S-1/A 1 tv488113_s1a.htm S-1/A

 

As filed with the U.S. Securities and Exchange Commission on March 19, 2018.

 

Registration No. 333-223168

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

AMENDMENT NO. 1

TO

FORM S-1
REGISTRATION STATEMENT

UNDER
THE SECURITIES ACT OF 1933

 

 

 

TERRAPIN 4 ACQUISITION CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of

incorporation or organization)

6770

(Primary Standard Industrial

Classification Code Number)

82-1710140

(I.R.S. Employer

Identification Number)

 

 

 

2655 South Le Jeune Road, Suite 550

Coral Gables, FL 33134
(212) 710-4100

 

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

 

Nathan Leight
Chairman of the Board
Terrapin 4 Acquisition Corporation
2655 South Le Jeune Road, Suite 550

Coral Gables, FL 33134
(212) 710-4100

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Copies to:

Alan I. Annex, Esq.
Jason T. Simon, Esq.
Greenberg Traurig, LLP
MetLife Building
200 Park Avenue
New York, NY 10166
(212) 801-9200
(212) 801-6400 — Facsimile
Gregg A. Noel, Esq.
Michael Mies, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue
Palo Alto, CA 94301
(650) 470-4500
(650) 470-4570 — Facsimile

 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ¨ Accelerated filer ¨
Non-accelerated filer  x (Do not check if a smaller reporting company)   Smaller reporting company ¨
    Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨

 

 

CALCULATION OF REGISTRATION FEE

Title of each Class of
Security being registered
  Amount
being
Registered
  Proposed
Maximum
Offering Price 
Per Security(1)
    Proposed
Maximum
Aggregate
Offering Price(1)
    Amount of
Registration Fee
 
Units, each consisting of one share of Class A common stock, $0.0001 par value, and one redeemable warrant   23,000,000 Units(2)   $ 10.00     $ 230,000,000     $ 28,635  
Shares of Class A common stock included as part of the units (3)   23,000,000 Shares(4)     -       -       - (6)
Redeemable warrants included as part of the units   23,000,000 Warrants(5)     -       -       - (6)
Total               $ 230,000,000     $ 28,635 (7) 

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

(1)Estimated solely for the purpose of calculating the registration fee.
(2) Includes 3,000,000 units, consisting of 3,000,000 shares of Class A common stock and 3,000,000 redeemable warrants, which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(3) Pursuant to Rule 416 under the Securities Act, there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.
(4) Includes 3,000,000 shares of Class A common stock which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(5) Includes 3,000,000 redeemable warrants which may be issued upon exercise of a 45-day option granted to the underwriters to cover over-allotments, if any.
(6) Pursuant to Rule 457(g) under the Securities Act, no additional fee.
(7) Previously Paid

 

 

 

 

 

 

 

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED MARCH 19, 2018

 

PRELIMINARY PROSPECTUS

 

TERRAPIN 4 ACQUISITION CORPORATION

 

$200,000,000
20,000,000 Units

 

Terrapin 4 Acquisition Corporation is a newly organized blank check 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, which we refer to throughout this prospectus as our initial business combination. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target.

 

This is an initial public offering of our securities. Each unit has an offering price of $10.00 and consists of one share of our Class A common stock and one warrant. Each warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. We have also granted the underwriters a 45-day option to purchase up to an additional 3,000,000 units to cover over allotments, if any.

 

Terrapin 4 Sponsor Partnership, LLC, which we refer to as our sponsor throughout this prospectus, has committed to purchase an aggregate of 3,500,000 warrants at a price of $1.00 per warrant, or $3,500,000 in the aggregate, in a private placement that will close simultaneously with the closing of this offering. We refer to these warrants throughout this prospectus as the private placement warrants. Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein.

 

Nomura Securities International, Inc., an underwriter of this offering, which we refer to as Nomura throughout this prospectus, has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase agreement allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450,000,000 of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

 

 

 

Currently, there is no public market for our units, Class A common stock or our warrants. Our units will be listed on the NASDAQ Capital Market, or NASDAQ, under the symbol “TRTLU” on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Nomura, as the representative of the underwriters, informs us of its decision to allow earlier separate trading and we have satisfied certain conditions. Once the securities comprising the units begin separate trading, we expect that the Class A common stock and warrants will be listed on NASDAQ under the symbols “TRTL” and “TRTLW,” respectively.

