DEFM14A 1 d105588ddefm14a.htm DEFM14A DEFM14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

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  Preliminary Proxy Statement
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  Definitive Proxy Statement
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  Soliciting Material under §240.14a-12

Crescent Acquisition Corp

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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CRESCENT ACQUISITION CORP 11100 Santa Monica Blvd., Suite 2000

Los Angeles, CA 90025

Dear Crescent Acquisition Corp Stockholder:

We cordially invite you to attend a special meeting in lieu of the 2021 annual meeting of the stockholders of Crescent Acquisition Corp, a Delaware corporation (“we,” “us,” “our” or the “Company”), which will be held on June 16, 2021 at 10:00 a.m. Pacific Time virtually via the Internet (the “Special Meeting”). You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card. The meeting is being held virtually via the Internet and you will not be able to attend the meeting in person.

On January 13, 2021, the Company, Function Acquisition I Corp, a Delaware corporation and a direct, wholly owned subsidiary of the Company (“First Merger Sub”), Function Acquisition II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company (“Second Merger Sub”), LiveVox Holdings, Inc., a Delaware corporation (“LiveVox”), and GGC Services Holdco, Inc., a Delaware corporation, solely in its capacity as the representative, agent and attorney-in-fact of the stockholder of LiveVox (in such capacity, the “Stockholder Representative”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), a copy of which is attached to the accompanying proxy statement as Annex A. The Merger Agreement provides for, among other things, (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation (the “Surviving Corporation”) and becoming a direct, wholly owned subsidiary of the Company as a consequence (the “First Merger”) and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, which will be renamed such name as LiveVox shall designate no later than five business days prior to the closing of the transaction (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”), in each case, in accordance with the terms and subject to the conditions of the Merger Agreement as more fully described in the accompanying proxy statement. Following the closing of the Business Combination, the Company will own, directly or indirectly, all the stock of LiveVox and its direct and indirect subsidiaries and LiveVox TopCo, LLC, a Delaware limited liability company and the sole stockholder of LiveVox as of immediately prior to the effective time of the First Merger (the “LiveVox Stockholder”) will hold a portion of the Company’s stock.

You are being asked to vote on the Business Combination between us and LiveVox. At the Special Meeting, our stockholders will be asked to consider and vote upon a proposal (the “Business Combination Proposal” or “Proposal No. 1”) to approve and adopt the Merger Agreement and approve the Business Combination.

In accordance with and subject to the terms of the Merger Agreement and customary adjustments set forth therein, the base aggregate merger consideration to be paid in connection with the Business Combination is $824,375,000, which amount will be: (i) increased by the amount of cash and cash equivalents held by LiveVox and its direct and indirect subsidiaries as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (ii) decreased by the amount of LiveVox’s outstanding indebtedness as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (iii) decreased by the aggregate amount of transaction expenses incurred by the Company prior to the closing of the Business Combination; (iv) decreased by the aggregate amount of certain transaction expenses incurred by LiveVox and its direct or indirect subsidiaries, to the extent incurred but not paid by LiveVox prior to the closing of the Business Combination, which amount shall also include transaction-related bonuses and other amounts payable in connection with or anticipation of the consummation of the Business Combination; (v) increased by the amount of interest accrued on deposits in the trust account (the “Trust Account”) established at the consummation of our initial public offering (our “IPO”), after giving effect to taxes paid or payable and any redemptions that may be elected by any of our public stockholders for their pro rata share of the aggregate amount of funds in the Trust Account as of


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two business days prior to the closing of the Business Combination (which instructions to redeem such public shares are further discussed in the accompanying proxy statement); (vi) decreased by the $2,000,000 to be placed into an escrow account at the closing of the Business Combination, to be drawn upon by the Company in case of any downward purchase price adjustment and otherwise released to the LiveVox Stockholder as merger consideration (the “Adjustment Escrow Account”); and (vii) decreased by $100,000 to be deposited at the closing of the Business Combination with the Stockholder Representative to pay for third-party expenses of the Stockholder Representative and to otherwise be released to the LiveVox Stockholder as merger consideration (the “Stockholder Representative Expense Holdback Amount”).

The consideration to be paid to the LiveVox Stockholder will be a combination of cash and stock (including Earn-Out Shares). The maximum amount of cash consideration payable to LiveVox Stockholder is $220,000,000, including up to $2,000,000 that could potentially be released to the LiveVox Stockholder from the Adjustment Escrow Account. The exact amount of cash consideration payable to the LiveVox Stockholder as the closing of the Business Combination is to be determined as follows: (i) the aggregate amount of cash contained in the Trust Account immediately prior to the closing of the Business Combination after making payments in connection with redemptions that may be elected by our public stockholders; plus (ii) all cash and cash equivalents held by the Company outside of the Trust Account immediately prior to the closing of the Business Combination; less (iii) $2,000,000 to be placed into the Adjustment Escrow Account; less (iv) the Stockholder Representative Expense Holdback Amount; plus (v) $25,000,000 of Company proceeds pursuant to the Forward Purchase Agreement, dated as of January 13, 2021 (the “Forward Purchase Agreement”), by and between the Company and Crescent Capital Group Holdings LP, a Delaware limited partnership (“Crescent”) and an affiliate of the Company’s sponsor, CFI Sponsor LLC, a Delaware limited liability company (our “Sponsor”), pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A common stock of the Company, par value $0.0001 per share (“Class A Stock”), plus 833,333 redeemable warrants of the Company (“Warrants”), each whole Warrant entitling the holder thereof to purchase one share of Class A Stock at an exercise price of $11.50 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of equity or equity-linked securities), for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination (which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners); plus (vi) $75,000,000 of Company proceeds pursuant to subscription agreements entered into between the Company and certain investors (collectively, the “PIPE Investors”), pursuant to which the PIPE Investors have collectively subscribed for 7,500,000 shares of Class A Stock for an aggregate purchase price of $75,000,000 in cash in private placements that will close immediately prior to the Business Combination; plus (vii) any additional Company proceeds pursuant to the right but not the obligation of Crescent, either alone or with our Sponsor, to purchase additional shares of Class A Stock immediately prior to the closing of the Business Combination at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent the sum of (i) through (vi) is less than $250,000,000 (we refer to the sum of (i) through this (vii) as our “total cash proceeds”); less (viii) certain transaction expenses of the Company and LiveVox (in each case, to the extent incurred and not paid prior to the closing of the Business Combination) (such expenses collectively, the “Aggregate Transaction Expenses”); and less (ix) cash to be retained by the Company in the amount of $100,000,000 less the amount by which the Aggregate Transaction Expenses exceeds $30,000,000.

The remainder of the consideration paid to the LiveVox Stockholder will be stock consideration, consisting of a number of newly issued shares of Class A Stock, valued at $10.00 per share, equal to the difference between the total merger consideration and the cash consideration payable at the closing of the Business Combination for purposes of determining the aggregate number of shares payable to the LiveVox Stockholder for its ownership interests in LiveVox. The number of shares of Class A Stock to be issued to the LiveVox Stockholder as consideration is subject to adjustment, depending on, among other things, the level of redemptions of our shares of Class A Stock by our public stockholders or in certain cases to preserve the intended tax-free treatment of the

 

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Business Combination. To the extent the stock consideration is increased, there will be a corresponding reduction to the cash consideration paid to the LiveVox Stockholder. Following the closing of the Business Combination, the LiveVox Stockholder may receive cash consideration or, in some cases, share consideration as a result of any adjustment of the purchase price.

As additional consideration payable to the LiveVox Stockholder, the Company will issue 5,000,000 shares of Class A Stock (the “Earn-Out Shares”) to the LiveVox Stockholder to be held in an escrow account to be subject to release to the LiveVox Stockholder only if the price of Class A Stock trading on the Nasdaq Capital Market (“Nasdaq”) exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any Earn-Out Shares not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration.

The shares of Class F common stock of the Company, par value $0.0001 per share (our “Class F Stock” and, together with the Class A Stock, our “Common Stock”), will automatically convert into shares of Class A Stock on a one-for-one basis at the closing of the Business Combination and will continue to be subject to the transfer restrictions applicable to the Class F Stock.

As an incentive for LiveVox to enter into the Merger Agreement, our Sponsor has agreed to the cancelation of (i) 7,000,000 Warrants that it acquired pursuant to a private placement in connection with and concurrently with the closing of our IPO and (ii) 2,725,000 shares of Class F Stock held by it immediately following the closing of the Business Combination. Furthermore, our Sponsor and certain of our independent directors have agreed to place a total of 2,743,750 shares of Class A Stock held by them immediately following the closing of the Business Combination (and following the automatic conversion of such shares upon the closing of the Business Combination from shares of Class F Stock into shares of Class A Stock) into an escrow account to be subject to release only if the price of Class A Stock trading on the Nasdaq exceeds the same thresholds as the Earn-Out Shares during the seven-year period following the closing of the Business Combination. Any such securities not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration.

As described further in the accompanying proxy statement, certain agreements in connection with the Business Combination have been or will be entered into on or prior to the date the Business Combination is consummated. Such agreements include the Sponsor Support Agreement, the Stockholder Support Agreement, the Forward Purchase Agreement, the Amended and Restated Registration Rights Agreement, the Escrow Agreement, the Share Escrow Agreement, the Finders Agreement and the Stockholders Agreement. For additional information, please see “Proposal No. 1—Approval of the Business Combination—Related Agreements” in the accompanying proxy statement.

In addition to voting on the Business Combination, at the Special Meeting, Company stockholders will be asked to consider and vote upon: (i) a proposal to approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding common stock pursuant to the Business Combination (the “Nasdaq Proposal” or “Proposal No. 2”); (ii) seven separate proposals relating to adopting the Second Amended and Restated Certificate of Incorporation (collectively, the “Charter Proposals” or “Proposal No. 3”); (iii) proposals to elect nine directors to serve staggered terms on our Board of Directors (our “Board”) until the 2022, 2023 and 2024 annual meetings of the stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposals” or “Proposal No. 4”); (iv) a proposal to approve the LiveVox 2021 Equity Incentive Plan (the “Incentive Plan”), including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 5”); and a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals or the Incentive Plan Proposal (the “Adjournment Proposal” or “Proposal No. 6”). Each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other.

 

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Each of these proposals is more fully described in the accompanying proxy statement, which each of our stockholders is encouraged to read carefully and in its entirety.

Our publicly traded Class A Stock, units and warrants are currently listed on Nasdaq under the symbols “CRSA,” “CRSAU” and “CRSAW,” respectively. We intend to apply to continue the listing of our publicly traded Class A Stock, units and warrants on Nasdaq under the symbols “LVOX,” “LVOXU” and “LVOXW,” respectively, upon the closing of the Business Combination.

Pursuant to our amended and restated certificate of incorporation, we are providing our public stockholders with the opportunity to redeem, upon the closing of the Business Combination, shares of our Class A Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in our Trust Account that holds the proceeds (including interest not previously released to the Company to pay its franchise and income taxes) of our IPO. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $8,750,000 that we will pay to the underwriters of our IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based upon the amount held in our Trust Account of approximately $253,628,041 as of December 31, 2020, and estimated interest income and taxes post-December 31, 2020, the Company estimates that the per-share price at which public stockholders may redeem their Class A Stock from cash held in the Trust Account will be approximately $10.14 at the time of the Special Meeting. Public stockholders may elect to redeem their shares even if they vote in favor of the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the units sold in our IPO. We refer to this as the “15% threshold.” We have no specified maximum redemption threshold under our amended and restated certificate of incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held investment securities with a fair value of approximately $253,628,041 as of December 31, 2020. The Merger Agreement provides that our obligation and LiveVox’s obligation to consummate the Business Combination is conditioned on the Company’s total cash proceeds equaling or exceeding $250,000,000. This condition to closing in the Merger Agreement is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of our Class A Stock by our public stockholders this condition is not met (or waived), then we or LiveVox may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s net tangible assets equaling less than $5,000,001. Public holders of our outstanding Warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Stock.

Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination and to vote any shares of Common Stock owned by them in favor of the Business Combination. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 shares of Class F Stock, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to, (i) in their capacity as holders of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation, and (ii) vote any shares of Common Stock owned by them in favor of the Business Combination and each of the proposals to be considered at the Special Meeting. Currently, our Sponsor and independent directors, in the aggregate, own approximately 20% of our issued and

 

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outstanding shares of Common Stock, including all shares of Class F Stock. Our Class F Stock will be excluded from the pro rata calculation used to determine the per-share redemption price and, along with the Class A Stock it is convertible into, is subject to transfer restrictions.

We are providing the accompanying proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournments or postponements of the Special Meeting. Information about the Special Meeting, the Business Combination and other related business to be considered by the Company’s stockholders at the Special Meeting is included in the accompanying proxy statement. Whether or not you plan to attend the Special Meeting, we urge all Company stockholders to read the accompanying proxy statement, including the Annexes and the accompanying financial statements of the Company and LiveVox, carefully and in their entirety.

In particular, we urge you to read carefully the section entitled “Risk Factors” beginning on page 63 of the accompanying proxy statement.

After careful consideration, our Board has unanimously approved the Merger Agreement and the Business Combination, and unanimously recommends that our stockholders vote “FOR” adoption of the Merger Agreement and approval of the Business Combination, and “FOR” all other proposals presented to our stockholders in the accompanying proxy statement. When you consider the Board’s recommendation of these proposals, you should keep in mind that our directors and officers have interests in the Business Combination that may conflict with your interests as a stockholder. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Interests of Certain Persons in the Business Combination” for additional information.

Approval of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). Approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes cast in the Director Election Proposals; this means that the nine individuals nominated for election to the Board who receive the most “FOR” votes (among the shares of our Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting) will be elected.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in the accompanying proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the Special Meeting. Unless waived by the parties to the Merger Agreement, each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the Special Meeting virtually, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting. If you are a stockholder of record and you virtually attend and vote at the Special Meeting, you may withdraw your proxy and vote at the live webcast.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST DEMAND THAT THE COMPANY REDEEM YOUR SHARES FOR A PRO RATA PORTION OF THE FUNDS HELD IN THE TRUST

 

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ACCOUNT AND TENDER YOUR SHARES TO THE COMPANY’S TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE SCHEDULED DATE OF THE SPECIAL MEETING. YOU MAY TENDER YOUR SHARES BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

On behalf of our Board, I would like to thank you for your support of Crescent Acquisition Corp and look forward to a successful completion of the Business Combination.

 

   Sincerely,
May 14, 2021   

/s/ Robert D. Beyer

Robert D. Beyer

Executive Chairman of the Board of Directors

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

The accompanying proxy statement is dated May 14, 2021 and is expected to be first mailed to Company stockholders on or about May 14, 2021.

 

 

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NOTICE OF SPECIAL MEETING

IN LIEU OF 2021 ANNUAL MEETING OF

STOCKHOLDERS OF CRESCENT ACQUISITION CORP

TO BE HELD JUNE 16, 2021

To the Stockholders of Crescent Acquisition Corp:

NOTICE IS HEREBY GIVEN that a special meeting in lieu of the 2021 annual meeting of the stockholders of Crescent Acquisition Corp, a Delaware corporation (the “Company”), will be held on June 16, 2021 at 10:00 a.m. Pacific Time virtually via the Internet (the “Special Meeting”). You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card. The meeting is being held virtually via the Internet and you will not be able to attend the meeting in person. You are cordially invited to attend the Special Meeting to conduct the following items of business:

 

  1.

Business Combination Proposal—To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of January 13, 2021 (as it may be amended from time to time, the “Merger Agreement”) by and among the Company, Function Acquisition I Corp, a Delaware corporation and a direct, wholly owned subsidiary of the Company (“First Merger Sub”), Function Acquisition II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company (“Second Merger Sub”), LiveVox Holdings, Inc., a Delaware corporation (“LiveVox”), and GGC Services Holdco, Inc., a Delaware corporation, solely in its capacity as the representative, agent and attorney-in-fact of the stockholder of LiveVox (in such capacity, the “Stockholder Representative”), a copy of which is attached to this proxy statement as Annex A, and approve the transactions contemplated thereby, including, among other things: (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation (the “Surviving Corporation”) and becoming a direct, wholly owned subsidiary of the Company as a consequence (the “First Merger”) and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”) (the “Business Combination Proposal” or “Proposal No. 1”);

 

  2.

Nasdaq Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable Nasdaq Capital Market (“Nasdaq”) listing rules, the issuance of more than 20% of the Company’s issued and outstanding common stock in connection with the Business Combination (the “Nasdaq Proposal” or “Proposal No. 2”);

 

  3.

Charter Proposals—To consider and act upon seven separate proposals to adopt the Second Amended and Restated Certificate of Incorporation in the form attached hereto as Annex C (the “Charter Proposals” or “Proposal No. 3”);

 

  4.

Director Election Proposals—To consider and vote upon proposals to elect nine directors to serve staggered terms on our Board until the 2022, 2023 and 2024 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposals” or “Proposal No. 4”);

 

  5.

Incentive Plan Proposal—To consider and vote upon a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposalor “Proposal No. 5”); and

 

  6.

Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more of the other proposals at the Special Meeting. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve one or more of the other proposals (the “Adjournment Proposal” or “Proposal No. 6”).


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The above matters are more fully described in this proxy statement, which also includes, as Annex A, a copy of the Merger Agreement. We urge you to read carefully this proxy statement in its entirety, including the Annexes and accompanying financial statements of the Company and LiveVox.

The record date for the Special Meeting is May 10, 2021. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment thereof. A complete list of our stockholders of record entitled to vote at the Special Meeting will be available for ten days before the Special Meeting at our principal executive offices for inspection by stockholders during ordinary business hours for any purpose germane to the Special Meeting.

Pursuant to our amended and restated certificate of incorporation, we are providing our public stockholders with the opportunity to redeem, upon the closing of the Business Combination, shares of our Class A common stock, par value $0.0001 per share (our “Class A Stock”) then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the closing of the Business Combination) in our trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to the Company to pay its franchise and income taxes) of our initial public offering (our “IPO”). The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commission totaling $8,750,000 that we will pay to the underwriters of our IPO or transaction expenses incurred in connection with the Business Combination. For illustrative purposes, based upon the amount held in our Trust Account of $253,628,041 as of December 31, 2020, and estimated interest income and taxes post-December 31, 2020, the Company estimates that the per-share price at which public stockholders may redeem their Class A Stock from cash held in the Trust Account will be approximately $10.14 at the time of the Special Meeting. Public stockholders may elect to redeem their shares even if they vote for the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the units sold in our IPO. We refer to this as the “15% threshold.” We have no specified maximum redemption threshold under our amended and restated certificate of incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held investment securities with a fair value of $253,628,041 as of December 31, 2020. The Merger Agreement provides that our obligation and LiveVox’s obligation to consummate the Business Combination is conditioned on the Company’s total cash proceeds (which we describe how to calculate in the accompanying proxy statement) equaling or exceeding $250,000,000. This condition to closing in the Merger Agreement is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of our Class A Stock by our public stockholders this condition is not met (or waived), then we or LiveVox may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s net tangible assets equaling less than $5,000,001. Public holders of our outstanding Warrants do not have redemption rights in connection with the Business Combination. Unless otherwise specified, the information in the accompanying proxy statement assumes that none of our public stockholders exercise their redemption rights with respect to their shares of Class A Stock.

Our sponsor, CFI Sponsor LLC, a Delaware limited liability company (our “Sponsor”), officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our common stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our common stock they may hold in connection with the consummation of the Business Combination and to vote any shares of common stock owned by them in favor of the Business Combination. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our common stock) and directors (not including our independent directors, who own a total of 75,000 shares of Class F common stock, par value $0.0001 per share (our “Class F Stock”), which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to, (i) in their capacity as holders of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in

 

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connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation, and (ii) vote any shares of common stock owned by them in favor of the Business Combination and each of the proposals to be considered at the Special Meeting. Currently, our Sponsor and independent directors, in the aggregate, own approximately 20% of our issued and outstanding shares of common stock, including all shares of Class F Stock. Our Class F Stock will be excluded from the pro rata calculation used to determine the per-share redemption price and, along with the Class A Stock it is convertible into, is subject to transfer restrictions.

Each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. Each of these proposals is more fully described in the proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

Approval of the Business Combination Proposal, the Nasdaq Proposal, the Incentive Plan Proposal and the Adjournment Proposal require the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). Approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of common stock entitled to vote thereon at the Special Meeting. Directors are elected by a plurality of the votes cast in the Director Election Proposals; this means that the nine individuals nominated for election to the Board who receive the most “FOR” votes (among the shares of our Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting) will be elected. The Board unanimously recommends that you vote FOR each of these proposals.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in this proxy statement to make sure that your shares are represented at the Special Meeting. If you hold your shares in “street name” through a broker, bank or other nominee, you will need to follow the instructions provided to you by your broker, bank or other nominee to ensure that your shares are represented and voted at the Special Meeting. Each of the proposals is more fully described in this proxy statement, which each stockholder is encouraged to read carefully and in its entirety.

If you sign and return your proxy card without indicating how you wish to vote, your proxy will be voted “FOR” each of the proposals presented at the Special Meeting. If you fail to return your proxy card or fail to instruct your broker, bank or other nominee how to vote, and do not attend the Special Meeting, the effect will be, among other things, that your shares will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will not be voted. An abstention will be counted towards the quorum requirement for each of the proposals presented at the Special Meeting but a broker non-vote will not. In connection with (i) the Business Combination Proposal, the Director Elections Proposals, the Incentive Plan Proposal and the Adjournment Proposal, abstentions and broker non-votes will have no effect, (ii) the Nasdaq Proposal, abstentions will be counted as a vote cast at the Special Meeting and will have the same effect as a vote “AGAINST” the proposal but broker non-votes will have no effect and (iii) the Charter Proposal, abstentions and broker non-votes will have the same effect as voting “AGAINST” the proposal. If you are a stockholder of record and you virtually attend and vote at the Special Meeting, you may withdraw your proxy at the live webcast.

Your attention is directed to the remainder of this proxy statement following this notice (including the Annexes and other documents referred to herein) for a more complete description of the proposed Business Combination and each of the proposals to be considered at the Special Meeting. You are encouraged to read this proxy statement carefully and in its entirety, including the Annexes and other documents referred to herein. If you have any questions or need assistance voting your shares, please

 

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contact Morrow Sodali LLC, our proxy solicitor, by calling (800) 662-5200 (banks and brokers can call collect at (203) 658-9400) or by emailing CRSA.info@investor.morrowsodali.com.

 

     By Order of the Board of Directors
    

/s/ Robert D. Beyer

Robert D. Beyer

Executive Chairman of the Board of Directors

Los Angeles, California

May 14, 2021

  

 

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TABLE OF CONTENTS

 

FREQUENTLY USED TERMS

     1  

MARKET, RANKING AND OTHER INDUSTRY DATA

     7  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     8  

NON-GAAP FINANCIAL MEASURES

     9  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     11  

SUMMARY TERM SHEET

     13  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

     20  

SUMMARY OF THE PROXY STATEMENT

     37  

RISK FACTORS

     63  

SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

     125  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA OF LIVEVOX

     127  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     129  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     131  

COMPARATIVE SHARE INFORMATION

     142  

SPECIAL MEETING OF COMPANY STOCKHOLDERS

     145  

PROPOSAL NO. 1—APPROVAL OF THE BUSINESS COMBINATION

     153  

PROPOSAL NO. 2—APPROVAL OF THE ISSUANCE OF MORE THAN 20% OF THE COMPANY’S ISSUED AND OUTSTANDING COMMON STOCK IN CONNECTION WITH THE BUSINESS COMBINATION

     200  

PROPOSAL NO. 3—APPROVAL OF THE SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

     202  

PROPOSAL NO. 4—ELECTION OF DIRECTORS TO THE BOARD OF DIRECTORS

     207  

PROPOSAL NO. 5—APPROVAL OF THE 2021 EQUITY INCENTIVE PLAN, INCLUDING THE AUTHORIZATION OF THE INITIAL SHARE RESERVE UNDER THE 2021 EQUITY INCENTIVE PLAN

     208  

PROPOSAL NO. 6—THE ADJOURNMENT PROPOSAL

     215  

INFORMATION ABOUT THE COMPANY

     216  

THE COMPANY’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     231  

INFORMATION ABOUT LIVEVOX

     237  

LIVEVOX MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     253  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     273  

EXECUTIVE COMPENSATION

     279  

DESCRIPTION OF SECURITIES

     287  

BENEFICIAL OWNERSHIP OF SECURITIES

     300  

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     305  

MARKET PRICE INFORMATION

     310  

INDEPENDENT REGISTERED ACCOUNTING FIRM

     311  

APPRAISAL RIGHTS

     311  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     311  

TRANSFER AGENT AND REGISTRAR

     311  

SUBMISSION OF STOCKHOLDER PROPOSALS

     311  

FUTURE STOCKHOLDER PROPOSALS

     311  

WHERE YOU CAN FIND MORE INFORMATION

     312  
ANNEXES   

Annex A – Merger Agreement

  

Annex B – Sponsor Support Agreement

  

Annex C – Form of Second Amended and Restated Certificate of Incorporation

  

Annex D – Form of Amended and Restated Bylaws

  

 

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FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, in this proxy statement:

Adjustment Escrow Account” means an escrow account in which $2,000,000 of Company proceeds will be placed at the closing of the Business Combination, to be drawn upon by the Company in case of any downward purchase price adjustment and otherwise released to the LiveVox Stockholder as merger consideration.

Aggregate Transaction Expenses” means certain transaction expenses of the Company and LiveVox (in each case, to the extent incurred and not paid prior to the closing of the Business Combination).

AI” means artificial intelligence.

Amended and Restated Bylaws” means the Amended and Restated Bylaws, a form of which is attached hereto as Annex D, which will become the post-Business Combination Company’s bylaws upon the consummation of the Business Combination.

Amended and Restated Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement to be entered into at the closing of the Business Combination by the Company, Ms. Briscoe and Messrs. Gauthier and Turner, our Sponsor and the LiveVox Stockholder, the form of which is attached to this proxy statement as Annex F.

Board” or “Board of Directors” means the board of directors of the Company.

Bank of America” means BofA Securities, Inc. and/or Merrill Lynch, Pierce, Fenner & Smith Incorporated.

Business Combination” means the transactions contemplated by the Merger Agreement, including: (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of the Company as a consequence; and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity.

CAGR” means compound annual growth rate.

CCaaS” means cloud-hosted Contact Center as a Service.

CCPA” means the California Consumer Privacy Act of 2018.

Class A Stock” means the shares of Class A common stock, par value $0.0001 per share, of the Company.

Class F Stock” means the shares of Class F common stock, par value $0.0001 per share, of the Company.

“Credit Agreement” means the Credit Agreement, dated as of November 7, 2016, by and among LiveVox, certain of its subsidiaries, as guarantors, the lenders party thereto and PNC Bank, National Association as administrative agent, as amended.

Code” means the Internal Revenue Code of 1986, as amended.

Common Stock” means the shares of common stock, par value $0.0001 per share, of the Company, consisting of: (i) prior to the Business Combination, the Class A Stock and Class F Stock; and (ii) following the closing of the Business Combination, the Class A Stock.

Company,” “we,” “us” and “our” mean Crescent Acquisition Corp, a Delaware corporation.

 

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Credit Suisse” means Credit Suisse Securities (USA) LLC.

Crescent” means Crescent Capital Group Holdings LP, a Delaware limited partnership and an affiliate of our Sponsor.

Crescent Capital” means Crescent and its affiliated entities, not including our Sponsor and the Company.

CRM” means customer relationship management, a system that centralizes and standardizes key customer interactions and data into a single database, creating unified customer profiles with insight across the entire customer journey.

DGCL” means the General Corporation Law of the State of Delaware.

Earn-Out Shares” means the 5,000,000 shares of Class A Stock to be issued to the LiveVox Stockholder and held in an escrow account, subject to release to the LiveVox Stockholder only if the price of Class A Stock trading on Nasdaq or another national securities exceeds certain thresholds during the seven-year period following the closing of the Business Combination, any Earn-Out Shares not released during such period will be forfeited and canceled for no consideration.

Escrow Agent” means Citibank, N.A., as escrow agent for the Adjustment Escrow Amount.

Escrow Agreement” means the Escrow Agreement, in form and substance reasonably acceptable to the parties thereto, that the Stockholder Representative, the Company and the Escrow Agent, will enter into at the closing of the Business Combination.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Expiration Date” means June 30, 2021, which is the date by which the Company must complete its initial business combination or cease its operations except for the purpose of winding up and redeem all of the outstanding shares of Class A Stock, and in which the Trustee must liquidate the Trust Account.

EY” means Ernst & Young, LiveVox’s independent auditor.

FCC” means the U.S. Federal Communications Commission.

First Merger” means the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of the Company as a consequence as part of the Business Combination.

First Merger Sub” means Function Acquisition I Corp, a Delaware corporation and a direct, wholly owned subsidiary of the Company.

Forward Purchase Agreement” means the Forward Purchase Agreement, dated as of January 13, 2021, by and between the Company and Crescent, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners.

 

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Forward Purchasers” means Crescent and any third-party transferees to which Crescent may assign, in whole or in part, its commitment under the Forward Purchase Agreement to purchase 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, such possible transferees, including, but not limited to, Crescent’s current or prospective limited partners.

Founder Shares” means the 6,250,000 shares of Class F Stock that are currently owned by our Initial Stockholders, of which 6,175,000 shares are held by our Sponsor and 25,000 shares are held by each of Ms. Briscoe and Messrs. Gauthier and Turner, which shares shall automatically convert to shares of Class A Stock on a one-for-one basis upon the closing of the Business Combination.

FTC” means the U.S. Federal Trade Commission.

U.S. GAAP” means U.S. generally accepted accounting principles.

GDPR” means the General Data Protection Regulation.

GGC” means, collectively, LiveVox TopCo, LLC, Golden Gate Capital Opportunity Fund, L.P., Golden Gate Capital Opportunity Fund-A, L.P., GGCOF Third-Party Co-Invest, L.P., GGCOF Executive Co-Invest, L.P., GGCOF IRA Co-Invest, L.P. and affiliates thereof.

“Golden Gate Capital” means Golden Gate Capital Opportunity Fund, L.P., Golden Gate Capital Opportunity Fund-A, L.P., GGCOF Third-Party Co-Invest, L.P., GGCOF Executive Co-Invest, L.P., GGCOF IRA Co-Invest, L.P., GGC Administration, L.P and affiliates thereof.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Incentive Plan” means the LiveVox 2021 Equity Incentive Plan, the form of which is attached to this proxy statement as Annex H.

Initial Stockholders” means our Sponsor and the following three of our four independent directors (who were our independent directors at the time we consummated our IPO): Ms. Briscoe and Messrs. Gauthier and Turner.

Investment Company Act” means the Investment Company Act of 1940, as amended.

IPO” means the Company’s initial public offering, consummated on March 12, 2019, through the sale of 25,000,000 Units at $10.00 per Unit.

JOBS Act” means the Jumpstart Our Business Startups Act of 2012.

LiveVox” means LiveVox Holdings, Inc., a Delaware corporation.

LiveVox Bonus Plans” means the VCIP and the OBIP.

LiveVox Stockholder” or “LiveVox TopCo” means LiveVox TopCo, LLC, a Delaware limited liability company and the sole stockholder of LiveVox common stock and preferred stock as of immediately prior to the effective time of the First Merger.

Lock-Up Shares” means the total of 2,743,750 shares of Class A Stock held by our Sponsor and certain of our independent directors immediately following the closing of the Business Combination upon the automatic conversion of shares of Class F Stock, which will be placed in an escrow account to be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any of the Lock-Up Shares not released during such period will be forfeited and canceled for no consideration.

 

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Max Redemption Scenario” means a scenario in which, in connection with the Business Combination, 10,025,597 shares of Class A Stock, or 40% of the outstanding shares of Class A Stock, are redeemed, resulting in an aggregate payment of approximately $101.8 million out of the Trust Account, such that the fair value of the cash and investments held in the Trust Account following such redemption along with the proceeds from the Forward Purchase Agreement and PIPE Investment are sufficient to satisfy the minimum closing cash condition pursuant to the terms of the Merger Agreement, i.e., so that our total cash proceeds are at least $250,000,000. This is our estimate of the maximum number of shares that could be redeemed in connection with the Business Combination in order to satisfy such condition.

Merger Agreement” means that certain Agreement and Plan of Merger, dated as of January 13, 2021, by and among the Company, First Merger Sub, Second Merger Sub, LiveVox and the Stockholder Representative, solely in its capacity as the representative, agent and attorney-in-fact of the stockholders of LiveVox thereunder.

Mergers” means the First Merger and the Second Merger, together.

Morrow” means Morrow Sodali, proxy solicitor to the Company.

Nasdaq” means the Nasdaq Capital Market.

Neuberger” means Neuberger Berman BD LLC, a Delaware limited liability company.

No Redemption Scenario” means a scenario in which, in connection with the Business Combination, no shares of Class A Stock are redeemed.

OBIP” means the Option-Based Incentive Plan established by LiveVox in 2014.

PIPE Investment” means the $75,000,000 of Company proceeds pursuant to the Subscription Agreements in which the PIPE Investors have collectively subscribed for 7,500,000 shares of Class A Stock for an aggregate purchase price of $75,000,000 in cash in private placements that will close immediately prior to the Business Combination.

PIPE Investors” means the investors who are parties to Subscription Agreements, pursuant to which such investors have collectively subscribed for 7,500,000 shares of Class A Stock for an aggregate purchase price of $75,000,000 in cash in private placements that will close immediately prior to the Business Combination.

Private Placement Warrants” means the Warrants held by our Sponsor that were purchased by our Sponsor on the IPO closing date at a price of $1.00 per Warrant, each such Warrant which is exercisable for one share of Class A Stock at a price of $11.50 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of equity or equity-linked securities).

Public Warrants” means the Warrants that were issued as part of our Units in our IPO.

SaaS” means software as a service.

SEC” means the United States Securities and Exchange Commission.

Second Amended and Restated Certificate of Incorporation” means the proposed Second Amended and Restated Certificate of Incorporation of the Company, a form of which is attached hereto as Annex C, which will become the post-Business Combination Company’s certificate of incorporation upon the approval of each of the Charter Proposals, assuming the consummation of the Business Combination.

 

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Second Merger” means the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity as part of the Business Combination.

Second Merger Sub” means Function Acquisition II LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company.

Securities Act” means the Securities Act of 1933, as amended.

Share Escrow Agreement” means the Share Escrow Agreement, dated as of January 13, 2021, by and among the Company, certain independent directors of the Company and the Sponsor, providing for the treatment of the Lock-Up Shares.

Skadden” means Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Company.

Special Meeting” means the special meeting in lieu of the 2021 annual meeting of the stockholders of the Company that is the subject of this proxy statement.

Sponsor” means CFI Sponsor LLC, a Delaware limited liability company.

Sponsor Support Agreement” means the Sponsor Support Agreement, dated as of January 13, 2021 and attached hereto as Annex B, by and among LiveVox, the Company, our Sponsor and certain record and beneficial owners of our Founder Shares, pursuant to which, among other things, such holders and our Sponsor agree to restrictions on their Company securities and to vote in favor of the proposals set forth herein.

Stockholder Representative” means GGC Services Holdco, Inc., a Delaware corporation, solely in its capacity as the representative, agent and attorney-in-fact of the LiveVox Stockholder under the Merger Agreement.

Stockholder Representative Expense Holdback Amount” means $100,000 of Company proceeds to be deposited at the closing of the Business Combination with the Stockholder Representative to pay for third-party expenses of the Stockholder Representative and to otherwise be released to the LiveVox Stockholder as merger consideration.

Subscription Agreements” means, collectively, those certain subscription agreements entered into on January 13, 2021, between the Company and the PIPE Investors, and substantially in the form attached to this proxy statement as Annex G.

Surviving Corporation” means the surviving corporation resulting from the First Merger.

Transfer Agent” means Continental Stock Transfer & Trust Company as the Company’s transfer agent.

Trust Account” means the trust account of the Company that holds the proceeds from the Company’s IPO.

“Trust Agreement” means the Investment Management Trust Agreement, dated March 7, 2019 and amended on February 17, 2021, between the Company and Trustee, which, among other things, governs the release of funds from the Trust Account.

Trustee” means Continental Stock Transfer & Trust Company.

Units” mean units of the Company, each consisting of one share of Class A Stock and one-half of one Warrant.

VCIP” means the Value Creation Incentive Plan established by LiveVox in 2014.

Voice products” means the voice portion of omnichannel and AI.

 

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Volume Weighted Average Share Price” shall mean the volume weighted average share price of the Class A Stock on Nasdaq or any other national securities exchange on which the Class A Stock is listed for trading as displayed on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m. (or such hours of the trading day as the relevant market shall be open in the event of an abbreviated trading day), New York City time, on such trading day.

Warrant Agent” means Continental Stock Transfer & Trust Company as the Company’s warrant agent.

Warrants” mean redeemable warrants of the Company, each whole warrant entitling the holder thereof to purchase one share of Class A Stock at a price of $11.50 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of equity or equity-linked securities).

WFO” means workforce optimization, a suite of tools and analytics designed to improve contact center operations, productivity, compliance, and overall customer satisfaction.

Withum” means WithumSmith+Brown, PC, independent registered public accounting firm to the Company.

 

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MARKET, RANKING AND OTHER INDUSTRY DATA

Unless otherwise indicated, information contained in this proxy statement concerning LiveVox’s industry, its business and the markets in which it operates is based on information from independent industry or research organizations, other industry publications, surveys and forecasts, and LiveVox management estimates. LiveVox management estimates are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from LiveVox’s internal research and tracking mechanisms, and are based on assumptions made by LiveVox upon reviewing such data and LiveVox’s knowledge of its industry and markets, which we and LiveVox believe to be reasonable. We are responsible for all of the disclosure in this proxy statement and while we believe the data from the sources described above to be accurate and complete, neither we nor LiveVox have independently verified data from these sources or obtained third-party verification of market share data and this information may not be reliable. This information generally involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such information, projections or estimates. In addition, customer preferences can and do change. Industry publications and other reports LiveVox has obtained from independent parties generally state that the data contained in these publications or other reports have been obtained in good faith or from sources considered to be reliable, but they do not guarantee the accuracy or completeness of such data. References herein to LiveVox being a leader in a market or service category refers to LiveVox’s belief that it has a leading market share position in each specified market, unless the context otherwise requires. In addition, the discussion herein regarding LiveVox’s various markets is based on how LiveVox defines the markets for its products and services, which products may be either part of larger overall markets or markets that include other types of products.

