other
third parties to operate or may be forced to liquidate. Neither our sponsor, members of our management team nor any of their affiliates
is under any obligation to loan funds to us in such circumstances. Any such loans would be repaid only from funds held outside
the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete
our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations
and liquidate the trust account. In such case, our public shareholders may receive only $10.00 per share, or less in certain circumstances,
and our warrants will expire worthless. 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 shareholders may be less than $10.00 per share”
and other risk factors herein.
Subsequent
to our 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
the price of our securities, 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
identify all material issues that may be present with a particular target business that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control
will not later arise. As a result of these factors, we may be forced to later write down or write off assets, restructure our
operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully
identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with
our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity,
the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In
addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of
assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly,
any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders and warrant holders are unlikely to have a remedy
for such reduction in value.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by shareholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we have sought
and will continue to seek to have all vendors, service providers (other than our independent auditors), prospective target businesses
or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind
in or to any monies held in the trust account for the benefit of our public shareholders, 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 enter into an agreement
with a third party that has not executed a waiver only 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 we are 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 shareholders 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 (other than our independent auditors)
for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction
agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount
per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third
party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act.
Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible
to the extent of any liability for such third-party claims. We have not independently verified whether our sponsor has sufficient
funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Our
sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our sponsor to reserve for such
obligations, and therefore, no funds are currently set aside to cover any such obligations. As a result, if any such claims were
successfully made against the trust account, the funds available for our initial business combination and redemptions could be
reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our
directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public shareholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (1) $10.00 per public share or (2) such
lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in
the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that
it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent
directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we
currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so
in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of
funds in the trust account available for distribution to our public shareholders may be reduced below $10.00 per share.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members
of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members
of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under
applicable debtor/creditor and/or insolvency laws as a voidable performance. As a result, a liquidator could seek to recover some
or all amounts received by our shareholders. In addition, our board of directors may be viewed as having breached its fiduciary
duty to our creditors and/or having acted in bad faith by paying public shareholders from the trust account prior to addressing
the claims of creditors, thereby exposing itself and us to claims of punitive damages.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary
bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over
the claims of our shareholders and the per-share amount that would otherwise be received by our shareholders in connection with
our liquidation may be reduced.
If,
before distributing the proceeds in the trust account to our public shareholders, we file a winding up petition or winding
up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency
law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of
our shareholders. To the extent any liquidation claims deplete the trust account, the per-share amount that would otherwise be
received by our shareholders in connection with our liquidation would 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;
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each
of which may make it difficult for us to complete our initial business combination.
In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company with the SEC;
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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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We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the
trust account may be invested by the trustee only in U.S. government treasury bills with a maturity of 180 days or less or
in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. Because the investment of the proceeds is restricted to these instruments, we believe we meet the requirements for
the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the
Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have
not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business
combination, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, 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.
If
we are unable to consummate our initial business combination by April 8, 2021, our public shareholders may be forced to wait
beyond April 8, 2021 before redemption from our trust account.
If
we are unable to consummate our initial business combination by April 8, 2021, unless we obtain the approval of our shareholders
to amend our amended and restated memorandum and articles of association to extend the date by which we must complete our initial
business combination, we will distribute the aggregate amount then on deposit in the trust account, including interest (less up
to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public
shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described
elsewhere in this report. Any redemption of public shareholders from the trust account shall be effected automatically by function
of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required to windup,
liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation
process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Law (2016 Revision)
of the Cayman Islands, or the Companies Law. In that case, investors may be forced to wait beyond April 8, 2021 before the
redemption proceeds of our trust account become available to them and they receive the return of their pro rata portion of the
proceeds from our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation
unless we consummate our initial business combination prior thereto and then only in cases where investors have sought to redeem
their ordinary shares. Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we
are unable to complete our initial business combination.
Our
shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful
payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts
as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received
by our shareholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from
the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons. We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be
paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business
would be guilty of an offence and may be liable to a fine of up to approximately $15,000 and to imprisonment for five years in
the Cayman Islands.
We
may not hold an annual meeting of shareholders until after the consummation of our initial business combination.
In
accordance with the NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than
one year after our first fiscal year end following our listing on the NYSE. There is no requirement under the Companies Law for
us to hold annual or general meetings to elect directors. Until we hold an annual meeting of shareholders, public shareholders
may not be afforded the opportunity to discuss company affairs with management.
We
have not registered the ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from
being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We
have not registered the ordinary shares issuable upon exercise of the warrants under the Securities Act or any state securities
laws. However, under the terms of the warrant agreement, we have agreed, as soon as practicable, but in no event later than 15
business days after the closing of our initial business combination, to use our best efforts to file a registration statement
under the Securities Act covering the issuance of such shares and maintain a current prospectus relating to the ordinary shares
issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant
agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental
change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated
by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants
are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis.
However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders
seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the
securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above,
if our ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that it
satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at
our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain
in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable blue sky
laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying
the warrants under applicable state securities laws and no exemption is 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 shall
not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired
their warrants as part of a purchase of units will have paid the full unit purchase price solely for the ordinary shares included
in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to
register or qualify the underlying ordinary shares for sale under all applicable state securities laws.
The
grant of registration rights to our initial shareholders and their permitted transferees may make it more difficult to complete
our initial business combination, and the future exercise of such rights may adversely affect the market price of our ordinary
shares.
Pursuant
to an agreement entered into on April 3, 2019, our initial shareholders and their permitted transferees can demand that we
register the resale of their founder shares. In addition, our sponsor and its permitted transferees can demand that we register
the resale of the private placement warrants and the ordinary shares issuable upon exercise of the private placement warrants,
and holders of warrants that may be issued upon conversion of working capital loans may demand that we register the resale of
such warrants or the ordinary shares 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 ordinary shares. In addition, the existence of the registration rights may make our initial
business combination more costly or difficult to conclude. This is because the shareholders of the target business may increase
the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market
price of our ordinary shares that is expected when the ordinary shares owned by our initial shareholders or their permitted transferees,
our private placement warrants or warrants issued in connection working capital loans are registered for resale.
Because
we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination,
you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although
we initially focused our search for a target in Argentina and/or Brazil on industries we believed would have favorable prospects
and a high likelihood of generating strong risk-adjusted returns for our shareholders, including, but not limited to, the consumer,
telecommunications and technology, energy, financial services and real estate sectors, we may complete a business combination
with an operating company in any industry or sector. However, we will not, under our amended and restated memorandum and articles
of association, be permitted to effectuate our initial business combination with another blank check company or similar company
with nominal operations. Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular
industry in which we may ultimately operate or the target business which we may ultimately acquire. 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 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 shareholder who chooses to remain a shareholder following our initial business combination
could suffer a reduction in the value of their securities. Such shareholders are unlikely to have a remedy for such reduction
in value.
Past
performance by our management team and their affiliates may not be indicative of future performance of an investment in our company.