 

We will provide our stockholders with the opportunity to redeem all or a portion of their shares of our Class A common stock upon the completion of our initial business combination, subject to the limitations described herein. If we are unable to complete our business combination within 24 months from the closing of this offering, we will redeem 100% of the public shares for cash, subject to applicable law and as further described herein.

 

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements. Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 24 for a discussion of information that should be considered in connection with an investment in our securities. Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. 

 

    Per Unit     Total  
Public offering price   $ 10.00     $ 200,000,000  
Underwriting discounts and commissions(1)   $ 0.49     $ 9,800,000  
Proceeds, before expenses, to us   $ 9.51     $ 190,200,000  

 

(1) Includes $0.40 per unit, or $8,000,000 in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States and held at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination, as described in this prospectus. Does not include the sale of 220,000 founder shares in connection with the underwriting of this transaction from our sponsor to Nomura described further in this prospectus. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See also “Underwriting (Conflicts of Interest)” beginning on page 121 for a description of compensation and other items of value payable to the underwriters.

 

Of the proceeds we receive from this offering and the sale of the private placement warrants described in this prospectus, $200,000,000 or $230,000,000 if the underwriters’ over-allotment option is exercised in full ($10.00 per unit, regardless of whether or not the underwriters exercise any portion of their over-allotment option) will be deposited into a trust account located in the United States and held at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee. 

 

The underwriters are offering the units for sale on a firm commitment basis. The underwriters expect to deliver the units to the purchasers on or about                         , 2018.

 

 

Sole Book-Running Manager

 

Nomura

  

 

 

Co-Managers 

 

SunTrust Robinson Humphrey Janney Montgomery Scott

 

 

                    , 2018

 

 

 

 

SUMMARY

 

This summary only highlights the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.

 

Unless otherwise stated in this prospectus, references to:

 

·“we,” “us,” “company” or “our company” are to Terrapin 4 Acquisition Corporation;
·“public shares” are to shares of our Class A common stock sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market);
·“public stockholders” are to the holders of our public shares, including our initial stockholders and members of our management team to the extent our initial stockholders and/or members of our management team purchase public shares, provided that each initial stockholder’s and member of our management team’s status as a “public stockholder” shall only exist with respect to such public shares;
·“management” or our “management team” are to our executive officers and directors;
·“sponsor” are to Terrapin 4 Sponsor Partnership, LLC, a Delaware limited liability company affiliated with Nathan Leight, our Chairman of the Board, and Guy Barudin, our Chief Operating Officer and Chief Financial Officer;
·“Nomura” are to Nomura Securities International, Inc., an underwriter of this offering;
·“equity-linked securities” are to any debt or equity securities that are convertible, exercisable or exchangeable for shares of our Class A common stock issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt;
· “founder shares” are to shares of our Class F common stock, 7,016,373 of which have been issued to our initial stockholders prior to this offering (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased);
·“common stock” are to Class A common stock and Class F common stock;
· “forward purchase agreement” is to the agreement providing for the sale of an aggregate of 5,065,494 shares of our Class A common stock to Nomura or its assignees in a private placement to occur concurrently with the closing of our initial business combination;
·“forward purchase shares” are to the shares of our Class A common stock to be issued pursuant to the forward purchase agreement;
·“forward financing” are to the agreement of Nomura, if requested by us, to underwrite, arrange and/or syndicate up to $450,000,000 of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination, as described herein;
·“private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously with the closing of this offering; and
·“initial stockholders” are to holders of our founder shares prior to this offering.

 

Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option. 

 

General

 

We are a newly organized blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not identified any potential business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any potential business combination target.

 

We intend to focus our efforts on seeking an initial business combination with a company that has an enterprise value of between $500 million and $2 billion, although a target entity with a smaller or larger enterprise value may be considered. Following the initial business combination, our objective will be to implement or support the acquired company’s operating strategies in order to generate additional value for shareholders. General goals may include additional acquisitions and operational improvements. Our efforts to identify a prospective target business will not be limited to a particular industry.