Assumptions and estimates of our and LiveVox’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors—Risks Related to LiveVox’s Business and Industry.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Cautionary Note Regarding Forward-Looking Statements.

 

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TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This proxy statement contains some of LiveVox’s or its subsidiaries’ trademarks, service marks and trade names, including, among others, LiveVox and SpeechIQ and other names of certain of LiveVox’s products. Each one of these trademarks, service marks or trade names is either (1) a registered trademark of LiveVox or one of its subsidiaries, (2) a trademark for which LiveVox or one of its subsidiaries has a pending application, or (3) a trade name or service mark for which LiveVox or one of its subsidiaries claims common law rights. All other trademarks, trade names or service marks of any other company appearing in this proxy statement belong to their respective owners. The use or display of other parties’ trademarks, service marks or trade names is not intended to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us or LiveVox by, these other parties.

Solely for convenience, the trademarks, service marks and trade names referred to in this proxy statement are presented without the TM, SM and ® symbols, but such references are not intended to indicate, in any way, that we, LiveVox or the applicable licensors will not assert, to the fullest extent under applicable law, our, LiveVox’s or the applicable licensors’ respective rights to these trademarks, service marks and trade names.

 

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NON-GAAP FINANCIAL MEASURES

Financial statements included in this proxy statement have been prepared in accordance with U.S. GAAP. Certain financial measures presented in this proxy statement, such as EBITDA, Adjusted EBITDA, Non-GAAP Gross Profit and Non-GAAP Gross Margin, are not recognized under U.S. GAAP. We define these terms as follows:

 

   

EBITDA” means, for any reporting period, net income before interest, taxes, depreciation and amortization.

 

   

Adjusted EBITDA” means, for any reporting period, net income before interest, taxes, depreciation and amortization and adjusted to exclude the impact of long-term equity incentive bonus and stock compensation, acquisition and financing related fees and expenses, Golden Gate Capital management fee expenses, other non-recurring expenses as well as certain other items identified as affecting comparability, when applicable.

 

   

Non-GAAP Gross Profit” means, for any reporting period, gross profit, adding back depreciation and amortization, long-term equity incentive bonus and stock compensation, other non-recurring expenses and other items identified as affecting comparability, when applicable.

 

   

Non-GAAP Gross Margin percentage” means, for any reporting period, Non-GAAP Gross Profit divided by revenue.

EBITDA, Adjusted EBITDA, Non-GAAP Gross Profit and Non-GAAP Gross Margin percentage have been included in this proxy statement because they are important metrics used by LiveVox’s management as one of the means by which it assesses financial performance. EBITDA, Adjusted EBITDA, Non-GAAP Gross Profit and Non-GAAP Gross Margin percentage are also frequently used by analysts, investors and other interested parties to evaluate companies in LiveVox’s industry. These measures, when used in conjunction with related U.S. GAAP financial measures, provide investors with an additional financial analytical framework that may be useful in assessing LiveVox and its results of operations.

EBITDA, Adjusted EBITDA, Non-GAAP Gross Profit and Non-GAAP Gross Margin percentage are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP. These non-GAAP metrics have certain limitations and should not be considered as alternatives to financial measures prepared in accordance with U.S. GAAP, such as net income, or as measures of financial performance or any other performance measure derived in accordance with U.S. GAAP or as measures of liquidity. LiveVox’s future results may be affected by unusual or nonrecurring items for which these non-GAAP measures adjust. Management compensates for these limitations by using EBITDA, Adjusted EBITDA, Non-GAAP Gross Profit and Non-GAAP Gross Margin percentage as supplemental financial metrics and in conjunction with LiveVox’s results prepared in accordance with U.S. GAAP. Other companies, including those in LiveVox’s industry, may not use such measures or may calculate one or more of the measures differently than as presented in this proxy statement, limiting their usefulness as a comparative measure.

The non-GAAP information in this proxy statement should be read in conjunction with LiveVox’s audited annual financial statements and the related notes included elsewhere in this proxy statement. For a reconciliation of the most directly comparable U.S. GAAP measures, see “LiveVox Managements Discussion and Analysis of Financial Condition and Results of Operations.

Additional Financial Metrics and Other Data

 

   

LTM Net Revenue Retention Rate” for any customer or group of customers means, the (x) the sum of monthly recurring revenue by month by customer for the prior 12 months, divided by (y) by the sum of monthly recurring revenue for such customers during the trailing twelve months prior to the period being presented.

 

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Monthly recurring revenue” means, for any specific period, that portion of revenue calculated in accordance with GAAP which LiveVox determines to be recurring monthly contracted revenue and usage-based revenue.

 

   

Contracted revenue,” represents, for any specific period, that portion of revenue calculated in accordance with GAAP which LiveVox determines to be contracted minimum recurring revenue regardless of customer usage.

 

   

Usage-based revenue” represents, for any specific period, that portion of revenue calculated in accordance with GAAP which LiveVox determines to be revenue, under a usage-based pricing model in excess of contracted minimums, with prices calculated on a number of agent seats and units of usage (which includes minutes of voice, SMS messages, emails sent, and SpeechIQ hours).

For additional information on how LiveVox calculates LTM Net Revenue Retention Rates, see “LiveVox Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains “forward-looking statements” within the meaning of Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to the Business Combination and any other statements relating to future results, strategy and plans of the Company and LiveVox (including certain projections and business trends, and statements which may be identified by the use of the words “plans,” “expects” or “does not expect,” “estimated,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates” or “does not anticipate,” “targets,” “projects,” “contemplates,” “predicts,” “potential,” “continue,” or “believes,” or variations of such words and phrases or state that certain actions, events or results “may,” “could,” “would,” “should,” “might,” “will” or “will be taken,” “occur” or “be achieved”).

Forward-looking statements are based on the opinions and estimates of management of the Company or LiveVox, as the case may be, as of the date such statements are made, and they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to:

 

   

the occurrence of any event, change or other circumstances that could give rise to a delay in or the failure to close the Business Combination;

 

   

the amount of redemptions by our public stockholders;

 

   

the ability to retain key personnel and the ability to achieve stockholder and regulatory approvals, industry trends, legislation or regulatory requirements and developments in the global economy as well as the public health crisis related to the coronavirus (COVID-19) pandemic and resulting significant negative effects to the global economy;

 

   

disrupted global supply chains and significant volatility and disruption of financial markets;

 

   

increased operating costs;

 

   

the impact of the COVID-19 pandemic on the operations of LiveVox and of the post-Business Combination Company;

 

   

dependence on the operational and financial results of, and relationships with, third-party customer relationship management CRM providers, workforce optimization WFO providers, other technology providers, systems integrators, and telephony providers;

 

   

dependence on the operational and financial results of third-party data centers and public cloud providers;

 

   

the ability to protect LiveVox’s brand and reputation;

 

   

the ability to attract new customers or sell additional products to LiveVox’s existing customers;

 

   

the ability to execute LiveVox’s growth strategy, including through the acquisition of or investment in businesses, applications or technologies that could complement or expand LiveVox’s solution;

 

   

the ability to manage the growth of the post-Business Combination Company and the associated strain on resources;

 

   

the high level of competition in the cloud contact center industry;

 

   

changes to the industry in which LiveVox operates;

 

   

reliance on information systems and the ability to properly maintain the confidentiality and integrity of data;

 

   

the occurrence of cyber incidents or a deficiency in cybersecurity protocols;

 

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the post-Business Combination Company’s business model being susceptible to litigation;

 

   

the ability to obtain third-party software licenses for use in or with LiveVox’s products;

 

   

increased expenses associated with being a public company;

 

   

the ability to adequately protect intellectual property;

 

   

risks associated with the use of social media platforms in marketing;

 

   

the ability to obtain and retain high-profile strategic partnership arrangements;

 

   

the ability to comply with existing or future domestic and international laws and regulations and taxation requirements;

 

   

the post-Business Combination Company’s business model being susceptible to litigation; and

 

   

the other factors identified under the heading “Risk Factors” beginning on page 63 of this proxy statement.

Additional information on these and other factors that may cause actual results and the Company’s performance to differ materially is included in the Company’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, the Company’s annual report on Form 10-K for the year ended December 31, 2020.

Copies of the Company’s filings with the SEC are available publicly on the SEC’s website at www.sec.gov or may be obtained by contacting the Company. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligations to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Before any of our stockholders grant their proxies or instruct how their votes should be cast or vote on the proposals to be put to the Special Meeting, such stockholders should be aware that the occurrence of the events described in the “Risk Factors” section starting on page 63 and elsewhere in this proxy statement may adversely affect us.

 

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SUMMARY TERM SHEET

This summary term sheet, together with the sections entitled “Questions and Answers About the Proposals for Stockholders” and “Summary of the Proxy Statement,” summarizes certain information contained in this proxy statement, but does not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the attached Annexes, for a more complete understanding of the matters to be considered at the Special Meeting. In addition, for definitions used commonly throughout this proxy statement, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

 

   

The Company is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

 

   

There are currently 31,237,762 shares of Common Stock issued and outstanding, consisting of (i) 24,987,762 shares of Class A Stock originally sold as part of the IPO, and (ii) 6,250,000 shares of Class F Stock that were initially issued to our Sponsor, prior to our IPO. There are currently no shares of Company preferred stock issued and outstanding. In addition, we issued 12,500,000 Public Warrants (originally sold as part of the Units issued in our IPO) as part of our IPO along with 7,000,000 Private Placement Warrants issued to our Sponsor in a private placement on the IPO closing date. Each whole Warrant entitles its holder to purchase one share of our Class A Stock at an exercise price of $11.50 per share (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of equity or equity-linked securities). The Warrants will become exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants at a price of $0.01 per warrant if the last sale price of Class A Stock on Nasdaq equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the Company sends the notice of redemption to the Warrant holders. The Private Placement Warrants, however, are non-redeemable and exercisable on a cashless basis so long as they are held by our Sponsor or its permitted transferees. For more information regarding the warrants, please see the section entitled “Description of Securities.”

 

   

LiveVox offers a cloud contact center, or CCaaS, platform that unifies omnichannel, AI, CRM and WFO capabilities to enable enterprises to deliver an exceptional customer and agent experience while mitigating compliance and security risk. Key highlights of LiveVox’s business and market opportunity include a large and growing CCaaS market opportunity, a differentiated product, and an attractive financial profile. Since LiveVox’s acquisition by funds affiliated with Golden Gate Capital in 2014, LiveVox has invested in reaching product maturity and developing a differentiated value proposition for enterprise customers. Over this time period, LiveVox sustained its revenue growth and sustained attractive unit economics. For more information about LiveVox, please see the sections entitled “Information About LiveVox,” “LiveVox Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management after the Business Combination.”

 

   

In accordance with and subject to the terms of the Merger Agreement and customary adjustments set forth therein, the base aggregate merger consideration to be paid in connection with the Business Combination is $824,375,000, which amount will be: (i) increased by the amount of cash and cash equivalents held by LiveVox and its direct and indirect subsidiaries as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (ii) decreased by the amount of LiveVox’s outstanding indebtedness as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (iii) decreased by the aggregate amount of transaction expenses incurred by the Company prior to the closing of the Business Combination; (iv) decreased by the aggregate amount of certain transaction expenses incurred by LiveVox and its direct or indirect subsidiaries, to the extent incurred but not paid by LiveVox prior to the closing of the Business Combination, which amount shall also include transaction-related bonuses and other amounts payable in connection with or anticipation

 

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of the consummation of the Business Combination; (v) increased by the amount of interest accrued on deposits in the Trust Account after giving effect to taxes paid or payable and any redemptions that may be elected by any of our public stockholders for their pro rata share of the aggregate amount of funds in the Trust Account as of two business days prior to the closing of the Business Combination (which instructions to redeem such public shares are further discussed in the accompanying proxy statement); (vi) decreased by the $2,000,000 to be placed into the Adjustment Escrow Account; and (vii) decreased by the Stockholder Representative Expense Holdback Amount.

 

   

The consideration to be paid to the LiveVox Stockholder will be a combination of cash and stock (including Earn-Out Shares). The maximum amount of cash consideration payable to LiveVox Stockholder is $220,000,000, including up to $2,000,000 that could potentially be released to the LiveVox Stockholder from the Adjustment Escrow Account. The exact amount of cash consideration payable to the LiveVox Stockholder as of the closing of the Business Combination is to be determined as follows: (i) the aggregate amount of cash contained in the Trust Account immediately prior to the closing of the Business Combination after making payments in connection with redemptions that may be elected by our public stockholders; plus (ii) all cash and cash equivalents held by the Company outside of the Trust Account immediately prior to the closing of the Business Combination; less (iii) $2,000,000 to be placed into the Adjustment Escrow Account; less (iv) the Stockholder Representative Expense Holdback Amount; plus (v) $25,000,000 of Company proceeds pursuant to the Forward Purchase Agreement; plus (vi) $75,000,000 of Company proceeds pursuant to the PIPE Investment; plus (vii) any additional Company proceeds pursuant to the right but not the obligation of Crescent, either alone or with our Sponsor, to purchase additional shares of Class A Stock immediately prior to the closing of the Business Combination at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent the sum of (i) through (vii) is less than $250,000,000 (we refer to the sum of (i) through this (vii) as our “total cash proceeds”); less (viii) certain transaction expenses of the Company and LiveVox (in each case, to the extent incurred and not paid prior to the closing of the Business Combination) (such expenses collectively, the “Aggregate Transaction Expenses”); and less (ix) cash to be retained by the Company in the amount of $100,000,000 less the amount by which the Aggregate Transaction Expenses exceeds $30,000,000.

 

   

The remainder of the consideration paid to the LiveVox Stockholder will be stock consideration, consisting of a number of newly issued shares of Class A Stock, valued at $10.00 per share, equal to the difference between the total merger consideration and the cash consideration payable at the closing of the Business Combination for purposes of determining the aggregate number of shares payable to the LiveVox Stockholder for its ownership interests in LiveVox. The number of shares of Class A Stock to be issued to the LiveVox Stockholder as consideration is subject to adjustment, depending on, among other things, the level of redemptions of our shares of Class A Stock by our public stockholders or in certain cases to preserve the intended tax-free treatment of the Business Combination. To the extent the stock consideration is increased, there will be a corresponding reduction to the cash consideration paid to the LiveVox Stockholder. Following the closing of the Business Combination, the LiveVox Stockholder may receive cash consideration or, in some cases, share consideration as a result of any adjustment of the purchase price.

 

   

As additional consideration payable to the LiveVox Stockholder, the Company will issue 5,000,000 shares of Class A Stock as Earn-Out Shares to the LiveVox Stockholder to be held in an escrow account to be subject to release to the LiveVox Stockholder only if the price of Class A Stock trading on the Nasdaq exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any Earn-Out Shares not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration. For more information about the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

 

   

Prior to the closing of the Business Combination, LiveVox is wholly owned by the LiveVox Stockholder.

 

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The following diagram illustrates the ownership of LiveVox and its subsidiaries as of the date of this proxy statement on an as-converted to common stock basis:

Pre-Closing Organization Chart

 

 

LOGO

 

   

It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders will retain an ownership interest of approximately 25.9% in the post-Business Combination Company; (ii) our Initial Stockholders will own approximately 3.6% of the post-Business Combination Company; (iii) the Forward Purchasers will own approximately 2.6% of the post-Business Combination Company; (iv) the PIPE Investors will own approximately 7.7% of the post-Business Combination Company; (v) the participants in the LiveVox Bonus Plans will own approximately 3.6% of the post-Business Combination Company; and (vi) the LiveVox Stockholder will own approximately 56.6% of the post-Business Combination Company. The ownership percentages with respect to the post-Business Combination Company (a) do not take into account (1) any redemption by our public stockholders (and the percentages therefore assume our total cash proceeds exceed $250,000,000 without the purchase of additional shares of Class A Stock by Crescent and our Sponsor) and (2) Warrants that will remain outstanding immediately following the Business Combination, but (b) do include (1) the issuance of Class A Stock pursuant to the Forward Purchase Agreement, (2) the issuance of Class A Stock pursuant to the PIPE Investment, (3) the issuance of Class A Stock pursuant to the LiveVox Bonus Plans, (4) the remaining Founder Shares, all of which will be converted into shares of Class A Stock at the closing of the Business Combination on a one-for-one basis, after the cancelation of 2,725,000 of such shares by our Sponsor, and (5) the Earn-Out Shares and Lock-Up Shares that will be placed into escrow because the LiveVox Stockholder and our Initial Stockholders, respectively, will maintain voting power over such shares, and therefore such interests represent voting power (and not necessarily pecuniary interests or dispositive power). If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders and the ownership percentage of the LiveVox Stockholder in the post-Business Combination Company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Companys Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

 

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The following diagram illustrates the anticipated ownership structure, pursuant to the assumptions described in the bullet point above, of the post-Business Combination Company and its expected subsidiaries immediately following the consummation of the Business Combination:

Post-Closing Organization Chart

 

 

LOGO

 

(1)

The Company will change its name to LiveVox Holdings, Inc. in connection with the closing of the Business Combination.

 

   

Our management and Board considered various factors in determining whether to approve the Merger Agreement and the Business Combination, including LiveVox’s attractive growth profile, differentiated product strategy, proven and experienced management team, large and growing total addressable market, attractive valuation and strong balance sheet along with other alternatives, the terms of the Merger Agreement, continued support for the post-Business Combination Company by the LiveVox Stockholder, the evaluation of our independent directors, the risks of benefits not achieved, the COVID-19 pandemic, the Expiration Date, the need for stockholder approval, the risks of redemptions, the risks of potential litigation, fees and expenses involved and other risks. For more information about our decision-making process, see the section entitled “Proposal No. 1—Approval of the Business Combination—The Companys Board of Directors Reasons for the Approval of the Business Combination.”

 

   

Pursuant to our amended and restated certificate of incorporation, in connection with the Business Combination, holders of our public shares may elect to have their Class A Stock redeemed for cash at the applicable redemption price per share calculated in accordance with our amended and restated certificate of incorporation. For illustrative purposes, based upon the amount held in our Trust Account of $253,628,041 as of December 31, 2020, and estimated interest income and taxes post-December 31, 2020, the Company estimates that the per-share price at which public stockholders may redeem their Class A Stock from cash held in the Trust Account will be approximately $10.14 at the time of the Special Meeting. If a holder exercises its, his or her redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-Business Combination Company and will not participate in the future growth of the post-Business Combination

 

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Company, if any. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the Special Meeting. Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights.”

 

   

In addition to voting on the proposal to adopt the Merger Agreement and approve the transactions contemplated thereunder, including the Business Combination, at the Special Meeting, the stockholders of the Company will be asked to vote on:

 

   

a proposal to approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination (the “Nasdaq Proposal” or “Proposal No. 2”);

 

   

seven separate proposals relating to adopting the Second Amended and Restated Certificate of Incorporation (collectively, the “Charter Proposals” or “Proposal No. 3”);

 

   

proposals to elect nine directors to serve staggered terms on our Board until the 2022, 2023 and 2024 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified (the “Director Election Proposals” or “Proposal No. 4”);

 

   

a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan (the “Incentive Plan Proposal” or “Proposal No. 5”); and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of any of the other proposals (the “Adjournment Proposal” or “Proposal No. 6”).

Please see the sections entitled “Proposal No. 1—Approval of the Business Combination,” “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination,” “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation,” “Proposal No. 4— Election of Directors to the Board of Directors,” “Proposal 5—Approval of the Incentive Plan, including the Authorization of the Initial Share Reserve under the Incentive Plan” andProposal No. 6—The Adjournment Proposal.” Each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other.

 

   

Upon consummation of the Business Combination, our Board anticipates increasing its size from seven directors to nine directors and providing for three classes of directors (Class I, Class II and Class III), with each Class I director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2022, each Class II director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2023 and each Class III director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2024, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. We anticipate having 3 Class I directors, 3 Class II directors and 3 Class III directors. Please see the section entitled “Management After the Business Combination” for additional information.

 

   

Unless waived by the applicable parties to the Merger Agreement, and subject to applicable law, the closing of the Business Combination is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the stockholder approvals contemplated by this proxy statement and the total cash proceeds of the Company equaling or exceeding $250,000,000. For more information about the closing conditions to the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination.”

 

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The Merger Agreement may be terminated at any time prior to the consummation of the Business Combination upon agreement of the parties thereto, or by the Company or the Stockholder Representative in specified circumstances. For more information about the termination rights under the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Termination.”

 

   

The proposed Business Combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

 

   

In considering the recommendation of our Board to vote for the proposals presented at the Special Meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, certain members of our Board and officers, as well as our Sponsor, have interests in the Business Combination that are different from, or in addition to, the interests of our stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to our stockholders that they vote in favor of the proposals presented at the Special Meeting, including the Business Combination Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares;

 

   

the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of 1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Class A Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration, but which will have no value if an initial business combination is not consummated by the Expiration Date;

 

   

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by the Expiration Date;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

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the fact that our Sponsor will have the right to nominate two independent directors of the post-Business Combination Company pursuant to a stockholder’s agreement to be entered into upon closing of the Business Combination;

 

   

the anticipated continuation of two of our existing directors, Robert D. Beyer and Todd M. Purdy, as directors of the post-Business Combination Company;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by the Expiration Date;

 

   

that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

that, at the closing of the Business Combination we will enter into the Amended and Restated Registration Rights Agreement, which provides for registration rights to, among others, our Initial Stockholders and their permitted transferees;

 

   

that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers); and

 

   

that Crescent, either alone or with our Sponsor, has the right but not the obligation to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent our total cash proceeds are less than $250,000,000.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR STOCKHOLDERS

The questions and answers below highlight only selected information from this proxy statement and only briefly address some commonly asked questions about the proposals to be presented at the Special Meeting, including with respect to the proposed Business Combination. The following questions and answers do not include all the information that is important to our stockholders. We urge stockholders to read carefully this entire proxy statement, including the Annexes and the other documents referred to herein, to fully understand the proposed Business Combination and the voting procedures for the Special Meeting, which will be held on June 16 at 10:00 a.m. Pacific Time virtually via the Internet. You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card. You will not be able to attend the meeting in person.

Q:    Why am I receiving this proxy statement?

A:    Our stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination, among other proposals. We have entered into the Merger Agreement providing for, among other things: (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of the Company as a consequence and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity, which, together with the First Merger and the other transactions contemplated by the Merger Agreement, we refer to herein as the “Business Combination.” You are being asked to vote on the Business Combination between us and LiveVox. Subject to the terms of the Merger Agreement, the base aggregate merger consideration to be paid in connection with the Business Combination is $824,375,000, subject to the adjustments described elsewhere in this proxy statement. A copy of the Merger Agreement is attached to this proxy statement as Annex A.

This proxy statement and its Annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. You should read this proxy statement and its Annexes carefully and in their entirety.

Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this proxy statement and its Annexes.

Q:    When and where is the Special Meeting?

A:    The Special Meeting will be held on June 16. 2021 at 10:00 a.m. Pacific Time virtually via the Internet. You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card.

Q:    Can I attend the Special Meeting?

A:    We will be hosting the Special Meeting virtually via the Internet. You will not be able to attend the Special Meeting in person. You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card. Our Board considers this to be the appropriate format of the Special Meeting. The meeting will comply with the meeting rules of conduct; the rules of conduct will be posted on the virtual meeting web portal. The Special Meeting live webcast will begin promptly on June 16. 2021 at 10:00 a.m. Pacific Time. We encourage you to access the Special Meeting webcast prior to the start time. Online check-in will begin at 9:45 a.m. Pacific Time, and you should allow ample time for the check-in procedures.

 

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Q:    What do I need in order to be able to participate in the Special Meeting?

A:    You will need the voter control number included on your proxy card in order to be able to vote your shares or submit questions during the Special Meeting. If you do not have a voter control number, you will be able to listen to the meeting only and you will not be able to vote or submit questions during the Special Meeting.

Q:    What are the specific proposals on which I am being asked to vote at the Special Meeting?

A:    The Company’s stockholders are being asked to approve the following proposals:

 

  1.

Business Combination Proposal—To adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination;

 

  2.

Nasdaq Proposal—To approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock in connection with the Business Combination;

 

  3.

Charter Proposals—The following seven separate proposals relating to adopting the Second Amended and Restated Certificate of Incorporation:

 

  a)

to authorize shares and provide for the relative conversion voting, dividend and liquidation rights of all classes of Common Stock;

 

  b)

to provide that the number of directors initially be nine and thereafter will be determined exclusively by the Board pursuant to a resolution adopted by a majority of the Board as will be provided in our Amended and Restated Bylaws;

 

  c)

to provide that the post-Business Combination Company will not be governed by Section 203 of the DGCL (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

  d)

to require the approval by affirmative vote of the holders of at least two-thirds of the Common Stock of the post-Business Combination Company entitled to vote to make amendments to the Second Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws;

 

  e)

to provide for certain amendments relating to control by the LiveVox Stockholder and GGC;

 

  f)

to provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, the Exchange Act and any other claim for which the federal courts have exclusive jurisdiction; and

 

  g)

to make other general changes.

 

  4.

Director Election Proposals—To consider and vote upon proposals to elect nine directors to serve staggered terms on our Board until the 2022, 2023 and 2024 annual meetings of stockholders, as applicable, and until their respective successors are duly elected and qualified.

 

  5.

Incentive Plan Proposal—To consider and vote upon a proposal to approve the Incentive Plan, including the authorization of the initial share reserve under the Incentive Plan.

 

  6.

Adjournment Proposal—To consider and vote upon a proposal to approve the adjournment of the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals or the Incentive Plan Proposal. This proposal will only be presented at the Special Meeting if there are not sufficient votes to approve the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals or the Incentive Plan Proposal.

Q:    Are the proposals conditioned on one another?

A:    Yes. Each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposal, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other. Therefore, unless waived by the parties to the Merger Agreement, if any of these proposals do not receive the requisite vote

 

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for approval, then we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by the Expiration Date, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in the Trust Account to the public stockholders. The Merger Agreement requires us to propose a charter amendment to our stockholders for the purpose of effecting an extension. See the section entitled “Proposal No. 1—The Business Combination Proposal—The Merger Agreement—Covenants of the Parties” for more information.

Q:    Why is the Company providing stockholders with the opportunity to vote on the Business Combination?

A:    Under our amended and restated certificate of incorporation, we must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of our initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, we have elected to provide our stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, we are seeking to obtain the approval of our stockholders of the Business Combination Proposal in order to allow our public stockholders to effectuate redemptions of their public shares in connection with the closing of our Business Combination. The adoption of the Merger Agreement is required under Delaware law and the approval of the Business Combination is required under our amended and restated certificate of incorporation. In addition, such approval is also a condition to the closing of the Business Combination under the Merger Agreement.

Q:    What revenues and profits/losses has LiveVox generated in the last three years?

A:    For the years ended December 31, 2018, 2019 and 2020, LiveVox had total revenue of $77,177,000, $92,755,000 and $102,545,000, respectively, and net (loss) income of $1,886,000, $(6,913,000) and $(4,645,000), respectively. For additional information, please see the sections entitled “Selected Consolidated Historical Financial and Other Information of LiveVox” and “LiveVox Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Q:    What will happen in the Business Combination?

A:    Pursuant to the Merger Agreement, and upon the terms and subject to the conditions set forth therein, the Company will acquire LiveVox in a series of transactions we collectively refer to as the “Business Combination.” At the closing of the Business Combination contemplated by the Merger Agreement, the parties will undertake the following transactions: (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of the Company as a consequence; and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity. As a result of the First Merger, at the closing of the Business Combination and in connection with the First Merger, the Company will own 100% of the outstanding common stock of LiveVox and each share of common stock of LiveVox will be canceled and converted into the right to receive a portion of the consideration. As a result of the Second Merger, the Company will own 100% of the outstanding interests in the Second Merger Sub. After the Business Combination, the Company will own, directly or indirectly, all of the stock of LiveVox and its direct and indirect subsidiaries.

Q:    Following the Business Combination, will the Company’s securities continue to trade on a stock exchange?

A:    Yes. We intend to apply to continue the listing of the post-Business Combination Company’s Class A Stock, Units and Public Warrants on Nasdaq under the symbols “LVOX,” “LVOXU” and “LVOXW,” respectively, upon the closing of the Business Combination.

 

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Q:    How has the announcement of the Business Combination affected the trading price of the Company’s Class A Stock?

A:    On January 13, 2021, the trading date before the public announcement of the Business Combination, the Company’s Class A Stock, Units and Warrants closed at $10.40, $11.59 and $1.75, respectively. On May 13, 2021, the most recent practicable trading date prior to the date of this proxy statement, the Company’s Class A Stock, Units and Public Warrants closed at $10.08, $10.41 and $1.13, respectively.

Q:    How will the Business Combination impact the shares of the Company outstanding after the Business Combination?

A:    As a result of the Business Combination and the consummation of the transactions contemplated thereby, the amount of Common Stock outstanding will increase by approximately 310% to approximately 97 million shares of Common Stock (including the Earn-Out Shares and assuming that no shares of Class A Stock are redeemed and that no additional shares of Class A Stock are purchased pursuant to the right of Crescent and the Sponsor to purchase, immediately prior to the closing of the Business Combination, additional shares of Class A Stock to the extent our total cash proceeds are less than $250,000,000). Additional shares of Common Stock may be issuable in the future as a result of the issuance of additional shares that are not currently outstanding, including issuance of shares of Class A Stock upon exercise of the Warrants after the Business Combination. The issuance and sale of such shares in the public market could adversely impact the market price of our Common Stock, even if our business is doing well.

Q:    Is the Business Combination the first step in a “going private” transaction?

A:    No. The Company does not intend for the Business Combination to be the first step in a “going private” transaction. One of the primary purposes of the Business Combination is to provide a platform for LiveVox to access the U.S. public markets.

Q:    Will the management of LiveVox change in the Business Combination?

A:    We anticipate that all of the executive officers of LiveVox will remain with the post-Business Combination Company. In addition, Louis Summe, LiveVox’s Chief Executive Officer and co-founder, has been nominated to serve as a director of the post-Business Combination Company upon completion of the Business Combination. Please see the section entitled “Management After the Business Combination” for additional information.

Q:    What stake will current stockholders of the Company and the LiveVox Stockholder hold in the post-Business Combination Company after the closing?

A:    It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders will retain an ownership interest of approximately 25.9% in the post-Business Combination Company; (ii) our Initial Stockholders will own approximately 3.6% of the post-Business Combination Company; (iii) the Forward Purchasers will own approximately 2.6% of the post-Business Combination Company; (iv) the PIPE Investors will own approximately 7.7% of the post-Business Combination Company; (v) the participants in the LiveVox Bonus Plans will own approximately 3.6% of the post-Business Combination Company; and (vi) the LiveVox Stockholder will own approximately 56.6% of the post-Business Combination Company. The ownership percentages with respect to the post-Business Combination Company (a) do not take into account (1) any redemption by our public stockholders (and the percentages therefore assume our total cash proceeds exceed $250,000,000 without the purchase of additional shares of Class A Stock by Crescent and our Sponsor) and (2) Warrants that will remain outstanding immediately following the Business Combination, but (b) do include (1) the issuance of Class A Stock pursuant to the Forward Purchase Agreement, (2) the issuance of Class A Stock pursuant to the PIPE Investment, (3) the issuance of Class A Stock pursuant to the LiveVox Bonus Plans, (4) the remaining Founder Shares, all of which will be converted into shares of Class A Stock at the closing of the

 

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Business Combination on a one-for-one basis, after the cancelation of 2,725,000 of such shares by our Sponsor, and (5) the Earn-Out Shares and Lock-Up Shares that will be placed into escrow because the LiveVox Stockholder and our Initial Stockholders, respectively, will maintain voting power over such shares, and therefore such interests represent voting power (and not necessarily pecuniary interests or dispositive power). If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders and the ownership percentage of the LiveVox Stockholder in the post-Business Combination Company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

Q:    Will the Company assume any of LiveVox’s outstanding financing obligations or obtain new financing in connection with the Business Combination?

A:    The Company will use the proceeds from the Forward Purchase Agreement and PIPE Investment, together with the funds in the Trust Account, and, to the extent the Company’s total cash proceeds are otherwise less than $250,000,000, any proceeds from the sale of additional securities of the Company to Crescent and our Sponsor to fund the cash consideration payable to the LiveVox Stockholder in the Business Combination and certain transaction fees and expenses relating to the Business Combination. In addition, the Company will be assuming approximately $62 million of the existing net indebtedness of LiveVox. However, the Company does not anticipate obtaining any new debt financing to fund the Business Combination.

Q:    What conditions must be satisfied to complete the Business Combination?

A:    Unless waived by the applicable parties to the Merger Agreement, and subject to applicable law, the closing of the Business Combination is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the stockholder approvals contemplated by this proxy statement and the total cash proceeds of the Company equaling or exceeding $250,000,000. For a summary of the conditions that must be satisfied or waived prior to completion of the Business Combination, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

Q:    Are there any arrangements to help ensure that the Company will have sufficient funds to fund the aggregate purchase price?

A:    Unless waived by the Company or LiveVox, as applicable, the Merger Agreement provides that our obligation and the obligation of LiveVox to consummate the Business Combination is conditioned on the total cash proceeds of the Company equaling or exceeding $250,000,000.

Under the Forward Purchase Agreement, Crescent or parties designated by Crescent will purchase 2,500,000 shares of Class A Stock and 833,333 Warrants for an aggregate purchase price of $25,000,000 in a private placement that will close immediately prior to the Business Combination. Pursuant to the PIPE Investment, the PIPE Investors have collectively subscribed for 7,500,000 shares of Class A Stock for an aggregate purchase price of $75,000,000 in cash in private placements that will close immediately prior to the Business Combination. In addition, Crescent, either alone or with the Sponsor, has the right to purchase additional shares of our Class A Stock at $10.00 per share to the extent the total cash proceeds of the Company are otherwise less than $250,000,000.

The Company will use the proceeds from the Forward Purchase Agreement and PIPE Investment, together with the funds in the Trust Account, and, to the extent the Company’s total cash proceeds are otherwise less than $250,000,000, any proceeds from the sale of additional shares of our Class A Stock to Crescent and our Sponsor (i) to fund the cash consideration payable to the LiveVox Stockholder in the Business Combination and certain transaction fees and expenses relating to the Business Combination, and (ii) to provide the Company with additional liquidity.

 

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Q:    Why is the Company proposing the Nasdaq Proposal?

A:    We are proposing the Nasdaq Proposal in order to comply with Nasdaq Listing Rules 5635(a), (b) and (d), which require stockholder approval of certain transactions that result in the issuance of 20% or more of the outstanding voting power or shares of common stock outstanding before the issuance of such stock or an issuance or potential issuance of stock that would result in a change of control.

In connection with the Business Combination, we expect to issue approximately 69 million shares of Class A Stock, not taking into consideration any shares issued to Crescent and our Sponsor pursuant to their right to purchase shares to the extent our total cash proceeds are otherwise less than $250,000,000 or the conversion of our Class F Stock. Because we may issue 20% or more of our outstanding Common Stock when considering together the stock consideration to be issued in the Business Combination, the Forward Purchase Agreement and the PIPE Investment, we are required to obtain stockholder approval of such issuance pursuant to Nasdaq Listing Rules 5635(a) and (d). Because certain of the LiveVox Stockholder are expected to receive more than 20% of the Common Stock as part of the stock consideration issued in the Business Combination, we are required to obtain stockholder approval of such issuance pursuant to Nasdaq Listing Rule 5635(b). For more information, please see the section entitled “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination.”

Q:    Why is the Company proposing the Charter Proposals?

A:    The Second Amended and Restated Certificate of Incorporation that we are asking our stockholders to adopt in seven separate proposals in connection with the Business Combination (collectively, the “Charter Proposals” or “Proposal No. 3”) provides for certain amendments to our existing certificate of incorporation. Pursuant to Delaware law and the Merger Agreement, we are required to submit the Charter Proposals to the Company’s stockholders for adoption. For additional information please see the section entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation.”

Q:    Why is the Company proposing the Director Election Proposals?

A:    Upon consummation of the Business Combination, our Board anticipates increasing its size from seven directors to nine directors and providing for three classes of directors (Class I, Class II and Class III), with each Class I director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2022, each Class II director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2023 and each Class III director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2024, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. We anticipate having three Class I directors, three Class II directors and three Class III directors. The Company believes it is in the best interests of stockholders to allow stockholders to vote upon the election of newly appointed directors. Please see the section entitled “Proposal No. 4—Election of Directors to the Board of Directors” for additional information.

Q:    Why is the Company proposing the Incentive Plan Proposal?

A:     The purpose of the Incentive Plan Proposal is to further align the interests of the eligible participants with those of stockholders by providing long-term incentive compensation opportunities tied to the performance of the Company. Please see the section entitled “Proposal No. 5—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan” for additional information.

Q:    Why is the Company proposing the Adjournment Proposal?

A:    We are proposing the Adjournment Proposal to allow our Board to adjourn the Special Meeting to a later date or dates to permit further solicitation of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals or the Incentive Plan Proposal. In no event will our Board adjourn the

 

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Special Meeting or consummate the Business Combination beyond the Expiration Date. Please see the section entitled “Proposal No. 5—The Adjournment Proposal” for additional information.

Q:    What happens if I sell my shares of Class A Stock before the Special Meeting?

A:    The record date for the Special Meeting is earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Class A Stock after the record date, but before the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares of Class A Stock because you will no longer be able to deliver them for cancelation upon consummation of the Business Combination. If you transfer your shares of Class A Stock prior to the record date, you will have no right to vote those shares at the Special Meeting or redeem those shares for a pro rata portion of the proceeds held in our Trust Account.

Q:    What constitutes a quorum at the Special Meeting?