Information
regarding performance by our management team and their affiliates is presented for informational purposes only. Past performance
by our management team and their affiliates is not a guarantee either (1) that we will be able to identify a suitable candidate
for our initial business combination or (2) of success with respect to any business combination we may consummate. You should
not rely on the historical record of our management team and their affiliates as indicative of our future performance of an investment
in the company or the returns the company will, or is likely to, generate going forward.
We
may seek acquisition opportunities outside the Latin America opportunity sectors, which may be outside of our management’s
areas of expertise.
We
will consider a business combination outside the Latin America opportunity sectors, which may be outside of our management’s
areas of expertise, if a business combination candidate is presented to us and we determine that such candidate offers an attractive
acquisition opportunity for our company. In the event we elect to pursue an acquisition outside of the areas of our management’s
expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information
contained elsewhere in this report regarding the areas of our management’s expertise would not be relevant to an understanding
of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of
the significant risk factors relevant to such acquisition. Accordingly, any shareholder who chooses to remain a shareholder following
our initial business combination could suffer a reduction in the value of their securities. Such shareholders are unlikely to
have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition
with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if shareholder approval
of the transaction is required by law, or we decide to obtain shareholder approval for business or other reasons, it may be more
difficult for us to attain shareholder approval of our initial business combination if the target business does not meet our general
criteria and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
We
may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established
record of revenue or earnings.
To
the extent we complete our initial business combination with an early stage company, a financially unstable business or an entity
lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business
with which we combine. These risks include investing in a business without a proven business model and with limited historical
financial data, volatile revenues or earnings, intense competition 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 from a financial point of view.
Unless
we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion from an independent
investment banking firm that is a member of FINRA, or from an independent accounting firm, that the price we are paying is fair
to our company from a financial point of view. If no opinion is obtained, our shareholders will be relying on the judgment of
our board of directors, who will determine fair market value based on standards generally accepted by the financial community.
Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to
our initial business combination.
We
may issue additional ordinary shares or preferred shares to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. Any such issuances would substantially dilute the interest of our shareholders
and likely present other risks.
Our
amended and restated memorandum and articles of association authorizes the issuance of up to 200,000,000 ordinary shares, par
value $0.0001 per share, and 2,000,000 undesignated preferred shares, par value $0.0001 per share. As of March 25,
2021, there were 141,937,500 and 2,000,000 authorized but unissued ordinary shares and preferred shares, respectively, available
for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants.
We
may issue a substantial number of additional ordinary shares, and may issue preferred shares, in order to complete our initial
business combination or under an employee incentive plan after completion of our initial business combination. However, our amended
and restated memorandum and articles of association provide, among other things, that prior to our initial business combination,
we may not issue additional ordinary shares that would entitle the holders thereof to (1) receive funds from the trust account
or (2) vote on any initial business combination. The issuance of additional ordinary shares or preferred shares:
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may
significantly dilute the equity interest of our current security holders;
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may
subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded our
ordinary shares;
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could
cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our
ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present
officers and directors; and
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may
adversely affect prevailing market prices for our units, ordinary shares and/or warrants.
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We
may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences
to U.S. investors.
If
we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our ordinary
shares or warrants, the U.S. holder may be subject to adverse U.S. federal income tax consequences and may be subject to additional
reporting requirements. Our PFIC status for our current and subsequent taxable years may depend on whether we qualify for the
PFIC start-up exception. Depending on the particular circumstances, the application of the start-up exception is uncertain, and
there can be no assurance that we will qualify for the start-up exception. Accordingly, there can be no assurances with respect
to our status as a PFIC for our current taxable year or any subsequent taxable year. Our actual PFIC status for any taxable year
will not be determinable until after the end of such taxable year. Moreover, if we determine we are a PFIC for any taxable year,
we will endeavor to provide to a U.S. holder such information as the Internal Revenue Service (“IRS”) may require,
including a PFIC annual information statement, in order to enable the U.S. holder to make and maintain a “qualified electing
fund” election, but there can be no assurance that we will timely provide such required information, and such election would
likely be unavailable with respect to our warrants in all cases. We urge U.S. holders to consult their tax advisors regarding
the possible application of the PFIC rules to holders of our ordinary shares and warrants.
We
may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result
in taxes imposed on shareholders.
We
may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law,
reincorporate in the jurisdiction in which the target company or business is located or in another jurisdiction. The transaction
may require a shareholder to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which
its members are resident if it is a tax transparent entity. We do not intend to make any cash distributions to shareholders to
pay such taxes. Shareholders may be subject to withholding taxes or other taxes with respect to their ownership of us after the
reincorporation.
Resources
could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts
to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public
shareholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation
of our trust account and our warrants will expire worthless.
The
investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments requires substantial management time and attention and substantial costs for accountants, attorneys
and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the
proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business,
we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such
event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to
locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public shareholders
may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and
our warrants will expire worthless.
We
are dependent upon our 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, Edmond Safra and Gregorio Werthein, our
Co-Chief Executive Officers, Gerardo Werthein, a member of our advisory board, and Leonardo Madcur and Ezra Cohen, two of our
directors. We believe that our success depends on the continued service of our officers and directors, at least until we have
completed our initial business combination. In addition, our officers and directors are not required to commit any specified amount
of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business activities,
including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of our officers
and directors have time and attention requirements for investment funds of which affiliates of our sponsor are the investment
managers. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or officers.
The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
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 engage after our initial business combination, we cannot assure you that our assessment of these individuals will prove to
be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could
cause us to have to expend time and resources helping them become familiar with such requirements.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination. These agreements may provide for them to receive compensation following our initial business combination and as a
result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with the company after the completion of our initial business combination only if they are
able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take
place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target
business, subject to his or her fiduciary duties under Cayman Islands law. However, we believe the ability of such individuals
to remain with us after the completion of our initial business combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our
key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our
key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel
will remain with us will be made at the time of our initial business combination.
We
may have limited ability to assess the management of a prospective target business and, as a result, may effect our initial business
combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
shareholders who choose to remain shareholders following our initial business combination could suffer a reduction in the value
of their securities. Such shareholders are unlikely to have a remedy for such reduction in value.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The departure
of a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business. The role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot
be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s management team
will remain associated with the acquisition candidate following our initial business combination, it is possible that members
of the management of an acquisition candidate will not wish to remain in place.
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 a 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 several 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 also serve as officers
and board members for other entities. If our officers’ and directors’ other business affairs require them to devote
substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote
time to our affairs, which may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in 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 have engaged and will
continue to engage in the business of identifying and combining with one or more businesses. Our sponsor and officers and directors
are, or may in the future become, affiliated with entities that are engaged in a similar business, and they are not prohibited
from sponsoring, or otherwise becoming involved with, other blank check companies prior to us completing our initial business
combination. Moreover, certain of our officers and directors have time and attention requirements for investment funds of which
affiliates of our sponsor are the investment managers.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in
determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our
favor and a potential target business may be presented to other entities prior to its presentation to us, subject to his or her
fiduciary duties under Cayman Islands law.