 

 3 

 

 

We believe that private equity firms, venture capital funds and others will find the opportunity to enter into the initial business combination with us attractive for the following reasons:

 

·Track Record of Our Team. Members of our management team have served in management of three other blank check companies that completed business combinations. Nathan Leight served as chairman of Aldabra Acquisition Corporation, or Aldabra 1, which completed a merger with affiliates of and into Great Lakes Dredge & Dock Corporation, or GLDD (NASDAQ: GLDD), in 2006. Mr. Leight later served as chairman of Aldabra 2 Acquisition Corp., or Aldabra 2, which completed a merger in 2008 with certain paper and packaging businesses of Boise Cascade Company. The resulting company was subsequently listed on the New York Stock Exchange as Boise, Inc. or Boise. Mr. Leight served as the Chairman of Terrapin 3 Acquisition Corporation, or Terrapin 3, from its initial public offering in 2014 until its business combination with Yatra Online, Inc., or YTRA (NASDAQ: YTRA) in 2016. YTRA is the second largest online travel agency in India. Robert Plotkin served as a key member of the team for Aldabra 1, Aldabra 2, and Terrapin 3. Mr. Barudin served as a key member of the team for both Aldabra 2 and Terrapin 3. Stephen Schifrin and Irina Carpov served as key members of the team for Terrapin 3. David McMillan was an advisor to Aldabra 2 in the Boise transaction, has maintained a long relationship with our team, and has an extensive track record advising special purpose acquisition companies like Terrapin in the process of closing their business combinations. We believe private equity firms and venture capital funds will view the consummation of the Aldabra 1, Aldabra 2 and Terrapin 3 mergers as positive factors in considering whether to sell a portfolio company to us.

 

  · Minimum Funding Available as a Result of the $50 Million Forward Purchase Agreement and the Up to $450 Million Forward Financing. Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura is unable to identify an investor to assume Nomura’s purchase obligation under the forward purchase agreement and Nomura instead exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The funds from the forward purchase agreement will be used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement may be used for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination, subject to the satisfaction of the conditions to funding. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450,000,000 of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Nomura is a wholly owned subsidiary of Nomura Holding America Inc., which, in turn, is a wholly owned subsidiary of Nomura Holdings, Inc., or the Nomura Group (TSE: 8604; NYSE: NMR).  The Nomura Group is an Asia-headquartered global investment bank with an integrated network spanning over 30 countries. The Nomura Group services the needs of individuals, institutions, corporates and governments through three business divisions: Retail, Asset Management, and Wholesale (Global Markets and Investment Banking).  As of September 30, 2017, the Nomura Group had $391.6 billion in total assets and 28,857 employees globally (2,348 in the Americas, 3,047 in Europe, Middle East, and Africa, 6,756 in Asia excluding-Japan and 16,706 in Japan).

 

 4 

 

 

The Nomura Group’s Wholesale Division comprises Global Markets, which offers research, sales and trading of global securities, and Investment Banking, which offers capital raising and advisory services.  The Investment Banking platform provides a variety of advisory and capital-raising solutions to corporations, financial institutions, private equity, governments and public-sector organizations around the world. Collaborating across geographies, industries and products, Nomura provides comprehensive and innovative financing, advisory and risk solutions to clients.  Product offerings include:

 

·Mergers and Acquisitions: The Nomura Group acts as a financial advisor to identify and facilitate strategic merger and acquisition, sale of business or alliance opportunities for corporate, financial institutions and sponsor clients, with dedicated M&A teams in Asia, EMEA and the Americas work across borders and time zones to deliver holistic support to its clients globally;

 

·Capital Raising:  In Equity Capital Markets, the Nomura Group originates and executes equity and equity-linked transactions, including IPOs, rights issues, accelerated bookbuilds and convertibles.  Debt Capital Markets helps clients execute local and foreign-currency debt transactions with specialized teams servicing financial institutions, corporates, public sector agencies and sovereigns. Acquisition and Leveraged Finance arranges financing for leveraged buyouts and corporate acquisitions along with on-going refinancing needs using a variety of debt products;

 

·Solutions: Solutions teams apply a broad range of Fixed Income solutions, Equity related solutions and Insurance solutions to address the various risks faced by clients.  The team is also dedicated to understanding the capital and risk management needs of insurance companies and developing cutting-edge Insurance Solutions to help them respond to these challenges. These include securitization products, structured reinsurance and derivative hedging solutions for complex insurance-specific asset and liability risks.