A:    A majority of the issued and outstanding shares of the Company’s Common Stock entitled to vote as of the record date at the Special Meeting must be present virtually or represented by proxy, at the Special Meeting to constitute a quorum and in order to conduct business at the Special Meeting. Abstentions will be counted as present for the purpose of determining a quorum. Our Initial Stockholders, who currently own approximately 20% of our issued and outstanding shares of Common Stock, will count towards this quorum. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special Meeting. As of the record date for the Special Meeting,                shares of our Common Stock would be required to achieve a quorum.

Q:    What vote is required to approve the proposals presented at the Special Meeting?

A:    The following votes are required for each proposal at the Special Meeting:

 

   

Business Combination Proposal: The approval of the Business Combination Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Business Combination Proposal, will have no effect on the Business Combination Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Business Combination Proposal. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination.

 

   

Nasdaq Proposal: The approval of the Nasdaq Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). A Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting and a broker non-vote with regard to the Nasdaq Proposal will have no effect on the Nasdaq Proposal. The Nasdaq considers abstentions to be votes cast and included in the number of shares of which a majority is required to vote in favor. Accordingly, abstentions will have the same effect as a vote AGAINST the Nasdaq Proposal. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the Nasdaq Proposal.

 

   

Charter Proposals: The separate approval of each of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to any of

 

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the Charter Proposals will have the same effect as a vote “AGAINST” such Charter Proposal. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the Charter Proposals.

 

   

Director Election Proposals: Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the election of each of the director nominees named in the Director Election Proposals.

 

   

Incentive Plan Proposal: The approval of the Incentive Plan Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Incentive Plan Proposal. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any share of Common Stock owned by them in favor of the Incentive Plan Proposal.

 

   

Adjournment Proposal: The approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). Generally, only votes “FOR” or “AGAINST” are considered to be votes cast. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the Adjournment Proposal. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the Adjournment Proposal.

Q:     What happens if the Business Combination Proposal is not approved?

A:    If the Business Combination Proposal is not approved and we do not consummate a business combination by the Expiration Date, we will be required to dissolve and liquidate our Trust Account.

Q:     May the Company, its Sponsor or the Company’s directors or officers or their affiliates purchase shares in connection with the Business Combination?

A:    In connection with the stockholder vote to approve the proposed Business Combination, our Sponsor, directors or officers or their respective affiliates may privately negotiate transactions to purchase shares from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per-share pro rata portion of the Trust Account. None of our directors or officers or their respective affiliates will make any such purchases when they are in possession of any

 

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material non-public information not disclosed to the seller or during a restricted period under Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such selling stockholder, although still the record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights, and could include a contractual provision that directs such selling stockholder to vote such shares in a manner directed by the purchaser. In the event that our Sponsor, directors or officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be completed at purchase prices that are below or in excess of the per-share pro rata portion of the Trust Account.

Q:     How many votes do I have at the Special Meeting?

A:    Our stockholders are entitled to one vote on each proposal presented at the Special Meeting for each share of Common Stock held of record as of May 10, 2021, the record date for the Special Meeting. As of the close of business on the record date, there were 31,250,000 outstanding shares of our Common Stock.

Q:     How do I vote?

A:    If you were a holder of record of our Common Stock on May 10, 2021, the record date for the Special Meeting, you may vote with respect to the proposals at the Special Meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Voting by Mail. By signing the proxy card and returning it in the enclosed prepaid and addressed envelope, you are authorizing the individuals named on the proxy card to vote your shares at the Special Meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the Special Meeting so that your shares will be voted if you are unable to attend the Special Meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by 10:00 a.m. Pacific Time on June 16, 2021.

Voting at the Meeting. If you virtually attend and plan to vote at the Special Meeting, we will provide instructions for doing so during the live webcast. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote virtually at the Special Meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote virtually, you will need to bring to the Special Meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. For additional information, please see the section entitled “Special Meeting of Company Stockholders.”

Q:     What will happen if I abstain from voting or fail to vote at the Special Meeting?

A:    At the Special Meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. For purposes of approval, a failure to vote or an abstention will have no effect on the Business Combination Proposal, the Director Election Proposals, the Incentive Plan Proposal and the Adjournment Proposal. A failure to vote or abstention will have the same effect as a vote “AGAINST” each of the Charter Proposals. An abstention will have the same effect as a vote “AGAINST” the Nasdaq Proposal, while a failure to vote will have no effect on the Nasdaq Proposal.

Q:     What will happen if I sign and return my proxy card without indicating how I wish to vote?

A:    Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted FOR each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

 

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Q:     If I am not going to attend the Special Meeting virtually, should I return my proxy card instead?

A:    Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

Q:     If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

A:    No. Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. We believe the proposals presented to the stockholders at this Special Meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on any of the proposals presented at the Special Meeting. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for the purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the Special Meeting. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

Q:     How will a broker non-vote impact the results of each proposal?

Broker non-votes will count as a vote AGAINST each of the Charter Proposals but will not have any effect on the outcome of any other proposals.

Q:     May I change my vote after I have mailed my signed proxy card?

A:    Yes. You may change your vote by sending a later-dated, signed proxy card to our Secretary at the address listed below so that it is received by our Secretary prior to the Special Meeting or attend the Special Meeting virtually and vote. You also may revoke your proxy by sending a notice of revocation to our Secretary, which must be received by our Secretary prior to the Special Meeting.

Q:     What should I do if I receive more than one set of voting materials?

A:    You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

Q:     How will the Company’s Sponsor, directors and officers vote?

A:    Prior to our IPO, we entered into a letter agreement with our Sponsor and each of our directors and officers at the time (which includes our Initial Stockholders). We also entered into a letter agreement with our director who was appointed after our IPO, and we have entered into the Sponsor Support Agreement with our Sponsor and certain of our directors and officers. Pursuant to these agreements: (i) our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination; and (ii) our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and

 

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outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination and each of the proposals to be considered at the Special Meeting. None of our Sponsor, directors or officers has purchased any shares of our Common Stock during or after our IPO and, as of the date of this proxy statement, neither we nor our Sponsor, directors or officers have entered into agreements, and are not currently in negotiations, to purchase shares prior to the consummation of the Business Combination. Currently, our Initial Stockholders own approximately 20% of our issued and outstanding shares of Common Stock, including all of the Founder Shares, and will vote all such shares at the Special Meeting.

Q:     What interests do the Sponsor and the Company’s current officers and directors have in the Business Combination?

A:    Our Sponsor and certain members of our Board and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interests. You should take these interests into account in deciding whether to approve the Business Combination. These interests include:

 

   

the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares;

 

   

the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of 1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Class A Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration, but which will have no value if an initial business combination is not consummated by the Expiration Date;

 

   

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by the Expiration Date;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that our Sponsor will have the right to nominate two independent directors of the post-Business Combination Company pursuant to a stockholders agreement to be entered into upon closing of the Business Combination;

 

   

the anticipated continuation of two of our existing directors, Robert D. Beyer and Todd M. Purdy, as directors of the post-Business Combination Company;

 

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the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by the Expiration Date;

 

   

that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

that, at the closing of the Business Combination we will enter into the Amended and Restated Registration Rights Agreement, which provides for registration rights to, among others, our Sponsor, Crescent and their permitted transferees;

 

   

that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers); and

 

   

that Crescent, either alone or with our Sponsor, has the right but not the obligation to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent our total cash proceeds are less than $250,000,000.

These interests may influence our directors in making their recommendation that you vote in favor of the approval of the Business Combination.

Q:     Did the Company’s Board obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

A:    No. Neither our Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that we are paying for LiveVox is fair to us from a financial point of view. Neither our Board nor any committee thereof obtained a third-party valuation in connection with the Business Combination. In analyzing the Business Combination, our Board conducted due diligence on LiveVox and reviewed comparisons of selected financial data of LiveVox with certain of its peers in the industry and the financial terms set forth in the Merger Agreement. Based on the foregoing, our Board concluded that the Business Combination was in the best interest of the Company’s stockholders.

Q:     What happens if I vote against the Business Combination Proposal?

A:    If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting, then the Business Combination Proposal will be approved and, assuming the approval of the Incentive Plan Proposal, the Director Election Proposals, the Nasdaq Proposal and the Charter Proposals and the satisfaction or waiver of the other conditions to closing, the Business Combination will be consummated in accordance with the terms of the Merger Agreement.

 

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If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting, then the Business Combination Proposal will fail and we will not consummate the Business Combination. If we do not consummate the Business Combination, we may continue to try to complete a business combination with a different target business until the Expiration Date. If we fail to complete an initial business combination by the Expiration Date, then we will be required to dissolve and liquidate the Trust Account by returning the then-remaining funds in such account to our public stockholders.

Q:     Do I have redemption rights?

A:    If you are a holder of public shares, you may redeem your public shares for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then outstanding public shares; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) equaling less than $5,000,001. A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the units sold in our IPO. Holders of our outstanding Public Warrants do not have redemption rights in connection with the Business Combination. Our Sponsor, directors and officers have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, and the Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Our Sponsor has also agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation. For illustrative purposes, based upon the amount held in our Trust Account of $253,628,041 as of December 31, 2020, and estimated interest income and taxes post-December 31, 2020, the Company estimates that the per-share price at which public stockholders may redeem their Class A Stock from cash held in the Trust Account will be approximately $10.14 at the time of the Special Meeting. Additionally, shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the Trust Account (including interest not previously released to the Company to pay its franchise and income taxes) in connection with the liquidation of the Trust Account, unless we complete an alternative business combination prior to the Expiration Date.

Q:     Can the Company’s Initial Stockholders redeem their Founder Shares in connection with consummation of the Business Combination?

A:    No. Our Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares and any public shares they may hold in connection with the consummation of our Business Combination. Our Sponsor has also agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation.

Q:     Is there a limit on the number of shares I may redeem?

A:    Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares sold in our IPO. Accordingly, all shares in excess of 15% owned by a holder or “group” of holders will not be redeemed

 

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for cash. On the other hand, a public stockholder who holds less than 15% of the public shares of Class A Stock and is not a member of a “group” may redeem all of the public shares held by such stockholder for cash.

In no event is your ability to vote all of your shares (including those shares held by you or by a “group” in excess of 15% of the shares sold in our IPO) for or against our Business Combination restricted.

We have no specified maximum redemption threshold under our amended and restated certificate of incorporation, other than the aforementioned 15% threshold. Each redemption of shares of Class A Stock by our public stockholders will reduce the amount in our Trust Account, which held cash and investment securities with a fair value of $253,628,041 as of December 31, 2020. The Merger Agreement provides that our obligation and the obligation of LiveVox to consummate the Business Combination is conditioned on total cash proceeds of the Company equaling or exceeding $250,000,000. This condition to closing in the Merger Agreement is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of Class A Stock by our public stockholders, this condition is not met (or waived), then we or LiveVox may elect not to consummate the Business Combination. In addition, in no event will we redeem shares of our Class A Stock in an amount that would result in the Company’s net tangible assets equaling less than $5,000,001.

Q:     Is there a limit on the total number of shares that may be redeemed?

A:    Yes. Our amended and restated certificate of incorporation provides that we may not redeem our public shares in an amount that would result in the Company’s net tangible assets equaling less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the Merger Agreement. Other than this limitation, our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold. In addition, the Merger Agreement provides that our obligation and the obligation of LiveVox to consummate the Business Combination is conditioned on total cash proceeds of the Company equaling or exceeding $250,000,000. In the event the aggregate cash consideration we would be required to pay for all shares of Class A Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of Class A Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

Q:     Will how I vote affect my ability to exercise redemption rights?

A:    No. You may exercise your redemption rights whether you vote your shares of Common Stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this proxy statement. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq.

Q:     How do I exercise my redemption rights?

A:    In order to exercise your redemption rights, you must, (i) if you hold Units, separate the underlying shares of Class A Stock and Warrants, and (ii) prior to 5:00 p.m. Eastern Time on June 14, 2021 (two business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to Continental Stock Transfer & Trust Company, our Transfer Agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the Transfer Agent and time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, we do not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name” are required to either tender their certificates to our Transfer Agent prior to the date set forth in these proxy materials, or up to two business days prior to the vote on the proposal to approve the Business Combination at the Special Meeting, or to deliver their shares to the Transfer Agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. The requirement for physical or electronic delivery prior to the Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The Transfer Agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the redeeming stockholder. However, this fee would be incurred regardless of whether or not we require stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.

Q:     What are the U.S. federal income tax consequences of exercising my redemption rights?

A:    Whether the redemption is subject to U.S. federal income tax depends on the particular facts and circumstances. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—United States Federal Income Tax Considerations for Stockholders Exercising Redemption Rights.” We urge you to consult your tax advisors regarding the tax consequences of exercising your redemption rights.

Q:     If I am a Company warrant holder, can I exercise redemption rights with respect to my Public Warrants?

A:    No. The holders of our Public Warrants have no redemption rights with respect to our Public Warrants.

Q:     Do I have appraisal rights if I object to the proposed Business Combination?

A:    No. Appraisal rights are not available to holders of our Common Stock in connection with the Business Combination.

Q:     What happens to the funds held in the Trust Account upon consummation of the Business Combination?

A:    The Company will use the proceeds from the Forward Purchase Agreement and PIPE Investment, together with the funds in the Trust Account, and, to the extent the Company’s total cash proceeds are otherwise less than $250,000,000, any proceeds from the sale of additional shares of Class A Stock to Crescent and our Sponsor to fund the cash consideration payable to the LiveVox Stockholder in the Business Combination and certain transaction fees and expenses relating to the Business Combination, and to provide the Company with additional liquidity.

Q:     What happens if the Business Combination is not consummated?

A:    There are certain circumstances under which the Merger Agreement may be terminated. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement” for information regarding the parties’ specific termination rights.

 

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If we do not consummate the Business Combination, we may try to complete a business combination with a different target business until the Expiration Date. If we fail to complete an initial business combination by the Expiration Date, then we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per unit in the IPO. Please see the section entitled “Risk Factors—Risks Related to the Company and the Business Combination.”

Holders of our Founder Shares have waived any right to any liquidation distribution with respect to such shares. In addition, if we fail to complete a business combination by the Expiration Date, there will be no redemption rights or liquidating distributions with respect to our outstanding warrants, which will expire worthless.

Q:    When is the Business Combination expected to be completed?

A:    The closing of the Business Combination is expected to take place on or prior to the third business day following the satisfaction or waiver of the conditions described below in the subsection entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination.” The closing is expected to occur in the second quarter of 2021. The Merger Agreement may be terminated if the Business Combination is not consummated by June 30, 2021; provided that the right to terminate because such date has passed is not granted to a party whose action or failure to act has caused the delay in the closing of the Business Combination. The date may be further extended to September 13, 2021 in case all conditions to consummate the Business Combination have been satisfied or waived other than regulatory conditions and to a limited extent in case of government shutdowns; provided, further, that such date shall be automatically extended day-for-day for each business day a government shutdown is in effect that prevents the consummation of the Business Combination for a maximum of 60 days unless otherwise mutually agreed in writing by the parties to the Merger Agreement.

For a description of the conditions to the completion of the Business Combination, see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination.”

Q:    What do I need to do now?

A:    You are urged to read carefully and consider the information contained in this proxy statement, including the Annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

Q:    Who will solicit and pay the cost of soliciting proxies for the Special Meeting?

A:    The Company is soliciting proxies on behalf of its Board. The Company will pay the cost of soliciting proxies for the Special Meeting. The Company has engaged Morrow to assist in the solicitation of proxies for the Special Meeting. The Company has agreed to pay Morrow a fee of $25,000, plus disbursements, and will

 

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reimburse Morrow for its reasonable out-of-pocket expenses and indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. The Company will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of the Company’s Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the Company’s Common Stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q:    Who can help answer my questions?

A:    If you have questions about the proposals or if you need additional copies of this proxy statement or the enclosed proxy card you should contact:

Crescent Acquisition Corp

11100 Santa Monica Boulevard, Suite 2000

Los Angeles, CA 90025

(310) 235-5900

Attention: George P. Hawley

Email: spacir@crescentcap.com

You may also contact our proxy solicitor at:

Morrow Sodali LLC

470 West Avenue

Stamford, CT 06902

Individuals, please call toll-free: (800) 662-5200

Banks and brokerage, please call: (203) 658-9400

Email: CRSA.info@investor.morrowsodali.com

To obtain timely delivery, our stockholders must request the materials no later than five business days prior to the Special Meeting.

You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”

If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to our Transfer Agent prior to the Special Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact our Transfer Agent:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

Email: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT

This summary highlights selected information contained in this proxy statement and does not contain all of the information that may be important to you. You should read carefully this entire proxy statement, including the Annexes and accompanying financial statements of the Company and LiveVox, to fully understand the proposed Business Combination (as described below) before voting on the proposals to be considered at the Special Meeting (as described below). Please see the section entitled “Where You Can Find More Information” beginning on page 312 of this proxy statement.

Unless otherwise specified, all share calculations do not include the Lock-Up Shares and Earn-Out Shares and assume (i) no exercise of redemption rights by the Company’s public stockholders, (ii) no inclusion of any shares of Class A Stock issuable upon the exercise of the Warrants, and (iii) no additional shares of Class A Stock are issued pursuant to the right of Crescent and the Sponsor to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock to the extent our total cash proceeds are less than $250,000,000.

Parties to the Business Combination

The Company

The Company is a blank check company incorporated on November 17, 2017 as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

The Company’s securities are traded on Nasdaq under the ticker symbols “CRSA,” “CRSAU” and “CRSAW.” The Company intends to apply to continue the listing of its Class A Stock, Units and Public Warrants on Nasdaq under the symbols “LVOX,” “LVOXU” and “LVOXW,” respectively, upon the closing of the Business Combination.

The mailing address of the Company’s principal executive office is 11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA 90025 and its phone number is (310) 235-5900.

First Merger Sub

First Merger Sub, a Delaware corporation, is a wholly owned subsidiary of the Company, formed by the Company on June 18, 2020. In the Business Combination, First Merger Sub will merge with and into LiveVox, with LiveVox continuing as the surviving corporation.

The mailing address of First Merger Sub’s principal executive office is 11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA 90025 and its phone number is (310) 235-5900.

Second Merger Sub

Second Merger Sub, a Delaware limited liability company, is a wholly owned subsidiary of the Company, formed by the Company on June 18, 2020. In the Business Combination, the Surviving Corporation will merge with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity.

The mailing address of Second Merger Sub’s principal executive office is 11100 Santa Monica Blvd., Suite 2000, Los Angeles, CA 90025 and its phone number is (310) 235-5900.



 

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LiveVox

LiveVox is a Delaware corporation that was formed on February 25, 2014, for the purpose of acquiring LiveVox, Inc. LiveVox, Inc. was first incorporated in Delaware in 1998 under the name “Tools for Health” and in 2005 changed its name to “LiveVox, Inc.” In the Business Combination, First Merger Sub will merge with and into LiveVox, with LiveVox continuing as the Surviving Corporation, and immediately thereafter the Surviving Corporation will merge with and into Second Merger Sub, with Second Merger Sub continuing as the surviving entity.

The mailing address of LiveVox’s principal executive office is 655 Montgomery Street, Suite 1000, San Francisco, California, 94111 and its phone number is (844) 207-6663.

Stockholder Representative

The Stockholder Representative, a Delaware corporation, was formed on May 14, 2007. In connection with the Business Combination, the Stockholder Representative is acting as the representative, agent and attorney-in-fact of the LiveVox Stockholder.

The mailing address of the Stockholder Representative’s principal executive office is One Embarcadero Center, Suite 3900, San Francisco, California 94111 and its phone number is (415) 983-2700.

LiveVox’s Business

LiveVox’s mission is to enable next-generation cloud contact center experiences. LiveVox offers a cloud-hosted Contact Center as a Service (or CCaaS) platform for business processing outsourcing (BPO) organizations, enterprises, and collections agencies. Its offerings include omnichannel and artificial intelligence (AI), customer relationship management (CRM) and workforce optimization (WFO). LiveVox’s platform provides customers with a scalable, cloud-based architecture and preintegrated AI capabilities to support enterprise-grade deployments. Additionally, LiveVox’s platform features a native CRM which unifies disparate, department-level systems of record to present contact center agents with a single view of its customers. LiveVox has built a differentiated approach to the contact center software market and is complemented by an attractive financial model. Key highlights of LiveVox’s business and market opportunity include:

 

   

Large and growing CCaaS market opportunity: The contact center market is in the early stages of a shift to cloud-based solutions and LiveVox estimates that the vast majority of contact center agents are not using cloud-based solutions today. Various trends are driving this transition, including digital transformation, the automation of manual contact center labor, and the need for AI-enabled analytics to support omnichannel workflows and agents. LiveVox estimates this market to be approximately $27 billion for 2020, of which approximately $5 billion is comprised of cloud-based solutions. LiveVox and other industry sources estimate the total spend to reach approximately $83 billion by 2030. As enterprises continue to execute on their digital transformation strategies, LiveVox is well positioned to capture a meaningful amount of this growth as it increases its investment in sales and marketing to educate more potential customers on its platform.

 

   

Differentiated product: LiveVox offers a cloud-based, enterprise-focused contact center solution. The LiveVox platform consists of innovative cloud-based AI and omnichannel offerings, anchored by its native CRM solution. LiveVox’s products are designed to enable customers to remove legacy technology barriers and accelerate adoption of cloud-based solutions, regardless of digital transformation journey status. LiveVox’s platform is configured with features and functionalities as well as compliance standards and capabilities, and integrations with many existing third-party solutions, providing customers with a simple and scalable implementation process. LiveVox believes



 

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that its integrated offering accelerates the adoption of cloud-based contact center solutions, eliminates data silos, and allows its users to maximize engagement with their customers and create differentiated end user experiences. LiveVox believes that it is currently the only company to offer a product that integrates Omnichannel, Contact Center, CRM, WFO and AI capabilities in a single offering.

 

     

Integration: LiveVox’s products integrate AI and omnichannel capabilities under one platform, alongside CRM and WFO functionalities, providing customers with a single platform to support their contact center capabilities while providing consistent platform-wide analysis and reporting.

 

     

Approach to CRM and data: LiveVox’s products unify disparate, department-level systems of record to present a single view to contact center agents, eliminate data silos that exist between disparate and disconnected solutions, provide great customer experiences, and lower costs for its customers. Additionally, LiveVox’s approach enables simpler, more cost-efficient deployment and scaling when compared to competing solutions. For example, products provided by traditional contact center software vendors are labor intensive, time-consuming and expensive to implement because they use a bespoke integration process with disparate systems of record, resulting in complex integrations and custom code. These complex integrations often require high upfront and ongoing maintenance costs. By contrast, LiveVox’s products are pre-configured with AI and LiveVox’s proprietary CRM which allow existing consumer data sets to be easily integrated and combined with operational outcomes out of the box which leads to a highly scalable implementation and optimization process that takes significantly less time at a lower cost.

 

     

Enterprise-grade architecture: LiveVox offers enterprise-grade compliance, security, and governance capabilities that benefit its customers, many of whom are in highly regulated industries. While LiveVox’s platform is scalable for businesses of all sizes, it primarily serves enterprise companies with complex contact center needs. Approximately 90% of LiveVox’s revenue comes from customers deploying greater than 50 seats with LiveVox.

 

   

Attractive financial profile, underpinned by several qualities:

 

     

Recurring revenue model: LiveVox’s revenue model consists of approximately 99% recurring revenue. For the years ended December 31, 2020, 2019, 2018 and 2017, LiveVox’s revenues were $102.5 million, $92.8 million, $77.2 million and $60.6 million, respectively, representing year-over-year growth of 10%, 20% and 27%, respectively. LiveVox’s Adjusted EBITDA for the years ended December 31, 2020, 2019, 2018 and 2017 was $8.5 million, $13.3 million, $11.0 million and $3.8 million, respectively.

 

     

Attractive unit economics: LiveVox benefits from strong sales efficiency given its high customer retention rates and low cost of acquiring customers, driven by the productivity of its salesforce and flexible commercial model. This model seeks to meet customers at any stage of their digital transformation by utilizing a “land and expand” strategy that allows LiveVox to provide a subset of its full contact center solution to meet the initial requirement, and then expand that relationship by providing more features and functionality that empowers the customer to continue on their journey to greater digital and AI adoption. For the years ended December 31, 2020, 2019, 2018 and 2017, LiveVox’s LTM Net Revenue Retention Rates were 106%, 118%, 120% and 115%, respectively. Notwithstanding for the impact of COVID-19 on fiscal 2020, LiveVox’s average net revenue retention rate was 115% over the period 2017 to 2020. These qualities contribute to attractive unit economics. LiveVox estimates that the average calculated lifetime value of LiveVox’s customers is approximately seven times the associated cost of acquiring them for the time period from 2017 to 2020.

 

     

Resilience: LiveVox has not experienced a sustained disruption in its overall business as a result of COVID-19. In the first half of 2020, LiveVox’s usage-based revenues were impacted due to lower volumes, although usage revenue returned to growth in the third quarter of fiscal 2020.



 

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LiveVox’s contracted revenues (comprising approximately two thirds of LiveVox’s overall revenue) has grown at least 18% in each quarter of 2020 compared to the respective quarters of 2019. In the second half of fiscal 2020, LiveVox’s business rebounded to normalized levels of growth, and its bookings outperformed its budgeted plan for 2020 (that was set in 2019 and not subsequently adjusted).

Since LiveVox’s acquisition by funds affiliated with Golden Gate Capital in 2014, it has invested in reaching product maturity and developing a differentiated value proposition for enterprise customers. Over this time period, LiveVox sustained its revenue growth and sustained attractive unit economics. LiveVox intends to build on this foundation and increase its sales and marketing investment to capture future opportunity, including by increasing the size and reach of its go-to-market organization, expanding its channel and geographic presence, and continuing to build on the efficiency and productivity of its salesforce.

Shift to Cloud-Based CCaaS Solutions

LiveVox believes that the vast majority of today’s businesses are still using on-premise solutions and the market for cloud-based contact center software is growing rapidly, driven by a number of factors LiveVox believes to be true, including the following:

 

   

Digital transformation: Many companies continue to modernize all aspects of their businesses, incorporating digital, mobile, and cloud technologies in all areas. This is especially true for contact centers, where cloud-based solutions increase agility, flexibility, and efficiency.

 

   

Automation of manual labor: Human labor has traditionally been a necessity and the largest area of spend for the contact center. However, modern AI and cloud technologies support offerings that streamline manual processes. As these solutions reach cost and performance parity with manual labor, LiveVox expects their penetration to further increase.

 

   

Increased focus on customer experience: In the past, contact centers were viewed primarily as cost centers. Today, they are viewed as an important part of the customer experience, and, ultimately, the enterprise brand. As a result, the contact center is viewed as a key point of contact in facilitating a high-value customer experience. Contact centers are increasingly focused on user engagement, resulting in greater focus on AI-enabled analytics and CRM. Organizations are subsequently evaluating their technology strategies and the role of the contact center agent, and increasingly shifting to cloud-based solutions.

 

   

Increased demand for work-from-home flexibility: Historically, organizations viewed on-premise infrastructure as better suited for deployments with significant security, compliance, and governance requirements. Those beliefs have evolved more towards acceptance of cloud-based solutions in recent years and the COVID-19 pandemic has accelerated this evolution as it caused a rapid increase in remote work and distributed workforces, accelerating the shift to cloud-based solutions.

Limitations to Broader Adoption of CCaaS

LiveVox believes that despite the clear need for cloud-based contact center software, existing competitors’ cloud solutions lack key functions and qualities, limiting the rate of adoption. LiveVox believes key factors limiting the broader adoption of cloud-based contact center solutions include:

 

   

Data integration: Traditional contact center solutions offer bespoke, department-level integration with a customer’s existing systems of record, resulting in data generated outside the contact center being separately managed and not easily accessible to the agent, further creating poor end user experiences.

 

   

Complex and costly implementation: Traditional contact center software vendors offer costly and time-intensive implementation processes that often require bespoke integration with disparate systems of



 

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record at each deployment site. These often require high upfront and ongoing maintenance costs, and considerable time invested by IT teams. As IT budgets become increasingly constrained, companies need solutions that are simple and cost-efficient to deploy and scale.

 

   

Risk mitigation: Existing solutions lack the risk and compliance capabilities required of large, global businesses today. This creates a growing business risk for companies relying on their contact center for customer-facing deployments. Large enterprises require these advanced risk mitigation capabilities in particular, to adhere to their compliance standards.

 

   

Investment in legacy infrastructure: Based on internal and industry estimates, LiveVox believes approximately 15% of current spend on contact center software solutions is comprised of cloud offerings. Businesses that have invested large amounts of capital into existing infrastructure often have upgrade cycles of greater than five years, further limiting their ability to quickly shift to cloud-based solutions.

LiveVox’s Opportunity

LiveVox’s CCaaS market opportunity consists of the total spend on contact center software solutions. LiveVox estimates this market to be approximately $27 billion in 2020, of which approximately $5 billion is comprised of cloud-based solutions and LiveVox estimates total spend to reach approximately $83 billion by 2030. This growth is driven in part by the increasing automation of manual workflows using AI. LiveVox believes that as enterprises continue to execute on their digital transformation strategies, it is well positioned to capture a meaningful amount of this cloud transition growth as it increases its investment in sales and marketing to educate more potential customers on its platform.

LiveVox believes that the majority of its addressable market is unpenetrated today. Over time, LiveVox expects its total addressable market to grow considerably, due to a combination of cloud-based market tailwinds and LiveVox’s shift into new products to expand its addressable market. LiveVox continues to expand into other solutions, and benefit from market tailwinds in the cloud-based contact center software market as on-premise solutions shift to the cloud and contact center labor is automated.



 

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LiveVox’s Offerings

 

 

LOGO

LiveVox’s cloud-based contact center platform features a comprehensive, integrated suite of omnichannel, AI, CRM, and WFO capabilities. LiveVox’s products are differentiated by the following characteristics:

 

   

Comprehensive offering: LiveVox’s products provide voice, messaging, chat, AI, and WFO capabilities configured with LiveVox’s CRM. These products are provided in a single platform, with consistent user experiences across products and seamless integration with other systems of record.

 

   

Pre-integrated: LiveVox’s native CRM is integrated to work with existing vendor solutions. As a result, the implementation process is simple for IT teams to deploy and scale the LiveVox software. LiveVox’s solutions can be implemented in as quickly as three weeks. Additionally, LiveVox’s products unify disparate, department-level systems of record to present a single view to the agent, which eliminates data silos and provides great customer experiences.



 

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Cloud-native architecture: LiveVox uses a cloud-based, multi-tenant architecture model, with an approach designed from the ground up to operate securely while adhering to compliance and governance requirements. These features allow customers to easily scale their use of LiveVox’s products and spend with LiveVox, including adding new features and receiving software upgrades.

 

   

Enterprise-grade functionality: LiveVox’s products have strong enterprise grade compliance and security capabilities that help differentiate it from the competition. LiveVox offers advanced compliance capabilities that are demanded by its customers, many of whom are in highly regulated industries.

 

   

Flexible commercial model: LiveVox’s commercial model consists of an optimized combination of contracted billing and usage-based billing, with products delivered through bundles. These bundles enable LiveVox to bring in customers at multiple points in their digital transformation.

Benefits to LiveVox’s Customers

LiveVox’s platform uses AI capabilities to accelerate digital transformation for its customers. LiveVox believes that the following key attributes differentiate its platform, to both its customers and their end users:

 

   

Scalable, easy to use platform: LiveVox’s omnichannel/AI solution integrates with customers’ existing vendors, providing a flexible data platform that scales to reach customers as businesses grow. LiveVox allows businesses to rapidly adapt their strategies to meet the standards of changing technology and regulatory environments, in a simple product that is configured with value-added products built for mid-size and enterprise customers.

 

   

Accelerating digital transformation: LiveVox’s products enhance customers’ abilities to transform their businesses, increase agility, and create amazing customer experiences. LiveVox’s advanced omnichannel / AI capabilities and WFO tools provide insights on both its customers’ contact center operations, as well as on their customers. These insights facilitate strong customer and end user experiences, while improving agent productivity.

 

   

Cost-efficient: LiveVox’s commercial model typically requires lower implementation costs and resources when compared to other solutions, and following implementation, customers are able to scale their spend with their contact center needs. LiveVox’s AI-configured, native CRM facilitates faster deployments for its customers, enabling them to avoid long, costly integrations and the complexity that agents face when navigating multiple systems of record.

 

   

Consistent and continuous experience for end users: LiveVox’s integrated suite of products improves the end user experience by combining all of a user’s information, providing them with a consistent experience across SMS, voice, web, chat, and other channels, with all of their information stored in one central location. Today’s modern contact center needs to route the right communication to the right agents, providing agents access to a single view of pertinent customer information in real time to facilitate a seamless customer journey.

Growth Strategies

LiveVox is driving considerable growth in its business by executing across a number of dimensions including:

 

   

Acquire new customers: LiveVox is increasing its investment into sales and marketing to grow its customer base. LiveVox is growing its team of customer success managers and field-based reps, building its marketing capabilities to expand its reach, and investing in initiatives to improve salesforce productivity.



 

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Increase revenue from existing customers: LiveVox benefits from a land and expand model in which its revenue from existing customers grows over time. This is driven by LiveVox’s focus on large enterprise customers, as well as its sales strategy in which LiveVox often “lands” in a single department or line of business, providing it a strong upsell potential over time to expand the amount of business it does with a customer. For the last four years ending December 31, 2020, LiveVox’s LTM Net Revenue Retention Rate was 115%, on average. LiveVox believes a considerable opportunity exists for additional revenue from its existing customers through the sale of additional seats and products. LiveVox has identified opportunities it believes will allow it to expand its revenue from existing customers based on seats that are not currently using LiveVox’s software. LiveVox will continue to invest resources into identifying and executing on opportunities for increased penetration with existing customers.

 

   

Accelerate product innovation: LiveVox believes its platform is ideally suited for expansion and has a demonstrated track record of expanding the functionality and use cases of its products. Since 2014, LiveVox has expanded the functionality of its platform from an outbound-focused collections provider to an integrated omnichannel/AI platform that addresses all aspects of the agent experience. LiveVox will continue to invest in new technologies and harness existing ones.

 

   

Grow the LiveVox platform offering through partnerships and opportunistic M&A: LiveVox plans to continue to solidify its position as an enterprise cloud-based contact center software company. In addition to ongoing organic investment and partnerships, LiveVox will continue to explore opportunistic M&A as a source of product expansion, geographic reach, and growth.

The Business Combination Proposal

On January 13, 2021, the Company entered into the Merger Agreement, by and among the Company, First Merger Sub, Second Merger Sub, LiveVox and the Stockholder Representative. The Merger Agreement provides for, among other things: (i) the merger of First Merger Sub with and into LiveVox, with LiveVox continuing as the surviving corporation and becoming a direct, wholly owned subsidiary of the Company as a consequence; and (ii) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of the Surviving Corporation with and into Second Merger Sub with Second Merger Sub continuing as the surviving entity. For more information about the transactions contemplated by the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination.” A copy of the Merger Agreement is attached to this proxy statement as Annex A.

Consideration to the LiveVox Stockholder in the Business Combination

In accordance with and subject to the terms of the Merger Agreement and customary adjustments set forth therein, the base aggregate merger consideration to be paid in connection with the Business Combination is $824,375,000, which amount will be: (i) increased by the amount of cash and cash equivalents held by LiveVox and its direct and indirect subsidiaries as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (ii) decreased by the amount of LiveVox’s outstanding indebtedness as of 12:01 a.m., Eastern Time, on the date of the closing of the Business Combination; (iii) decreased by the aggregate amount of transaction expenses incurred by the Company prior to the closing of the Business Combination; (iv) decreased by the aggregate amount of certain transaction expenses incurred by LiveVox and its direct or indirect subsidiaries, to the extent incurred but not paid by LiveVox prior to the closing of the Business Combination, which amount shall also include transaction-related bonuses and other amounts payable in connection with or anticipation of the consummation of the Business Combination; (v) increased by the amount of interest accrued on deposits in the Trust Account after giving effect to taxes paid or payable and any redemptions that may be elected by any of our public stockholders for their pro rata share of the aggregate amount of funds in the Trust Account as of two business days prior to the closing of the Business Combination (which instructions to redeem



 

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such public shares are further discussed in the accompanying proxy statement); (vi) decreased by the $2,000,000 to be placed into the Adjustment Escrow Account; and (vii) decreased by the Stockholder Representative Expense Holdback Amount.

The consideration to be paid to the LiveVox Stockholder will be a combination of cash and stock (including the Earn-Out Shares). The maximum amount of cash consideration payable to the LiveVox Stockholder is $220,000,000, including up to $2,000,000 that could potentially be released to the LiveVox Stockholder from the Adjustment Escrow Account. The exact amount of cash consideration payable to the LiveVox Stockholder as of the closing of the Business Combination is to be determined as follows: (i) the aggregate amount of cash contained in the Trust Account immediately prior to the closing of the Business Combination after making payments in connection with redemptions that may be elected by our public stockholders; plus (ii) all cash and cash equivalents held by the Company outside of the Trust Account immediately prior to the closing of the Business Combination; less (iii) $2,000,000 to be placed into the Adjustment Escrow Account; less (iv) the Stockholder Representative Expense Holdback Amount; plus (v) $25,000,000 of Company proceeds pursuant to the Forward Purchase Agreement; plus (vi) $75,000,000 of Company proceeds pursuant to the PIPE Investment; plus (vii) any additional Company proceeds pursuant to the right but not the obligation of Crescent, either alone or with our Sponsor, to purchase additional shares of Class A Stock immediately prior to the closing of the Business Combination at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent the sum of (i) through (vii) is less than $250,000,000 (we refer to the sum of (i) through this (vii) as our “total cash proceeds”); less (viii) the Aggregate Transaction Expenses; and less (ix) cash to be retained by the Company in the amount of $100,000,000 less the amount by which the Aggregate Transaction Expenses exceeds $30,000,000.