EMS
Capital LP and its personnel are subject to extensive regulatory requirements and oversight.
EMS
Capital LP is an investment manager and, as such, it and its personnel are subject to extensive regulation and oversight
by the SEC and other regulatory authorities, including requirements under the Investment Advisers Act of 1940. Any violations,
or alleged allegations, by EMS Capital LP or its personnel of these regulatory requirements could harm our ability to complete
an initial business combination, including by making prospective target companies less likely to consummate a business combination
with us.
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 a business combination with a target business that is affiliated
with our sponsor, our directors or officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits
any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons
or entities may have a conflict between their interests and ours.
In
particular, affiliates of our sponsor have invested in industries as diverse as consumer, media & entertainment, telecommunications
and technology, industrials, energy, financial services, insurance, agribusiness, vineyards and real estate. As a result, there
may be substantial overlap between companies that would be a suitable business combination for us and companies that would make
an attractive target for such other affiliates.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our sponsor, officers or directors 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 and directors. Our officers and directors also serve as officers and board members for other
entities. Such entities may compete with us for business combination opportunities. Although we will not be specifically focusing
on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such
affiliated entity met our criteria for a business combination and such transaction was approved by a majority of our independent
and disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm that is a
member of FINRA, or from an independent accounting firm, regarding the fairness to our company from a financial point of view
of a business combination with one or more domestic or international businesses affiliated with our sponsor, officers or directors,
potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous
to our public shareholders as they would be absent any conflicts of interest.
Since
our initial shareholders 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
December 2018, our sponsor subscribed for an aggregate of 7,187,500 founder shares for an aggregate purchase price of $25,000,
or approximately $0.003 per share. In March 2019, our sponsor transferred 25,000 founder shares to each of two of our independent
directors and 40,000 founder shares to our third independent director. The founder shares will be worthless if we do not complete
an initial business combination. In addition, our sponsor purchased an aggregate of 7,750,000 private placement warrants for a
purchase price of $7,750,000 in the aggregate, or $1.00 per warrant, that will also be worthless if we do not complete a business
combination. Each private placement warrant may be exercised for one ordinary share at a price of $11.50 per share, subject to
adjustment.
The
founder shares are identical to the ordinary shares included in the units sold in our initial public offering except that: (1) the
founder shares are subject to certain transfer restrictions; (2) our initial shareholders have entered into a letter agreement
with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder shares and
any public shares held by them in connection with the completion of our initial business combination and (B) to waive their
rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial
business combination by April 8, 2021 (or such later date as may be approved by our shareholders in accordance with our amended
and restated memorandum and articles of association), although they will be entitled to liquidating distributions from the trust
account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed
time frame; and (3) the founder shares are entitled to registration rights. In addition, our officers and directors have
entered into letter agreements similar to the one signed by our initial shareholders with respect to any public shares acquired
by them, if any.
The
personal and financial interests of our sponsor, 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. This risk may become more acute as April 8, 2021 nears, which is the deadline for the completion
of our initial business combination, unless we obtain the approval of our shareholders to amend our amended and restated memorandum
and articles of association to extend the date by which we must complete our initial business combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
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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and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our
debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain
covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain
such financing while the debt security is outstanding;
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our
inability to pay dividends on our ordinary shares;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for
dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and 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; and
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution
of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
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We
may be able to complete only one business combination with the proceeds of our initial public offering and the sale of the private
placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products
or services. This lack of diversification may negatively impact our operations and profitability.
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 risks. Further, we would not
be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities
which may have the resources to complete several business combinations in different industries or different areas of a single
industry. Accordingly, the prospects for our success may be:
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solely
dependent upon the performance of a single business, property or asset; or
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dependent
upon the development or market acceptance of a single or limited number of products, processes or services.
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This
lack of diversification may 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. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. Very
little public information generally exists about private companies, and we could be required to make our decision on whether to
pursue a potential initial business combination on the basis of limited information, which may result in a business combination
with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide
assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We
may structure our initial business combination so that the post-transaction company in which our public shareholders own shares
will own less than 100% of the equity interests or assets of a target business, but we will complete such business combination
only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for us not to be required to register as an investment company
under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our shareholders prior to our 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 business combination transaction. For example, we could pursue a transaction in which we issue a substantial number
of new ordinary shares in exchange for all of the issued and outstanding capital stock of a target. In this case, we would acquire
a 100% interest in the target. However, as a result of the issuance of a substantial number of new ordinary shares, our shareholders
immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares subsequent
to such transaction. In addition, other minority shareholders may subsequently combine their holdings resulting in a single person
or group obtaining a larger share of the company’s 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
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our shareholders do not agree.
Our
amended and restated memorandum and articles of association do 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, after payment of the deferred
underwriting commissions, to be less than $5,000,001 (such that we do not then become subject to the SEC’s “penny
stock’ rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating to
our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial
majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder
approval of our initial business combination and do not conduct redemptions in connection with our 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 any of their affiliates. In the event the aggregate cash consideration we would be required to pay for
all ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to
the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business
combination or redeem any shares, all ordinary shares submitted for redemption will be returned to the holders thereof, and we
instead may search for an alternate business combination.
In
order to effectuate an initial business combination, blank check companies have, in the past, amended various provisions of their
charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated memorandum
and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business
combination that some of our shareholders may not support.
In
order to effectuate a business combination, blank check companies have, in the past, amended various provisions of their charters
and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased
redemption thresholds and changed industry focus. We cannot assure you that we will not seek to amend our amended and restated
memorandum and articles of association or governing instruments in order to effectuate our initial business combination, though
amending our amended and restated memorandum and articles of association will require at least a special resolution of our shareholders
as a matter of Cayman Islands law.
Certain
provisions of our amended and restated memorandum and articles of association that relate to our pre-business combination activity
(and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the
approval of holders of at least two-thirds of our ordinary shares who attend and vote at a general meeting, which is a lower amendment
threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated
memorandum and articles of association and the trust agreement to facilitate the completion of an initial business combination
that some of our shareholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-business combination activity, without approval by holders of a certain percentage
of the company’s shares. In those companies, amendment of these provisions typically requires approval by holders holding
between 90% and 100% of the company’s public shares. Our amended and restated memorandum and articles of association provide
that any provisions, including those related to pre-business combination activity (including the requirement to deposit proceeds
of our initial public offering and the sale of the private placement of warrants into the trust account and not release such amounts
except in specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who attend
and vote in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our trust
account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who collectively beneficially
own 27% of our ordinary shares, may participate in any vote to amend our amended and restated memorandum and articles of association
and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the
provisions of our amended and restated memorandum and articles of association which govern our pre-business combination behavior
more easily than some other blank check companies, and this may increase our ability to complete our initial business combination
with which you do not agree. However, our amended and restated memorandum and articles of association prohibit any amendment (a) that
would modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination by April 8, 2021 (or such later date as may be approved by our shareholders in accordance with our amended and
restated memorandum and articles of association) or (b) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, unless we provide public shareholders with the opportunity to redeem their
public shares. Furthermore, our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they
will not propose such an amendment unless we provide our public shareholders with the opportunity to redeem their public shares.