 

The Nomura Group’s Investment Banking platform offers services to a variety of industry sectors, including:

 

·Business Services;

 

·Consumer / Retail;

 

·Financial Institutions;

 

·Healthcare;

 

·Industrials;

 

·Natural Resources & Power;

 

·Real Estate / Gaming / Lodging / Leisure; and

 

·Telecom / Media / Technology.

 

We believe private equity firms, venture capital firms and management teams will view the track record of our team and the Nomura Group’s financial commitments, deal sourcing, and execution capabilities as positive attributes contributing to our ability to identify attractive acquisition opportunities, and structure and complete a successful business combination.

 

With respect to the above transactions, past performance by Mr. Leight, our team and/or Nomura, its affiliates and employees, is not a guarantee either of success with respect to any business combination we may consummate or that we will be able to locate a suitable candidate for our initial business combination.

 

 5 

 

 

Initial Business Combination

 

NASDAQ rules require that our initial business combination be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, with respect to the satisfaction of such criteria.

 

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

 

We do not have any specific business combination under consideration. Our officers and directors have neither individually identified nor considered a target business nor have they had any discussions regarding possible target businesses amongst themselves or with our underwriters or other advisors. Nomura, through its financial advisory business, is continuously made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination. We will not consider a business combination with any company that has been identified by or to Nomura as an acquisition candidate for our initial business combination prior to the closing of this offering. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition.

 

We have identified certain general criteria and guidelines for evaluating prospective target businesses. We will use these criteria and guidelines, but we may decide to enter into our initial business combination with a target business that does not meet some or all of these criteria and guidelines. Fundamentally, we intend to focus on companies with positive operating cash flow, significant assets, and experienced and successful management teams that are also well-positioned to capitalize on one or more of the following investment themes.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant.

 

·Fundamental Changes in Socio-Economics and Demographics. We may focus on candidates who would benefit from global and regional socio-economic and demographic trends including, but not limited to, growing consumer demand in emerging markets and aging populations in developed markets. While these trends provide opportunities for broad market growth of sales and profits, we believe that certain companies may not have altered their strategy to specifically prepare for such trends. If we acquire such a company, we intend to support strategies aimed at accelerating its ability to benefit from the effect of these types of fundamental economic changes on its business.

 

 6 

 

 

·Under-managed Intellectual Property, Proprietary Business Practices and/or Other Intangible Assets. We intend to focus on companies that have potentially underexploited intellectual property, proprietary business practices or other under-managed assets. If we acquire such a company, we intend to focus on applying new resources, technologies, or business models to leverage or more fully develop its intangible assets, and thereby increase growth and improve profitability.

 

·Competitive Advantage. We will seek targets that can take advantage of barriers to entry of competition for its products or services. For example, companies with assets that are difficult to replicate, either due to proprietary technology, location, or simply because their replacement cost exceeds the capacity of competitors to invest, may be able to earn sustainable profits.

 

·Fundamental Changes in Competitive Dynamics. We may seek targets in industries in which fundamental changes, regardless of their source, are altering the relative advantages enjoyed by new and old competitors. Certain markets may be undergoing disruptive change or shifts in historic patterns of competition. This may occur in both rapidly growing and mature, stable industries. We believe there are good investments not only in high-growth industries but also in more mature sectors in which significant restructuring drives better asset utilization and improved pricing discipline.

 

·Increasingly Networked Economies. We may focus on targets that benefit from increasing connectivity between production and consumption in geographic markets or industrial sectors. We believe that accelerated change in the deployment of telecommunication grids and electronic commerce in both developing and developed economies, and more intensive use of air, rail, road, and maritime transportation to link markets, may create growth opportunities for target companies that may benefit from funding in the public markets available through a business combination with us.