The remainder of the consideration paid to the LiveVox Stockholder will be stock consideration, consisting of newly issued shares of Class A Stock, which shares will be valued at $10.00 per share as the difference between the total merger consideration and the cash consideration payable at the closing of the Business Combination for purposes of determining the aggregate number of shares payable to the LiveVox Stockholder for its ownership interests in LiveVox. The number of shares of Class A Stock to be issued to the LiveVox Stockholder as consideration is subject to adjustment, depending on, among other things, the level of redemptions of our shares of Class A Stock by our public stockholders or in certain cases to preserve the intended tax-free treatment of the Business Combination. To the extent the stock consideration is increased, there will be a corresponding reduction to the cash consideration paid to the LiveVox Stockholder. Following the closing of the Business Combination, the LiveVox Stockholder may receive cash consideration or, in some cases, share consideration as a result of any adjustment of the purchase price.

As additional consideration payable to the LiveVox Stockholder, the Company will issue 5,000,000 shares of Class A Stock as Earn-Out Shares to the LiveVox Stockholder to be held in an escrow account and released to the LiveVox Stockholder only if the price of Class A Stock trading on Nasdaq exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any Earn-Out Shares not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration.

For more information about the Merger Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement.”

Related Agreements

Sponsor Support Agreement

On January 13, 2021, the Company entered into a Sponsor Support Agreement, attached hereto as Annex B, with LiveVox, the Sponsor and certain of our directors and officers. Pursuant to the Sponsor Support Agreement,



 

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each of the parties signatory thereto (besides the Company and LiveVox) agreed to, among other things, certain restrictions on the transfer of Company securities owned or beneficially owned by such party or acquired thereafter, vote Company securities owned or beneficially owned by such party in favor of the approval of the Business Combination and the other proposals set forth in this proxy statement, refrain from redeeming Company securities owned or beneficially owned by such party and waive certain other rights associated with the ownership or beneficial ownership of Company securities by such party. As an incentive for LiveVox to enter into the Merger Agreement, the Sponsor also agreed to the cancelation of (i) 7,000,000 Warrants acquired by the Sponsor pursuant to a private placement in connection with the initial public offering of the Company at a purchase price of $1.00 per warrant and (ii) 2,725,000 shares of Class F Stock held by the Sponsor, in each case, for no consideration and concurrent with and contingent upon the consummation of the Business Combination. For more information about the Sponsor Support Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Sponsor Support Agreement.”

Share Escrow Agreement

On January 13, 2021, the Company, certain independent directors of the Company and the Sponsor entered into a Share Escrow Agreement. Pursuant to the Share Escrow Agreement, the Sponsor and such independent directors agreed, upon the closing of the Business Combination, to deposit the Lock-Up Shares, representing a total of 2,743,750 shares of Class A Stock (following the automatic conversion of such shares upon the closing of the Business Combination from shares of Class F Stock into shares of Class A Stock) into an escrow account to be subject to release only if the price of Class A Stock trading on Nasdaq exceeds the certain thresholds during the seven-year period following the closing of the Business Combination. 781,250 Lock-Up Shares will be released if the Volume Weighted Average Share Price equals or exceeds $12.50 per share for 20 of any 30 consecutive trading days following the closing of the Business Combination; another 781,250 Lock-Up Shares will be released if the Volume Weighted Average Share Price equals or exceeds $15.00 per share for 20 of any 30 consecutive trading days following the closing of the Business Combination; and another 1,181,250 Lock-Up Shares will be released if the Volume Weighted Average Share Price equals or exceeds $17.50 per share for 20 of any 30 consecutive trading days following the closing of the Business Combination. Any Lock-Up Shares not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration. For more information about the Share Escrow Agreement, please see the section entitled Proposal No. 1—Approval of the Business Combination—Related Agreements—Share Escrow Agreement.

Finders Agreement

On January 13, 2021, the Company and Neuberger entered into the Finders Agreement. Pursuant to the Finders Agreement, in exchange for Neuberger introducing the Company to LiveVox, the Company has agreed, following the closing of the Business Combination, to provide Neuberger compensation and registration rights. Neuberger shall not have any rights to compensation or registration rights if the Company does not consummate the Business Combination. The Finders Agreement provides that Neuberger is initially eligible to receive 781,250 shares of Class A Stock upon the earlier of (i) one year following the date of the consummation of the Business Combination and (ii) following the closing of the Business Combination (x) at such time when the last sale price of the Class A Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the closing of the Business Combination or (y) subject to certain conditions, upon the completion of a liquidation, merger stock exchange or other similar transaction. Additionally, Neuberger is eligible to receive up to an additional 1,943,750 shares of Class A Stock if the price of Class A Stock trading on Nasdaq exceeds the following thresholds during the seven-year period following the closing of the Business Combination: 781,250 of such shares will be issued to Neuberger if the Volume Weighted Average Share Price equals or exceeds $12.50 per share for 20 of any 30 consecutive trading days; another 781,250 of



 

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such shares will be issued to Neuberger if the Volume Weighted Average Share Price equals or exceeds $15.00 per share for 20 of any 30 consecutive trading days; and another 381,250 of such shares will be issued to Neuberger if the Volume Weighted Average Share Price equals or exceeds $17.50 per share for 20 of any 30 consecutive trading days. The Finders Agreement also provides for certain registration rights. For more information about the Share Escrow Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Finders Agreement.

Forward Purchase Agreement

On January 13, 2021, Crescent and the Company entered into the Forward Purchase Agreement, attached hereto as Annex E, pursuant to which Crescent has committed to purchase from the Company, subject to the terms and conditions set forth therein, 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers). The securities issued pursuant to the Forward Purchase Agreement will be subject to certain restrictions. The Forward Purchase Agreement provides for certain registration rights. For more information about the Forward Purchase Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Forward Purchase Agreement.”

Amended and Restated Registration Rights Agreement

At the closing of the Business Combination, the Company will enter into the Amended and Restated Registration Rights Agreement, substantially in the form attached as Annex F to this proxy statement, with our Sponsor and certain other stockholders of the post-Business Combination Company, including the LiveVox Stockholder. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, (a) any outstanding share of Class A Stock or any other equity security (including the Private Placement Warrants) of the Company held by a signatory thereto (besides the Company) as of the date of the Amended and Restated Registration Rights Agreement or thereafter acquired by a such holder (including the shares of Class A Stock issued upon conversion of the Class F Stock and upon exercise of any Private Placement Warrants or any other equity security of the Company) and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock held by such holder by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise, will be entitled to registration rights. In the Amended and Restated Registration Rights Agreement, the LiveVox Stockholder has also agreed to be bound by certain restrictions on the transfer of their Class A Stock acquired pursuant to the Merger Agreement. For more information about the Amended and Restated Registration Rights Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Amended and Restated Registration Rights Agreement.”

Escrow Agreement

At the closing of the Business Combination, the Company, the Stockholder Representative and Citibank, N.A., as Escrow Agent, will enter into the Escrow Agreement pursuant to which, at the closing of the Business Combination, the Company will deposit $2,000,000 into the Adjustment Escrow Account as partial security for the obligations of the LiveVox Stockholder in connection with any downward post-closing adjustment to the merger consideration pursuant to the terms of the Merger Agreement. The Escrow Agent will hold such amount until the final merger consideration is finally determined in accordance with the Merger Agreement, at which point the Escrow Agent will release the funds in accordance with joint written instructions duly executed and delivered by the Company and the Stockholder Representative to the Escrow Agent. For more information about the Escrow Agreement, please see the section entitled “Proposal No. 1—Approval of the Business Combination—Related Agreements—Escrow Agreement.”



 

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Incentive Plan

As contemplated by the Incentive Plan Proposal, we intend to reserve 9,770,000 shares for grants of awards under the Incentive Plan. For more information about the Incentive Plan, please see the section entitled “Proposal No. 5—Approval of the Incentive Plan, including the Authorization of the Initial Share Reserve under the Incentive Plan.”

Organizational Structure

The following diagram illustrates the ownership of LiveVox and its subsidiaries as of the date of this proxy statement on an as-converted to common stock basis:

Pre-Closing Organization Chart

 

 

LOGO



 

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The following diagram illustrates the anticipated ownership structure, pursuant to the assumptions described below under “—Impact of the Business Combination on the Company’s Public Float,” of the post-Business Combination Company and its expected subsidiaries immediately following the consummation of the Business Combination:

Post-Closing Organization Chart

 

 

LOGO

(1)

The Company will change its name to LiveVox Holdings, Inc. in connection with the closing of the Business Combination.

Redemption Rights

Pursuant to our amended and restated certificate of incorporation, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to the Company to pay its franchise and income taxes, by (ii) the total number of then outstanding public shares; provided that the Company will not redeem any shares of Class A Stock issued in the IPO to the extent that such redemption would result in the Company’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) equaling less than $5,000,001. For illustrative purposes, based upon the amount held in our Trust Account of $253,628,041 as of December 31, 2020, and estimated interest income and taxes post-December 31, 2020, the Company estimates that the per-share price at which public stockholders may redeem their Class A Stock from cash held in the Trust Account will be approximately $10.14 at the time of the Special Meeting. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A Stock included in the units sold in our IPO.

If a holder exercises its, his or her redemption rights, then such holder will be exchanging its shares of our Class A Stock for cash and will no longer own shares of the post-Business Combination Company. Such a holder



 

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will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to our Transfer Agent in accordance with the procedures described herein. Please see the section entitled “Special Meeting of Company Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Impact of the Business Combination on the Company’s Public Float

Crescent has agreed to purchase 2,500,000 shares of our Class A Stock and 833,333 Warrants for an aggregate purchase price of $25,000,000 in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers). Pursuant to the PIPE Investment, the PIPE Investors have collectively subscribed for 7,500,000 shares of Class A Stock for an aggregate purchase price of $75,000,000 in cash in private placements that will close immediately prior to the Business Combination. In addition, Crescent, either alone or with the Sponsor, has the right to purchase additional shares of our Class A Stock at $10.00 per share to the extent the total cash proceeds of the Company are otherwise less than $250,000,000.

In this proxy statement, we assume that the proceeds from the Forward Purchase Agreement and the PIPE Investment, together with the funds in the Trust Account, and, to the extent the Company’s total cash proceeds are otherwise less than $250,000,000, any proceeds from the sale of additional shares of Class A Stock to Crescent and our Sponsor will be used to fund the cash consideration payable to the LiveVox Stockholder in the Business Combination, certain transaction fees and expenses relating to the Business Combination and the repayment of approximately $5,000,000 of the revolver that is outstanding under the Credit Agreement, and to provide the Company with additional liquidity.

It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders will retain an ownership interest of approximately 25.9% in the post-Business Combination Company; (ii) our Initial Stockholders will own approximately 3.6% of the post-Business Combination Company; (iii) the Forward Purchasers will own approximately 2.6% of the post-Business Combination Company; (iv) the PIPE Investors will own approximately 7.7% of the post-Business Combination Company; (v) the participants in the LiveVox Bonus Plans will own approximately 3.6% of the post-Business Combination Company; and (vi) the LiveVox Stockholder will own approximately 56.6% of the post-Business Combination Company. The ownership percentages with respect to the post-Business Combination Company (a) do not take into account (1) any redemption by our public stockholders (and the percentages therefore assume our total cash proceeds exceed $250,000,000 without the purchase of additional shares of Class A Stock by Crescent and our Sponsor) and (2) Warrants that will remain outstanding immediately following the Business Combination, but (b) do include (1) the issuance of Class A Stock pursuant to the Forward Purchase Agreement, (2) the issuance of Class A Stock pursuant to the PIPE Investment, (3) the issuance of Class A Stock pursuant to the LiveVox Bonus Plans, (4) the remaining Founder Shares, all of which will be converted into shares of Class A Stock at the closing of the Business Combination on a one-for-one basis, after the cancelation of 2,725,000 of such shares by our Sponsor, and (5) the Earn-Out Shares and Lock-Up Shares that will be placed into escrow because the LiveVox Stockholder and our Initial Stockholders, respectively, will maintain voting power over such shares, and therefore such interests represent voting power (and not necessarily pecuniary interests or dispositive power).

If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders and the ownership percentage of the LiveVox Stockholder in the post-Business Combination Company will be different. For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information.”



 

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The following table illustrates varying ownership levels in the Company, assuming varying levels of redemptions by the Company’s public stockholders:

The following table illustrates the voting power (and not necessarily pecuniary interests or dispositive power) of various Company shareholders following the consummation of the Business Combination, assuming varying levels of redemptions by the Company’s public stockholders:

 

     No
Redemption

Scenario
Shares of
Class A
Stock (1)
     Max
Redemption

Scenario
Shares of
Class A
Stock (1)
     Earn-Out
Shares (2)
     Lock-Up
Shares (3)
     No Redemption
Scenario Voting
Power (4)
    Max
Redemption
Scenario
Voting Power (4)
 

Initial Stockholders

     781,250        781,250        —          2,743,750        3.6     3.7

Forward Purchasers

     2,500,000        2,500,000        —          —          2.6     2.6

PIPE Investors

     7,500,000        7,500,000        —          —          7.7     7.8

Public Stockholders

     24,987,762        14,962,165        —          —          25.9     15.4

LiveVox Bonus Plans Participants (5)

     3,454,881        3,454,881        —          —          3.6     3.6

LiveVox Stockholder

     49,667,772        59,467,772        5,000,000        —          56.6     66.9
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total

     88,891,665        88,666,068        5,000,000        2,743,750        100.0     100.0

 

(1)

Not including Earn-Out Shares and Lock-Up Shares.

(2)

Earn-Out Shares are shares of Class A Stock that will be subject to release to the LiveVox Stockholder only if the trading price of Class A Stock on Nasdaq exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any Earn-Out Shares not released during such period will be forfeited and canceled for no consideration. The LiveVox Stockholder will have voting power over the Earn-Out Shares as of the consummation of the Business Combination, but will not have dispositive power over such shares unless and until they are released.

(3)

Lock-Up Shares are shares of Class A Stock and subject to release only if the trading price of Class A Stock on Nasdaq exceeds certain thresholds during the seven-year period following the closing of the Business Combination. Any of the Lock-Up Shares not released during such period will be forfeited and canceled for no consideration. The Initial Stockholders will have voting power over the Lock-Up Shares as of the consummation of the Business Combination, but will not have dispositive power over such shares unless and until they are released.

(4)

Including Earn-Out Shares and Lock-Up Shares.

(5)

Includes shares to be issued to participants in the LiveVox Bonus Plans, including officers, employees, and directors of LiveVox upon the consummation of the Business Combination. The actual number of shares issued pursuant to the LiveVox Bonus Plans may differ.

Board of Directors of the Company Following the Business Combination

Louis Summe, Rishi Chandna, Marcello Pantuliano, Doug Ceto, Bernhard Nann, Stewart Bloom, Robert Beyer, Todd Purdy, Susan Morisato, Kathleen Pai and Leslie C. G. Campbell have each been nominated to serve as directors of the post-Business Combination Company. Please see the sections entitled “Proposal No. 4—Election of Directors to the Board of Directors” and “Management after the Business Combination” for additional information.



 

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The Charter Proposals

Upon the closing of the Business Combination, our amended and restated certificate of incorporation will be amended and restated to the Second Amended and Restated Certificate of Incorporation promptly to reflect the Charter Proposals to:

 

   

amend the number of authorized shares of our Common Stock to eliminate the Class F Stock;

 

   

increase the number of authorized shares of Preferred Stock from 5,000,000 shares to 25,000,000 shares;

 

   

provide for the relative voting, dividend and liquidation rights of all classes of Common Stock;

 

   

provide that the number of directors will initially be nine and thereafter will be determined exclusively by the Board pursuant to a resolution adopted by a majority of our Board as will be provided in our Amended and Restated Bylaws;

 

   

provide that the post-Business Combination Company will not be governed by Section 203 of the DGCL (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

require the approval (x) prior to the first date (the “Amendment Trigger Date”) on which GGC ceases to beneficially own in the aggregate (directly or indirectly) at least 50% of our Common Stock, the affirmative vote of the holders of at least a majority of the voting power of the post-Business Combination Company and (y) after the Amendment Trigger Date, the affirmative vote of the holders of at least two-thirds (66 23%) of the voting power of the post-Business Combination Company make certain amendments to the Second Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws;

 

   

change the Company’s name to LiveVox Holdings, Inc.;

 

   

change the purpose of the post-Business Combination Company to “to engage in any lawful act or activity for which a corporation may be organized under the DGCL”;

 

   

remove the prior provisions relating to our status as a blank check company that will be no longer applicable following the Business Combination.;

 

   

provide that so long as GGC beneficially owns in the aggregate (directly or indirectly) at least 30% or more of the voting power of the capital stock of the post-Business Combination Company, the directors nominated by GGC shall be entitled to designate the chairperson of our Board;

 

   

provide that so long as GGC beneficially owns in the aggregate (directly or indirectly) at least 35% or more of the voting power of the capital stock off the post-Business Combination Company:

 

   

any action which is required or permitted to be taken by our stockholders may be taken without a meeting by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted; and

 

   

the chairperson of the Board may call a special meeting of our stockholders by written request of the holders of a majority of the voting power of the then outstanding shares of our voting stock;

 

   

to provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, the Exchange Act and any other claim for which the federal courts have exclusive jurisdiction; and

 

   

remove waivers regarding the doctrine of corporate opportunity.



 

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Please see the section entitled “Proposal No. 3—Approval of the Second Amended and Restated Certificate of Incorporation” for more information.

Other Proposals

In addition, the stockholders of the Company will be asked to vote on:

 

   

a proposal to approve, for purposes of complying with applicable Nasdaq Listing Rules, the issuance of more than 20% of the Company’s issued and outstanding Common Stock pursuant to the Business Combination (Proposal No. 2);

 

   

a proposal to approve and adopt the Incentive Plan, the form of which is attached to this proxy statement as Annex H, including the authorization of the initial share reserve under the Incentive Plan (Proposal No. 5); and

 

   

a proposal to adjourn the Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes for, or otherwise in connection with, the approval of the Business Combination Proposal, the Nasdaq Proposal, the Director Election Proposals, the Incentive Plan Proposal or the Charter Proposals (Proposal No. 6).

Please see the sections entitled “Proposal No. 2—Approval of the Issuance of More than 20% of the Company’s Issued and Outstanding Common Stock in Connection with the Business Combination,” “Proposal No. 5—Approval of the Incentive Plan, Including the Authorization of the Initial Share Reserve under the Incentive Plan,” and “Proposal No. 6—The Adjournment Proposal” for more information.

Date, Time and Place of Special Meeting

The Special Meeting will be held on June 16, 2021 at 10:00 a.m. Pacific Time virtually via the Internet. You can participate in the meeting, vote and submit questions via live webcast by visiting https://www.cstproxy.com/crescentacquisitioncorp/2021 and entering the voter control number included on your proxy card. You will not be able to attend the meeting in person.

Voting Power; Record Date

Only Company stockholders of record at the close of business on May 10, 2021, the record date for the Special Meeting, will be entitled to vote at the Special Meeting. You are entitled to one vote for each share of Company Common Stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were 31,237,762 shares of Company Common Stock outstanding and entitled to vote, of which 24,987,762 are shares of Class A Stock and 6,250,000 are Founder Shares held by our Initial Stockholders.

Accounting Treatment

Notwithstanding the legal form of the Business Combination pursuant to the Merger Agreement, the Business Combination will be accounted for as a reverse recapitalization under the scope of the Financial Accounting Standards Board’s Accounting Standards Codification 805, Business Combinations, or “ASC 805,” in accordance with U.S. GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes and LiveVox will be treated as the accounting acquirer. The Business Combination will be treated as the equivalent of LiveVox issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company will be stated at historical cost, with no goodwill or intangible assets recorded. Operations prior to the Business Combination will be those of LiveVox. LiveVox has been determined to be the accounting acquirer under both the No Redemption Scenario and Max Redemption Scenarios based on the evaluation of the following facts and circumstances:

 

   

The LiveVox Stockholder and participants in the LiveVox Bonus Plans will retain an aggregate of between 60.1% (in the No Redemption Scenario) and 70.5% (in the Max Redemption Scenario) of the



 

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post-Business Combination Company’s voting rights, including the 3,454,881 shares of Class A Stock that will be issued pursuant to the LiveVox Bonus Plans and the 5,000,000 Earn-Out Shares that will be placed in escrow because the LiveVox Stockholder will maintain voting power over such shares;

 

   

Current LiveVox management team will comprise all key management positions of the post-Business Combination Company;

 

   

LiveVox comprises all the operations of the post-Business Combination Company; and

 

   

The LiveVox Stockholder will have the right to nominate a majority of the post-Business Combination Company’s Board.

Appraisal Rights

Appraisal rights are not available to our stockholders in connection with the Business Combination.

Proxy Solicitation

The Company is soliciting proxies on behalf of its Board. Proxies may be solicited by mail. The Company has engaged Morrow to assist in the solicitation of proxies.

If a stockholder grants a proxy, it may still vote its shares virtually at the live webcast if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of Company Stockholders—Revoking Your Proxy.”

Interests of Certain Persons in the Business Combination

In considering the recommendation of our Board to vote in favor of the Business Combination, stockholders should be aware that aside from their interests as stockholders, certain members of our Board and officers, as well as our Sponsor, have interests in the Business Combination that are different from, or in addition to, those of other stockholders generally. Our Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination.

These interests include, among other things:

 

   

the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares;

 

   

the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of 1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Class A Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the



 

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seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration, but which will have no value if an initial business combination is not consummated by the Expiration Date;

 

   

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by the Expiration Date;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that our Sponsor will have the right to nominate two independent directors of the post-Business Combination Company pursuant to a stockholder’s agreement to be entered into upon closing of the Business Combination;

 

   

the anticipated continuation of two of our existing directors, Robert D. Beyer and Todd M. Purdy, as directors of the post-Business Combination Company;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by the Expiration Date;

 

   

that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

that at the closing of the Business Combination we will enter into the Amended and Restated Registration Rights Agreement, which provides for registration rights to, among others, our Sponsor, Crescent and their permitted transferees;

 

   

that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers); and

 

   

that Crescent, either alone or with our Sponsor, has the right but not the obligation to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent our total cash proceeds are less than $250,000,000.



 

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Reasons for the Approval of the Business Combination

The Board, in evaluating the transaction with LiveVox, consulted with the Company’s management and its legal counsel, financial advisor and other advisors. In reaching its unanimous resolution (i) that the terms and conditions of the Merger Agreement and the transactions contemplated thereby, including the Business Combination, are advisable, fair to and in the best interests of the Company and its stockholders and (ii) to recommend that the Company’s stockholders adopt the Merger Agreement and approve the transactions contemplated thereby, including the Business Combination, the Board considered and evaluated a number of factors, including, but not limited to, the factors discussed below. In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The Board viewed its decision as being based on all of the information available and the factors presented to and considered by it. In addition, individual directors may have given different weight to different factors.

Our management and Board considered various factors in determining whether to approve the Merger Agreement and the Business Combination, including LiveVox’s attractive growth profile, differentiated product strategy, proven and experienced management team, large and growing total addressable market, attractive valuation and strong balance sheet along with other alternatives, the terms of the Merger Agreement, continued support for the post-Business Combination Company by the LiveVox Stockholder, the evaluation of our independent directors, the risks of benefits not achieved, the COVID-19 pandemic, the Expiration Date, the need for stockholder approval, the risks of redemptions, the risks of potential litigation, fees and expenses involved and other risks.

For more information about our decision-making process, please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Company’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Conditions to Closing of the Business Combination

The respective obligations of the Company and LiveVox to consummate and effect the Mergers and the other transactions contemplated by the Merger Agreement are subject to the satisfaction, at or prior to the closing of the Business Combination, of each of the following conditions:

 

   

the required vote of the Company’s stockholders to approve the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Incentive Plan Proposal and the Director Election Proposals shall have been duly obtained in accordance with the DGCL, the Company’s organizational documents and the rules and regulations of Nasdaq;

 

   

the Company shall have at least $5,000,001 of net tangible assets following the exercise of any redemption rights by the Company’s holders of Class A Stock in accordance with the Company’s current amended and restated certificate of incorporation;

 

   

the parties to the Merger Agreement will have received or have been deemed to have received all necessary pre-closing authorizations, consents, clearances, waivers and approvals of the governmental entities in connection with the execution, delivery and performance of the Merger Agreement and the Business Combination (or any applicable waiting period thereunder shall have expired or been terminated);

 

   

there must not be in effect any law or regulation prohibiting, enjoining, restricting or making illegal the consummation of the Business Combination and no temporary, preliminary or permanent restraining order by a court of competent jurisdiction enjoining, restricting or making illegal the consummation of the Business Combination shall be in effect or will be threatened in writing by a governmental entity;



 

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the shares of Class A Stock to be issued in connection with the closing of the Business Combination shall have been conditionally approved for listing upon the closing of the Business Combination on Nasdaq subject to the requirement to have a sufficient number of round lot holders; and

 

   

the total cash proceeds of the Company, including the $25,000,000 and $75,000,000 to be invested pursuant to the Forward Purchase Agreement and PIPE Investment, respectively, shall, after giving effect to redemptions, equal or exceed $250,000,000.

The obligations of the Company, First Merger Sub and Second Merger Sub to consummate and effect the Business Combination are subject to the satisfaction, at or prior to the closing of the Business Combination, of certain conditions, any of which may be waived, in writing, exclusively by the Company, including, among others, that LiveVox must have performed and complied in all material respects with all obligations required to be performed or complied with by it under the Merger Agreement at or prior to closing;

The obligations of LiveVox to consummate and effect the Business Combination are subject to the satisfaction, at or prior to the closing of the Business Combination, of certain conditions, any of which may be waived, in writing, exclusively by LiveVox, including, among others, that the Company, First Merger Sub and Second Merger Sub must have performed and complied in all material respects with all obligations required to be performed or complied with by them under the Merger Agreement at or prior to closing;

Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Conditions to Closing of the Business Combination” for additional information.

Regulatory Matters

Under the HSR Act and the rules that have been promulgated thereunder by the FTC, certain transactions may not be consummated until notification has been made to the Antitrust Division of the Department of Justice and the FTC and certain waiting period requirements have been satisfied or terminated. The Business Combination is subject to HSR notification and may not be completed until the expiration of a 30-day waiting period following the filing of the required Premerger Notification and Report Forms with the Antitrust Division of the Department of Justice and the FTC or until early termination of the waiting period is granted. Prior to the expiration of the waiting period, the FTC or the Antitrust Division of the Department of Justice has the ability to issue a Request for Additional Information and Documentary Materials (also referred to as a “Second Request”). If the FTC or the Antitrust Division of the Department of Justice issues a Second Request, the waiting period with respect to the Business Combination would be extended for an additional period of 30 calendar days, to begin once both the Company and LiveVox have certified substantial compliance with the Second Request. In practice, complying with a Second Request can take a significant period of time. On January 28, 2021, the Company and LiveVox filed the required notifications under the HSR Act with the FTC and Antitrust Division of the Department of Justice. The 30-day waiting period with respect to the Business Combination, which cannot expire on a Saturday, Sunday or a U.S. federal holiday, expired at 11:59 p.m. Eastern Time on March 1, 2021.

Before or after consummation of the Business Combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Business Combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. We cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the Business Combination on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result. Neither the Company nor LiveVox is aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the expiration or early termination of the waiting period under the HSR Act. It is



 

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presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.

Quorum and Required Vote for Proposals for the Special Meeting

A quorum of Company stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the Company’s Common Stock outstanding on the record date and entitled to vote at the Special Meeting is represented virtually or by proxy. Abstentions will count as present for the purposes of establishing a quorum.

The approval of the Business Combination Proposal, the Incentive Plan Proposal and the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). A Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote will have no effect on the Business Combination Proposal, the Incentive Plan Proposal or the Adjournment Proposal.

The approval of the Nasdaq Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock that are voted at the Special Meeting (whether represented by attending the virtual meeting or by proxy). A Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting and broker non-votes will not be counted towards the number of shares of Common Stock required to validly establish a quorum, and if a valid quorum is otherwise established, such failure to vote and broker non-votes will have no effect on the outcome of any vote on the Nasdaq Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established and will have the same effect as a vote “AGAINST” the Nasdaq Proposal.

The approval of the Charter Proposals requires the affirmative vote of holders of a majority of our outstanding shares of Common Stock entitled to vote thereon at the Special Meeting. Accordingly, a Company stockholder’s failure to vote by proxy or to vote virtually at the Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals will have the same effect as a vote “AGAINST” such Charter Proposals.

Directors are elected by a plurality of all of the votes cast by holders of shares of our Common Stock represented virtually or by proxy and entitled to vote thereon at the Special Meeting. This means that the nine director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions and broker non-votes will have no effect on the election of directors.

Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination. Our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (not including our independent directors, who own a total of 75,000 Founder Shares, which represent 0.24% of our issued and outstanding shares of Common Stock) have agreed to vote any shares of Common Stock owned by them in favor of the Business Combination and each of the proposals to be considered at the Special Meeting.

Each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals and the Incentive Plan Proposal is cross-conditioned on the approval of each other. The



 

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Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement. It is important for you to note that in the event that the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals or the Incentive Plan Proposal do not receive the requisite vote for approval, we will not consummate the Business Combination. If we do not consummate the Business Combination and fail to complete an initial business combination by the Expiration Date, we will be required to dissolve and liquidate our Trust Account by returning the then remaining funds in such account to our public stockholders.

Independent Director Oversight

Our Board is comprised of a majority of independent directors who are not affiliated with our Sponsor and its affiliates, including Crescent. In connection with the Business Combination, our independent directors, Mss. Briscoe and Naftzger and Messrs. Gauthier and Turner, took an active role in evaluating and negotiating the proposed terms of the Business Combination, including the Merger Agreement, the related agreements and the amendments to our amended and restated certificate of incorporation to take effect upon the completion of the Business Combination. As part of their evaluation of the Business Combination, our independent directors were aware of the potential conflicts of interest with our Sponsor and its affiliates, including Crescent, that could arise with regard to the proposed terms of the Merger Agreement and amendments to our amended and restated certificate of incorporation to take effect upon the completion of the Business Combination (including the election not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders, which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective). Our independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the Board, the Merger Agreement and the transactions contemplated therein, including the Business Combination. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—Independent Director Oversight.”

Recommendation to Company Stockholders

Our Board believes that each of the Business Combination Proposal, the Nasdaq Proposal, the Charter Proposals, the Director Election Proposals, the Incentive Plan Proposal and the Adjournment Proposal to be presented at the Special Meeting is in the best interests of the Company and our stockholders and unanimously recommends that its stockholders vote “FOR” each of the proposals.

When you consider the recommendation of our Board in favor of approval of the Business Combination Proposal, you should keep in mind that certain members of our Board and officers, as well as our Sponsor, have interests in the Business Combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include, among other things:

 

   

the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares;

 

   

the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of



 

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1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Class A Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration, but which will have no value if an initial business combination is not consummated by the Expiration Date;

 

   

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to complete an initial business combination by the Expiration Date;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that our Sponsor will have the right to nominate two independent directors of the post-Business Combination Company pursuant to a stockholders agreement to be entered into upon closing of the Business Combination;

 

   

the anticipated continuation of two of our existing directors, Robert D. Beyer and Todd M. Purdy, as directors of the post-Business Combination Company;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated by the Expiration Date;

 

   

that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

that at the closing of the Business Combination we will enter into the Amended and Restated Registration Rights Agreement, which provides for registration rights to, among others, our Sponsor, Crescent and their permitted transferees;

 

   

that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited



 

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to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers); and

 

   

that Crescent, either alone or with our Sponsor, has the right but not the obligation to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent our total cash proceeds are less than $250,000,000.

Risk Factors

In evaluating the Business Combination and the proposals to be considered and voted on at the Special Meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page 63 of this proxy statement. The occurrence of one or more of the events or circumstances described in that section, alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of the Company and LiveVox to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of LiveVox prior to the consummation of the Business Combination and the post-Business Combination Company.

Below is a summary of some of the principal risks LiveVox faces:

 

   

If LiveVox is unable to attract new customers or sell additional products and functionality to its existing customers, its revenue and revenue growth will be harmed.

 

   

LiveVox is subject to risks related to the ongoing COVID-19 pandemic.

 

   

LiveVox’s recent rapid growth may not be indicative of its future growth.

 

   

LiveVox’s growth depends in part on the success of its strategic relationships with third parties.

 

   

Security breaches or other cyber attacks on its systems, could result in litigation and regulatory risk and thus harm LiveVox’s reputation and its business.

 

   

The markets in which LiveVox participates involve numerous competitors and are highly competitive, and if it does not compete effectively, its operating results could be harmed.

 

   

If LiveVox’s existing customers terminate their product subscriptions or reduce the scope of their product subscriptions and related usage, its revenues and gross margins will be harmed and it will be required to spend more money to grow its customer base.

 

   

The contact center software solutions market is subject to rapid technological change, and LiveVox must innovate in order to maintain and grow its business.

 

   

LiveVox is subject to risks related to compliance with or changes in domestic or foreign laws and regulations.

 

   

LiveVox depends on its employees and management team.

 

   

LiveVox depends on its intellectual property rights to protect its technology and its brand.

 

   

LiveVox faces risks relating to its status as a “controlled company” under Nasdaq’s rules.

 

   

Other risks and uncertainties indicated in this proxy statement, including those set forth under the section entitled “Risk Factors.”

Below is a summary of some of the principal risks related to the Company and the Business Combination:

 

   

The ability to complete the Business Combination or any delay in the closing of the Business Combination.



 

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The occurrence of any event, change or other circumstance could give rise to the termination of the Merger Agreement or the termination of any Subscription Agreement.

 

   

The ability to maintain the listing of the Company’s securities on a national securities exchange following the Business Combination.

 

   

The potential liquidity and trading of the Company’s public securities.

 

   

The inability to recognize the anticipated benefits of the proposed Business Combination, which may be affected by, among other things, the amount of cash available following any redemption of public shares by the Company’s stockholders.

 

   

The impact of the COVID-19 pandemic.

 

   

Any potential litigation involving the Company or LiveVox.

 

   

Costs related to the Business Combination.

 

   

Expectations regarding the time during which the Company will be an “emerging growth company” under the JOBS Act.

 

   

Potential for litigation, inquiries from the SEC and other regulatory bodies, other disputes or proceedings which may include, among others, monetary judgments, penalties or other sanctions, claims invoking the federal and state securities laws and contractual claims resulting from the restatement of our previously issued financial statements and material weakness in our internal control over financial reporting, the change in accounting for the Warrants and other matters raised or that may in the future be raised by the SEC.

 

   

Other risks and uncertainties indicated in this proxy statement/consent solicitation statement, including those set forth under the section entitled “Risk Factors.”



 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement, including the financial statements and notes to the financial statements included in this proxy statement, in evaluating the Business Combination and the proposals to be voted on at the Special Meeting. The following risk factors apply to the business and operations of LiveVox and its consolidated subsidiaries and will also apply to the business and operations of the post-Business Combination Company. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the Business Combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of the post-Business Combination Company. In reviewing these risk factors, you should also consider the ongoing COVID-19 pandemic and its consequences, which implicate, and may amplify, the risks and uncertainties facing LiveVox, and their potential impact on LiveVox’s business, financial position and results of operations. You should carefully consider the following risk factors in addition to the other information included in this proxy statement, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” We or LiveVox may face additional risks and uncertainties that are not presently known to us or LiveVox, or that we or LiveVox currently deems immaterial, which may also impair our or LiveVox’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included in this proxy statement.

Risks Related to LiveVox’s Business and Industry

LiveVox’s quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of its business.

LiveVox’s quarterly and annual results of operations, including its revenues, profitability and cash flow have varied, and may vary significantly in the future, and period-to-period comparisons of its operating results may not be meaningful. Accordingly, the results of any one quarter or period, or series of quarters or periods, should not be relied upon as an indication of future performance. LiveVox’s quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside its control and, as a result, may not fully reflect the underlying performance of its business. Fluctuation in quarterly and annual results may harm the value of LiveVox’s common stock. Factors that may cause fluctuations in LiveVox’s quarterly and annual results include, without limitation:

 

   

market acceptance of its products;

 

   

its ability to attract new customers and grow its business with existing customers;

 

   

customer renewal rates;

 

   

customer attrition rates;

 

   

its ability to adequately expand its sales and service team;

 

   

its ability to acquire and maintain strategic and customer relationships;

 

   

the timing and success of new product and feature introductions by it or its competitors or any other change in the competitive dynamics of its industry, including consolidation, partnership or collaboration among competitors, customers or strategic partners;

 

   

network outages or security incidents, which may result in additional expenses or losses, legal or regulatory actions, the loss of customers, the provision of customer credits, and/or harm to its reputation;

 

   

general economic, industry and market conditions;

 

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catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, other adverse weather and climate conditions and pandemics, including the ongoing COVID-19 pandemic;

 

   

the amount and timing of costs and expenses related to the maintenance and expansion of its business, operations and infrastructure;

 

   

seasonal factors that may cause its revenues to fluctuate across quarters;

 

   

inaccessibility or failure of its products due to failures in the products or services provided by third parties;

 

   

the amount and timing of costs and expenses related to its research and development efforts or in the acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies;

 

   

its ability to successfully integrate companies and businesses that it acquires and achieve a positive return on its investment;

 

   

its ability to expand and effectively utilize its network of master agents, referral agents and other third-party selling partners;

 

   

changes in accounting rules under current and future U.S. GAAP;

 

   

changes in its pricing policies or those of its competitors;

 

   

increases or decreases in the costs to provide its products or pricing changes upon any renewals of customer agreements;

 

   

the level of professional services and support it provides its customers;

 

   

fluctuations or changes in the components of its revenue;

 

   

the addition or loss of key customers, including through acquisitions or consolidations;

 

   

compliance with, or changes in, the current and future domestic and international regulatory environments;

 

   

the hiring, training and retention of its key employees;

 

   

changes in law or policy that impact it or its customers or suppliers;

 

   

the outcome of litigation or other claims against it;

 

   

the ability to expand internationally, and to do so profitably;

 

   

its ability to obtain additional financing on acceptable terms if and when needed; and

 

   

advances and trends in new technologies and industry standards.

If LiveVox is unable to attract new customers or sell additional products and functionality to its existing customers, its revenue and revenue growth will be harmed.