In certain circumstances, our shareholders may pursue remedies against us for any breach of our amended and restated memorandum
and articles of association.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination.
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 redeem for cash a significant number of shares from shareholders who elect redemption in connection with our
initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business
combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure
you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be
unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction
or abandon that particular business combination and seek an alternative target business candidate. 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 shareholders 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 shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation
of our trust account, and our warrants will expire worthless.
Our
initial shareholders hold a substantial interest in us. As a result, they may exert a substantial influence on actions requiring
shareholder vote, potentially in a manner that you do not support.
Our
initial shareholders collectively beneficially own 27% of our issued and outstanding ordinary shares. As a result of their substantial
ownership in our company, our initial shareholders may exert a substantial influence on actions requiring a shareholder vote,
potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association
and approval of major corporate transactions. If our initial shareholders purchase any additional ordinary shares in the aftermarket
or in privately negotiated transactions, this would increase their influence over these actions. Accordingly, our initial shareholders
will exert significant influence over actions requiring a shareholder vote 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 a majority of the then outstanding public warrants.
Our
warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company,
as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of
any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority
of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public
warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a
majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public
warrants with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of such amendments
could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease
the number of ordinary shares 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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(i)
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we
issue additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of
our initial business combination at an issue price or effective issue price, or the Newly Issued Price, of less than $9.20
per ordinary share;
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(ii)
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the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of our initial business combination on the date of the consummation of our initial business combination (net
of redemptions); and
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the
volume weighted average trading price of our ordinary shares during the 20 trading day period starting on the trading day
prior to the day on which we consummate our initial business combination, or 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 ordinary shares equals or exceeds $18.00 per share
(as adjusted for share splits, share dividends, rights issuances, subdivisions, 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 we send the notice of
redemption to the warrant holders. If and when the warrants become redeemable by us, we may exercise our redemption right even
if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption
of the outstanding warrants could force you to: (1) exercise your warrants and pay the exercise price therefor at a time
when it may be disadvantageous for you to do so; (2) sell your warrants at the then-current market price when you might otherwise
wish to hold your warrants; or (3) 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 our sponsor or its permitted transferees.
Our
warrants and founder shares may have an adverse effect on the market price of our ordinary shares and make it more difficult to
effectuate our initial business combination.
We
issued warrants to purchase 14,375,000 ordinary shares, at a price of $11.50 per whole share (subject to adjustment), as part
of the units sold in our initial public offering and an aggregate of 7,750,000 private placement warrants, each exercisable to
purchase one ordinary share at a price of $11.50 per share, subject to adjustment. Our initial shareholders currently hold 7,187,500
founder shares. In addition, if our sponsor, an affiliate of our sponsor or certain of our officers and directors make 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. To the extent we issue ordinary shares to effectuate
a business transaction, the potential for the issuance of a substantial number of additional ordinary shares upon exercise of
these warrants or conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance
will increase the number of issued and outstanding ordinary shares and reduce the value of the ordinary shares issued to complete
the business transaction. Therefore, our warrants and founder shares may make it more difficult to effectuate a business combination
or increase the cost of acquiring the target business.
The
private placement warrants are identical to the warrants sold as part of the units in our initial public offering except that,
so long as they are held by our sponsor or its permitted transferees: (1) they will not be redeemable by us; (2) they
(including the ordinary shares 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; (3) they may
be exercised by the holders on a cashless basis; and (4) they (including the ordinary shares issuable upon exercise of these
warrants) are entitled to registration rights.
A
market for our securities may not fully develop or be sustained, which would adversely affect the liquidity and price of our securities.
The
price of our securities may vary significantly due to one or more potential business combinations and general market or economic
conditions. An active trading market for our securities may not fully develop or be sustained. Additionally, if our securities
become delisted from the NYSE for any reason, and are quoted on the OTC Pink Sheets, an inter-dealer automated quotation system
for equity securities not listed on a national exchange, the liquidity and price of our securities may be more limited than if
we were listed on the NYSE or another national exchange. You may be unable to sell your securities unless a market can be fully
developed and sustained.
Because
we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the
same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the
tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, U.S. 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 target businesses we may acquire
because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in
accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We
are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage
of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this
could make our securities less attractive to investors and may make it more difficult to compare our performance with other public
companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. As a result, our shareholders may not have
access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates exceeds
$700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth
company as of the end of such fiscal year. 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 election to opt out is irrevocable.
We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it
has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised
standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements
with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of
using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
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 ordinary shares held by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter,
and (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our ordinary
shares held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. To the
extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with
other public companies difficult or impossible.
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 acquisition.
Section 404
of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report
on Form 10-K for the year ended December 31, 2020. Only in the event we are deemed to be a large accelerated filer
or an accelerated filer would 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 business 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 acquisition.
Because
we are incorporated under the laws of the Cayman Islands, shareholders may face difficulties in protecting their interests, and
their ability to protect their rights through the U.S. Federal courts may be limited.
We
are an exempted company incorporated under the laws of the Cayman Islands. As a result, it may be difficult for holders of our
securities to effect service of process within the United States upon our directors or officers, or enforce judgments obtained
in the United States courts against our directors or officers.
Our
corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same
may be supplemented or amended from time to time) and the common law of the Cayman Islands. The rights of shareholders to take
action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under
Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be
under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different
body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed
and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a
shareholders derivative action in a Federal court of the United States.
We
have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (1) to recognize
or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities
laws of the United States or any state; and (2) in original actions brought in the Cayman Islands, to impose liabilities
against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so
far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory
enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize
and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle
that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment
has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment
must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent
with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or
be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive
or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings
if concurrent proceedings are being brought elsewhere.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions
taken by management, members of our board of directors or controlling shareholders than they would as public shareholders of a
United States company.
Provisions
in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors
might be willing to pay in the future for our ordinary shares and could entrench management.
Our
amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals
that shareholders may consider to be in their best interests. These provisions include two-year director terms and the ability
of our board of directors to designate the terms of and issue new series of preferred shares, which may make more difficult the
removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
After
our initial business combination, it is possible that a majority of our directors and officers will live outside the United States
and all of our assets will be located outside the United States; therefore investors may not be able to enforce federal securities
laws or their other legal rights.
It
is possible that after our initial business combination, a majority of our directors and officers will reside outside of the United
States and all of our assets will be located outside of the United States. As a result, it may be difficult, or in some cases
not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors
or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors
and officers under United States laws.