 

·Technology Disrupting Markets. We may seek candidates either benefiting from new technology or providing technology products or services that change the competitive environment in their target markets. Continuing and accelerating advances in hardware, software, and materials sciences create opportunities to disrupt traditional industries and also may profoundly influence the development of new types of businesses. In particular, the novel use of technology to innovate the gathering and analysis of large amounts of data may accelerate business growth and shifts in market share.

 

·Increasingly Large Private Technology Companies. We may seek targets among the increasingly large number of private technology companies. According to Bloomberg Data, funds raised in 2006 or earlier held more than $210 billion of unrealized assets as of June 2016. As a result, the number of large private companies has increased, particularly in the technology sector. PitchBook Data, Inc. listed 215 privately held U.S. technology companies with valuations in excess of $1.0 billion as of February 9, 2018. We believe investors in these entities will want liquidity at some point and that a business combination with us can provide flexibility not available in traditional IPOs.

 

Sourcing of Potential Business Combination Targets

 

We believe certain non-public companies and their shareholders can benefit from a transaction with us. Acquisition candidates are entities that may need stable, permanent equity financing, but may currently have limited access to the public markets. While targets may be either independent entities or divisions of larger organizations, we believe there is an opportunity for us to provide value to current owners of targets that fall into four general categories.

 

(1)Private Equity Fund Portfolio Companies — Substantial amounts of capital have been invested by private equity and venture capital firms. According to PitchBook Data, Inc., U.S. private equity funds raised approximately $2.3 trillion from 2007 through 2017 in more than 2,120 different funds. Venture capital funds raised approximately $292 billion in the U.S. during the same period. From 2007 through 2016, the median hold time of companies held by private equity funds increased from approximately 3.6 years to more than 5.2 years. Therefore, we believe that there should be a significant number of portfolio companies available for sale from private equity firms in the coming years as they seek liquidity. These funds have an ongoing need for investment realizations, particularly in older vintage portfolios.

 

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(2)Entities Struggling with Complex or Failed Transactions — Public market exits are increasingly challenging for many private company shareholders. According to JP Morgan Asset Management, the number of publicly-traded companies declined from more than 8,000 to less than 4,400 between 1996 and 2016. According to Bloomberg Data and SEC filings, the number of IPOs completed annually between the 1996 and 2016 declined at a compound average rate of 10% annually. Companies seeking to access the public market through traditional IPOs or to sell to financial buyers may face obstacles to closing those transactions. Failed auctions and failed IPOs occur for a variety of reasons. Public or strategic investors may have previously judged these transactions to be too complicated to close in a timely manner. Public markets may simply be inaccessible for IPOs due to economic conditions or negative investor sentiment at the time the transaction was prepared to begin. A business combination with us can be a solution for investors in firms that have experienced these types of failed transactions.

 

(3)Entities Held by Non-Traditional Investors — Financial institutions, banks, non-bank lenders, hedge funds, or any other investor who does not typically hold and manage operating assets, may be anxious to divest their holdings. In the event that those types of investors are experiencing liquidation or other pressures in their core businesses, they may need to divest certain holdings in order to maximize the return on their portfolios or from their other assets.

 

(4)Divestiture of Non-Core Assets by Large Conglomerates — Certain multi-unit companies may face the need to rationalize their business by sale or spin-off of operating units due to pressures from lenders, customers, suppliers, or shareholders.

 

We may or may not consummate our business combination with a company that falls into one of the categories above.

 

In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with a company that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, will obtain an opinion from an independent accounting firm or an independent investment banking firm which is a member of FINRA that our initial business combination is fair to our company from a financial point of view.

 

Members of our management team may directly or indirectly own common stock and warrants following this offering, and, accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination. Our sponsor was formed in 2017 by some of the members of our management team for the purpose of serving as our sponsor. Mr. Leight, our Chairman and Chief Executive Officer, is the sole managing member and majority owner of our sponsor, and certain other members of our management team have financial interests in our sponsor.

 

Each of our sponsor, officers and directors presently has, and any of them in the future may have, additional fiduciary or contractual obligations to another entity pursuant to which such sponsor, officer or director is required to present a business combination opportunity to such entity. Accordingly, if any of our sponsor, officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations, it, he or she will honor its, his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination.