To increase its revenue, LiveVox must add new customers, increase the amount and types of business it does with existing customers, and encourage existing customers to renew their product subscriptions on terms favorable to LiveVox. As LiveVox’s industry matures, as its customers experience seasonal trends in their business, or as competitors introduce lower cost or differentiated products or services that are perceived to compete favorably with LiveVox, its ability to add new customers and renew, maintain or sell additional products to existing customers based on pricing, cost of ownership, technology and functionality could be harmed. As a result, LiveVox’s existing customers may not renew their agreements or may decrease the amount of business they do with LiveVox, or may place increased pressure on LiveVox for pricing concessions, and LiveVox may be unable to attract new customers or grow or maintain its business with existing customers, each of which could harm its revenue and growth.

 

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The effects of the COVID-19 pandemic have had and could continue to have a material adverse effect on LiveVox’s results of operations and financial condition or on the operations of many of its customers and third-party suppliers, and the duration and extent to which this will impact its future results of operations and overall financial performance remains uncertain.

In December 2019, a novel coronavirus disease known as COVID-19 was reported and on March 11, 2020, the World Health Organization, or WHO, characterized COVID-19 as a pandemic. This pandemic has resulted in a widespread health crisis that has continued to significantly harm the U.S. and global economies and has caused significant fluctuation in financial markets and regulatory frameworks and may impact demand for LiveVox’s products.

In accordance with the various and changing regulatory frameworks and social distancing and other business or office closure orders and recommendations of applicable government agencies, all of LiveVox’s employees have temporarily transitioned to work-from-home operations and LiveVox has canceled all business travel by its employees except where necessary and properly authorized, which has changed how it operates its business. LiveVox’s customers and business partners are also subject to various and changing regulatory frameworks and social distancing and business or office closure orders and recommendations and travel restrictions or prohibitions, which have changed the way it interacts with its customers and business partners. Moreover, the conditions caused by the COVID-19 pandemic, the extent of which depends upon its prolonged impact, has or may:

 

   

harm its ability to renew and maintain its relationships with its existing customers;

 

   

cause its existing customers to reduce the amount of business they do with it, seek price concessions, declare bankruptcy or go out of business, which would harm its revenue;

 

   

result in some of its customers failing to comply with the terms of their agreements, including payment terms, due to economic uncertainty, financial hardship, and even failure of these businesses, which could result in it being required to take action to collect payments, terminate their product subscriptions, increase accounts receivable, and reduce consumer collections, any of which could increase its expenses, reduce its cashflow, and harm its revenues and results of operations;

 

   

make it more difficult for it to sell additional products or functionality to its existing customers;

 

   

reduce the rate of spending on enterprise software solutions or cloud-based enterprise contact center systems generally;

 

   

delay prospective customers’ decisions to subscribe to its products, increase the length of sales cycles, or slow the typical growth in the use of its products once customers have initially deployed its products;

 

   

harm its ability to effectively market and sell its solutions, particularly during social distancing and office closure orders;

 

   

change the mix and sizes or types of organizations that purchase its products;

 

   

delay the introduction of enhancements to its products and market acceptance of any new features and products;

 

   

harm its ability to establish and/or grow its international sales and operations;

 

   

harm its ability to recruit, onboard and successfully integrate new employees, including members of its direct sales force, both domestically and internationally, as a result of not being able to interface in person;

 

   

harm its ability to maintain its corporate culture with an employee base temporarily working remotely and facing unique personal and professional challenges;

 

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increase the burden on its technical operations infrastructure, which could harm the capacity, stability, security and performance of its operations infrastructure and potentially leave it more vulnerable to security breaches;

 

   

increase the risk that it may experience cybersecurity-related events such as COVID-19 themed phishing attacks, exploitation of any cybersecurity flaws that may exist, an increase in the number cybersecurity threats or attacks, and other security challenges as a result of its employees and service providers continuing to work remotely during the COVID-19 pandemic, and potentially beyond as remote work and resource access expand;

 

   

limit its ability to efficiently deliver products to its larger customers, as those products often require services that have sometimes been performed onsite, which could delay implementation of its products at new customers;

 

   

harm its ability to manage, maintain or increase its network of master agents, referral agents and other third-party selling partners to sell its products, and make it more difficult for them to effectively assist it with their sales efforts;

 

   

impact the health and safety of its employees, including its senior management team, and their ability to perform services;

 

   

cause its management team to continue to commit significant time, attention and resources to monitor the COVID-19 pandemic and seek to mitigate its effect on its business and workforce; and

 

   

lead to the adoption of additional new laws and regulations that it and/or its customers and partners are required to comply with and that could harm its results of operations and may subject it to COVID-19 related litigation.

Such effects will likely continue for the duration of the pandemic, which is uncertain, and for some period thereafter. While several countries, as well as certain states, counties and cities in the United States, began to relax the early public health restrictions with a view to partially or fully reopening their economies, many cities, both globally and in the United States, have since experienced a surge in the reported number of cases and hospitalizations related to the COVID-19 pandemic. This increase in cases has led to the reintroduction of restrictions and business shutdowns in certain states, counties and cities in the United States and globally and could continue to lead to the re-introduction of such restrictions elsewhere. Additionally, in December 2020, the U.S. Food and Drug Administration authorized vaccines produced by Pfizer-BioNTech and Moderna for emergency use. However, it remains unclear how quickly the vaccines will be distributed nationwide and globally or if or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely. The delay in distributing the vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may experience or continue to experience a recession, and LiveVox’s business and operations could be materially adversely affected by a prolonged recession in the U.S. and other major markets.

Any of the foregoing factors could significantly harm LiveVox’s future sales, operating results, cash flow, gross margin and overall financial performance, which could cause it to experience a decreased level of growth of its business and make its future financial results and prospects difficult to predict. The COVID-19 pandemic and its impact on LiveVox and the U.S. and global economies, could limit its ability to forecast its future operating results, including its ability to predict revenue and expense levels, and plan for and model future results of operations. Moreover, because a significant portion of LiveVox’s revenue is derived from existing customers, downturns in new sales will not immediately be reflected in its operating results and may be difficult to discern until future periods. LiveVox’s competitors could experience similar or different impacts as a result of COVID-19, which could result in changes to its competitive landscape.

The duration and extent of the impact from the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the ongoing severity and transmission rate of the virus, the

 

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extent and effectiveness of vaccine programs and other containment actions, the duration of social distancing, office closure and other restrictions on businesses and society at large, and the specific impact of these and other factors on LiveVox’s business, employees, customers and partners. If LiveVox is not able to respond to and manage the impact of such events effectively, its business will be harmed. There are no comparable recent events that provide guidance as to the effect the COVID-19 pandemic may have and, as a result, the ultimate impact of the outbreak on its business and operations is highly uncertain and subject to change. The effects of the COVID-19 pandemic have had, and could continue to have a material impact on LiveVox’s results of operations and increase many of the other risks described under “Risk Factors” and elsewhere herein.

LiveVox’s recent rapid growth may not be indicative of its future growth, and if it continues to grow rapidly, it may fail to manage its growth effectively.

For the years ended December 31, 2017, 2018, 2019 and 2020, LiveVox’s revenues were $60.6 million, $77.2 million, $92.8 million and $102.5 million, respectively, representing year-over-year growth of 27.3%, 20.2% and 10.5%, respectively. In the future, as LiveVox’s revenue increases, its annual revenue growth rate may decline. LiveVox believes its revenue growth will depend on a number of factors, including its ability to:

 

   

compete with other vendors of cloud-based enterprise contact center systems, including recent market entrants, and with providers of legacy on-premise systems;

 

   

increase its existing customers’ use of its products and further develop its partner ecosystem;

 

   

strengthen and improve its products through significant investments in research and development and the introduction of new and enhanced products;

 

   

introduce its products to new markets outside of the United States and increase global awareness of its brand;

 

   

selectively pursue acquisitions that enhance its product offerings; and

 

   

respond to general macro-economic factors and industry and market conditions.

If LiveVox is not successful in achieving these objectives, its ability to grow its revenue may be harmed. In addition, LiveVox plans to continue to invest in future growth, including expending substantial financial and other resources on:

 

   

expanding its sales and marketing organizations;

 

   

its technology infrastructure, including systems architecture, management tools, scalability, availability, performance and security, as well as disaster recovery measures;

 

   

its product development, including investments in related personnel and the development of new products, as well as new applications and features for existing products;

 

   

international expansion; and

 

   

general administration, including legal, regulatory compliance and accounting expenses.

Moreover, LiveVox continues to expand its headcount and operations. LiveVox grew from 422 employees as of December 31, 2018 to 461 employees as of December 31, 2019, and to 506 employees as of December 31, 2020. LiveVox anticipates that it will continue to expand its operations and headcount in the near term and beyond. This growth has placed, and future growth will place, a significant strain on its management, administrative, operational and financial resources, company culture and infrastructure. LiveVox’s success will depend in part on its ability to manage this growth effectively while retaining personnel. To manage the expected growth of its operations and personnel, it will need to continue to improve its operational, financial and management controls and its reporting systems and procedures. Failure to effectively manage growth could result in difficulty or delays in adding new customers, declines in quality or customer satisfaction, increases in costs,

 

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system failures, difficulties in introducing new features or products, the need for more capital than it anticipates or other operational difficulties, and any of these difficulties could harm its business performance and results of operations.

The expected addition of new employees and the capital investments that LiveVox anticipates will be necessary to help it grow and to manage that growth may make it more difficult to generate earnings or offset any future revenue shortfalls by reducing costs and expenses in the short term. If LiveVox fails to manage its anticipated growth, it will be unable to execute its business plan successfully.

Failure to adequately retain and expand LiveVox’s key employees, including those in its sales force, could impede its growth.

Key to LiveVox’s success is the continuity and development of key employees, including those in its sales force. LiveVox needs to continue to retain key employees, including members of its sales force while expanding and optimizing its sales infrastructure in order to grow its customer base and business. LiveVox plans to continue to expand its sales force. Identifying and recruiting qualified personnel and training them in the use and sale of its products requires significant time, expense and attention. It can take several months before LiveVox’s sales representatives are fully trained and productive. LiveVox’s business may be harmed if it fails to retain key employees, including members of its sales force, or if its efforts, and the expense incurred, to expand and train its sales force do not generate a corresponding increase in revenues. In particular, if LiveVox is unable to hire, develop and retain talented sales personnel or if new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, it may not be able to realize the expected benefits of this investment or increase its revenues.

If LiveVox fails to manage its technical operations infrastructure, its existing customers may experience service outages, its new customers may experience delays in the deployment of its products, and it could be subject to, among other things, claims for credits or damages.

LiveVox’s success depends in large part upon the capacity, stability, security and performance of its operations infrastructure. From time to time, LiveVox has experienced interruptions in service, and it may experience such interruptions in the future. These service interruptions may be caused by a variety of factors, including infrastructure changes, human or software errors, viruses, security attacks, fraud, spikes in customer usage and denial of service issues. In some instances, it may not be able to identify the cause or causes of these performance problems within an acceptable period of time. LiveVox’s failure to achieve or maintain expected performance levels, stability and security, particularly as it increases the number of users of its products and the product applications that run on its system, could harm its relationships with its customers, result in claims for credits or damages, damage its reputation, significantly reduce customer demand for its products, cause it to incur significant expense and personnel time replacing and upgrading its infrastructure and harm its business.

LiveVox has experienced significant growth in the number of agent seats and interactions that its infrastructure supports. As the number of agent seats within its customer base grows and its customers’ use of its products increases, LiveVox needs to continue to make additional investments in its capacity to maintain adequate and reliable stability and performance, the availability of which may be limited or the cost of which may be prohibitive, and any failure may cause interruptions in service that may harm its business. In addition, LiveVox needs to properly manage its operations infrastructure in order to support version control, changes in hardware and software parameters and the evolution of its suite of products. If LiveVox does not accurately predict its infrastructure requirements or efficiently improve its infrastructure, its business could be harmed.

LiveVox’s growth depends in part on the success of its strategic relationships with third parties and its failure to successfully maintain, grow and manage these relationships could harm its business.

LiveVox leverages strategic relationships with third-party technology providers, including telecommunications providers. These relationships are typically not exclusive and its partners often also offer

 

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products to its competitors. As LiveVox grows its business, it will continue to depend on both existing and new strategic relationships. LiveVox’s competitors may be more successful than it is in establishing or expanding relationships with such third-party technology providers. Furthermore, there has and continues to be a significant amount of consolidation in the technology industry, including telecommunications providers, and if its partners are acquired, fail to work effectively with it or go out of business, they may no longer support its products, or may be less effective in doing so, which could harm its business, financial condition and operations. If LiveVox is unsuccessful in establishing or maintaining its strategic relationships with third parties, its ability to compete in the marketplace or to grow its revenues could be impaired and its operating results may suffer.

In addition, identifying new third-party technology providers, and negotiating and documenting relationships with them, requires significant time and resources. As the complexity of LiveVox’s products and its third-party relationships increases, the management of those relationships and the negotiation of contractual terms sufficient to protect its rights and limit its potential liabilities will become more complicated. LiveVox also licenses technology from certain third parties. Certain of these agreements permit either party to terminate all or a portion of the relationship without cause at any time and for any reason. If one of these agreements is terminated by the other party, it would have to find an alternative source or develop new technology itself, which could preclude, limit or delay its ability to offer its products or certain product features to its customers and could result in increased expense and harm its business. LiveVox’s inability to successfully manage and maintain these complex relationships or negotiate sufficient and favorable contractual terms could harm LiveVox’s business.

LiveVox has established, and plans to continue to increase, a network of master agents, referral agents and other third-party selling partners to sell its products. Its failure to effectively develop, manage, and maintain this network could materially harm its revenues.

LiveVox has established, and is continuing to increase, its network of master sales agents, referral agents and other third-party selling partners which provide sales leads to LiveVox for new customers. These selling partners sell, or may in the future decide to sell, products and/or solutions for LiveVox’s competitors. LiveVox’s competitors may be able to cause its current or potential selling partners to favor their products over LiveVox’s products, either through financial incentives, technological innovation, product features or performance, or by offering a broader array of services to these selling partners or otherwise, which could reduce the effectiveness of LiveVox’s use of these selling partners. If LiveVox fails to maintain relationships with its current selling partners, fails to develop relationships with new selling partners, fails to manage, train, or provide appropriate incentives to its existing selling partners, or if its selling partners are not successful in their sales efforts, sales of its products may decrease or not grow at an appropriate rate and its operating results could be harmed. Additionally, in order to effectively utilize its selling partners, LiveVox must enhance its systems, develop specialized marketing materials and invest in educating selling partners regarding its systems and product offerings. LiveVox’s failure to accomplish these objectives could limit its success in marketing and selling its products.

In addition, identifying new selling partners and negotiating and documenting relationships with them requires significant time and resources. As the complexity of LiveVox’s products and its selling partner relationships increases, the management of those relationships and the negotiation of contractual terms sufficient to protect its rights and limit its potential liabilities will become more complicated. LiveVox’s inability to successfully manage these complex relationships or negotiate sufficient contractual terms could harm its business.

Adverse economic conditions may harm LiveVox’s business.

LiveVox’s business depends on the overall demand for cloud contact center software solutions and on the economic health of its current and prospective customers. In addition to the United States, LiveVox plans to market and may sell its products in international markets in the future. If economic conditions, including currency exchange rates, in these areas and other key potential markets for its solution remain uncertain or

 

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deteriorate, customers may delay or reduce their contact center and overall information technology spending. If LiveVox’s customers or potential customers experience economic hardship, this could reduce the demand for its products, delay and lengthen sales cycles, lower prices for its products, and lead to slower growth or even a decline in its revenues, operating results and cash flows.

Data security incidents could harm LiveVox’s reputation, cause it to modify business practices and otherwise adversely affect business and subject it to liability.

LiveVox is dependent on information technology systems and infrastructure to operate. In the ordinary course of business, LiveVox will collect, store, process and transmit large amounts of information, including, for example, information about its customers, its customers’ clients or other information treated by its customers as confidential. LiveVox will need to be able to do so in a secure manner to maintain the confidentiality, integrity and availability of such information. LiveVox’s obligations under applicable laws, regulations, contracts, industry standards, self-certifications, and other documentation may include maintaining the confidentiality, integrity and availability of personal information in its possession or control and maintaining reasonable and appropriate security safeguards as part of an information security program. These obligations create potential legal liability to regulators, business partners, customers, and other relevant stakeholders and also impact the attractiveness of its products to existing and potential customers.

All information technology operations are inherently vulnerable to inadvertent or intentional security breaches, incidents, attacks and exposures. Vulnerabilities can be exploited from inadvertent or intentional actions of LiveVox’s employees, third-party vendors, business partners, or by malicious third parties. Attacks of this nature are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives (including, but not limited to, industrial espionage) and expertise, including organized criminal groups, “hacktivists,” nation states and others.

Although LiveVox has, and may in the future, implement remote working protocols and offer work-issued devices to certain employees, the actions of employees while working remotely may have a greater effect on the security of its systems and the personal data it processes, including for example by increasing the risk of compromise to systems or data arising from employees’ combined personal and private use of devices, accessing LiveVox systems or data using wireless networks that LiveVox does not control, or the ability to transmit or store company-controlled data outside of the LiveVox secured network. Although many of these risks are not unique to the remote working environment, they have been heightened by the dramatic increase in the numbers of its employees who have been and are continuing to work from home as a result of government requirements or guidelines and internal policies that have been put in place in response to the COVID-19 pandemic.

In addition to the threat of unauthorized access or acquisition of sensitive or personal information, other threats could include the deployment of harmful malware, ransomware attacks, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information. LiveVox’s systems likely experience directed attacks on at least a periodic basis that are intended to interrupt its operations; interrupt its customers’ ability to access the LiveVox platform; extract money from LiveVox; and/or obtain its data (including without limitation user or employee personal information or proprietary information). Although LiveVox has implemented certain security measures, systems, processes, and safeguards intended to protect its information technology systems and data from such threats and mitigate risks to its systems and data, LiveVox cannot be certain that threat actors will not have a material impact on LiveVox systems or products in the future. LiveVox safeguards intended to prevent or mitigate certain threats may not be sufficient to protect its information technology systems and data due to the developing sophistication and means of attack in the threat landscape. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to its data or its users’ data. Recent developments in the threat landscape include an increased number of cyber extortion and ransomware attacks, with increases in the amount of ransom demands and the sophistication and variety of ransomware techniques and methodology.

 

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Significant disruptions of third-party vendors’ and/or commercial partners’ information technology systems or other similar data security incidents could adversely affect LiveVox’s business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive or personal information, which could harm its business. In addition, information technology system disruptions, whether from attacks on LiveVox’s technology environment or from computer viruses, natural disasters, terrorism, war and telecommunication and electrical failures, could result in a material disruption of its product development and business operations.

There is no way of knowing for certain whether LiveVox has experienced any data security incidents that have not been discovered. While LiveVox has no reason to believe that it has experienced a data security incident that it has not discovered, attackers have become very sophisticated in the way they conceal their unauthorized access to systems, and many companies that have been attacked are not aware that they have been attacked. Any event that leads to unauthorized access, use or disclosure of sensitive or personal information, including, but not limited to, personal information regarding LiveVox customers or LiveVox customers’ customers, could disrupt LiveVox’s business, harm its reputation, compel it to comply with applicable federal and/or state breach notification laws and foreign law equivalents, subject it to time consuming, distracting and expensive litigation, regulatory investigation and oversight, mandatory corrective action, require it to verify the correctness of database contents, or otherwise subject it to liability under laws, regulations and contractual obligations, including those that protect the privacy and security of personal information. This could result in increased costs to LiveVox and result in significant legal and financial exposure and/or reputational harm. Such incidents could also cause interruptions to the products it provides, degrade the user experience, or cause customers to lose confidence in its products.

Applicable data privacy and security laws may also obligate LiveVox to employ security measures that are appropriate to the nature of the data it collects and processes and, among other factors, the risks attendant to data processing activities in order to protect personal information from unauthorized access or disclosure, or accidental or unlawful destruction, loss, or alteration. LiveVox has implemented security measures that it believes are appropriate, but a regulator could deem the security measures not to be appropriate given the lack of prescriptive measures in certain data protection laws. Given the evolving nature of security threats and evolving safeguards, LiveVox cannot be sure that its chosen safeguards will protect against security threats to its business including the personal data that it processes. Even security measures that are appropriate, reasonable, and/or in accordance with applicable legal requirements may not be able to fully protect LiveVox’s information technology systems and the data contained in those systems, or LiveVox data that is contained in third parties’ systems. Moreover, certain data protection laws impose on LiveVox responsibility for its employees and third parties that assist with aspects of its data processing. LiveVox’s employees’ or third parties’ intentional, unintentional, or inadvertent actions may increase its vulnerability or expose it to security threats, such as phishing attacks, and LiveVox may remain responsible for successful access, acquisition or other disclosure of its data despite the quality and legal sufficiency of its security measures.

Any failure or perceived failure by LiveVox or its vendors or business partners to comply with privacy, confidentiality or data security-related legal or other obligations to third parties, or any security incidents or other unauthorized access events that result in the unauthorized access, release or transfer of sensitive information, which could include personal information, may result in governmental investigations, enforcement actions, regulatory fines, litigation, or public statements against LiveVox by advocacy groups or others. They could also cause third parties, including current and potential customers or partners, to lose trust in LiveVox, including for example perceiving its platform, system or networks as less desirable. LiveVox could also be subject to claims by third parties that it has breached privacy- or confidentiality-related obligations, which could materially and adversely affect its business and prospects.

 

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The markets in which LiveVox participates involve numerous competitors and are highly competitive, and if LiveVox does not compete effectively, its operating results could be harmed.

The market for contact center solutions is highly competitive. LiveVox currently competes with large legacy technology vendors that offer on-premise contact center systems, such as Avaya and Cisco, and legacy on-premise software companies, such as Aspect Software and Genesys (including through its acquisition of Interactive Intelligence). These legacy technology and software companies are increasingly supplementing their traditional on-premise contact center systems with competing cloud offerings, through a combination of acquisitions, partnerships and in-house development. Additionally, LiveVox competes with vendors that historically provided other contact center services and technologies and expanded to offer cloud contact center software such as NICE inContact. LiveVox also faces competition from many other contact center service providers including Five9, Talkdesk and Seranova, as well as vendors offering unified communications and contact center solutions. In addition, Amazon and Twilio have introduced solutions aimed at companies who wish to build their own contact centers with in-house developers. In addition, CRM vendors are increasingly offering features and functionality that were traditionally provided by contact center providers. CRM vendors also continue to partner with contact center service providers to provide integrated solutions and may, in the future, acquire competitive contact center service providers. These factors could harm LiveVox’s revenue and results of operations.

LiveVox’s actual and potential competitors may enjoy competitive advantages over it, including greater name recognition, longer operating histories and larger marketing budgets, as well as greater financial or technical resources. With the introduction of new technologies and market entrants, LiveVox expects competition to continue to intensify in the future. LiveVox’s recent, and any future, acquisitions will subject it to new competitors and cause it to face additional and different competition in the markets served by these businesses.

Some of LiveVox’s competitors can devote significantly greater resources than it can to the development, promotion and sale of their products and services and many have the ability to initiate or withstand substantial price competition. Current or potential competitors may also be acquired by third parties with significantly greater resources. In addition, many of LiveVox’s competitors have stronger name recognition, longer operating histories, established relationships with customers, more comprehensive product offerings, larger installed bases and major distribution agreements with consultants, system integrators and other third-party selling partners. LiveVox’s competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their product offerings or resources and ability to compete. If LiveVox’s competitors’ products, services or technologies become more accepted than LiveVox’s products, if they are successful in bringing their products or services to market earlier than LiveVox, or if their products or services are less expensive or more technologically capable than LiveVox’s, LiveVox’s revenues could be harmed. Pricing pressures and increased competition could result in reduced sales and revenues, reduced margins and loss of, or a failure to maintain or improve, LiveVox’s competitive market position, any of which could harm its business.

If LiveVox’s existing customers terminate their product subscriptions or reduce their product subscriptions and related usage, LiveVox’s revenues and gross margins will be harmed and it will be required to spend more money to grow its customer base.

LiveVox expects to continue to derive a significant portion of its revenues from existing customers. As a result, retaining its existing customers is critical to LiveVox’s future operating results. With limited exceptions, LiveVox offers annual and multiple-year contracts to its customers. Additional products can be provisioned on limited notice. Product subscriptions and related usage by LiveVox’s existing customers may decrease if:

 

   

customers are not satisfied with its products, prices or the functionality of its products;

 

   

the stability, performance or security of its products are not satisfactory;

 

   

the U.S. or global economy declines;

 

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its customers’ business declines due to the loss of customers, industry cycles, seasonality, business difficulties or other reasons;

 

   

its customers favor products offered by other contact center providers, particularly as competition continues to increase;

 

   

alternative technologies, products or features emerge or gain popularity that it does not provide; or

 

   

its customers or potential customers experience financial difficulties.

If LiveVox’s existing customers’ product subscriptions and related usage decrease or are terminated, it will need to spend more money to acquire new customers and still may not be able to maintain its existing level of revenues. LiveVox incurs significant costs and expenses, including sales and marketing expenses, to acquire new customers, and those costs and expenses are an important factor in determining its profitability. There can be no assurance that its efforts to acquire new customers will be successful.

The loss of one or more of LiveVox’s key customers, or a failure by LiveVox to renew its product subscription agreements with one or more of its key customers, could harm LiveVox’s ability to market its products.

LiveVox relies on its reputation and recommendations from key customers in order to market and sell its products. The loss of any of its key customers, or a failure of some of them to renew or to continue to recommend its products, could have a significant impact on its revenues, reputation and its ability to obtain new customers. In addition, acquisitions of its customers could lead to cancelation of its contracts with those customers, thereby reducing the number of its existing and potential customers and key reference customers.

LiveVox customers may fail to comply with the terms of their agreements, necessitating action by LiveVox to collect payment, or may terminate their subscriptions for its products.

If customers fail to pay LiveVox under the terms of its agreements or fail to comply with the terms of its agreements, including compliance with regulatory requirements and intellectual property terms, it may terminate customers, lose revenue, be unable to collect amounts due to it, be subject to legal or regulatory action and incur costs in enforcing the terms of its contracts, including litigation. Some of its customers may seek bankruptcy protection or other similar relief and fail to pay amounts due to it, seek reimbursement for amounts already paid, or pay those amounts more slowly, which could harm its operating results, financial position and cash flow.

LiveVox sells its products to larger enterprises that can require longer sales cycles, longer and more costly implementation periods, and more configuration and integration services or customized features and functions that LiveVox may not offer, any of which could delay the time until revenue is recognized from these customers or prevent these sales from ever occurring, all of which could harm LiveVox’s revenue growth rates and profitability.

As LiveVox continues to target its sales efforts at larger enterprises, it faces higher costs, longer sales cycles and longer and more costly implementation periods and less predictability in closing sales. These larger enterprises typically require more configuration and integration services which increases LiveVox’s upfront investment in sales and deployment efforts with no guarantee that these customers will subscribe to additional LiveVox products or subscribe to its products at all. Furthermore, with larger enterprises, LiveVox must provide a higher level of education regarding the use and benefits of its products to a broader group of people in order to generate a sale. As a result of these factors, LiveVox must devote a significant amount of sales support and professional services resources to individual customers and prospective customers, thereby increasing the cost and time required to complete sales. LiveVox’s typical sales cycle for larger enterprises is six to twelve months, but can be significantly longer, and its average sales cycle may increase as sales to larger enterprises continue to grow in proportion to its overall new sales. In addition, many of LiveVox’s customers that are larger enterprises initially deploy its products to support only a portion of their contact center agents. LiveVox’s success depends,

 

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in part, on its ability to increase the number of agent seats and the number of products utilized by these larger enterprises over time and LiveVox incurs additional sales and marketing expenses in these efforts. There is no guarantee that these customers will purchase additional products from LiveVox or increase the number of agent seats for which it subscribes. If LiveVox does not expand its initial relationships with larger enterprises, the return on its investments in sales, marketing and implementation for these customers will decrease and LiveVox’s business may suffer.

Because a significant percentage of LiveVox’s revenue is recurring from existing customers, downturns or upturns in new sales will not be immediately reflected in its operating results and may be difficult to discern.

LiveVox generally recognizes revenue from customers monthly as services are delivered. As a result, the vast majority of the revenue it reports in each quarter is derived from existing customers. Consequently, a decline in new product subscriptions in any single quarter will likely have only a small impact on its revenue results for that quarter. However, the cumulative impact of such declines could negatively impact its business and results of operations in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of its products, and potential changes in its pricing policies or renewal rates, will typically not be reflected in its results of operations until future periods. LiveVox also may be unable to adjust its cost structure to reflect the changes in revenue, resulting in lower margins and earnings. In addition, its subscription model makes it difficult for it to rapidly increase its revenue through additional sales in any period, as revenue from new customers will be recognized over time as services are delivered. Moreover, many of LiveVox’s customers initially deploy its products to support only a portion of their contact center agents and, therefore, it may not generate significant revenue from these new customers at the outset of their relationship, if at all. Any increase to LiveVox’s revenue and the value of these existing customer relationships will only be reflected in its results of operations as revenue is recognized, and if and when these customers increase the number of agent seats and the number of components of its products they deploy over time.

LiveVox relies on third-party telecommunications and internet service providers to provide its products, including connectivity to its cloud contact center software, and any failure by these service providers to provide reliable services could cause it to lose customers and subject it to claims for credits or damages, among other things.

LiveVox relies on services from third-party telecommunications providers in order to provide services to its customers and their customers, including telephone numbers. In addition, LiveVox depends on its internet bandwidth suppliers to provide uninterrupted and error-free service through their networks. LiveVox exercises little control over these third-party providers, which increases its vulnerability to problems with the services they provide.

When problems occur, it may be difficult to identify the source of the problem. Service disruption or outages, whether caused by LiveVox’s service, the products or services of LiveVox’s third-party service providers, or LiveVox’s customers’ or their customers’ equipment and systems, may result in loss of market acceptance of its products and any necessary repairs or other remedial actions may force it to incur significant costs and expenses.

If any of these service providers fail to provide reliable services, suffer outages, degrade, disrupt, increase the cost of or terminate the services that LiveVox and its customers depend on, LiveVox may be required to switch to another service provider. Delays caused by switching LiveVox’s technology to another service provider, if available, and qualifying this new service provider could materially harm its customer relationships, business, financial condition and operating results. Further, any failure on the part of third-party service providers to achieve or maintain expected performance levels, stability and security could harm LiveVox’s relationships with its customers, cause it to lose customers, result in claims for credits or damages, increase its costs or the costs incurred by its customers, damage its reputation, significantly reduce customer demand for its products and seriously harm its financial condition and operating results.

 

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LiveVox’s customers rely on internet service providers to provide them with access and connectivity to LiveVox’s cloud contact center software, and changes in how internet service providers handle and charge for access to the internet could materially harm LiveVox’s customer relationships, business, financial condition and operations results.

LiveVox’s customers must have access to broadband internet access services in order to use its products and certain of its offerings require substantial capacity to operate effectively. In the United States, internet access services are provided by relatively few companies that, depending on the geographic area, have market power over such offerings. It is possible that these companies could charge LiveVox, its customers, or both fees to guarantee a service amount of capacity, or for quality of broadband internet access services, advantage themselves or LiveVox’s competitors by degrading, disrupting, limiting, or otherwise restricting the use of their infrastructure to support LiveVox’s services. Notably, some of the largest providers of broadband internet access services have committed to not engage in acts that would impede LiveVox’s customers’ broadband internet access services from accessing products or services like LiveVox’s but, depending on the facts, there may be no law that prohibits such providers from doing so. However, these providers likely have the ability to increase LiveVox’s rates, LiveVox’s customers’ rates, or both for broadband internet access services which may increase the cost of LiveVox’s products making its products less competitive or decreasing LiveVox’s profit margins.

In 2018, the Federal Communications Commission or FCC released an order repealing rules that would have prevented broadband internet access providers from degrading, disrupting or otherwise restricting LiveVox’s and LiveVox’s customers’ broadband internet access services. The FCC’s 2018 repeal was largely upheld by the D.C. Circuit Court of Appeals in a decision issued in October 2019. That same court rejected the FCC’s attempt to categorically preempt states from adopting their own network neutrality requirements. While this may mean that states and localities are free to adopt rules stricter than those than the FCC adopted allowing states or localities to prohibit providers of broadband internet access services from blocking, degrading or otherwise restricting such services to LiveVox and its customers, that issue was not specifically before the court at the time of the appeal so it remains unclear as to what kinds of regulations states and localities may be able to adopt with respect to the practices of providers of broadband internet access services. At this time, LiveVox cannot predict whether the change in administration as a result of the 2020 presidential election and change in FCC leadership will result in a change of the FCC’s rules with respect to these issues.

As LiveVox considers approaches for expanding internationally, government regulation protecting the non- discriminatory provision of internet access may be nascent or non-existent. In those markets where regulatory safeguards against unreasonable discrimination are nascent or non-existent and where local network operators possess substantial market power, LiveVox could experience anti-competitive practices that could impede its growth, cause it to incur additional expenses or otherwise harm its business. Future regulations or changes in laws and regulations or their existing interpretations or applications could also hinder LiveVox’s operational flexibility, raise compliance costs and result in additional liabilities for LiveVox, which may harm its business.

LiveVox depends on data centers operated by third parties and public cloud providers and any disruption in the operation of these facilities could harm its business.

LiveVox hosts its products at data centers owned and operated by third party providers and located in Oregon, Virginia, Ohio, and Montreal, Canada. Any failure or downtime in one of LiveVox’s data center facilities could affect a significant percentage of its customers. LiveVox does not control the operation of these facilities. The owners of its data center facilities have no obligation to renew their agreements with LiveVox on commercially reasonable terms, or at all. If it is unable to renew these agreements on commercially reasonable terms, or if one of its data center operators is acquired, closes, suffers financial difficulty or is unable to meet LiveVox’s growing capacity needs, LiveVox may be required to transfer its servers and other infrastructure to new data center facilities, and it may incur significant costs and service interruptions in connection with doing so.

The data centers within which LiveVox hosts its products are subject to various points of failure. Problems with cooling equipment, generators, uninterruptible power supply, routers, switches, or other equipment, could

 

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result in service interruptions for its customers as well as equipment damage. These data centers are subject to disasters such as earthquakes, floods, fires, hurricanes, acts of terrorism, sabotage, break-ins, acts of vandalism and other events, which could cause service interruptions or the operators of these data centers to close their facilities for an extended period of time or permanently. The destruction or impairment of any of these data center facilities could result in significant downtime for LiveVox’s products and the loss of customer data. Because LiveVox’s ability to attract and retain customers depends on it providing customers with highly reliable service, even minor interruptions in its service could harm LiveVox’s business, revenues and reputation. Additionally, in connection with the continuing expansion of LiveVox’s existing data center facilities, there is an increased risk that service interruptions may occur as a result of server addition, relocation or other issues.

These data centers are also subject to increased power costs. LiveVox may not be able to pass on any increase in power costs to its customers, which could reduce its operating margins.

LiveVox has little or no control over public cloud providers. Any disruption of the public cloud or any failure of the public cloud providers to effectively design and implement sufficient security systems or plan for increases in capacity could, in turn, cause delays or disruptions in LiveVox’s products. In addition, using the public cloud presents a variety of additional risks, including risks related to sharing the same computing resources with others, reliance on public cloud providers’ authentication, security, authorization and access control mechanisms, a lack of control over the public cloud’s redundancy and security systems and fault tolerances, and a reduced ability to control data security and privacy.

LiveVox’s plans to establish public cloud-based data centers for its international operations may be unsuccessful and may present execution and competitive risks.

LiveVox may seek to establish new public cloud deployments in the future to facilitate its platform in certain international markets. LiveVox may partner with a third-party to develop, test and deploy its technology to offer a full stack of products on the public cloud in certain international markets. If LiveVox is successful in the deployment of its technology to the public cloud, it may expand its public cloud deployments to facilitate its platform in the U.S. and in international markets. LiveVox’s public cloud-based platform offering is critical to developing and providing its products to its customers, scaling its business for future growth, accurately maintaining data and otherwise operating its business. Infrastructure buildouts on the public cloud are complex, time-consuming and may involve substantial expenditures. In addition, the implementation of public cloud-based data centers involves risks inherent in the conversion to a new system, including loss of information and potential disruption to LiveVox’s normal operations. Even once LiveVox implements public cloud-based data centers, it may discover deficiencies in the design, implementation or maintenance of the system that could materially harm its business.

Shifts over time or from quarter-to-quarter in the mix of sizes or types of organizations that purchase LiveVox’s products or changes in the components of its products purchased by its customers could affect its gross margins and operating results.

LiveVox’s strategy is to sell its products to both smaller and larger organizations. LiveVox’s gross margins can vary depending on numerous factors related to the implementation and use of its products, including the features and number of agent seats purchased by its customers and the level of usage required by its customers. Sales to larger organizations may also entail longer sales cycles and more significant selling efforts and expense. Selling to smaller customers may involve smaller contract sizes, fewer opportunities to sell additional services, a higher likelihood of contract terminations, lower returns on sales and marketing expense, fewer potential agent seats and greater credit risk and uncertainty. If the mix of organizations that purchase its products, or the mix of product components purchased by its customers, changes unfavorably, LiveVox’s revenues and gross margins could decrease and its operating results could be harmed.

 

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LiveVox plans to expand its international operations, which exposes it to significant risks.

To date, LiveVox has not generated significant revenues outside of the U.S. However, LiveVox may seek to grow its international presence in the future. The future success of its business may depend, in part, on its ability to expand its operations and customer base to other countries. Operating in international markets requires significant resources and management attention and will subject it to regulatory, economic, and political risks that are different from those in the U.S. In addition, in order to effectively market and sell its products in international markets, LiveVox could be required to localize its products, including the language in which its products are offered, which will increase its costs, could result in delays in offering its products in these markets and may decrease the effectiveness of LiveVox’s sales efforts. Due to LiveVox’s limited experience with international operations and developing and managing sales and distribution channels in international markets, its international expansion efforts may not be successful.

Sales to customers outside the United States or with international operations and LiveVox’s international sales efforts and operations support expose it to risks inherent in international sales and operations.