Our
search for a business combination, and any target business with which we ultimately consummate a business combination, may be
materially adversely affected by the coronavirus (COVID-19) pandemic and the status of debt and equity markets.
The
coronavirus (COVID-19) pandemic has resulted, 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, or if COVID-19 causes a prolonged economic downturn. 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 materially adversely affected.
In
addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing,
which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity
and third-party financing being unavailable on terms acceptable to us or at all.
The
COVID-19 pandemic may also have the effect of heightening many of the other risks described in this “Risk Factors”
section, such as those related to the market for our securities and cross-border transactions.
The
securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the
value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.00
per share.
The
funds held in the trust account are invested only in U.S. government treasury obligations with a maturity of 180 days or less
or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct
U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of
interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest
rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that
it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business
combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders
are entitled to receive their pro-rata share of the funds held in the trust account, plus any interest income, net of taxes paid
or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest for any dissolution
expenses). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount
received by public shareholders may be less than $10.00 per share.
As
the number of special purpose acquisition companies increases, there may be more competition to find an attractive target for
an initial business combination. This could increase the costs associated with completing our initial business combination and
may result in our inability to find a suitable target for our initial business combination.
In
recent years, the number of special purpose acquisition companies that have been formed has increased substantially. Many companies
have entered into business combinations with special purpose acquisition companies, and there are still many special purpose acquisition
companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies
currently in registration. As a result, at times, fewer attractive targets may be available, and it may require more time, effort
and resources to identify a suitable target for an initial business combination.
In
addition, because there are more special purpose acquisition companies seeking to enter into an initial business combination with
available targets, the competition for available targets with attractive fundamentals or business models may increase, which could
cause target companies to demand improved financial terms. Attractive deals could also become scarcer for other reasons, such
as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close
business combinations or operate targets post-business combination. This could increase the cost of, delay or otherwise complicate
or frustrate our ability to find a suitable target for and/or complete our initial business combination.
If
we effect our initial business combination with a company located outside of the United States, we would be subject to a variety
of additional risks that may negatively impact our operations.
If
we effect our initial business combination with a company located outside of the United States, we would be subject to any special
considerations or risks associated with companies operating in an international setting, including any of the following:
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costs
and difficulties inherent in managing cross-border business operations and complying with 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;
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tax
issues, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government
provides to domestic companies, and variations in tax laws as compared to the United States;
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currency
fluctuations and exchange controls;
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rates
of inflation;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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public
health or safety concerns and governmental restrictions, including those caused by outbreaks of infectious disease, such as
the COVID-19 pandemic;
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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;
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energy
shortages and tariffs resulting in unpredictable availability and costs;
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economic
stability; and
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government
appropriation 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.
If
we effect a business combination with a company located outside of the United States, the laws applicable to such company will
likely govern all of our material agreements and we may not be able to enforce our legal rights.
If
we effect a business combination with a company located outside of the United States, the laws of the country in which such company
operates will likely govern almost all of the material agreements relating to its operations. We cannot assure you that the target
business will be able to enforce any of its material agreements or that remedies will be available in this new jurisdiction. The
system of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation
as in the United States. The inability to enforce or obtain a remedy under any of our future agreements could result in a significant
loss of business, business opportunities or capital.
If
our management following our initial business combination is unfamiliar with U.S. securities laws, they may have to expend time
and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, any or all of our management could resign from their positions as officers of the company, and
the management of the target business at the time of the business combination could remain in place. Management of the target
business may not be familiar with U.S. securities laws. If new management is unfamiliar with U.S. securities laws, they may have
to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead to various
regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of
our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be
subject, to a significant extent, to the economic, political, social and government policies, developments and conditions in the
country in which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located
could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a
slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain
industries could materially and adversely affect our ability to find an attractive target business with which to consummate our
initial business combination and if we effect our initial business combination, the ability of that target business to become
profitable.
Risks
Associated with the Proposed Business Combination
References
in this section to “we,” “us,” “our” and “Replay” refer to Replay Acquisition
Corp., references in this section to “New Pubco” refer to Finance of America Companies Inc., references in this section
to “FoA” refer to Finance of America Equity Capital LLC and references in this section to the “combined company”
and “post-combination company” refer to New Pubco and its subsidiaries, including FoA, following the consummation
of the Proposed Business Combination. Stockholders should review closely the risk factors included in the Proxy Statement filed
with the SEC in connection with the General Meeting to approve the Proposed Business Combination, among other matters.
Although
New Pubco expects to file an application to list its securities on the NYSE, there can be no assurance that its securities
will be so listed or, if listed, that New Pubco will be able to comply with the continued listing standards.
New
Pubco expects to file a new listing application to list its Class A Common Stock on the NYSE upon consummation of the Proposed
Business Combination in accordance with the requirements of the exchange. As part of the listing process, New Pubco will be required
to provide evidence that it is able to meet the initial listing requirements. There can be no assurance that New Pubco will be
able to meet the initial listing standards of the NYSE or any other exchange or, if its securities are listed, that New Pubco
will be able to maintain such listing
In
addition, if after listing, the NYSE delists New Pubco’s securities from trading on its exchange for failure to meet the
continued listing standards, New Pubco and its securityholders could face significant material adverse consequences including:
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a
limited availability of market quotations for its securities;
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a
determination that its common stock is a “penny stock” which will require
brokers trading in its common stock to adhere to more stringent rules, possibly resulting
in a reduced level of trading activity in the secondary trading market for its common
stock; and
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a
decreased ability to issue additional securities or obtain additional financing in the
future.
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There
has been no prior public market for New Pubco’s Class A Common Stock and a market may never develop, which would adversely
affect the liquidity and price of the Class A Common Stock.
The
New Pubco Class A Common Stock is a new issue of securities for which there is no established public market. New Pubco intends
to apply to list the Class A Common Stock on the NYSE. However, an active public market for the Class A Common Stock may not develop
or be sustained after the consummation of the Proposed Business Combination, which could affect the ability to sell, or depress
the market price of, the Class A Common Stock. We cannot predict the extent to which a trading market will develop or how liquid
that market might become.
In
addition, the price of New Pubco securities after the Proposed Business Combination can vary due to general economic conditions
and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities are not
listed on, or become delisted from, the NYSE for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated
quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may
be more limited than if we were quoted or listed on the NYSE or another national securities exchange. You may be unable to sell
your securities unless a market can be established or sustained.
We
are not required to obtain, and have not obtained, 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 terms of the Proposed Business
Combination are fair to our company from a financial point of view.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm that
the price we are paying is fair to our company from a financial point of view. Our board of directors did not obtain a third-party
valuation or fairness opinion in connection with their determination to approve the Proposed Business Combination. In analyzing
the Proposed Business Combination, our board of directors and management team conducted due diligence on FoA and researched the
industry in which FoA operates and concluded that the Proposed Business Combination was in the best interest of our shareholders.