 

Our sponsor and our executive officers, directors and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an officer or director of, another blank check company that is seeking an initial business combination requiring total consideration to the seller of less than $1.25 billion until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within the time frame set forth in this prospectus.

 

Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our business combination.

 

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We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

 

Our executive offices are located at 2655 South Le Jeune Road, Suite 550, Coral Gables, Florida 33134 and our telephone number is (212) 710-4100.

 

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The Offering

 

In making your decision whether to invest in our securities, you should take into account not only the backgrounds of the members of our management team, but also the special risks we face as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled “Risk Factors” beginning on page 24 of this prospectus.

 

Securities offered  

20,000,000 units, at $10.00 per unit, each unit consisting of:

 

·    one share of Class A common stock; and

·    one warrant. Each warrant entitles its holder to purchase one share of Class A common stock.

     
NASDAQ symbols  

Units: “TRTLU”

Class A common stock: “TRTL”

Warrants: “TRTLW”

     
Trading commencement and separation of common stock and warrants   The units will begin trading on or promptly after the date of this prospectus.  The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Nomura, as the representative of the underwriters, informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin.  Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities.  Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants.
     
Separate trading of the Class A common stock and warrants is prohibited until we have filed a Current Report on Form 8-K   In no event will the Class A common stock and warrants be traded separately until we have filed a Current Report on Form 8-K with the SEC containing an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering.  We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place two business days from the first trading of the units on NASDAQ. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.  
Units:    
     
Number outstanding before this offering   0
     
Number outstanding after this offering   20,000,000(1)
     
Common stock:    
     
Number outstanding before this offering   7,016,373(2) (4)
     
Number outstanding after this offering   26,266,373 (1)(3) (4)
     
Warrants:    
     
Number outstanding before this offering   0
     
Number of private placement warrants to be sold in a private placement simultaneously with this offering   3,500,000

 

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Number of warrants to be outstanding after this offering and the private placement   23,500,000(1)
     
Exercisability   Each warrant offered in this offering is exercisable to purchase one share of our Class A common stock, subject to adjustment as provided herein.  

 

(1) Assumes no exercise of the underwriters’ over-allotment option.
(2) Includes up to 750,000 founder shares subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised such that the founder shares will represent 20% of the shares of our common stock issued and outstanding upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. Up to 1,266,373 founder shares are subject to forfeiture following the consummation of this offering depending on the extent to which the forward purchase shares are purchased, such that the founder shares will represent 20% of the shares of our common stock issued and outstanding upon the consummation of this offering if none of the forward purchase shares are ultimately purchased.

(3) Includes 20,000,000 public shares and 6,266,373 founder shares, of which up to 1,266,373 founder shares are subject to forfeiture depending on the extent to which the forward purchase shares are purchased, such that the founder shares will represent 20% of the shares of our common stock issued and outstanding upon the consummation of this offering if none of the forward purchase shares are ultimately purchased.

(4) Founder shares are classified as shares of Class F common stock, which shares, at the time of this offering, are convertible into Class A common stock on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder share anti-dilution.”

 

Exercise price   $11.50 per whole share, subject to adjustments as described herein.
     
Exercise period  

The warrants will become exercisable on the later of:

·    30 days after the completion of our initial business combination, and

·    12 months from the closing of this offering;

 

provided in each case that we have an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).

 

We are not registering the shares of Class A common stock issuable upon exercise of the warrants at this time. However, we have agreed that as soon as practicable, but in no event later than fifteen (15) business days after the closing of our initial business combination, we will use our best efforts to file with the SEC and have an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed; provided, that if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement.

 

The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account.

 

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Redemption of warrants  

Once the warrants become exercisable, we may call the warrants for redemption (except as described therein with respect to the private placement warrants):

·     in whole and not in part;

·     at a price of $0.01 per warrant;

·     upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

·     if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date we send to the notice of redemption to the warrant holders.

 

We will not redeem the warrants unless an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the warrants is effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. 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.

 

If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Please see the section entitled “Description of Securities — Warrants — Public Stockholders’ Warrants” for additional information.

 

None of the private placement warrants will be redeemable by us so long as they are held by our sponsor of the private placement warrants or its permitted transferees.