An element of LiveVox’s growth strategy is to expand its international sales efforts and develop a worldwide customer base. Because of LiveVox’s limited experience with international sales, its international expansion may not be successful and may not produce the return on investment it expects. To date, LiveVox has realized only a small portion of its revenues from customers outside the United States, with approximately 5% of its revenue for the year ended December 31, 2020 derived from customers with a billing address outside of the United States.

LiveVox’s international subsidiaries employ workers primarily in India and Colombia. Operating in international markets requires significant resources and management attention and subjects it to intellectual property, regulatory, economic and political risks that are different from those in the United States. As LiveVox increases its international sales efforts it will face risks in doing business internationally that could harm its business, including:

 

   

the need to establish and protect LiveVox’s brand in international markets;

 

   

the need to localize and adapt LiveVox’s products for specific countries, including translation into foreign languages and associated costs and expenses;

 

   

difficulties in staffing and managing foreign operations, particularly hiring and training qualified sales and service personnel;

 

   

the need to implement and offer customer care in various languages;

 

   

different pricing environments, longer sales and accounts receivable payment cycles and collections issues;

 

   

weaker protection for intellectual property and other legal rights than in the U.S. and practical difficulties in enforcing intellectual property and other rights outside of the U.S.;

 

   

privacy and data protection laws and regulations that are complex, expensive to comply with and may require that customer data be stored and processed in a designated territory;

 

   

increased risk of piracy, counterfeiting and other misappropriation of LiveVox’s intellectual property in its locations outside the U.S.;

 

   

new and different sources of competition;

 

   

general economic conditions in international markets;

 

   

fluctuations in the value of the U.S. dollar and foreign currencies, which may make LiveVox’s products more expensive in other countries or may increase its costs, impacting its operating results when translated into U.S. dollars;

 

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compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, tax, telecommunications and telemarketing laws and regulations;

 

   

increased risk of international telecom fraud;

 

   

laws and business practices favoring local competitors;

 

   

compliance with laws and regulations applicable to foreign operations and cross border transactions, including the Foreign Corrupt Practices Act, the U.K. Bribery Act and other anti-corruption laws, supply chain restrictions, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on LiveVox’s ability to sell its products in certain foreign markets, and the risks and costs of non-compliance;

 

   

increased financial accounting and reporting burdens and complexities;

 

   

restrictions or taxes on the transfer of funds;

 

   

adverse tax consequences; and

 

   

unstable economic and political conditions and potential accompanying shifts in laws and regulations.

These risks could harm LiveVox’s international operations, increase its operating costs and hinder its ability to grow its international business and, consequently, its overall business and results of operations.

In addition, compliance with laws and regulations applicable to LiveVox’s international operations increases its cost of doing business outside the United States. LiveVox may be unable to keep current with changes in foreign government requirements and laws as they change from time to time, which often occurs with minimal or no advance notice. Failure to comply with these regulations could harm its business. In many countries outside the United States, it is common for others to engage in business practices that are prohibited by LiveVox’s internal policies and procedures or United States or international regulations applicable to it. Although LiveVox has implemented policies and procedures designed to ensure compliance with these laws and policies, there can be no assurance that all of its employees, contractors, strategic partners and agents will comply with these laws and policies. Violations of laws or key control policies by LiveVox’s employees, contractors, strategic partners or agents could result in delays in revenue recognition, financial reporting misstatements, fines, delays in filing financial reports required as a public company, penalties, or prohibitions on selling its products, any of which could harm its business.

LiveVox has a history of losses and it may be unable to achieve or sustain profitability.

LiveVox incurred a net loss of $4.6 million, a net loss of $6.9 million and net income of $1.9 million for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. As of December 31, 2020, LiveVox had an accumulated deficit of $24.8 million. These losses and LiveVox’s accumulated deficit reflect the substantial investments it has made, and continues to make, to develop its products and acquire new customers, among other expenses. LiveVox expects the dollar amount of its costs and expenses to increase in the future as revenue increases, although at a slower rate. LiveVox expects its losses to continue for the foreseeable future as it continues to invest in research and development and expand its business. In addition, as a public company, LiveVox will incur significant legal, accounting and other expenses. LiveVox’s historical or recent growth in revenues is not necessarily indicative of its future performance. Accordingly, there is no assurance that LiveVox will achieve profitability in the future or that, if LiveVox does become profitable, it will sustain profitability.

LiveVox’s recent growth makes it difficult to evaluate and predict its current business and future prospects.

While LiveVox has been in existence for over twenty years, much of its growth has occurred in recent years. LiveVox’s recent growth may make it difficult for investors to evaluate its current business and its future

 

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prospects. LiveVox has encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including increasing and unforeseen expenses as it continues to grow its business.

LiveVox’s ability to forecast its future operating results is limited and subject to a number of uncertainties, including its ability to predict revenue and expense levels and plan for and model future growth. LiveVox has encountered and will continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described in this proxy statement. If its assumptions regarding these risks and uncertainties, which it uses to plan its business, are incorrect or change due to adjustments in its markets or its competitors and their product offerings, or if it does not address these risks successfully, its operating and financial results could differ materially from its expectations and its business could suffer.

Development of LiveVox’s AI products to make agents more efficient and improve customer experience may not be successful and may result in reputational harm and LiveVox’s future operating results could be materially harmed.

LiveVox plans to increase and provide its customers with AI-powered applications, including conversational virtual agents, agent assistance and business insights. While LiveVox aims for its AI-powered applications to make agents more efficient and improve customer experience, its AI models may not achieve sufficient levels of accuracy. In addition, it may not be able to acquire sufficient training data or its training data may contain biased information. Furthermore, the costs of AI technologies, such as speech recognition and natural language processing, may be too high for market adoption. LiveVox’s competitors or other organizations may incorporate AI features into their products more quickly or effectively and their AI features may achieve higher market acceptance than LiveVox’s, which may result in LiveVox failing to recoup its investments in developing AI-powered applications. Should any of these items or others occur, LiveVox’s ability to compete, its reputation and operating results may be materially and adversely affected.

If LiveVox’s products fail, or are perceived to fail, to perform properly or if they contain technical defects, LiveVox’s reputation could be harmed, LiveVox’s market share may decline, and/or LiveVox could be subject to product liability claims.

LiveVox’s products may contain undetected errors or defects that may result in failures or otherwise cause its products to fail to perform in accordance with customer expectations and contractual obligations. Moreover, LiveVox’s customers could incorrectly implement or inadvertently misuse its products, which could result in customer dissatisfaction and harm the perceived utility of LiveVox’s products and its brand. Because LiveVox’s customers use its products for mission-critical aspects of their business, any real or perceived errors or defects in, or other performance problems with, its products may damage LiveVox’s customers’ businesses and could significantly harm its reputation. If that occurs, LiveVox could lose future sales, or its existing customers could cancel their use of its products, seek payment credits, seek damages against LiveVox, or delay or withhold payment to it, which could result in reduced revenues, an increase in LiveVox’s provision for uncollectible accounts and service credits, an increase in collection cycles for accounts receivable, and harm LiveVox’s financial results. Customers also may make indemnification or warranty claims against LiveVox, which could result in significant expense and risk of litigation. Performance problems could result in loss of market share, reputational harm, failure to achieve market acceptance and the diversion of development resources.

Any product liability, intellectual property, warranty or other claims against LiveVox could damage its reputation and relationships with its customers and could require LiveVox to spend significant time and money in litigation or pay significant settlements or damages. Although LiveVox maintains general liability insurance, including coverage for errors and omissions, this coverage may not be sufficient to cover liabilities resulting from such claims. Also, LiveVox’s insurers may disclaim coverage. LiveVox’s liability insurance also may not continue to be available to LiveVox on reasonable terms, in sufficient amounts, or at all. Any contract or product liability claims successfully brought against LiveVox would harm its business.

 

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LiveVox is subject to many hazards and operational risks that can disrupt its business, some of which may not be insured or fully covered by insurance.

LiveVox’s operations are subject to many hazards inherent in the cloud contact center software business, including:

 

   

damage to third-party and its infrastructure and data centers, related equipment and surrounding properties caused by earthquakes, hurricanes, tornadoes, floods, fires and other natural disasters, explosions and acts of terrorism;

 

   

security breaches resulting in loss or disclosure of confidential customer and customer data and potential liability to customers and non-customer third parties for such losses on disclosures; and

 

   

other hazards that could also result in suspension of operations, personal injury and even loss of life.

These risks could result in substantial losses and the curtailment or suspension of LiveVox’s operations. For example, in the event of a major earthquake, hurricane, tropical storm, flooding or severe weather or catastrophic events such as fire, power loss, telecommunications failure, cyber-attack, war or terrorist attack impacting LiveVox’s headquarters or any of the data centers it uses, LiveVox may be unable to continue its operations and may endure system and service interruptions, reputational harm, delays in product development, breaches of data security and loss of critical data, any of which could harm its business and operating results.

LiveVox is not insured against all claims, events or accidents that might occur. If a significant accident or event occurs that is not fully insured, if it fails to recover all anticipated insurance proceeds for significant accidents or events for which it is insured, or if it or its data center providers fail to reopen facilities damaged by such accidents or events, LiveVox’s operations and financial condition could be harmed. In addition to being denied coverage under existing insurance policies, LiveVox may not be able to maintain or obtain insurance of the type and amount LiveVox desires at reasonable rates.

The contact center software market is subject to rapid technological change, and LiveVox must develop and sell incremental and new features and products in order to maintain and grow its business.

The contact center software market is characterized by rapid changes in customer requirements, frequent introductions of new and enhanced products and features and continuing and rapid technological advancement. To compete successfully, LiveVox must continue to devote significant resources to design, develop, deploy and sell new and enhanced contact center products, applications and features that provide increasingly higher capabilities, performance and stability at lower cost. If LiveVox is unable to develop or acquire new features for its existing products or new applications that achieve market acceptance or that keep pace with technological developments, its business would be harmed. For example, LiveVox is focused on enhancing the reliability, features and functionality of its contact center products to enhance its utility to its customers, particularly larger customers, with complex, dynamic and global operations. The success of these enhancements depends on many factors, including timely development, introduction and market acceptance, as well as its ability to transition LiveVox’s existing customers to these new products, applications and features. Failure in this regard may significantly impede LiveVox’s revenue growth. In addition, because LiveVox’s products are designed to operate on a variety of systems, it needs to continuously modify and enhance its solution to keep pace with changes in hardware, operating systems, the increasing trend toward multichannel communications and other changes to software technologies. LiveVox may not be successful in developing or acquiring these modifications and enhancements or bringing them to market in a timely fashion. Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could delay introduction of changes and updates to LiveVox’s products and increase LiveVox’s research and development expenses. Any failure of LiveVox’s products to operate effectively, including with future network platforms and technologies, could reduce the demand for LiveVox’s products, result in customer dissatisfaction and harm its business.

 

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Failure to comply with laws and regulations could harm LiveVox’s business and its reputation.

LiveVox’s business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, environmental laws, privacy or data security laws, consumer protection laws, calling and texting, anti-bribery laws, import/export controls, federal securities laws and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States and in other circumstances these requirements may be more stringent in the United States. The application and interpretation of the laws and regulations to which LiveVox and its products are subject are often uncertain, particularly given the new and rapidly evolving industry in which it operates. Because these laws and regulations have continued to develop and evolve rapidly, it is possible that LiveVox may not be, or may not have been, compliant with all applicable laws or regulations. Noncompliance with applicable regulations or requirements could subject LiveVox to investigations, sanctions, mandatory recalls, notification obligations, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions, lawsuits or other claims and LiveVox may have to restructure its products, create new products, and otherwise adapt to the changing legal and regulatory landscape. If any governmental sanctions, fines or penalties are imposed, or if LiveVox does not prevail in any civil or criminal litigation, its business, operating results, financial condition and reputation could be harmed. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could further harm LiveVox’s business, operating results, financial condition and reputation.

Alleged or actual failure by LiveVox, its competitors, or other companies to comply with the constantly evolving legal and contractual environment surrounding calling or texting, and the governmental or private enforcement actions related thereto, could harm LiveVox’s business, financial condition, results of operations and cash flows.

The legal and contractual environment surrounding calling and texting is constantly evolving. In the United States, two federal agencies, the FTC and the FCC, and various states have laws and regulations including, at the federal level, the Telephone Consumer Protection Act of 1991, that restrict the placing of certain telephone calls and texts by means of automatic telephone dialing systems, prerecorded or artificial voice messages and fax machines. In addition, there are a series of federal and state laws that regulate marketing calls and texts. Some of these laws require companies to institute processes and safeguards to comply with applicable restrictions. The legal interpretation of certain of the requirements of these laws has been in dispute before the courts and federal agencies, including for example as part of pending FCC proceedings and a case currently pending before the U.S. Supreme Court. Some of these laws, where a violation is established, can be enforced by the FTC, FCC, State Attorneys General, or private party litigants. In these types of actions and depending on the circumstances, the plaintiff may seek damages, statutory penalties, or other fees.

LiveVox has designed its products to comply with applicable law. To the extent that its products are viewed by customers or potential customers as less functional, or more difficult to deploy or use, because of its products’ compliance features, LiveVox may lose market share to competitors that do not include similar compliance safeguards. LiveVox’s contractual arrangements with its customers who use its solution to place calls also expressly require the customers to comply with all such laws and to indemnify LiveVox for any failure to do so.

Although LiveVox takes steps to confirm that the use of its products complies with applicable laws, it is possible that the FTC, FCC, private litigants or others may attempt to hold LiveVox’s customers, or LiveVox as a software solution provider, responsible for alleged violations of these laws. To the extent any court finds that the products violated a controlling legal standard, LiveVox could face indemnification demands from its customers for costs, fees and damages with respect to calls placed using those products. It also is possible that LiveVox may not successfully enforce or collect upon LiveVox’s contractual indemnities from its customers. Defending such suits can be costly and time-consuming and could result in fines, damages, expenses and losses. Additionally, these laws, and any changes to them or the applicable interpretation thereof, that further restrict calling or texting consumers,

 

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adverse publicity regarding the alleged or actual failure by companies, including LiveVox, its customers and competitors, or other third parties, to comply with such laws or governmental or private enforcement actions related thereto, could result in a reduction in the use of its products by its customers and potential customers, which could harm LiveVox’s business, financial condition, results of operations and cash flows.

On December 12, 2018, the FCC issued an order concluding that certain text messaging services qualify as an “information service” under federal law and not a “telecommunications service.” The regulatory significance to LiveVox is that the FCC’s decision gives wireless carriers additional flexibility to manage messaging traffic on their network, including by blocking traffic. Such blocking efforts by carriers may make it more difficult for LiveVox’s customers to use messaging services provided by LiveVox as a part of its overall communications and outreach solution for its customers. Thus, although short message service (“SMS”) comprises only a small portion of LiveVox’s revenue base, its future availability as an effective tool for communication and outreach for LiveVox’s customers and their customers remains uncertain and could cause its products to be less valuable to customers and potential customers.

Increased taxes and surcharges (including Universal Service Fund, whether labeled a “tax,” “surcharge,” or other designation) on LiveVox’s products may increase its customers’ cost of using its products and/or increase its costs and reduce LiveVox’s profit margins to the extent the costs are not passed through to LiveVox’s customers, and LiveVox may be subject to liabilities for past sales and other taxes, surcharges and fees.

The applicability of federal, state, and local taxes, fees, surcharges or similar taxes to LiveVox’s products is complex and subject to interpretation and change. Based on analysis of LiveVox’s activities, LiveVox has determined that either it is directly obligated to collect and remit U.S. state or local sales or use taxes in certain U.S. states, municipalities or local tax jurisdictions depending on the state(s) in question and the location of its customers, among other factors. The taxing authorities may challenge LiveVox’s interpretation of the laws and may assess additional taxes, penalties and interests which could have adverse effects on the results of operations and, to the extent LiveVox passes these through to its customers, demand for LiveVox’s products. LiveVox is registered for collecting and remitting applicable taxes where such a determination has been made and such registration is required. LiveVox analyzes its activities and revenue to determine if it is subject to taxes in additional jurisdictions. Based on such ongoing assessment of its U.S. federal, state and local tax collection and remittance obligations, LiveVox registers for tax purposes in such jurisdictions it deems required and collects and remits applicable state and local taxes to these jurisdictions.

Federal, state, and local taxing and regulatory authorities may challenge LiveVox’s position and may decide to audit LiveVox’s business and operations with respect to, for example, state or local sales, use, gross receipts, excise and utility user taxes, fees or surcharges, which could result in LiveVox being liable for taxes, fees, or surcharges, as well as related penalties and interest, above LiveVox’s recorded accrued liability or additional liability for taxes, fees, or surcharges, as well as penalties and interest for LiveVox’s customers, which could harm LiveVox’s results of operations and its relationships with its customers. In addition, if LiveVox’s international sales grow, additional foreign countries may seek to impose sales or other tax collection obligations on LiveVox, which would increase its exposure to liability.

If jurisdictions enact new legislation or if taxing and regulatory authorities promulgate new rules or regulations or expand or otherwise alter their interpretations of existing rules and regulations, LiveVox could incur additional liabilities. In addition, the collection of additional taxes, fees or surcharges in the future could increase LiveVox’s prices or reduce its profit margins. Compliance with new or existing legislation, rules or regulations may also make LiveVox less competitive with those competitors who are not subject to, or choose not to comply with, such legislation, rules or regulations. LiveVox has incurred, and will continue to incur, substantial ongoing costs associated with complying with state or local tax, fee or surcharge requirements in the numerous markets in which LiveVox conducts or will conduct business.

 

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LiveVox’s ability to offer products outside the United States is subject to different regulatory and taxation requirements which may be complicated and uncertain.

When LiveVox expands the sale and implementation of its solutions internationally, LiveVox will be subject to additional regulations, taxes, surcharges and fees. Compliance with these new complex regulatory requirements differ from country to country and are frequently changing and may impose substantial compliance burdens on LiveVox’s business. At times, it may be difficult to determine which laws and regulations apply and LiveVox may discover that it is required to comply with certain laws and regulations after having provided services for some time in that jurisdiction, which could subject LiveVox to liability for taxes, fees and penalties on prior revenues, and LiveVox may be subject to conflicting requirements. Additionally, as LiveVox expands internationally, there is risk that governments will regulate or impose new or increased taxes or fees on the types of products that LiveVox provides. Any such additional regulation or taxes could decrease the value of LiveVox’s international expansion and harm its results of operations.

Requirements for LiveVox or its suppliers to pay federal or state universal service fund contribution amounts and assessments (either LiveVox paying directly or paying through its suppliers in the form of surcharges) for other telecommunications funds or taxes could impact the desirability and profitability of its products.

Applicable requirements for LiveVox to pay to its suppliers, or in some instances to pay directly, federal or state universal service surcharge amounts and assessments for other telecommunications funds or taxes, continue to change over time and may impact the desirability and profitability of its products. For example, interconnected voice over internet protocol (“VoIP”) providers are generally required to contribute to the federal Universal Service Fund, and the contribution rates have increased in recent years. In addition, if LiveVox is unable to continue to pass some or all of the cost of these surcharges and assessments to its customers, LiveVox’s profit margins will decrease. LiveVox’s surcharge and assessment obligations, whether made directly or indirectly, may significantly increase in the future, due to new interpretations by governing authorities, governmental budget pressures, changes in its business model or products or other factors.

If LiveVox does not comply with federal or state laws and regulations, to the extent applicable, it could be subject to enforcement actions, forfeitures, loss of licenses/authorizations and possibly restrictions on its ability to operate or offer certain of LiveVox’s products.

LiveVox’s business is impacted by federal and state laws and regulations. Additionally, LiveVox is registered with the FCC and intends to begin providing interconnected VoIP services in the second half of 2021. As an interconnected VoIP provider, LiveVox will be subject to certain existing or potential FCC regulations. If LiveVox does not comply with federal or state laws and regulations, to the extent applicable to its interconnected VoIP or other services, it could be subject to enforcement actions, forfeitures, behavioral or operational remedies, and possibly restrictions on its ability to operate or offer certain of LiveVox’s products. Any enforcement action, elements of which may become public, would hurt LiveVox’s reputation in the industry, could impair LiveVox’s ability to sell its products to customers and could harm LiveVox’s business and results of operations.

Some of the regulations to which LiveVox may be subject or which otherwise may impact its business (in whole or in part) include:

 

   

the Communications Assistance for Law Enforcement Act, or CALEA, which requires covered entities to assist law enforcement in undertaking electronic surveillance;

 

   

contributions to federal or state Universal Service funds;

 

   

payment of annual FCC regulatory fees based on LiveVox’s interstate and international revenues;

 

   

rules pertaining to access to LiveVox’s products by people with disabilities and contributions to the Telecommunications Relay Services;

 

   

911 and E911 requirements;

 

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TRACED Act requirements; and

 

   

FCC rules regarding Customer Proprietary Network Information, or CPNI, which prohibit LiveVox from using such information without customer approval, subject to certain exceptions.

If LiveVox does not comply with any current or future rules or regulations that apply to LiveVox’s business, it could be subject to additional and substantial fines and penalties (including those mentioned above), LiveVox may have to restructure its products, exit certain markets, accept lower margins or raise the price of its products, any of which could harm its business and results of operations.

Privacy concerns and domestic or foreign laws and regulations may reduce the demand for LiveVox’s solution, increase its costs and harm its business.

In order to provide its products, LiveVox receives and stores personal data from customers, and it may also collect and store personal data from or about potential customers and website visitors. LiveVox may share personal data with its service providers, such as cloud or other technical services providers, as necessary to provide the products. Various federal, state, and foreign laws and regulations as well as industry standards and contractual obligations govern the processing of personal data. The regulatory environment for the collection and use of personal data by online service providers is evolving in the United States and internationally. Privacy groups and government bodies, including the FTC, state attorneys general, the European Commission and European data protection authorities, have increasingly scrutinized privacy issues with respect to personal data, and LiveVox expects such scrutiny to continue to increase. The United States and foreign governments have enacted and are considering laws and regulations that could significantly impact the processing of personal data. These include laws such as the EU GDPR and the CCPA.

LiveVox has made and continues to make changes to its data protection compliance program to address applicable legal requirements. It also continues to monitor the implementation and evolution of data protection regulations, but if LiveVox is deemed to not be compliant with applicable law, it may be subject to significant fines and penalties (such as restrictions on personal data processing) and its business may be harmed. LiveVox also may be bound by additional, more stringent contractual obligations relating to its collection, use, and disclosure of personal, financial, and other data.

Additionally, some laws might require LiveVox to disclose proprietary or confidential aspects of its products in a manner that compromises the effectiveness of its products or that enables LiveVox’s competitors or bad actors to gain insight into the operation of LiveVox’s technology, enabling them to copy or circumvent LiveVox’s products and thereby reducing the value of its technology.

LiveVox publishes privacy policies, notices and other documentation regarding LiveVox’s collection, processing, use and disclosure of personal information and/or other confidential information. Although LiveVox endeavors to comply with published policies, certifications, and documentation, it may at times fail to do so or may be perceived to have failed to do so. Moreover, despite LiveVox’s efforts, it may not be successful in achieving full compliance if its employees or vendors fail to comply with LiveVox’s published policies, certifications, and documentation.

The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to LiveVox and the businesses of its customers may limit the use and adoption of LiveVox’s products and reduce overall demand for its products. Also, failure to comply with such laws may lead to significant fines, penalties or other regulatory liabilities, such as orders or consent decrees forcing LiveVox or its customers to modify business practices, and reputational damage or third-party lawsuits for any noncompliance with such laws. LiveVox’s business could be harmed if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent from country to country and inconsistent with LiveVox’s current policies and practices, or those of its customers.

 

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Furthermore, privacy and data protection concerns may cause consumers to resist providing the personal data or other types of protected data that may be subject to laws and regulations that is necessary to allow LiveVox’s customers to use its products effectively. Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of LiveVox’s products in certain industries or countries.

The European Union’s GDPR may continue to increase LiveVox’s costs and the costs of its customers to operate, limit the use of LiveVox’s products or change the way it operates, expose LiveVox to substantial fines and penalties if it fails to comply, and has led to similar laws being enacted in other jurisdictions.

On May 25, 2018, the EU adopted the GDPR. The GDPR replaced the EU Data Protection Directive, also known as Directive 95/46/EC, and is intended to harmonize data protection laws throughout the EU by applying a single data protection law that is binding throughout each member state. LiveVox and many of its customers are subject to the GDPR based upon LiveVox’s processing of personal data collected from EU data subjects, such as its processing of personal data of LiveVox’s customers in the EU.

The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers. Non-compliance with the GDPR can trigger steep fines of up to €20 million or 4% of total worldwide annual turnover, whichever is higher. The member states of the EU were tasked under the GDPR to enact certain implementing legislation that would add to or further interpret the GDPR requirements and this additional implementing legislation potentially extends LiveVox’s obligations and potential liability for failing to meet such obligations.

Given the breadth and depth of changes in data protection obligations, LiveVox’s compliance with the GDPR’s requirements will continue to require time, resources and review of the technology and systems LiveVox uses to satisfy the GDPR’s requirements. LiveVox has ongoing procedures to maintain GDPR compliance. LiveVox continues to deliver product features that enhance its data management and security in support of GDPR compliance.

While LiveVox does not regularly transfer high volumes of personal data outside of the European Economic Area (“EEA”), there may be circumstances in which ex-EEA transfers of personal data, including to countries which European regulators do not recognize as providing an adequate level of protection for personal data, are necessary to provide products to its customers or otherwise operate its business. In the event LiveVox conducts any such transfers of personal data, it may have to implement new or additional processes, transfer mechanisms, or tools to comply with the GDPR or other applicable data protection laws, which may result in increased operational costs. Additionally, there are certain unsettled legal issues regarding transferring personal data outside of the EEA, the resolution of which may impact LiveVox’s ability to transfer personal data from the EEA to the United States.

Given the complexity of operationalizing the GDPR, the maturity level of proposed compliance frameworks and the relative lack of guidance in the interpretation of its numerous requirements, LiveVox and its customers are at risk of enforcement actions taken by EU data protection authorities or litigation from consumer advocacy groups acting on behalf of data subjects. This risk will likely remain until there is more guidance on the GDPR, including as to implementing legislation enacted by the member states and enforcement actions taken by various data protection authorities.

The implementation of the GDPR has led other jurisdictions to amend, or propose legislation to amend, their existing data protection laws to align with the requirements of the GDPR with the aim of obtaining an adequate level of data protection to facilitate the transfer of personal data from the EU. Accordingly, the challenges LiveVox faces in the EU will likely also apply to other jurisdictions outside the EU that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.

 

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The CCPA and its amendments could increase LiveVox’s costs and the costs of its customers to operate, limit the use of its products or change the way LiveVox operates, and expose LiveVox to substantial fines and class action risk if it fails to comply, and lead to similar laws being enacted in other states.

In 2018, the State of California adopted the CCPA. The CCPA applies to certain for-profit entities doing businesses in California. LiveVox and its qualifying customers were required to comply with these requirements before the CCPA became effective on January 1, 2020.

The CCPA establishes a new privacy framework for covered businesses by creating an expanded definition of personal information and creating new data privacy rights for consumers in the State of California. As required by the statute, entities doing business in California have new and ongoing disclosure obligations to consumers for whom they hold or process personal data. Businesses must also provide consumers with the right to dictate how their personal information is used and shared. Complying with these obligations will involve continued expenditures that could increase as more consumers exercise their rights under the statute.

The CCPA also creates a new and potentially severe statutory damages framework for violations of its provisions. The California Attorney General can enforce the CCPA by seeking statutory penalties for failure to comply with the act. For businesses that fail to implement reasonable security procedures, the CCPA also creates a private right of action for consumers whose personal data is subject to certain data breaches. This private right of action has the potential to create significant class action liability for businesses, like LiveVox’s, that operate in California. To protect against these new risks, it may be necessary to change LiveVox’s insurance programs or take other business steps. The CCPA has been amended multiple times, and the California Office of the Attorney General has published final regulations to implement portions of the CCPA and is currently reviewing modifications to those regulations. Additionally, in November 2020, California voters passed the California Privacy Rights Act (the “CPRA”) ballot initiative, which introduces significant amendments to the CCPA. The CPRA will go into effect on January 1, 2023 and new CPRA regulations are expected to be introduced. The potential effects of the CCPA amendments, Attorney General implementation, and CPRA are far-reaching and may require LiveVox to modify its data processing practices and policies and to incur substantial costs and expenses in an effort to comply. LiveVox is continuing to assess the impact of these developments on its business as additional information and guidance becomes available.

Changes in government regulation applicable to the collections industry or any failure of LiveVox or its customers to comply with existing regulations could result in the suspension, termination or impairment of the ability of LiveVox or its customers to conduct business, may require the payment of significant fines by LiveVox or its customers and could require changes in customer’s businesses that would reduce the need for its products, or require other significant expenditures.

Many of LiveVox’s customers operate in the collections industry, which is heavily regulated under various federal, state, and local laws, rules, and regulations. In particular, the Consumer Financial Protection Bureau (“CFPB”), FTC, state attorneys general and other regulatory bodies have the authority to impose certain restrictions on the collections industry and to investigate a variety of matters, including consumer complaints against debt collection companies, and can bring enforcement actions and seek monetary penalties, consumer restitution, and injunctive relief. If LiveVox, or its customers fail to comply with applicable laws, rules, and regulations, including, but not limited to, identity theft, privacy, data security, the use of automated dialing equipment, laws related to consumer protection, debt collection, and laws applicable to specific types of debt, it could result in the suspension or termination of the ability of LiveVox’s customers to conduct collection operations, which in turn would adversely affect LiveVox.

Additionally, new laws, rules or regulations, including changes to permissible communications in connection with consumer debt collection enacted by the CFPB, could limit the ability of certain of LiveVox’s customers to use its products or could potentially expose LiveVox or its customers to fines or penalties, which could reduce LiveVox’s revenues, or increase its expenses, and consequently adversely affect its business,

 

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financial condition and operating results. In addition, new federal, state or local laws or regulations, or changes in the ways these rules or laws are interpreted or enforced, could limit the activities of LiveVox or its customers in the future and could significantly increase the cost of regulatory compliance. Compliance with this extensive regulatory framework is expensive and labor-intensive. Any of the foregoing could have an adverse effect on LiveVox’s business, financial condition and operating results.

LiveVox’s ability to continue to enhance its products is dependent on adequate research and development resources. If LiveVox is not able to adequately fund its research and development efforts, it may not be able to compete effectively and its business and operating results may be harmed.

In order to remain competitive, LiveVox must devote significant and increasing resources to developing new product offerings, features, and enhancements to its existing cloud contact center software, which will increase its research and development and operating expenses. LiveVox’s research and development expenses totaled $20.2 million, $16.6 million and $12.4 million for the years ended December 31, 2020, December 31, 2019 and December 31, 2018, respectively. Maintaining adequate research and development personnel and resources to meet the demands of the market is essential. If LiveVox is unable to develop products, applications or features internally due to constraints, such as high employee turnover, insufficient cash, inability to hire sufficient research and development personnel or a lack of other research and development resources, LiveVox may miss market opportunities. Furthermore, many of LiveVox’s competitors have greater financial resources and expend considerably greater amounts on their research and development programs than LiveVox does, and those that do not may be acquired by larger companies that would allocate greater resources to LiveVox’s competitors’ research and development programs. LiveVox’s failure to devote adequate research and development resources or compete effectively with the research and development programs of LiveVox’s competitors could harm its business.

If LiveVox is unable to maintain the compatibility of its software with other products and technologies, its business would be harmed.

LiveVox’s customers often integrate LiveVox’s products with their business applications. These third-party providers or their partners could alter their products so that LiveVox’s products no longer integrates well with them, or they could delay or deny LiveVox’s access to technology releases that allow LiveVox’s to adapt its products to integrate with their products in a timely fashion. If LiveVox cannot adapt its products to changes in complementary technology deployed by its customers, it may significantly impair LiveVox’s ability to compete effectively.

LiveVox’s business could be harmed if its customers are not satisfied with the professional services or technical support provided by LiveVox or its partners.

LiveVox’s business depends on its ability to satisfy its customers, not only with respect to its products, but also with the professional services and technical support that are required for LiveVox’s customers to implement and use its products to address their business needs. Professional services and technical support may be performed by LiveVox’s own staff or, in a select subset of cases, by third parties. Some of LiveVox’s professional services offerings have negative margins. Accordingly, any increase in sales of professional services could harm LiveVox’s gross margins and operating results. LiveVox will need to continue to expand and optimize its professional services and technical support in order to keep up with new customer installations and ongoing service, which takes time and expense to implement. Identifying and recruiting qualified service personnel and training them in LiveVox’s products is difficult and competitive and requires significant time, expense and attention. LiveVox may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services. LiveVox also may be unable to modify the format of its support services or change its pricing to compete with changes in support services provided by its competitors. Increased customer demand for these services, without corresponding revenues, could increase LiveVox’s costs and harm its operating results. If a customer is not satisfied with the deployment and ongoing services performed by

 

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LiveVox or a third party, it could lose customers, miss opportunities to expand its business with these customers, incur additional costs, or suffer reduced (including negative) margins on LiveVox’s service revenue, any of which could damage LiveVox’s ability to grow its business. In addition, negative publicity related to LiveVox’s professional services and technical support, regardless of its accuracy, may damage LiveVox’s business by affecting its ability to compete for new business with current and prospective customers.

LiveVox depends on its senior management team, and the loss of one or more key employees or an inability to attract and retain highly skilled executives and other employees could harm its business and results of operations.

LiveVox’s success depends, in part, upon the performance and continued services of its executive officers and senior management team. If LiveVox’s executive leadership team fails to perform effectively or if it fails to attract or retain its key executives or senior management, its business, financial condition or results of operations could be harmed. LiveVox also relies on its leadership team in the areas of research and development, marketing, sales, services, and general and administrative functions, and on mission-critical individual contributors. The loss of one or more of LiveVox’s executive officers or key employees could seriously harm its business. LiveVox currently does not maintain key person life insurance policies on any of its employees.

To execute LiveVox’s growth plan, it must attract and retain highly qualified personnel and it may incur significant costs (including stock-based compensation expense) to do so. Competition for these personnel is intense, especially for senior executives, engineers highly experienced in designing and developing cloud software and for senior sales personnel. LiveVox has, from time to time, experienced, and it expects to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. LiveVox invests significant time and expense in training its employees, which increases their value to competitors who may seek to recruit them and increases LiveVox’s costs. If LiveVox fails to attract new personnel or fails to retain and motivate its current personnel, particularly its executive officers and senior management team, LiveVox’s business and future growth prospects would be harmed. Many of the companies with which it competes for experienced personnel have greater resources than LiveVox has. If LiveVox hires employees from competitors or other companies, their former employers may attempt to assert that these employees or LiveVox have breached legal obligations, resulting in a diversion of LiveVox’s time and resources and, potentially, damages.

Volatility or lack of performance in the trading price of LiveVox’s common stock may also affect LiveVox’s ability to attract and retain qualified personnel because job candidates and existing employees often emphasize the value of the stock awards they receive in connection with their employment when considering whether to accept or continue employment. If the perceived value of LiveVox’s stock awards is low or declines, it may harm LiveVox’s ability to recruit and retain highly skilled employees.

If LiveVox fails to grow its marketing capabilities and develop widespread brand awareness cost effectively, its business may suffer.

LiveVox’s ability to increase its customer base and achieve broader market acceptance of its cloud contact center software products will depend to a significant extent on LiveVox’s ability to expand its marketing operations. LiveVox plans to continue to dedicate significant resources to its marketing programs, including internet advertising, digital marketing campaigns, social media, trade shows, industry events, and co-marketing with strategic partners. The effectiveness of LiveVox’s internet advertising is as yet unproven, and there is existing competition for key search terms. All of these marketing efforts will continue to require LiveVox to invest significant financial and other resources. LiveVox’s business will be seriously harmed if its efforts and expenditures do not generate a proportionate increase in revenue.

In addition, LiveVox believes that developing and maintaining widespread awareness of its brand in a cost-effective manner is critical to achieving widespread acceptance of LiveVox’s products and attracting new customers. Brand promotion activities may not generate customer awareness or increase revenues, and even if

 

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they do, any increase in revenues may occur after the expense has been incurred and may not offset the costs and expenses of building LiveVox’s brand. If LiveVox fails to successfully promote, maintain and protect its brand, or incurs substantial costs and expenses, it may fail to attract or retain customers necessary to realize a sufficient return on its brand-building efforts, or to achieve the widespread brand awareness that is critical to increasing customer adoption of its products.

LiveVox may not be able to secure additional financing on favorable terms, or at all, to meet its future capital needs.

LiveVox may require additional capital to respond to business opportunities, challenges, acquisitions, a decline in sales, increased regulatory obligations or unforeseen circumstances and may engage in equity or debt financings or enter into credit facilities. LiveVox has a substantial amount of debt. As of December 31, 2020, LiveVox had approximately $56.5 million in principal amount outstanding under the term loan. See Note 8 to LiveVox’s consolidated financial statements included elsewhere in this proxy statement.

Any debt financing obtained by LiveVox in the future could cause it to incur additional debt service expenses and could include restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for it to obtain additional capital and pursue business opportunities and could be secured by all of LiveVox’s assets. If LiveVox raises additional funds through further issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution in their percentage ownership of LiveVox, and any new equity securities it issues could have rights, preferences and privileges senior to those of holders of LiveVox’s common stock. If LiveVox is unable to obtain adequate financing or financing on terms satisfactory to it when LiveVox requires it, LiveVox’s ability to continue to grow and support its business and to respond to business challenges could be significantly limited.

LiveVox may acquire other companies or technologies or be the target of strategic transactions, which could divert its management’s attention, result in additional dilution to LiveVox’s stockholders and otherwise disrupt LiveVox’s operations and harm its operating results.

LiveVox may acquire or invest in businesses, applications or technologies that it believes could complement or expand its products, enhance its technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management, and cause LiveVox to incur various costs and expenses in identifying, investigating and pursuing acquisitions, whether or not they are consummated. LiveVox may not be able to identify desirable acquisition targets or be successful in entering into an agreement with any particular target.