Accordingly, our shareholders will be relying solely on the judgment of our board of directors in determining the value of the
Proposed Business Combination, and our board of directors may not have properly valued such business. The lack of third-party
valuation or a fairness opinion may also lead an increased number of shareholders to vote against the Proposed Business Combination
or demand redemption of their shares, which could potentially impact our ability to consummate the Proposed Business Combination.
Even
if we consummate the Proposed Business Combination, there is no guarantee that the public warrants will ever be in the money,
and they may expire worthless and the terms of our warrants may be amended.
The
exercise price for our warrants is $11.50 per share. There is no guarantee that the public warrants will ever be in the money
prior to their expiration, and as such, the warrants may expire worthless.
Our
ability to successfully effect the Proposed Business Combination and to be successful thereafter will be dependent upon the
efforts of our key personnel, including the key personnel of FoA, whom we expect to stay with the post-combination company following
the Proposed Business Combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business and its financial condition could suffer as a result.
Our
ability to successfully effect our Proposed Business Combination is dependent upon the efforts of our key personnel, including
the key personnel of FoA. Although certain of our key personnel may remain with the post-combination company in senior management
or advisory positions following our Proposed Business Combination, it is possible that we will lose certain key personnel, the
loss of whom could negatively impact the operations and profitability of our post-combination business. We anticipate that some
or all of the FoA management will remain in place.
FoA’s
success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult
to replace. Departure by certain of FoA’s officers could have a material adverse effect on FoAs business, financial condition,
or operating results. FoA does not maintain key-man life insurance on any of its officers. The services of such personnel may
not continue to be available to FoA.
Our
company and FoA will be subject to business uncertainties and contractual restrictions while the Proposed Business Combination
is pending.
Uncertainty
about the effect of the Proposed Business Combination on employees and third parties may have an adverse effect on our company
and FoA. These uncertainties may impair our or FoA’s ability to retain and motivate key personnel and could cause third
parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing
business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities
of the Proposed Business Combination, our or FoA’s business could be harmed.
We
may waive one or more of the conditions to the Proposed Business Combination.
We
may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Proposed Business Combination,
to the extent permitted by our amended and restated memorandum and articles of association and applicable laws. For example, it
is a condition to our obligations to close the Proposed Business Combination that there be no breach of FoA’s representations
and warranties as of the closing date of the Proposed Business Combination. However, if our board of directors determines that
any such breach is not material to the business of FoA, then our board of directors may elect to waive that condition and close
the Proposed Business Combination. We are not able to waive the condition that our shareholders approve the Proposed Business
Combination.
The
exercise of our directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Proposed
Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Proposed Business
Combination or waivers of conditions are appropriate and in our shareholders’ best interest.
In
the period leading up to the closing date of the Proposed Business Combination, events may occur that, pursuant to the Transaction
Agreement, would require us to amend the Transaction Agreement, to consent to certain actions taken by the other parties to the
Transaction Agreement or to waive rights to which our company is entitled under the Transaction Agreement. Such events could arise
because of changes in the course of FoA’s business, a request by a party to undertake actions that would otherwise be prohibited
by the terms of the Transaction Agreement or the occurrence of other events that would have a material adverse effect on FoA’s
business and would entitle us to terminate the Transaction Agreement. In any of such circumstances, it would be at our discretion,
acting through our board of directors, to grant our consent or waive our rights. The existence of the financial and personal interests
of our directors described elsewhere in this report may result in a conflict of interest on the part of one or more of the directors
between what she/he may believe is best for our company and our shareholders and what she/he may believe is best for herself/himself
or her/his affiliates in determining whether or not to take the requested action. As of the date of this report, we do not believe
there will be any changes or waivers that our directors and officers would be likely to make after shareholder approval of the
Proposed Business Combination has been obtained. While certain changes could be made without further shareholder approval, if
there is a change to the terms of the transaction that would have a material impact on the shareholders, we will be required to
circulate a new or amended proxy statement or supplement thereto and resolicit the vote of our shareholders.
We
will incur significant transaction and transition costs in connection with the Proposed Business Combination.
We
have incurred and expect to continue incurring significant costs in connection with consummating the Proposed Business Combination
and operating as a public company following the consummation of the Proposed Business Combination. We may incur additional costs
to retain key employees. Except as otherwise specified in the Transaction Agreement, we and FoA shall each bear our own costs
and expenses incurred in connection with the Transaction Agreement and the Proposed Business Combination, including all legal,
accounting, consulting, investment banking and other fees, expenses and costs; provided, however, that we and FoA shall each pay
one-half of all fees and expenses in connection with any filing pursuant to the HSR Act and other competition laws.
Subsequent
to our completion of our Proposed 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.
Although
we have conducted due diligence on FoA, we cannot assure you that this diligence has uncovered all material issues that may be
present in FoA’s business, that it would be possible to uncover all material issues through a customary due diligence process,
or that factors outside of FoA’s business and outside of our and FoA’s control will not later arise. As a result of
these factors, we may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other
charges that could result in losses. Additionally, 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
the post-combination company or its securities. Accordingly, any of our shareholders who choose to remain shareholders following
our Proposed Business Combination could suffer a reduction in the value of their shares.
Unanticipated
changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely
affect our financial condition and results of operations.
We
will be subject to income taxes in the United States, and our domestic tax liabilities will be subject to the allocation of expenses
in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of
factors, including:
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changes
in the valuation of our deferred tax assets and liabilities;
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expected
timing and amount of the release of any tax valuation allowances;
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tax
effects of stock-based compensation;
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costs
related to intercompany restructurings;
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changes
in tax laws, regulations or interpretations thereof; and
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lower
than anticipated future earnings in jurisdictions where we have lower statutory tax rates
and higher than anticipated future earnings in jurisdictions where we have higher statutory
tax rates.
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In
addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities.
Outcomes from these audits could have an adverse effect on our financial condition and results of operations.
If
the Proposed Business Combination’s benefits do not meet the expectations of investors, shareholders or financial analysts,
the market price of New Pubco securities may decline.
If
the benefits of the Proposed Business Combination do not meet the expectations of investors or securities analysts, the market
price of New Pubco securities may decline. The market value of New Pubco securities at the time of the Proposed Business Combination
may vary significantly from the prices of Replay’s securities on the date the Transaction Agreement was executed, the date
of this report, or the date on which our shareholders vote on the Proposed Business Combination.
In
addition, following the Proposed Business Combination, fluctuations in the price of New Pubco securities could contribute to the
loss of all or part of your investment. Immediately prior to the Proposed Business Combination, there has not been a public market
for New Pubco’s stock and trading in New Pubco’s securities has not been active. Accordingly, the valuation ascribed
to New Pubco’s Class A Common Stock in the Proposed Business Combination may not be indicative of the price that will prevail
in the trading market following the Proposed Business Combination. If an active market for New Pubco’s securities develops
and continues, the trading price of New Pubco securities following the Proposed Business Combination could be volatile and subject
to wide fluctuations in response to various factors, certain of which are beyond our control. Any of the factors listed below
could have a material adverse effect on your investment in our securities and New Pubco securities may trade at prices significantly
below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience
a further decline.
Factors
affecting the trading price of New Pubco’s securities following the Proposed Business Combination may include:
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actual
or anticipated fluctuations in our quarterly financial results or the quarterly financial
results of companies perceived to be similar to us;
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changes
in the market’s expectations about our operating results;
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the
public’s reaction to our or New Pubco’s press releases, our other public
announcements and our or New Pubco’s filings with the SEC;
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speculation
in the press or investment community;
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success
of competitors;
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our
operating results failing to meet the expectation of securities analysts or investors
in a particular period;
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changes
in financial estimates and recommendations by securities analysts concerning the post-combination
company or the market in general;
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operating
and stock price performance of other companies that investors deem comparable to the
post-combination company;
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changes
in laws and regulations affecting our business;
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commencement
of, or involvement in, litigation involving the post-combination company;
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changes
in the post-combination company’s capital structure, such as future issuances of
securities or the incurrence of additional debt;
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the
volume of shares of New Pubco Class A Common Stock available for public sale;
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any
major change in the New Pubco board of directors or management;
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sales
of substantial amounts of New Pubco Class A Common Stock by our directors, officers or
significant shareholders or the perception that such sales could occur; and
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general
economic and political conditions such as recessions, interest rates, fuel prices, international
currency fluctuations and acts of war or terrorism.
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market and industry factors may materially harm the market price of our securities irrespective of our operating performance.
The stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate
to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our
securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors
perceive to be similar to the post-combination company could depress our stock price regardless of our business, prospects, financial
conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to
issue additional securities and our ability to obtain additional financing in the future.
In
the past, securities class action litigation has often been initiated against companies following periods of volatility in their
stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources,
and could also require us to make substantial payments to satisfy judgments or to settle litigation.
Future
sales of New Pubco Class A Common Stock may cause the market price of its securities to drop significantly, even if its business
is performing well.
Our
initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption
rights with respect to their founder shares in connection with (a) the consummation of the Proposed Business Combination or (b)
the liquidation of our trust account if we fail to complete the Proposed Business Combination (or another business combination)
by April 8, 2021 (or such later date as may be approved by our shareholders in accordance with our amended and restated memorandum
and articles of association).
Our
sponsor and our officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder
shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent
to our initial business combination, (x) if the last reported sale price of the ordinary shares equals or exceeds $12.00 per share
(as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like)
for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination,
or (y) the date on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction
that results in all of our shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Furthermore,
the Sponsor Agreement provides for (i) a one-year post-closing lock-up period applicable to the transfer of an initial
shareholder’s New Pubco securities, other than any securities of Replay issued in Replay’s initial public offering or
purchased on the open market, pursuant to the Replay PIPE Agreements or acquired through the exchange of all of the private placement warrants owned by our sponsor for ordinary shares (collectively, the
“Excluded Securities”), and (ii) a 180-day post-closing lock-up period applicable to the transfer of an initial
shareholder’s Excluded Securities, other than any Excluded Securities purchased in connection with the Replay PIPE Agreements
or on the open market after the date of the Sponsor Agreement, except, in each case, to certain customary permitted
transferees.
In
addition, the Principal Stockholders will be entitled to registration rights, subject to certain limitations, with respect to
New Pubco shares they receive in the Proposed Business Combination pursuant to the Registration Rights Agreement to be entered
into in connection with the consummation of the Proposed Business Combination. In addition, these stockholders will have certain
demand and “piggyback” registration rights following the consummation of the Proposed Business Combination. New Pubco
will bear certain expenses incurred in connection with the exercise of such rights. The presence of these additional securities
trading in the public market may have an adverse effect on the market price of New Pubco Class A Common Stock.
A
significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the
near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales
of a substantial number of our securities in the public market could occur at any time. These sales, or the perception in the
market that the holders of a large number of shares intend to sell shares, could reduce the market price of our securities. Our
initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their founder shares until
one year after the completion of the Proposed Business Combination. Notwithstanding the foregoing, (1) if the reported last sale
price of ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances,
subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after the Proposed Business Combination, or (2) if we consummate a liquidation, merger, share exchange, reorganization
or other similar transaction after the Proposed Business Combination which results in all of our shareholders having the right
to exchange their ordinary shares for cash, securities or other property, then such securities will be released from these restrictions.
Our
quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and
investors due to seasonality and other factors, certain of which are beyond our control, resulting in a decline in our stock price.
Our
quarterly operating results may fluctuate significantly because of several factors, including:
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labor
availability and costs for hourly and management personnel;
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macroeconomic
conditions, both nationally and locally;
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negative
publicity relating to products we serve;
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changes
in consumer preferences and competitive conditions; and
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If,
following the Proposed Business Combination, securities or industry analysts do not publish or cease publishing research
or reports about the post-combination company, its business, or its market, or if they change their recommendations regarding
New Pubco’s Class A Common Stock adversely, then the price and trading volume of New Pubco’s Class A Common Stock
could decline.
The
trading market for New Pubco’s Class A Common Stock will be influenced by the research and reports that industry or securities
analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently,
and may never, publish research on Replay or the post-combination company. If no securities or industry analysts commence coverage
of the post-combination company, New Pubco’s stock price and trading volume would likely be negatively impacted. If any
of the analysts who may cover the post-combination company change their recommendation regarding our stock adversely, or provide
more favorable relative recommendations about our competitors, the price of Class A Common Stock would likely decline. If any
analyst who may cover the post-combination company were to cease coverage of the post-combination company or fail to regularly
publish reports on it, we could lose visibility in the financial markets, which could cause New Pubco’s stock price or trading
volume to decline.
Each
of our warrants will be converted into and become the right to receive a New Pubco warrant exercisable for one share of New
Pubco’s Class A Common Stock, which would increase the number of shares eligible for future resale in the public market
and result in dilution to New Pubco’s stockholders.
We
issued public warrants as part of our initial public offering and warrants to purchase 7,750,000 of our ordinary shares as part
of the private placement. Each warrant is exercisable for one ordinary share at $11.50 per share. In addition, prior to consummating
an initial business combination, nothing prevents us from issuing additional securities in a private placement so long as they
do not participate in any manner in the trust account or vote as a class with our ordinary shares on a business combination. In
connection with the Proposed Business Combination, our warrants will be converted into and become New Pubco warrants. To the extent
such warrants are exercised, additional shares of Class A Common Stock will be issued, which will result in dilution to the holders
of Class A Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers
of such shares in the public market could adversely affect the market price of Class A Common Stock.