To date, the growth in LiveVox’s business has been primarily organic, and LiveVox has limited experience in acquiring other businesses. With respect to any future acquisitions, LiveVox may not be able to successfully integrate acquired personnel, operations and technologies, or effectively manage the combined business following the acquisition. LiveVox also may not achieve the anticipated benefits from these or any future acquisitions due to a number of factors, including:

 

   

inability to integrate or benefit from acquisitions in a profitable manner;

 

   

unanticipated costs or liabilities associated with the acquisition, including legal claims arising from the activities of companies or businesses LiveVox acquires;

 

   

acquisition-related costs;

 

   

difficulty converting the customers of the acquired business to LiveVox’s products and contract terms, including due to disparities in the revenue, licensing, support or professional services model of the acquired company;

 

   

difficulty integrating the accounting systems, operations and personnel of the acquired business;

 

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difficulties and additional costs and expenses associated with supporting legacy products and the hosting infrastructure of the acquired business;

 

   

diversion of management’s attention from other business concerns;

 

   

harm to its existing relationships with its partners and customers as a result of the acquisition;

 

   

the loss of its or the acquired business’s key employees;

 

   

diversion of resources that could have been more effectively deployed in other parts of its business; and

 

   

use of substantial portions of its available cash to consummate the acquisition.

In addition, a significant portion of the purchase price of companies and businesses LiveVox acquires may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. If LiveVox’s acquisitions do not yield expected returns, it may be required to take charges to its operating results based on this impairment assessment process, which could harm its results of operations.

Acquisitions could also result in dilutive issuances of equity securities, the use of LiveVox’s available cash, or the incurrence of additional debt to fund such acquisitions, which could harm its operating results. If an acquired business fails to meet LiveVox’s expectations, its operating results, business and financial condition could suffer.

In addition, third parties may be interested in acquiring LiveVox. LiveVox will continue to consider, evaluate and negotiate such transactions as it deems appropriate. Such potential transactions may divert the attention of management, and cause LiveVox to incur various costs and expenses in investigating, evaluating and negotiating such transactions, whether or not they are consummated.

Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect LiveVox’s reported operating results.

U.S. GAAP is subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in accounting standards or practices can have a significant effect on LiveVox’s reported results and may even affect LiveVox’s financial statements issued before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and will occur in the future. Changes to existing rules or the questioning of current practices may harm LiveVox’s reported financial results or the way it accounts for or conducts its business.

For example, in May 2014, the FASB issued new revenue recognition rules under Accounting Standard Codification 606—Revenue from Contracts with Customers (“ASC 606”), which included a single set of rules and criteria for revenue recognition to be used across all industries. LiveVox adopted this standard in January 2019 using a full retrospective method. With the adoption of this standard, the timing of LiveVox’s commission expense recognition changed, which caused fluctuations in LiveVox’s operating results. See Note 2 to LiveVox’s consolidated financial statements included elsewhere in this proxy statement for more information.

Further, in February 2016, the FASB issued new rules for leases under the Accounting Standard Codification 842—Leases (“ASC 842”), which requires a lessee to recognize assets and liabilities for both finance, previously known as capital, and operating leases with lease terms of more than 12 months. LiveVox adopted this standard on January 1, 2020 using a modified retrospective method. With the adoption of this standard, LiveVox recognized right-of-use, or ROU, assets and lease liabilities for operating leases. See Note 2 to LiveVox’s December 31, 2020 consolidated financial statements included elsewhere in this proxy statement for more information.

 

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The application of any new accounting guidance is, and will be, based on all information available to LiveVox as of the date of adoption and up through subsequent interim reporting, including transition guidance published by the standard setters. However, the interpretation of these new standards may continue to evolve as other public companies adopt the new guidance and the standard setters issue new interpretative guidance related to these rules. As a result, changes in the interpretation of these rules could result in material adjustments to LiveVox’s application of the new guidance, which could have a material effect on its results of operations and financial condition. Additionally, any difficulties in implementing these pronouncements could cause LiveVox to fail to meet its financial reporting obligations, which could result in regulatory discipline, cessation or disruption of trading in LiveVox’s common stock and harm investors’ confidence in LiveVox.

In addition, certain factors have in the past and may in the future cause LiveVox to defer recognition of revenues. For example, the inclusion in LiveVox’s customer contracts of non-standard terms, such as acceptance criteria, could require the deferral of revenue. To the extent that such contracts become more prevalent in the future LiveVox’s revenue may be impacted.

Because of these factors and other specific requirements under U.S. GAAP for revenue recognition, LiveVox must have precise terms and conditions in its arrangements in order to recognize revenue when it delivers its products or performs its professional services. Negotiation of mutually acceptable terms and conditions can extend its sales cycle, and LiveVox may accept terms and conditions that do not permit revenue recognition at the time of delivery.

LiveVox may not be able to utilize a significant portion of its net operating loss, and under the existing federal corporate tax rates such tax benefits will be of less value, which could harm LiveVox’s profitability and financial condition.

As of December 31, 2020, LiveVox had federal and state net operating loss carryforwards due to prior period losses of $23.4 million and $66.9 million, respectively, with varying expirations from 2022 through 2035. If LiveVox is unable to generate sufficient taxable income to utilize its net operating loss carryforwards, they could expire unused and be unavailable to offset future income tax liabilities, which could harm LiveVox’s profitability and financial condition in future periods.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or IRC Sections 382 and 383, LiveVox’s ability to utilize net operating loss carryforwards or other tax attributes in any taxable year may be limited if LiveVox experiences an “ownership change.” An IRC Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of LiveVox’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. Subsequent or future issuances or sales of LiveVox’s stock could cause an “ownership change,” which would impose an annual limit on the amount of pre-ownership change net operating loss carryforwards and other tax attributes LiveVox can use to reduce its taxable income, potentially causing those tax attributes to expire unused or to be reduced, and increasing and accelerating LiveVox’s liability for income taxes. It is possible that such an ownership change could materially reduce LiveVox’s ability to use its net operating loss carryforwards or other tax attributes to offset taxable income, which could require LiveVox to pay more income taxes than if LiveVox were able to fully utilize its net operating loss carryforwards and harm its profitability.

Legislative and regulatory changes to laws or policies related to loan deferment, forbearance, or forgiveness, including following the recent U.S. presidential election or as a response to COVID-19, could have a material negative impact on the business operations and prospects of certain of LiveVox’s customers and as a result have a negative impact on LiveVox’s business, operations, and financial condition.

Legislative and regulatory changes to laws or policies related to loan deferment, forbearance, or forgiveness, including following the recent U.S. presidential election or as a response to COVID-19, may have a significant

 

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impact on LiveVox’s customers’ businesses. For example, on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. In compliance with the CARES Act, payments and interest accruals on federal student loans were suspended until September 30, 2020, and subsequent Executive Orders have directed the Department of Education (“ED”) to extend the suspension until September 30, 2021. While the CARES Act applies only to loans owned by the ED, several states announced various initiatives to suspend payment obligations for private student loan borrowers in those states. Additionally, on March 25, 2020, the ED announced that private collection agencies were required to stop making outbound collection calls and sending letters or billing statements to borrowers in default. Moreover, in April 2020, various restrictions around the servicing and collection of private education loans were enacted by certain states. There is additional uncertainty as to the future of student loan forbearance or forgiveness under President Biden’s administration. President Biden has indicated a desire and a willingness to cancel federal student loan debt for certain individuals up to a threshold amount and there have been similar proposals in Congress.

Additionally, the CARES Act allowed borrowers affected by the COVID-19 pandemic to request temporary loan forbearance for federally-backed mortgage loans. Nevertheless, servicers of mortgage loans are contractually bound to advance monthly payments to investors, insurers, and taxing authorities regardless of whether the borrower actually makes those payments. While government-sponsored enterprises, including Fannie Mae and Freddie Mac, recently issued guidance limiting the number of payments a servicer must advance in the case of a forbearance, loan servicers expect that a borrower who has experienced a loss of employment or a reduction of income may not repay the forborne payments at the end of the forbearance period. Additionally, loan servicers are prohibited by the CARES Act from collecting certain servicing related fees, such as late fees, during the forbearance plan period. They are further prohibited from initiating foreclosure and/or eviction proceedings under applicable investor and/or state law requirements.

These legislative and regulatory changes have had, and these and other changes that may be promulgated in the future, may have a negative impact on certain of LiveVox’s customers who service student loans or federally backed mortgage loans. In particular, forgiveness of outstanding loans or a suspension of loan payments and interest accruals may lead to a reduction in the demand for LiveVox’s customers’ business, resulting in a corresponding reduction to LiveVox’s business. Due to the impact of new legislation and regulation, coupled with the additional uncertainty of the new presidential administration’s student loan-related initiatives, LiveVox is not able to estimate the ultimate impact of changes in law on LiveVox’s customers and consequently LiveVox’s financial results, business operations, or strategies. Until the future of loan servicing is decided, LiveVox’s customers in this industry will continue to experience increased uncertainty. LiveVox’s profitability, results of operations, financial condition, cash flows, and future business prospects could be materially and adversely affected as a result.

Many of LiveVox’s customer contracts contain usage-based revenue components that depend upon such customer’s ability to sustain or increase their business activity and such business activity can be subject to the impact of external events beyond the control of LiveVox or such customers, including unexpected weather conditions, political instability or government shutdowns, public health issues (including pandemics and quarantines) or natural disasters. LiveVox’s revenue and profitability could be harmed as a result of any decrease to such customer’s business activity.

Many of LiveVox’s customer contracts contain usage-based revenue components that depend upon such customers’ ability to sustain or increase their business activity. Such customers’ business activity has in the past been and could in the future be subject to the impact of external events beyond the control of such customers or LiveVox, such as unexpected weather conditions, public health issues (including pandemics and quarantines), political instability or government shutdowns or natural disasters. For example, several of LiveVox’s customers had call centers in the Houston area that were completely destroyed or severely damaged by the impact of Hurricane Harvey in 2017, resulting in a negative impact on such customers and a resulting decrease in LiveVox’s revenue from such customers. Additionally, certain of LiveVox’s customers typically increase their collection activities from January through April when many Americans receive federal tax refunds. Any delay in

 

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the Internal Revenue Service’s ability to timely process Americans’ federal tax returns and remit refunds to filers, including as a result of COVID-19 precautions or a government shutdown such as the one that occurred in late 2018 and early 2019, has in the past caused and could in the future cause those customers to forgo increases in hiring or usage which could in turn unfavorably impact LiveVox’s revenue and profitability.

LiveVox may be unable to generate sufficient cash flow to satisfy its debt service obligations, which would adversely affect its results of operations and financial condition.

LiveVox’s ability to make scheduled payments on, or to refinance its obligations under, its indebtedness will depend on its future operating performance and on economic, financial, competitive, legislative, regulatory and other factors. Many of these factors are beyond LiveVox’s control. LiveVox can provide no assurance that its business will generate sufficient cash flow from operations or that future borrowings will be available to it in an amount sufficient to enable it to satisfy its obligations under its indebtedness or to fund its other needs. In order for LiveVox to satisfy its obligations under its indebtedness, it must continue to execute its business strategy. If LiveVox is unable to do so, it may need to refinance all or a portion of its indebtedness on or before maturity. LiveVox can provide no assurance that it will be able to refinance any of its indebtedness on commercially reasonable terms or at all.

The terms of LiveVox’s indebtedness could adversely affect its business.

The Credit Agreement contains restrictive covenants that, among others, limit LiveVox’s ability to:

 

   

pay dividends and make distributions and repurchase stock;

 

   

engage in transactions with affiliates;

 

   

create liens;

 

   

incur indebtedness not under the Credit Agreement;

 

   

engage in sale-leaseback transactions;

 

   

make investments;

 

   

make loans and guarantee obligations of other persons;

 

   

amend material agreements and organizational documents and enter into agreement affecting ability to pay dividends;

 

   

maintain or contribute to a defined employee benefit plan or arrangement that is not subject to the laws of the U.S.; and

 

   

sell or dispose of all or substantially all of LiveVox’s assets and engage in specified mergers or consolidations.

In addition, the Credit Agreement contains certain financial covenants, including the maintenance of a consolidated total leverage ratio and a consolidated fixed charge coverage ratio that come into effect in March 2022. LiveVox’s ability to borrow under the revolving facility depends on its compliance with these financial covenants. Events beyond LiveVox’s control, including changes in general economic and business conditions, may affect its ability to meet these financial covenants. LiveVox cannot guarantee that it will meet these financial covenants in the future, or that the lenders will waive any failure to meet these financial covenants.

Any failure to protect LiveVox’s intellectual property rights could impair its ability to protect its proprietary technology and its brand.

LiveVox’s success and ability to compete depend in part upon its intellectual property. As of December 31, 2020, LiveVox’s intellectual property portfolio included four registered U.S. trademarks, three pending trademark

 

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applications, and one issued U.S. patent. LiveVox primarily relies on copyright, trade secret and trademark laws, trade secret protection and confidentiality or license agreements with its employees, customers, partners and others to protect its intellectual property rights. The steps LiveVox takes to secure, protect and enforce its intellectual property rights may be inadequate. LiveVox may not be able to obtain any further patents or trademarks, its current patents could be invalidated or its competitors could design their products around LiveVox’s patented technology, and LiveVox’s pending applications may not result in the issuance of patents or trademarks. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights in other countries are uncertain and may afford little or no effective protection of LiveVox’s proprietary technology, and the risk of intellectual property misappropriation may be higher in these countries. Consequently, LiveVox may be unable to prevent its proprietary technology from being infringed or exploited abroad, which could affect LiveVox’s ability to expand into international markets or require costly efforts to protect its technology.

In order to protect its intellectual property rights, LiveVox may be required to spend significant resources to monitor and protect these rights. Litigation brought to protect and enforce its intellectual property rights could be costly, time consuming and distracting to LiveVox’s management and could result in the impairment or loss of LiveVox’s intellectual property. Furthermore, LiveVox’s efforts to enforce its intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of its intellectual property rights. Accordingly, LiveVox may not be able to prevent third parties from infringing upon or misappropriating LiveVox’s intellectual property. LiveVox’s failure to secure, protect and enforce its intellectual property rights could substantially harm the value of LiveVox’s technology, products, brand and business.

LiveVox will likely be subject to third-party intellectual property infringement claims.

There is considerable patent and other intellectual property development activity and litigation in LiveVox’s industry. LiveVox’s success depends upon its not infringing upon the intellectual property rights of others. LiveVox’s competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to LiveVox’s industry.

Certain technology necessary for LiveVox to provide its products may be patented, copyrighted or otherwise protected by other parties either now or in the future. In such case, LiveVox would have to negotiate a license for the use of that technology. LiveVox may not be able to negotiate such a license at a price that is acceptable, or at all. The existence of such a patent, copyright or other protections, or LiveVox’s inability to negotiate a license for any such technology on acceptable terms, could force LiveVox to cease using such technology and offering products incorporating such technology.

Others in the future may claim that LiveVox’s products and underlying technology infringe or violate their intellectual property rights. However, LiveVox may be unaware of the intellectual property rights that others may claim cover some or all of its technology or products. Any claims or litigation could cause LiveVox to incur significant costs and expenses and, if successfully asserted against LiveVox, could require that it pay substantial damages or ongoing royalty payments, require that it refrain from using, manufacturing or selling certain offerings or features or using certain processes, prevent it from offering its products or certain features thereof, or require that LiveVox comply with other unfavorable terms, any of which could harm its business and operating results. LiveVox may also be obligated to indemnify its customers or business partners and pay substantial settlement costs, including royalty payments, in connection with any such claim or litigation and to obtain licenses, which could be costly. Even if LiveVox were to prevail in such a dispute, any litigation regarding its intellectual property could be costly and time consuming and divert the attention of LiveVox’s management and key personnel from its business operations.

 

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Indemnity provisions in various agreements potentially expose LiveVox to substantial liability for intellectual property infringement and other losses.

In the ordinary course of business, LiveVox enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, vendors, lessors, business partners and other parties for third-party claims with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, certain claims related to third-party privacy or cyber security breaches or from intellectual property infringement claims made by third parties. Large indemnity payments or damage claims from contractual breach could harm LiveVox’s business, results of operations and financial condition. Although LiveVox often contractually limits its liability with respect to such obligations, LiveVox may still incur substantial liability related to them. Any dispute with a customer with respect to such obligations could be expensive, even if LiveVox ultimately prevails, and could harm LiveVox’s relationship with that customer and other current and prospective customers, reduce demand for its products and harm its business, results of operations and financial condition.

LiveVox employs third-party licensed software for use in or with its products, and the inability to maintain these licenses or errors in the software LiveVox licenses could result in increased costs, or reduced service levels, which could harm LiveVox’s business.

LiveVox’s products incorporate certain third-party software obtained under licenses from other companies. LiveVox anticipates that it will continue to rely on such software from third parties in the future. Although LiveVox believes that there are commercially reasonable alternatives to the third-party software LiveVox currently licenses, this may not be the case, or it may be difficult or costly to transition to other providers. In addition, integration of the software used in LiveVox’s products with new third-party software may require significant work and require substantial investment of LiveVox’s time and resources. To the extent that LiveVox’s products depend upon the successful operation of third-party software in conjunction with its software, any undetected errors or defects in this third-party software could prevent the deployment or impair the functionality of LiveVox’s products, delay new product introductions, result in increased costs, or a failure of LiveVox’s products and injure its reputation. LiveVox’s use of additional or alternative third-party software would require it to enter into license agreements with third parties and to integrate such software to its products.

There can be no assurance that the technology licensed by LiveVox will continue to provide competitive features and functionality or that licenses for technology currently utilized by it or other technology that it may seek to license in the future, including to replace current third-party software, will be available to it at a reasonable cost or on commercially reasonable terms, or at all. Third-party licensors may also be acquired or go out of business, which could preclude LiveVox from continuing to use such technology. The loss of, or inability to maintain, existing licenses could result in lost product features and litigation. The loss of existing licenses could also result in implementation delays or reductions until equivalent technology or suitable alternative products could be developed, identified, licensed and integrated, and could increase LiveVox’s costs and harm its business.

LiveVox’s products utilize open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect its business.

LiveVox’s products include software covered by open source licenses, which may include, for example, free general public use licenses, open source frontend libraries and open source applications. The terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on LiveVox’s ability to market its products. By the terms of certain open source licenses, LiveVox could be required to release the source code of its proprietary software, and to make its proprietary software available under open source licenses, if LiveVox combines its proprietary software with open source software in a certain manner. In the event that portions of LiveVox’s proprietary software are determined to be subject to an open source license, it could be required to

 

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publicly release the affected portions of its source code, re-engineer all or a portion of its technologies, or otherwise be limited in the licensing of its technologies, each of which could reduce or eliminate the value of LiveVox’s technologies and products. In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of the software. Given the nature of open source software, there is also a risk that third parties may assert copyright and other intellectual property infringement claims against LiveVox based on its use of certain open source software programs. Many of the risks associated with the usage of open source software cannot be eliminated and could harm LiveVox’s business.

Risks Related to our Sponsor and Management Team and Their Respective Interests

Our Initial Stockholders have agreed to vote in favor of the Business Combination Proposal and the other proposals described in this proxy statement, regardless of how our public stockholders vote.

Unlike many other blank check companies in which the founders agree to vote their Founder Shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, our Initial Stockholders have agreed to vote any shares of our Common Stock owned by them in favor of the Business Combination Proposal and the other proposals described in this proxy statement. As of the date hereof, our Initial Stockholders own shares equal to approximately 20% of our issued and outstanding shares of Common Stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the Business Combination than would be the case if our Initial Stockholders agreed to vote any shares of Common Stock owned by them in accordance with the majority of the votes cast by our public stockholders.

We did not obtain a third-party valuation in determining whether or not to pursue the Business Combination.

We are not required to obtain an opinion from an independent investment banking or accounting firm that the price that we are paying in connection with the Business Combination with LiveVox is fair to us from a financial point of view. Our Board did not obtain a third-party valuation in connection with the Business Combination. In analyzing the Business Combination, our Board conducted due diligence on LiveVox. Our Board also consulted with LiveVox’s management and its legal counsel, financial advisor and other advisors and considered a number of factors, uncertainty and risks, including, but not limited to, those discussed under “Proposal No. 1—Approval of the Business Combination—The Merger Agreement,” and concluded that the Business Combination was in the best interest of the Company and our stockholders. Accordingly, investors will be relying solely on the judgment of our Board in valuing LiveVox, and our Board may not have properly valued such businesses. The lack of a third-party valuation may lead an increased number of stockholders to vote against the Business Combination Proposal or demand redemption of their shares, which could potentially impact our ability to consummate the Business Combination.

Our Sponsor, certain members of our Board and our officers have interests in the Business Combination that are different from or are in addition to other stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this proxy statement.

When considering our Board’s recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal, our stockholders should be aware that our directors and officers have interests in the Business Combination that may be different from, or in addition to, the interests of our stockholders. These interests include:

 

   

the fact that our Sponsor, officers (other than our officer who was appointed subsequent to our IPO, who does not own any shares of our Common Stock) and directors (including our independent directors) have agreed to waive their redemption rights with respect to any shares of our Common Stock they may hold in connection with the consummation of the Business Combination, including all of the Founder Shares;

 

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the fact that our Sponsor has agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation;

 

   

the fact that our Sponsor paid an aggregate of $25,000 for 6,250,000 shares of Class F Stock (75,000 of which have been transferred to our independent directors, after giving effect to the (i) surrender of 1,437,500 shares on November 29, 2017 and (ii) forfeiture of 937,500 shares in April 2019) which will be converted into Class A Stock upon the closing of the Business Combination, including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration, but which will have no value if an initial business combination is not consummated by the Expiration Date;

 

   

the fact that our Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to consummate an initial business combination by the Expiration Date;

 

   

if the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the required time period, our Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which we have entered into an acquisition agreement or claims of any third party (other than our independent public accountants) for services rendered or products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that our Sponsor will have the right to nominate two independent directors of the post-Business Combination Company pursuant to a stockholders agreement to be entered into upon closing of the Business Combination;

 

   

the anticipated continuation of two of our existing directors, Robert D. Beyer and Todd M. Purdy, as directors of the post-Business Combination Company;

 

   

the continued indemnification of our existing directors and officers and the continuation of our directors’ and officers’ liability insurance after the Business Combination;

 

   

the fact that our Sponsor, officers and directors will lose their entire investment in us and will not be reimbursed for any out-of-pocket expenses if we are unable to consummate an initial business combination by the Expiration Date;

 

   

that, as described in the Charter Proposals and reflected in Annex C, our proposed Second Amended and Restated Certificate of Incorporation will be amended to expressly elect not to be bound or governed by, or otherwise subject to, Section 203 of the DGCL, thereby removing certain restrictions on business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective);

 

   

that, at the closing of the Business Combination we will enter into the Amended and Restated Registration Rights Agreement, which provides for registration rights to, among others, our Sponsor, Crescent and their permitted transferees;

 

   

that Crescent has entered into the Forward Purchase Agreement with the Company, pursuant to which Crescent has committed to purchase, subject to the terms and conditions set forth in the Forward Purchase Agreement, including a lock-up period that restricts the transfer of securities issued pursuant

 

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to the Forward Purchase Agreement and registration rights granted thereto, an aggregate of 2,500,000 shares of Class A Stock plus 833,333 Warrants for an aggregate purchase price of $25,000,000 in cash in a private placement that will close immediately prior to the Business Combination, which such commitment Crescent may assign, in whole or in part, to certain transferees, including, but not limited to, its current or prospective limited partners (Crescent and such possible transferees together comprising the Forward Purchasers); and

 

   

that Crescent, either alone or with our Sponsor, has the right but not the obligation to purchase immediately prior to the closing of the Business Combination additional shares of Class A Stock at a purchase price of $10.00 per share, subject to reasonably acceptable terms to be provided in a separate agreement, to the extent our total cash proceeds are less than $250,000,000.

Our Initial Stockholders, including our Sponsor and certain of our independent directors, hold a significant number of shares of our Common Stock. They will lose their entire investment in us if we do not consummate an initial business combination.

Our Initial Stockholders hold in the aggregate 6,250,000 Founder Shares, representing approximately 20% of the total outstanding shares of our Common Stock (including the 2,725,000 shares that our Sponsor has agreed to cancel concurrently with the closing of the Business Combination and the Lock-Up Shares which will be subject to release only if the price of Class A Stock trading on Nasdaq or another national securities exchange exceeds certain thresholds during the seven-year period following the closing of the Business Combination and will otherwise be forfeited and canceled for no consideration). The Founder Shares will be worthless if we do not consummate an initial business combination by the Expiration Date.

The Founder Shares are identical to the shares of Class A Stock, except that: (i) our Sponsor and each of our officers and directors at the time of our IPO entered into a letter agreement with us, pursuant to which they have agreed to (a) waive their redemption rights with respect to any shares of our Common Stock they may hold (which includes all of the Founder Shares) in connection with the consummation of an initial business combination, (b) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if we fail to consummate an initial business combination by the Expiration Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any shares of Class A Stock they hold if we fail to consummate an initial business combination by the Expiration Date) and (c) certain transfer restrictions on securities of the Company they may hold (which include all of the Founder Shares); (ii) our Sponsor entered into the Sponsor Support Agreement with us, certain of our officers and directors (not including our independent directors) and LiveVox, pursuant to which it agreed to, in its capacity as the holder of a majority of our Class F Stock, waive the right to a conversion price adjustment with respect to all shares of our Class F Stock in connection with the consummation of the Business Combination, such authority granted to the majority holders of our Class F Stock in our amended and restated certificate of incorporation; and (iii) the Founder Shares are automatically convertible into shares of Class A Stock at the time of the Business Combination, as described herein.

The personal and financial interests of our officers and directors may have influenced their motivation in identifying and selecting LiveVox and consummating the Business Combination and may influence their operation of the post-Business Combination Company. This risk may become more acute as the deadline of the Expiration Date, for consummating an initial business combination nears.

Our Sponsor, directors or officers or their affiliates may elect to purchase shares from public stockholders, which may influence a vote on the Business Combination Proposal and the other proposals described in this proxy statement and reduce the public “float” of our Class A Stock.

Our Sponsor, directors or officers or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the consummation of the Business Combination, although they

 

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are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our Sponsor, directors, officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the Business Combination Proposal and thereby increase the likelihood of obtaining stockholder approval of the Business Combination Proposal or to satisfy closing conditions in the Merger Agreement regarding required amounts in the Trust Account and the proceeds from the Forward Purchase Agreement equaling or exceeding certain thresholds where it appears that such requirements would otherwise not be met. This may result in the consummation of the Business Combination that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of our Class A Stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on the Nasdaq or another national securities exchange or reducing the liquidity of the trading market for our Class A Stock.

Past performance by Crescent, including our management team, may not be indicative of future performance of an investment in us.

Information regarding performance by, or businesses associated with, Crescent and its affiliates is presented for informational purposes only. Past performance by Crescent and by our management team is not a guarantee of success with respect to the Business Combination, especially in light of the fact that the LiveVox Stockholder will hold a majority of the outstanding equity of the Company following the consummation of the Business Combination and will have the ability to appoint the majority of the directors on the Board and that the post-Business Combination Company will be managed by the LiveVox management team. You should not rely on the historical record of Crescent or our management team’s performance as indicative of the future performance of the post-Business Combination Company or its returns going forward.

We have not registered the shares of Class A Stock issuable upon exercise of the Warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its Warrants except on a cashless basis and potentially causing such Warrants to expire worthless.

We have not registered the shares of Class A Stock issuable upon exercise of the Warrants under the Securities Act or any state securities laws at this time. However, under the terms of the Warrant Agreement, dated March 7, 2019, by and between the Company and Continental Stock Transfer & Trust Company, we have agreed to use our best efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A Stock issuable upon exercise of the Warrants, until the expiration of the Warrants in accordance with the provisions of such 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 such registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the Warrants are not registered under the Securities Act, we will be required to permit holders to exercise their Warrants on a cashless basis. However, no Warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our Class A Stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of 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

 

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effect a registration statement, but we will be required to use our best efforts to register the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any Warrant, or issue securities or other compensation in exchange for the Warrants in the event that we are unable to register or qualify the shares underlying the Warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the Warrants is not so registered or qualified or exempt from registration or qualification, the holder of such Warrant shall not be entitled to exercise such Warrant and such Warrant may have no value and expire worthless. In such event, holders who acquired their Warrants as part of a purchase of Units will have paid the full Unit purchase price solely for the shares of Class A Stock included in such Units. If and when the Warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A Stock for sale under all applicable state securities laws.

The exercise price for our Warrants is higher than in some similar blank check company offerings in the past, and, accordingly, the Warrants are more likely to expire worthless.

The exercise price of our Warrants is higher than is typical with many similar blank check companies in the past. Historically, with regard to units offered by blank check companies, the exercise price of a Warrant was generally a fraction of the purchase price of the units in the initial public offering. The exercise price for our Warrants is $11.50 per share, subject to adjustment as provided herein. As a result, the Warrants are less likely to ever be in the money and more likely to expire worthless.

We may amend the terms of the Warrants in a manner that may be adverse to holders of Public Warrants with the approval by the holders of at least 65% of the then outstanding Public Warrants. As a result, the exercise price of your Warrants could be increased, the Warrants could be converted into cash or stock, the exercise period could be shortened and the number of shares of our Class A Stock purchasable upon exercise of a Warrant could be decreased, all without your approval.

Our Warrants were issued in registered form under a Warrant Agreement between Continental Stock Transfer & Trust Company, as Warrant Agent, and us. Such Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants. Accordingly, we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding Public Warrants approve of such amendment. Although our ability to amend the terms of the Public Warrants with the consent of at least 65% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A Stock purchasable upon exercise of a Warrant.

We may redeem your unexpired Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Warrants worthless.

We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant; provided that the last reported sales price of our Class A Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of Class A Stock and equity-linked securities as described above) 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

 

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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.

Because each Unit contains one-half of one Warrant and only a whole Warrant may be exercised, the Units may be worth less than Units of other blank check companies.

Each Unit contains one-half of one Warrant. Because, pursuant to the Warrant Agreement that governs such Warrants, the Warrants may only be exercised for a whole number of shares, only a whole Warrant may be exercised at any given time. This is different from other offerings similar to ours whose Units include one share of common stock and one warrant to purchase one whole share. We have established the components of the Units in this way in order to reduce the dilutive effect of the Warrants upon consummation of a Business Combination since the Warrants will be exercisable in the aggregate for one-half of the number of shares compared to Units that each contain a Warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this Unit structure may cause our Units to be worth less than if they included a Warrant to purchase one whole share.

Warrants will become exercisable for our Class A Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

We issued Warrants to purchase 12,500,000 shares of Class A Stock as part of our IPO and, on the IPO closing date, we issued Private Placement Warrants to our Sponsor to purchase 7,000,000 shares of our Class A Stock, in each case 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 the Common Stock on an initial business combination. We expect to issue 2,500,000 shares of Class A Stock plus 833,333 Warrants to the Forward Purchasers pursuant to the Forward Purchase Agreement immediately prior to the Business Combination. The shares of Class A Stock issued pursuant to the Forward Purchase Agreement and additional shares of our Class A Stock issued upon exercise of our Warrants will result in dilution to the then existing holders of our Class A Stock and increase the number of shares eligible for resale in the public market.

Pursuant to the Sponsor Support Agreement, the Sponsor agreed to the cancelation of (i) 7,000,000 Warrants acquired by the Sponsor pursuant to a private placement in connection with the initial public offering of the Company at a purchase price of $1.00 per warrant and (ii) 2,725,000 shares of Class F Stock held by the Sponsor, in each case, for no consideration and concurrent with and contingent upon the consummation of the Business Combination. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A Stock.

Risks Related to our Securities and the Trust Account

Our public stockholders will experience dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination. Having a minority share position may reduce the influence that our current stockholders have on the management of the post-Business Combination Company. We cannot provide assurance that, upon loss of control of the post-Business Combination Company, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

The issuance of Common Stock in the Business Combination and pursuant to the Forward Purchase Agreement and PIPE Investment will dilute the equity interest of our existing stockholders and may adversely affect prevailing market prices for shares of our Class A Stock, Units and/or Warrants.

It is anticipated that, upon completion of the Business Combination: (i) the Company’s public stockholders will retain an ownership interest of approximately 25.9% in the post-Business Combination Company; (ii) our

 

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Initial Stockholders will own approximately 3.6% of the post-Business Combination Company; (iii) the Forward Purchasers will own approximately 2.6% of the post-Business Combination Company; (iv) the PIPE Investors will own approximately 7.7% of the post-Business Combination Company; (v) the participants in the LiveVox Bonus Plans will own approximately 3.6% of the post-Business Combination Company; and (vi) the LiveVox Stockholder will own approximately 56.6% of the post-Business Combination Company. The ownership percentages with respect to the post-Business Combination Company (a) do not take into account (1) any redemption by our public stockholders (and the percentages therefore assume our total cash proceeds exceed $250,000,000 without the purchase of additional shares of Class A Stock by Crescent and our Sponsor) and (2) Warrants that will remain outstanding immediately following the Business Combination, but (b) do include (1) the issuance of Class A Stock pursuant to the Forward Purchase Agreement, (2) the issuance of Class A Stock pursuant to the PIPE Investment, (3) the issuance of Class A stock pursuant to the LiveVox Bonus Plans, (4) the remaining Founder Shares, all of which will be converted into shares of Class A Stock at the closing of the Business Combination on a one-for-one basis, after the cancelation of 2,725,000 of such shares by our Sponsor, and (5) the Earn-Out Shares and Lock-Up Shares that will be placed into escrow because the LiveVox Stockholder and our Initial Stockholders, respectively, will maintain voting power over such shares, and therefore such interests represent voting power (and not necessarily pecuniary interests or dispositive power). If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders and the ownership percentage of the LiveVox Stockholder in the post-Business Combination Company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

The LiveVox Stockholder will have significant influence over us after consummation of the Business Combination.

Upon consummation of the Business Combination, the LiveVox Stockholder, which is controlled by Golden Gate Capital, will beneficially own approximately 56.6% of the post-Business Combination Company, which estimate (a) does not take into account (1) any redemption by our public stockholders (and the percentages therefore assume our total cash proceeds exceed $250,000,000 without the purchase of additional shares of Class A Stock by Crescent and our Sponsor) and (2) Warrants that will remain outstanding immediately following the Business Combination, but (b) does include (1) the issuance of Class A Stock pursuant to the Forward Purchase Agreement, (2) the issuance of Class A Stock pursuant to the PIPE Investment, (3) the remaining Founder Shares, all of which will be converted into shares of Class A Stock at the closing of the Business Combination on a one-for-one basis, after the cancelation of 2,725,000 of such shares by our Sponsor, and (4) the Earn-Out Shares and Lock-Up Shares that will be placed into escrow because the LiveVox Stockholder and our respective Initial Stockholders, respectively, will maintain voting power over such shares, and therefore such interests represent voting power (and not necessarily pecuniary interests or dispositive power). If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Company’s existing stockholders and the ownership percentage of the LiveVox Stockholder in the post-Business Combination Company will be different. For more information, please see the sections entitled “Summary of the Proxy Statement—Impact of the Business Combination on the Company’s Public Float” and “Unaudited Pro Forma Condensed Combined Financial Information.”

As long as the LiveVox Stockholder (and Golden Gate Capital) owns or controls a significant percentage of our outstanding voting power, they will have the ability to significantly influence all corporate actions requiring stockholder approval, including the election and removal of directors and the size of our Board, any amendment to our Second Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws, or the approval of any merger or other significant corporate transaction, including a sale of substantially all of our assets. In particular, (i) so long as Golden Gate Capital beneficially owns in the aggregate (directly or indirectly) at least 30% or more of the voting power of our capital stock, the directors nominated by Golden Gate Capital shall be entitled to designate the chairperson of the Board, and (ii) so long as Golden Gate Capital beneficially owns in the aggregate (directly or indirectly) at least 35% or more of the voting power of our capital stock: any

 

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action that is required or permitted to be taken by our stockholders may be taken without a meeting by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of our stock entitled to vote thereon were present and voted; and the chairperson of the Board may call a special meeting of our stockholders by written request of the holders of a majority of the voting power of the then outstanding shares of our voting stock. Accordingly, for such period of time, the LiveVox Stockholder (and Golden Gate Capital) will have significant influence with respect to our management, business plans and policies. The LiveVox Stockholder’s influence over the post-Business Combination Company’s management could have the effect of delaying or preventing a change in control or otherwise discouraging a potential acquirer from attempting to obtain control of the post-Business Combination Company, which could cause the market price of our Class A Stock to decline or prevent stockholders from realizing a premium over the market price for Class A Stock.

Because the second amended and restated certificate of incorporation of the post-Business Combination Company will opt out of Section 203 of the DGCL regulating certain business combinations with interested stockholders (which amendment will become effective 12 months after the Second Amended and Restated Certificate of Incorporation is filed and becomes effective), the LiveVox Stockholder may transfer shares to a third party by transferring their shares of Common Stock without the approval of our Board or other stockholders, which may limit the price that investors are willing to pay in the future for shares of our Common Stock.

Upon consummation of the Business Combination, our Board anticipates increasing its size from seven directors to nine directors and providing for three classes of directors (Class I, Class II and Class III), with each Class I director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2022, each Class II director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2023 and each Class III director having a term that expires at the post-Business Combination Company’s annual meeting of stockholders in 2024, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death. We anticipate having 3 Class I directors, 3 Class II directors and 3 Class III directors. As discussed above, in connection with the Business Combination, Louis Summe, Rishi Chandna, Marcello Pantuliano, Doug Ceto, Bernhard Nann, Stewart Bloom, Robert Beyer, Todd Purdy, Susan Morisato, Kathleen Pai and Leslie C. G. Campbell have each been nominated to serve as directors of the post-Business Combination Company upon consummation of the Business Combination.

The LiveVox Stockholder’s interests may not align with our interests as a company or the interests of our other stockholders. Accordingly, the LiveVox Stockholder could cause us to enter into transactions or agreements of which you would not approve or make decisions with which you would disagree.

There can be no assurance that our Class A Stock that will be issued in connection with the Business Combination will be approved for listing on Nasdaq or, if approved, will continue to be so listed following the closing of the Business Combination, or that we will be able to comply with the continued listing standards of Nasdaq.

Our Class A Stock, Units and Public Warrants are currently listed on Nasdaq. Our continued eligibility for listing may depend on, among other things, the number of our shares that are redeemed. We intend to apply to continue the listing of our Class A Stock, Units and Public Warrants on Nasdaq. If, after the Business Combination, Nasdaq delists our Class A Stock, Units and Public Warrants from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including:

 

   

a limited availability of market quotations for our securities;

 

   

reduced liquidity for our securities;

 

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a determination that our Class A Stock is a “penny stock” which will require brokers trading in our Class A Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

 

   

a limited amount of news and analyst coverage; and

 

   

a decreased ability to issue additional securities or obtain additional financing in the future.

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 Class A Stock, Units and Public Warrants are listed on Nasdaq, they are covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state, other than the State of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

Resales of the shares of Common Stock included in the Business Combination Stock Consideration could depress the market price of our Class A Stock, Units and/or Public Warrants.

There may be a large number of shares of Class A Stock, Units and/or Public Warrants sold in the market following the consummation of the Business Combination or shortly thereafter. The shares held by our public stockholders will be freely tradeable, while certain securities held by our Sponsor, the Initial Stockholders, Crescent and certain other stockholders of the post-Business Combination Company, including the LiveVox Stockholder, will be subject to certain restrictions described below prior to becoming freely tradeable. Please see the section entitled “—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 Class A Stock, Units and/or Public Warrants to drop significantly, even if our business is doing well” for additional risks related to restrictions on certain securities of the Company.

Even if we consummate the 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 of Class A Stock. 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.

If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

Our placing of funds in the Trust Account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an

 

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analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Our independent registered public accounting firm and the underwriters of our IPO will not execute agreements with us waiving such claims to the monies held in the Trust Account.

Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where 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 consummate the Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the 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 ten years following redemption. Accordingly, the per share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (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 our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), 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 IPO 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 the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of our company and, therefore, the Sponsor may not be able to satisfy those obligations. We have not asked the Sponsor to reserve for such obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for the Business Combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may not be able to consummate the Business Combination, and our public stockholders would receive such lesser amount per share in connection with any redemptions of 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 stockholders.

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 our franchise and income taxes, and the 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 the Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in certain instances. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public stockholders may be reduced below $10.00 per share.

 

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If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

A market for our securities may not continue, which would adversely affect the liquidity and price of our securities.

Following the Business Combination, the price of our securities may fluctuate significantly due to the market’s reaction to the Business Combination and general market and economic conditions. An active trading market for our securities following the Business Combination may never develop or, if developed, it may not be sustained. In addition, the price of our securities after the 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, Nasdaq 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 Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

If the Business Combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities prior to the closing of the Business Combination may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination Proposal.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Immediately prior to the Business Combination, there has not been a public market for LiveVox’s stock and trading in the shares of our Class A Stock has not been active. Accordingly, the valuation ascribed to LiveVox and our Class A Stock in the Business Combination may not be indicative of the price of the post-Business Combination Company that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some 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 our 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, regardless of our actual operating performance.

Factors affecting the trading price of the post-Business Combination Company’s securities following the Business Combination may include those listed in “—Risks Related to LiveVox’s Business and Industry” and the following, some of which will be beyond our control:

 

   

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;

 

   

the public’s reaction to our press releases, our other public announcements and our filings with the SEC;

 

   

speculation in the press or investment community;

 

   

success of competitors;

 

   

our ability to accurately project future results and our ability to achieve those and other industry and analyst forecasts;

 

   

our operating results failing to meet the expectation of securities analysts or investors in a particular period;

 

   

changes in expectations as to our future financial performance, including financial estimates and recommendations by securities analysts concerning the post-Business Combination Company or the market in general;

 

   

operating and stock price performance, or changes in market valuations of other companies that investors deem comparable to the post-Business Combination Company;

 

   

our ability to market new and enhanced products on a timely basis;

 

   

changes in consumer preferences and competitive conditions;

 

   

expansion to new markets;

 

   

negative publicity relating to our services;

 

   

changes in laws and regulations affecting our business, including changes in franchising laws in any jurisdiction in which we operate;

 

   

commencement of, or involvement in, litigation involving the post-Business Combination Company or announcements by third parties of significant claims or proceedings against us;

 

   

actions by the LiveVox Stockholder;

 

   

changes in the post-Business Combination Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

 

   

announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments;

 

   

the volume of shares of our Class A Stock, Units and/or Public Warrants available for public sale;

 

   

any major change in our Board or management;

 

   

sales of substantial amounts of Common Stock by our directors, officers or significant stockholders or the perception that such sales could occur;

 

   

the realization of any of the risk factors presented in this proxy statement;

 

   

labor availability and costs for hourly and management personnel;

 

   

additions or departures of key personnel;

 

   

failure to comply with the requirements of Nasdaq;

 

   

failure to comply with the Sarbanes-Oxley Act of 2002 or other laws or regulations;

 

   

actual, potential or perceived control, accounting or reporting problems;

 

   

changes in accounting principles, policies and guidelines;

 

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uncertainty regarding global economic events, including the impact of global health pandemics such as the COVID-19 outbreak; and

 

   

general market, economic and political conditions, on the local, national and international scale, such as recessions, interest rates, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected, including companies in LiveVox’s industry. 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-Business 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.

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 Class A Stock, Units and/or Public Warrants to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of Class A Stock, Units and/or Public Warrants 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 Class A Stock, Units and/or Public Warrants. After the Business Combination, our Initial Stockholders, including our Sponsor, will hold approximately 0.9% of our Common Stock. In addition, at the closing of the Business Combination, we will enter into the Amended and Restated Registration Rights Agreement, substantially in the form attached as Annex F to this proxy statement, with certain other stockholders of the post-Business Combination Company, including the LiveVox Stockholder. Pursuant to the terms of the Amended and Restated Registration Rights Agreement, (a) any outstanding share of Class A Stock or any other equity security (including the Private Placement Warrants) of the Company held by a signatory thereto (besides the Company) as of the date of the Amended and Restated Registration Rights Agreement or thereafter acquired by such holder (including the shares of Class A Stock issued upon conversion of the Founder Shares and upon exercise of any Private Placement Warrants or any other equity security of the Company) and (b) any other equity security of the Company issued or issuable with respect to any such share of Common Stock held by such a holder by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights. Please see the section entitled “Summary of the Proxy Statement—Related Agreements—Amended and Restated Registration Rights Agreement” for additional details.

The Amended and Restated Registration Rights Agreement also subjects the LiveVox Stockholder, subject to certain exceptions, to be bound by restrictions on the transfer of their Class A Stock acquired pursuant to the Merger Agreement for the earlier of (x) 180 days after the consummation of the Business Combination or (y) the date on which the Company completes a liquidation or similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.

In addition, our Initial Stockholders entered into a letter agreement pursuant to which they agreed to restrictions on the transfer of their securities issued in our IPO, which (i) in the case of the Class F Stock, which will be converted into shares of Class A Stock at the consummation of the Business Combination, is the earlier of

 

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(x) one year after the completion of the Business Combination, (y) the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (z) the date on which we complete a liquidation or similar transaction that results in all of our stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, and (ii) in the case of the Private Placement Warrants and the respective Class A Stock underlying the Private Placement Warrants, is 30 days after the completion of the Business Combination.

Certain independent directors of the Company and the Sponsor also agreed, pursuant to the Share Escrow Agreement, upon the closing of the Business Combination, to place a total of 2,743,750 shares of Class A Stock (following the automatic conversion of such shares upon the closing of the Business Combination from shares of Class F Stock into shares of Class A Stock) into an escrow account to be subject to release only if the price of Class A Stock trading on Nasdaq exceeds the following thresholds during the seven-year period following the closing of the Business Combination as follows: 781,250 of such shares will be released if the Volume Weighted Average Share Price equals or exceeds $12.50 per share for 20 of any 30 consecutive trading days; another 781,250 of such shares will be released if the Volume Weighted Average Share Price equals or exceeds $15.00 per share for 20 of any 30 consecutive trading days; and another 1,181,250 of such shares will be released if the Volume Weighted Average Share Price equals or exceeds $17.50 per share for 20 of any 30 consecutive trading days. Any such securities not released during the seven-year period following the closing of the Business Combination will be forfeited and canceled for no consideration.

Pursuant to the Sponsor Support Agreement, the Sponsor also agreed to the cancelation of (i) 7,000,000 Warrants acquired by the Sponsor pursuant to a private placement in connection with the initial public offering of the Company at a purchase price of $1.00 per warrant and (ii) 2,725,000 shares of Class F Stock held by the Sponsor, in each case, for no consideration and concurrent with and contingent upon the consummation of the Business Combination.

Pursuant to the Forward Purchase Agreement, Crescent has also agreed to restrictions on the transfer of (i) the shares of Class A Stock purchased by Crescent pursuant to the Forward Purchase Agreement until the earlier of (x) 180 days after the Business Combination or (ii) the date following the Business Combination on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their common stock for cash, securities or other property, and (iii) the warrants purchased by it pursuant to the Forward Purchase Agreement (and the respective Class A Stock underlying such warrants) until 30 days after the consummation of the Business Combination.

If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about the post-Business Combination Company, its business, or its market, or if they change their recommendations regarding our Class A Stock adversely, then the price and trading volume of our Class A Stock could decline.

The trading market for our Class A 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 us or the post-Business Combination Company. If no securities or industry analysts commence coverage of the post-Business Combination Company, our stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the post-Business Combination Company change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A Stock would likely decline. If any analyst who may cover us were to cease coverage of the post-Business Combination Company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

 

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Risks Related to the Company and the Business Combination

Upon the consummation of the Business Combination, LiveVox will be a “controlled company” within the meaning of the rules of Nasdaq and, as a result, LiveVox will qualify for, and intends to rely on, exemptions from certain corporate governance requirements. You will not have the same protections as those afforded to shareholders of companies that are subject to such governance requirements.

After completion of the Business Combination, LiveVox TopCo will continue to control a majority of the voting power of LiveVox’s outstanding common stock. As a result, LiveVox will be a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

 

   

the requirement that a majority of LiveVox’s Board consist of independent directors;

 

   

the requirement that LiveVox has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

 

   

the requirement that LiveVox has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees.

Following the completion of the Business Combination, LiveVox intends to utilize these exceptions. As a result, LiveVox may not have a majority of independent directors on LiveVox’s Board, LiveVox’s compensation and nominating and corporate governance committees may not consist entirely of independent directors and LiveVox’s compensation and nominating and corporate governance committees may not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

We currently intend to only consummate one initial business combination with the proceeds of our IPO and the sale of the Private Placement Warrants, which will cause us to be solely dependent on LiveVox’s business. This lack of diversification may negatively impact our operations and profitability.

We currently intend to only consummate one initial business combination with the proceeds of our IPO and the sale of the Private Placement Warrants. By consummating an initial business combination with only a single entity, our 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 following the consummation of the Business Combination. 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 consummate several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success will be solely dependent upon the business and financial performance of LiveVox. Please see the section entitled “—Risks Related to LiveVox’s Business and Industry” for risks we may face as a result of consummating the Business Combination with LiveVox.

We have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that we will be unable to continue as a going concern if we do not consummate an initial business combination by the Expiration Date. If we are unable to complete an initial business combination by the Expiration Date, we will be forced to liquidate and our Warrants will expire worthless.

We are a blank check company, and as we have no operating history and are subject to a mandatory liquidation and subsequent dissolution requirement, there is a risk that we will be unable to continue as a going

 

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concern if we do not consummate an initial business combination by the Expiration Date. In the event that we do not consummate a business combination or obtain an extension by June 30, 2021, third parties may bring claims against us for monies we owe for products or services provided to us. Unless we amend our amended and restated certificate of incorporation, as amended, to extend the life of the Company and the Trust Agreement, if we do not consummate an initial business combination by the Expiration Date, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the shares of Class A Stock, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding shares of Class A Stock, which redemption will completely extinguish our public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be less than the initial public offering price per Unit in the IPO. In such case, our public stockholders 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. In addition, if we fail to consummate an initial business combination by the Expiration Date, there will be no redemption rights or liquidating distributions with respect to the Public Warrants or the Private Placement Warrants, which will expire worthless, unless we amend our amended and restated certificate of incorporation to extend the life of the Company and certain other agreements into which we have entered.

The funds available to us outside of the Trust Account may not be sufficient to allow us to operate until the Expiration Date, assuming that no initial business combination is consummated during that time. We expect to incur significant costs in pursuit of our acquisition plans. However, our affiliates are not obligated to make loans to us or invest in 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.

Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed initial business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to consummate an initial business combination, our public stockholders 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 stockholders may be less than $10.00 per share” and other risk factors herein.

Our ability to successfully effect the Business Combination and to be successful thereafter will be dependent upon the efforts of key personnel of the Company and of LiveVox. The loss of key personnel could negatively impact the operations and profitability of the post-Business Combination and the Company’s financial condition could suffer as a result.

Our ability to successfully effect the Business Combination is dependent upon the efforts of key personnel of the Company and LiveVox. Although some of our key personnel may remain with the Company in senior management or advisory positions following the Business Combination, it is possible that we will lose some key

 

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personnel, the loss of which could negatively impact the operations and profitability of the post-Business Combination Company’s business. We anticipate that some or all of the management of LiveVox will remain in place.

The continued success of the business of LiveVox depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of LiveVox’s officers could have a material adverse effect on the post-Business Combination Company’s business, financial condition, or operating results. LiveVox does not maintain key-man life insurance on any of its officers. The services of such personnel may not continue to be available after the Business Combination.

We and LiveVox will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and third parties may have an adverse effect on us and LiveVox. These uncertainties may impair our or LiveVox’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 to seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the Business Combination, our or LiveVox’s business could be harmed.

LiveVox is a private company about which limited information is available, which may result in a post-Business Combination Company that is not as profitable as we suspected, if at all.

LiveVox is a privately held company. Very little public information generally exists about private companies, and our decision on whether to pursue the Business Combination has been made on the basis of limited information, which may result in a post-Business Combination Company that is not as profitable as we suspected, if at all.

We may waive one or more of the conditions to the Business Combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to consummate the Business Combination, to the extent permitted by our amended and restated certificate of incorporation and bylaws and applicable laws. For example, it is a condition to our obligations to close the Business Combination that total cash proceeds of the Company equal or exceed $250,000,000. However, if our Board determines that a failure to satisfy the condition is not material, then the Board may elect to waive that condition and close the Business Combination. We may not waive the condition that our stockholders approve the Business Combination. Please see the section entitled “Proposal No. 1—Approval of the Business Combination—The Merger Agreement—Conditions to Closing of the Business Combination” for additional information.

The exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the closing of the Business Combination, other events may occur that, pursuant to the Merger Agreement, would require us to agree to amend the Merger Agreement, to consent to certain actions or to waive rights that we are entitled to under those agreements. Such events could arise because of changes in the course of LiveVox’s business, a request by LiveVox to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on LiveVox’s business and would entitle us to terminate the Merger Agreement. In any of such circumstances, it would be in our discretion, acting through our Board, to grant our consent or waive our rights. The existence of the financial and personal interests of the directors described elsewhere in this proxy statement may result in a conflict of interest on the part of one or more of the directors between what he or she may believe

 

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is best for the Company and our stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this proxy statement, we do not believe there will be any changes or waivers that our directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, we will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of our stockholders with respect to the Business Combination Proposal.

We and LiveVox will incur significant transaction and transition costs in connection with the Business Combination.

We and LiveVox have both incurred and expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and LiveVox may also incur additional costs to retain key employees. All expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby (including the Business Combination), including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs, though the aggregate amount of certain transaction expenses incurred by LiveVox and its direct or indirect subsidiaries, to the extent incurred but not paid by LiveVox prior to the closing of the Business Combination, which amount shall also include transaction-related bonuses and other amounts payable in connection with or anticipation of the consummation of the Business Combination, will be decreased from the aggregate consideration to be received by the LiveVox Stockholder if the Business Combination is consummated.

Our transaction expenses as a result of the Business Combination are currently estimated at approximately $39,000,000, including $8,750,000 in deferred underwriting commissions to the underwriter of our IPO. The amount of the deferred underwriting commissions will not be adjusted for any shares of Class A Stock that are redeemed in connection with the Business Combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commissions and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.

Following the consummation of the Business Combination, our only significant asset will be our ownership interest in the business of LiveVox and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations. Additionally, the terms of LiveVox’s Credit Agreement generally prohibit it from making dividends or distributions except under limited circumstances.

Following the consummation of the Business Combination, we will have no direct operations and no significant assets other than our ownership of the business of the post-Business Combination Company. We and certain investors, the LiveVox Stockholder, and directors and officers of LiveVox and its affiliates will become stockholders of the post-Business Combination Company at that time. We will depend on the business of LiveVox for distributions, loans and other payments to generate the funds necessary to meet our financial obligations, including our expenses as a publicly traded company and to pay any dividends with respect to our Common Stock. The financial condition and operating requirements of LiveVox’s business may limit our ability to obtain cash from LiveVox’s business. The earnings from, or other available assets of, LiveVox’s business may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our Common Stock or satisfy our other financial obligations. The ability of LiveVox and its subsidiaries to make distributions, loans and other payments to us for the purposes described above and for any other purpose will be governed by the terms of the Credit Agreement, and will be subject to the negative covenants set forth therein. Under the Credit Agreement, LiveVox and its subsidiaries may make distributions or dividends only (i) to former employees, officers, or directors (or any spouses, ex-spouses, or estates of the foregoing) on account of repurchases, redemptions or forgiveness of indebtedness or (ii) for income tax purposes.

 

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The ability of LiveVox and its subsidiaries to make distributions, loans and other payments to us for the purposes described above and for any other purpose will be governed by the terms of the Credit Agreement, and will be subject to the negative covenants set forth therein.

We have a minimum cash requirement. This requirement may make it more difficult for us to consummate the Business Combination as contemplated.

The Merger Agreement provides that LiveVox’s obligation to consummate the Business Combination is conditioned on, among other things, a requirement that the total cash proceeds available in the transaction equal or exceed $250,000,000.

In addition, pursuant to our amended and restated certificate of incorporation, in no event will we redeem shares of Class A Stock in an amount that would cause our net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. If such conditions are not met, and such conditions are not or cannot be waived under the terms of the Merger Agreement, then the Merger Agreement could terminate and the proposed Business Combination may not be consummated.

If such conditions are waived and the Business Combination is consummated, the cash held by us and our subsidiaries (including LiveVox and its subsidiaries) in the aggregate, after the closing of the Business Combination may not be sufficient to allow us to operate and pay our bills as they become due. Furthermore, our affiliates are not obligated to make loans to us or invest in us in the future after the Business Combination. The additional exercise of redemption rights with respect to a large number of our public stockholders may make us unable to take such actions as may be desirable in order to optimize our capital structure after consummation of the Business Combination and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses and liabilities after the closing of the Business Combination. Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.

Following the consummation of the 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 LiveVox, we cannot assure you that this diligence will surface all material issues that may be present in LiveVox’s business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of LiveVox’s business and outside of our and LiveVox’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. 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 the post-Business Combination Company or its securities. Accordingly, any of our stockholders who choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.

We have no operating or financial history and our results of operations and those of the post-Business Combination Company may differ significantly from the unaudited pro forma financial data included in this proxy statement.

We are a blank check company and we have no operating history and no revenues. This proxy statement includes unaudited pro forma condensed combined financial statements for the post-Business Combination Company. The unaudited pro forma condensed combined statement of operations of the post-Business

 

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Combination Company combines our historical audited results of operations for the year ended December 31, 2020, with the historical audited results of operations of LiveVox for the year ended December 31, 2020, and gives pro forma effect to the Business Combination as if it had been consummated on January 1, 2020. The unaudited pro forma condensed combined balance sheet of the post-Business Combination Company combines our historical balance sheets as of December 31, 2020, and of LiveVox as of December 31, 2020, and gives pro forma effect to the Business Combination as if it had been consummated on December 31, 2020.

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations and financial position that would have been achieved had the Business Combination been consummated on the dates indicated above, or the future consolidated results of operations or financial position of the post-Business Combination Company. Accordingly, the post-Business Combination Company’s business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this proxy statement. For more information, please see the sections entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

The announcement of the proposed Business Combination could disrupt LiveVox’s relationships with its customers, suppliers, business partners and others, as well as its operating results and business generally.

Whether or not the Business Combination and related transactions are ultimately consummated, as a result of uncertainty related to the proposed transactions, risks relating to the impact of the announcement of the Business Combination on LiveVox’s business include the following:

 

   

its employees may experience uncertainty about their future roles, which might adversely affect LiveVox’s ability to retain and hire key personnel and other employees;

 

   

customers, suppliers, business partners, and other parties with which LiveVox maintains business relationships may experience uncertainty about LiveVox’s future and seek to terminate their relationship with LiveVox, seek alternative relationships with third parties, seek to alter their business relationships with LiveVox or fail to extend an existing relationship with LiveVox; and

 

   

LiveVox has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Business Combination which may negatively impact its ongoing operations.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact LiveVox’s results of operations and cash available to fund its businesses.

We may be unable to obtain additional financing to fund the operations and growth of the post-Business Combination Company.

We may require additional financing to fund the operations or growth of the post-Business Combination Company. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the post-Business Combination Company. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after the Business Combination.

Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate an initial

 

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business combination by the Expiration Date, may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the Expiration Date, in the event we do not consummate an initial business combination and, therefore, we do not intend to comply with the foregoing procedures.

Because we will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the ten years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations are limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon the redemption of our public shares in the event we do not consummate an initial business combination by the Expiration Date, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our Board may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of consummating an initial business combination.

The fact that we are a blank check company will make compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because LiveVox is not currently subject to Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”). The standards required for a public company under Section 404 of SOX are significantly more stringent than those required of LiveVox as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will

 

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be applicable to us after the Business Combination. If we are not able to implement the requirements of Section 404, including any additional requirements once we are no longer an emerging growth company, in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities. Additionally, once we are no longer an emerging growth company, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.

Anti-takeover provisions contained in our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Assuming the passage of Proposal Nos. 1 through 5 of this proxy statement, the post-Business Combination Company’s Second Amended and Restated Certificate of Incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make 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. These provisions will include:

   

no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

 

   

a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the Board;

 

   

the requirement that directors may only be removed from the Board for cause;

 

   

the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board;

 

   

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

 

   

a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

   

the requirement that changes or amendments to certain provisions of our Second Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws must be approved by holders of at least two-thirds of the Common Stock of the post-Business Combination Company entitled to vote; and

 

   

advance notice procedures that stockholders must comply with in order to nominate candidates to our Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

Our amended and restated certificate of incorporation and our Second Amended and Restated Certificate of Incorporation include a forum selection clause.

Our amended and restated certificate of incorporation and our Second Amended and Restated Certificate of Incorporation provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of the Company, (2) action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or employee of the Company to the Company or its stockholders, (3) action asserting a claim pursuant to any provision of the DGCL or our amended

 

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and restated certificate of incorporation, or Second Amended and Restated Certificate of Incorporation, as applicable, or our bylaws, or (4) action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine. Notwithstanding the foregoing, our Second Amended and Restated Certificate of Incorporation provides that the provision described in the preceding paragraph shall not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our Second Amended and Restated Certificate of Incorporation further provides the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Our decision to adopt a federal forum provision for suits arising under federal securities laws in our Second Amended and Restated Certificate of Incorporation followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. However, such provision may not be enforceable under Section 22 of the Securities Act, and it may be possible for the Company to be sued in applicable state and local courts notwithstanding such provision.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.

The forum selection clause may discourage claims or limit stockholders’ ability to submit claims in a judicial forum that they find favorable and may result in additional costs for a stockholder seeking to bring a claim. If a court were to determine the forum selection clause to be inapplicable or unenforceable in an action, we may incur additional costs in conjunction with our efforts to resolve the dispute in an alternative jurisdiction, which could have a negative impact on our results of operations and financial condition and result in a diversion of the time and resources of our management and board of directors.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under SOX, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following March 12, 2024, the fifth anniversary of our IPO, (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A Stock that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We cannot predict if investors will find our Common Stock less attractive if we choose to rely on these exemptions. If some investors find our Common Stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Common Stock and the price of our Common Stock may be more volatile. LiveVox had net revenues during calendar years 2020 and 2019 of $102.5 million and $92.7 million, respectively. If the post-Business Combination Company expands its business through acquisitions and/or continues to grow revenues organically post-Business Combination, we may cease to be an emerging growth company prior to March 12, 2024.

 

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In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. 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 to avail ourselves 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 that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

We cannot predict if investors will find our Class A Stock less attractive because we will rely on these exemptions. If some investors find our Class A Stock less attractive as a result, there may be a less active trading market for our Class A Stock and our stock price may be more volatile.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.

As a public company, we are required to comply with the SEC’s rules implementing Sections 302 and 404 of SOX, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting. To comply with the requirements of being a public company, the post-Business Combination Company will be required to provide attestation on internal controls commencing with the annual report for fiscal year ended December 31, 2020, and we may need to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. The standards required for a public company under Section 404 of SOX are significantly more stringent than those required of LiveVox as a privately held company. Further, as an emerging growth company, our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until the date we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event that it is not satisfied with the level at which the controls of the post-Business Combination Company are documented, designed or operating.

Testing and maintaining these controls can divert our management’s attention from other matters that are important to the operation of our business. If we identify material weaknesses in the internal control over financial reporting of the post-Business Combination Company or are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting when we no longer qualify as an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock could be negatively affected, and we could become subject to investigations by the SEC or other regulatory authorities, which could require additional financial and management resources.

Risks Related to the Redemption

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to consummate a Business Combination with which a substantial majority of our stockholders do not agree.

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that we will not redeem our public shares in an amount that would result in our failure to have

 

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net tangible assets of at least $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules). However, the Merger Agreement provides that our obligation and the obligation of LiveVox to consummate the Business Combination is conditioned on the total cash proceeds equaling or exceeding $250,000,000. As a result, we may be able to consummate the Business Combination even though a substantial portion of our public stockholders do not agree with the Business Combination and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to our Sponsor, directors or officers or their affiliates. As of the date of this proxy statement, no agreements with respect to the private purchase of public shares by us or the persons described above have been entered into with any such investor or holder. We will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this proxy statement) at the Special Meeting.

In the event the aggregate cash consideration we would be required to pay for all shares of Class A Stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not consummate the Business Combination or redeem any shares, all shares of Class A Stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate initial business combination.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than fifteen percent (15%) of our Class A Stock issued in the IPO, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of our Class A Stock issued in the IPO.

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a group (as deemed a “person” under Section 13 of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of Class A Stock included in the Units sold in our IPO. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, we will require each public stockholder seeking to exercise redemption rights to certify to us whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to stock ownership available to us at that time, such as Section 13D, Section 13G and Section 16 filings under the Exchange Act, will be the sole basis on which we make the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over our ability to consummate the Business Combination and you could suffer a material loss on your investment in us if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if we consummate the Business Combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in our IPO and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. We cannot assure you that the value of such excess shares will appreciate over time following the Business Combination or that the market price of our Class A Stock will exceed the per-share redemption price. Notwithstanding the foregoing, stockholders may challenge our determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.

However, our stockholders’ ability to vote all of their shares (including such excess shares) for or against the Business Combination is not restricted by this limitation on redemption.

There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the Trust Account will put the stockholder in a better future economic position.

We can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the consummation of the Business Combination or any alternative Business Combination. Certain events following the consummation of any initial business combination, including the Business

 

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Combination, may cause an increase in our share price, and may result in a lower value realized now than a stockholder of the Company might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder 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 stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this proxy statement. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.

Our stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this proxy statement, they will not be entitled to redeem their shares of our Class A Stock for a pro rata portion of the funds held in our Trust Account.

Our public stockholders who wish to redeem their shares for a pro rata portion of the Trust Account must, among other things (i) submit a request in writing and (ii) tender their certificates to our Transfer Agent or deliver their shares to the Transfer Agent electronically through the DWAC system at least two business days prior to the Special Meeting. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our Transfer Agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the Transfer Agent. However, because we do not have any control over this process or over the brokers, which we refer to as “DTC,” it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares.

Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. Please see the section entitled “Summary of the Proxy Statement—Redemption Rights” for additional information on how to exercise your redemption rights.

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with the 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 stockholder fails to receive our proxy materials, such stockholder 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 the Business Combination describes the various procedures that must be complied with in order to validly redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed.

General Risks

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:

 

   

changes in the valuation of our deferred tax assets and liabilities;

 

   

expected timing and amount of the release of any tax valuation allowances;

 

   

tax effects of stock-based compensation;

 

   

costs related to intercompany restructurings;

 

 

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changes in tax laws, regulations or interpretations thereof; or

 

   

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.

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.

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.

We are subject to laws, regulations and rules enacted by national, regional and local governments and Nasdaq. In particular, we are required to comply with certain SEC, Nasdaq and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

Events outside of our control, including the COVID-19 pandemic, may increase the uncertainty that the Business Combination will be consummated or negatively affect the results of our operations following the Business Combination.

Periods of market volatility may continue to occur in response to pandemics or other events outside of our control. These types of events could adversely affect our operating results. For example, in December 2019, a novel strain of coronavirus, which first surfaced in Wuhan, China, has resulted in the temporary closure of many corporate offices, retail stores, and manufacturing facilities and factories around the world. As the potential impact on global markets from the coronavirus is difficult to predict, the extent to which the coronavirus may negatively affect the consummation of the Business Combination is uncertain. Any potential impact will depend to a large extent on future developments and new information that may emerge regarding the duration and severity of the coronavirus and the actions taken by authorities and other entities to contain the coronavirus or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect our ability to consummate the Business Combination or the operations of the Company following the Business Combination.

Our Warrants and Forward Purchase Agreements are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.

On April 12, 2021, the SEC staff issued a statement discussing the accounting implications of certain terms that are common in warrants issued by Special Purpose Acquisition Companies. In light of such statement and guidance in ASC 815-40, the Company’s management evaluated the terms of the warrant agreements entered into in connection with the Company’s initial public offering and concluded that the Warrants and Forward Purchase Agreements include provisions that, based on the SEC staff’s statement, preclude the Warrants and Forward Purchase Agreements from being classified as components of equity. As a result, the Company has classified the Warrants and Forward Purchase Agreements as liabilities. Under this accounting treatment, the Company is required to measure the fair value of the Warrants and Forward Purchase Agreements at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside our control. We expect that we will recognize non-cash gains or losses due to the quarterly fair valuation of our Warrants and Forward Purchase Agreement and that such gains or losses could be material.

 

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We have identified a material weakness in our internal control over financial reporting. This material weakness could continue to adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

As described in our Amendment No. 1 to our Annual Report for the fiscal year ended December 31, 2020 on Form 10-K/A, we identified a material weakness in our internal control over financial reporting related to the accounting for a significant and unusual transaction related to the warrants we issued and the forward purchase agreement we entered into in connection with our initial public offering in March 2019. As a result of this material weakness, our management concluded that our internal control over financial reporting was not effective as of December 31, 2020.

To respond to this material weakness, we have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance these processes to better evaluate our research and understanding of the nuances of the complex accounting standards that apply to our consolidated financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Any failure to maintain such internal control could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise, if our financial statements are not filed on a timely basis, we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities. In either case, that could result in a material adverse effect on our business. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our stock.

We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements.

We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.

As a result of the restatement of our previously issued financial statements and material weakness in our internal control over financial reporting described above, the change in accounting for the Warrants and other matters raised or that may in the future be raised by the SEC, we face potential for litigation, inquiries from the SEC and other regulatory bodies, other disputes or proceedings which may include, among others, monetary judgments, penalties or other sanctions, claims invoking the federal and state securities laws and contractual

 

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claims. As of the date of this Amendment, we have no knowledge of any such litigation, inquiries, dispute or proceedings. However, we can provide no assurance that such litigation, inquiries, disputes or proceedings will not arise in the future. Any such litigation, inquiries, disputes or proceedings, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete our initial business combination.

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF THE COMPANY

The Company is providing the following selected historical financial information to assist you in your analysis of the financial aspects of the Business Combination. The Company’s balance sheet data as of December 31, 2020 and 2019, and statement of operations data for the years ended December 31, 2020 and 2019 are derived from the Company’s restated audited financial statements contained in its Amendment No. 1 to its Annual Report for the fiscal year ended December 31, 2020 on Form 10-K/A filed with the SEC and included elsewhere in this proxy statement. The restatement is more fully described in Note 2 of the notes to the Company’s financial statements included elsewhere in this proxy statement. The information is only a summary and should be read in conjunction with the Company’s consolidated financial statements and related notes and “The Companys Managements Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this proxy statement. Our historical results are not necessarily indicative of future results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

 

     As of December 31,  
     2020     2019  

Assets

    

Current assets:

    

Cash

   $ 306,626     $ 1,126,200  

Prepaid expenses

     27,353       108,675  

Other assets

     23,000       —    
  

 

 

   

 

 

 

Total current assets

     356,979       1,234,875  

Cash and investments held in Trust Account

     253,628,041       253,569,459  
  

 

 

   

 

 

 

Total assets

   $ 253,985,020     $ 254,804,334  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable and accrued expenses

   $ 2,611,543     $ 326,401  

Accrued franchise and income taxes

     —         491,781  

Advance from related party

     493       121,694  
  

 

 

   

 

 

 

Total current liabilities

     2,612,036       939,876  

Warrant liability

     33,015,000       20,010,000  

Forward Purchase Agreement liability

     5,185,000       3,396,000  

Deferred underwriting fee payable

     8,750,000       8,750,000  
  

 

 

   

 

 

 

Total liabilities

     49,562,036       33,095,876  
  

 

 

   

 

 

 

Commitments and Contingencies

    

Class A common stock subject to possible redemption, 19,942,298 and 21,670,845 shares at redemption value of approximately $10.00 per share as of December 31, 2020 and 2019, respectively

     199,422,980       216,708,450  

Stockholders’ Equity

    

Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding

     —         —    

Class A common stock, $0.0001 par value; 500,000,000 shares authorized; 5,057,702 and 3,329,155 shares issued and outstanding (excluding 19,942,298 and 21,670,845 shares subject to possible redemption) as of December 31, 2020 and 2019, respectively

     506       333  

Class F common stock, $0.0001 par value; 25,000,000 shares authorized; 6,250,000 shares issued and outstanding as of December 31, 2020 and 2019

     625       625  

Additional paid-in capital

     18,663,057       1,377,759  

(Accumulated deficit) retained earnings

     (13,664,184     3,621,291  
  

 

 

   

 

 

 

Total stockholders’ equity

     5,000,004       5,000,008  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 253,985,020     $ 254,804,334  
  

 

 

   

 

 

 

 

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     For the years ended
December 31,
 
     2020     2019  

Revenues

   $ —       $ —    

General and administrative expenses

     (3,264,815     (526,625
  

 

 

   

 

 

 

Loss from operations

     (3,264,815     (526,625

Change in the fair value of the Warrant liability

     (13,005,000     10,850,000  

Change in the fair value of the Forward Purchase Agreement liability

     (1,789,000     (1,361,000

Initial classification of Forward Purchase Agreement liability

     —         (2,035,000

Offering cost associated with Warrants recorded as liabilities

     —         (1,465,314

Loss on sale of Private Placement Warrants

     —         (5,110,000

Interest income on Trust Account

     910,070       4,472,458  
  

 

 

   

 

 

 

(Loss) income before income taxes

     (17,148,745     4,824,519  

Provision for income taxes

     (136,730     (1,195,607
  

 

 

   

 

 

 

Net (loss) income

   $ (17,285,475   $ 3,628,912  
  

 

 

   

 

 

 

Net (loss) income per share information:

    

Weighted average Class A common stock outstanding (basic and diluted)

     25,000,000       25,000,000  
  

 

 

   

 

 

 

Net income per Class A common stock (basic and diluted)

   $ 0.02     $ 0.12  
  

 

 

   

 

 

 

Weighted average Class F common stock outstanding (basic and diluted)

     6,250,000       6,250,000  
  

 

 

   

 

 

 

Net loss (income) per Class F common stock (basic and diluted)

   $ (2.85   $ 0.09  
  

 

 

   

 

 

 

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA OF LIVEVOX

The following tables present the selected historical consolidated financial and other data for LiveVox as of and for the dates indicated. You should read the selected historical consolidated financial data below in conjunction with “LiveVox Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited annual consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018, related notes, and other financial information for LiveVox included elsewhere in this proxy statement. The selected historical consolidated financial and other data in this section are not intended to replace consolidated financial statements and are qualified in their entirety by the consolidated financial statements and related notes included elsewhere in this proxy statement. The selected historical consolidated financial and other data for the years ended December 31, 2020, 2019 and 2018 has been derived from the audited consolidated financial statements of LiveVox included elsewhere in this proxy statement. The results of operations for the periods presented below are not necessarily indicative of the results to be expected in the future.

As explained elsewhere in this proxy statement, the financial information contained in this section relates to LiveVox, prior to and without giving pro forma effect to the impact of the Business Combination and, as such, the results reflected in this section may not be indicative of the results of the post-combination company going forward. See the sections entitled “Summary of the Proxy Statement” and “Unaudited Pro Forma Condensed Combined Financial Information” included elsewhere in this proxy statement.

 

     Year Ended
December 31,
 
     2020      2019      2018  
Consolidated Statement of Operations Data:    (dollars in thousands)  

Revenue

   $ 102,545      $ 92,755      $ 77,177  

Cost of revenue (1)(2)(5)

     39,476        38,253        33,457  
  

 

 

    

 

 

    

 

 

 

Gross profit

     63,069        54,502        43,720  

Operating expenses:

        

Sales and marketing expense (1)(2)

     29,023        24,423        15,926  

General and administrative expense (1)(2)(3)(4)(6)

     14,291        16,938        9,720  

Research and development expense (1)(2)(5)

     20,160        16,607        12,357  
  

 

 

    

 

 

    

 

 

 

Total operating expenses

     63,474        57,968        38,003  
  

 

 

    

 

 

    

 

 

 

Income (loss) from operations

     (405      (3,466      5,717  

Interest expense, net

     3,890        3,320        3,281  

Other expense (income), net

     154        (22      144  

Total other expense, net