We
may redeem unexpired warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making
their 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, upon a minimum of 30 days’ prior written notice of redemption; provided that the
last reported sales price of our common stock equals or exceeds $18.00 per share (as adjusted for share splits, share dividends,
rights issuances, subdivisions, 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 we send the notice of redemption to the warrant holders. If and when
the warrants become redeemable by us, we may exercise our redemption rights provided that there is an effective registration statement
covering the issuance of the shares of Class A Common Stock issuable upon exercise of the New Pubco warrants, a current prospectus
relating thereto, and we have provided notice to the holder not less than 30 days prior to the redemption date. Redemption
of the outstanding warrants could force the warrant holders (i) to exercise their warrants and pay the exercise price therefor
at a time when it may be disadvantageous for them to do so, (ii) to sell their warrants at the then-current market price when
they might otherwise wish to hold their 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 their warrants. None of the private
warrants will be redeemable by us so long as they are held by our founders or their permitted transferees.
New
Pubco will be a holding company with no business operations of its own and will depend on cash flow from FoA to meet its
obligations.
Following
the Proposed Business Combination, New Pubco will be a holding company with no business operations of its own or material assets
other than the stock of its subsidiaries. All of its operations will be conducted by its subsidiary, FoA, and its subsidiaries.
As a holding company, New Pubco will require dividends and other payments from its subsidiaries to meet cash requirements. The
terms of any credit facility may restrict New Pubco’s subsidiaries from paying dividends and otherwise transferring cash
or other assets to it. If there is an insolvency, liquidation or other reorganization of any of New Pubco’s subsidiaries,
New Pubco’s stockholders likely will have no right to proceed against their assets. Creditors of those subsidiaries will
be entitled to payment in full from the sale or other disposal of the assets of those subsidiaries before New Pubco, as an equityholder,
would be entitled to receive any distribution from that sale or disposal. If FoA is unable to pay dividends or make other payments
to New Pubco when needed, New Pubco will be unable to satisfy its obligations.
Anti-takeover
provisions contained in New Pubco’s proposed amended and restated certificate of incorporation and proposed bylaws, as well
as provisions of Delaware law, could impair a takeover attempt.
The
proposed amended and restated certificate of incorporation of New Pubco, or the Proposed Charter, contains provisions that may
discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Among other things, these
provisions:
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provide
that subject to the rights of the holders of any preferred stock and the rights granted
pursuant to the Stockholders Agreement, vacancies and newly created directorships may
be filled only by the remaining directors at any time the Principal Stockholders beneficially
own less than 30% of the total voting power of all then outstanding shares of New Pubco’s
capital stock entitled to vote generally in the election of directors;
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would
allow New Pubco to authorize the issuance of shares of one or more series of preferred
stock, including in connection with a stockholder rights plan, financing transactions
or otherwise, the terms of which series may be established and the shares of which may
be issued without stockholder approval, and which may include super voting, special approval,
dividend, or other rights or preferences superior to the rights of the holders of common
stock;
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prohibit
stockholder action by written consent from and after the date on which the Principal
Stockholders beneficially own at least 30% of the total voting power of all then outstanding
shares of New Pubco’s capital stock entitled to vote generally in the election
of directors unless such action is recommended by all directors then in office;
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provide
for certain limitations on convening special stockholder meetings; and
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establish
advance notice requirements for nominations for elections to our board or for proposing
matters that can be acted upon by stockholders at stockholder meetings.
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Further,
as a Delaware corporation, New Pubco will also be subject to provisions of Delaware law, which may impede or discourage a takeover
attempt that New Pubco’s stockholders may find beneficial. These antitakeover provisions and other provisions under Delaware
law could discourage, delay or prevent a transaction involving a change in control of New Pubco, including actions that New Pubco’s
stockholders may deem advantageous, or negatively affect the trading price of the Class A Common Stock. These provisions could
also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause New
Pubco to take other corporate actions they desire.
The
Proposed Charter will designate the Court of Chancery of the State of Delaware or the federal district courts of the United States
of America, as applicable, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated
by New Pubco’s stockholders, which could limit New Pubco’s stockholders’ ability to obtain a favorable judicial
forum for disputes with New Pubco or New Pubco’s directors, officers or other employees.
The
Proposed Charter will provide that, unless New Pubco consents to the selection of an alternative forum, the Court of Chancery
of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative
action or proceeding brought on our behalf; (ii) any action asserting a breach of fiduciary duty owed by any current or former
director, officer, stockholder or employee of New Pubco to New Pubco or its stockholders; (iii) any action asserting a claim against
New Pubco arising under the DGCL, the Proposed Organizational Documents or as to which the DGCL confers jurisdiction on the Court
of Chancery of the State of Delaware; or (iv) any action asserting a claim against New Pubco that is governed by the internal
affairs doctrine.
The
Proposed Charter further will provide that, unless New Pubco consents in writing to the selection of an alternative forum, to
the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for
the resolution of any complaint asserting a cause of action arising under the federal securities laws of the United States, including
the Securities Act and the Exchange Act and, in each case, the applicable rules and regulations promulgated thereunder.
Any
person or entity purchasing or otherwise acquiring any interest in any shares of New Pubco’s capital stock shall be deemed
to have notice of and to have consented to the forum provision in the Proposed Charter. This choice-of-forum provision may limit
a stockholder’s ability to bring a claim in a different judicial forum, including one that it may find favorable or convenient
for a specified class of disputes with New Pubco or New Pubco’s directors, officers, other stockholders or employees, which
may discourage such lawsuits. Alternatively, if a court were to find this provision of the Proposed Charter inapplicable or unenforceable
with respect to one or more of the specified types of actions or proceedings, New Pubco may incur additional costs associated
with resolving such matters in other jurisdictions, which could materially and adversely affect New Pubco’s business, financial
condition and results of operations and result in a diversion of the time and resources of New Pubco’s management and board
of directors.
There
is no guarantee that a shareholder’s decision whether to redeem its shares for a pro rata portion of the trust
account will put the shareholder in a better future economic position.
We
can give no assurance as to the price at which a shareholder may be able to sell its public shares in the future following the
completion of the Proposed Business Combination or any alternative business combination. Certain events following the consummation
of any initial business combination, including the Proposed Business Combination, may cause an increase in our share price, and
may result in a lower value realized now than a shareholder might realize in the future had the shareholder not redeemed its shares.
Similarly, if a shareholder does not redeem its shares, the shareholder will bear the risk of ownership of the public shares after
the consummation of any initial business combination, and there can be no assurance that a shareholder can sell its shares in
the future for a greater amount than the redemption price. A shareholder should consult the shareholder’s own tax and/or
financial advisor for assistance on how this may affect his, her or its individual situation.
If
a shareholder fails to receive notice of our offer to redeem our public shares in connection with our Proposed Business Combination,
or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
If,
despite our compliance with the proxy rules, a shareholder fails to receive our proxy materials, such shareholder may not become
aware of the opportunity to redeem its shares. In addition, the proxy materials that we are furnishing to holders of our public
shares in connection with our Proposed Business Combination describe the various procedures that must be complied with in order
to validly redeem public shares. In the event that a shareholder fails to comply with these procedures, its shares may not be
redeemed.