     
Forward Purchase Agreement  

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein.

 

The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount.

 

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The forward purchase agreement provides that Nomura (or its assignees) is entitled to registration rights with respect to the forward purchase shares. 

 

Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

The funds from the forward purchase agreement will be used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement may be used for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination, subject to the satisfaction of the conditions to funding.

     
Forward Financing   Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination.  We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us.  Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.
     
Founder shares   In June 2017, our sponsor and an affiliate thereof purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000. Prior to the initial investment in the company of $25,000 by our sponsor and its affiliate, the company had no assets, tangible or intangible.  The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura for an aggregate purchase price of $4,587.71, or approximately $0.0022 per share.  Also prior to the consummation of this offering, our sponsor sold an aggregate of 75,000 founder shares to Messrs. Kagan, Pollack, Rosston and Valner, each an independent director nominee, and Mr. Jeffrey Brown, a director nominee, for a purchase price of approximately $0.0022 per share. Prior to the consummation of this offering, the initial stockholders will forfeit an aggregate of 4,483,627 founder shares, such that at the time of this offering the initial stockholders own an aggregate of 7,016,373 founder shares (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased). Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction. Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering), calculated on a pro forma basis assuming the issuance of all of the forward purchase shares.  If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares (Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing).  Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors, amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions other than approval of our initial business combination.  Up to 750,000 founder shares will be subject to forfeiture by certain of our initial stockholders depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 founder shares are subject to forfeiture by certain of our initial stockholders (or their permitted transferees) depending on the extent to which the forward purchase shares are purchased.

 

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The founder shares are identical to shares of Class A common stock included in the units being sold in this offering, except that:

 

·     the founder shares are subject to certain transfer restrictions, as described in more detail below;

·     our initial stockholders, officers, directors and director nominees have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares in connection with the completion of our initial business combination and to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within the prescribed time frame). If we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination; and

·     the founder shares are subject to certain anti-dilution rights, as described in more detail below.

     
Transfer restrictions on founder shares   Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until one year after our initial business combination (except as described herein under “Principal Stockholders — Transfers of Shares and Warrants Held by Our Initial Stockholders”).  We refer to such transfer restrictions throughout this prospectus as the lock-up.  Notwithstanding the foregoing, if the last sale price of our 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 our initial business combination, or (2) if we consummate a transaction after our initial business combination which results in our stockholders having the right to exchange their shares for cash or property, the founder shares will be released from the lock-up.
     
Founder share anti-dilution   The 7,016,373 shares of our Class F common stock, par value $0.0001 per share, that will be issued and outstanding at the time of this offering will be convertible at the time of this offering into shares of Class A common stock at a ratio of one-for-one.  In the case that additional shares of Class A common stock, or equity-linked securities, are deemed issued in excess of the amounts offered in this prospectus and related to the closing of the business combination, the ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of Class A common stock sold pursuant to the prospectus, on a pro forma basis assuming the issuance of all of the forward purchase shares, plus all common shares or equity-linked securities deemed to be issued in connection with the business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination or pursuant to warrants issued to our sponsor. Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing.

 

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Private placement warrants   Our sponsor has committed to purchase an aggregate of 3,500,000 warrants at a price of $1.00 per warrant, or $3,500,000 in the aggregate, in a private placement that will close simultaneously with the closing of this offering.  Each private placement warrant is exercisable to purchase one share of our Class A common stock at a price of $11.50 per share subject to adjustment as provided herein. The purchase price of the private placement warrants will be added to the net proceeds from this offering to be held in the trust account less offering expenses, existing loans from shareholders and $950,000 in working capital to be held outside of the trust.  If we do not complete our initial business combination within 24 months from the closing of this offering, the proceeds of the sale of the private placement warrants will be used, in part, to fund the redemption of our public shares (subject to the requirements of applicable law) and the private placement warrants will expire worthless.  The private placement warrants will be non-redeemable so long as they are held by our sponsor or its permitted transferees (except as described below under “Principal Stockholders — Transfers of Founder — Shares and Private Placement Warrants”).  If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.  Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis.

 

Transfer restrictions on private placement warrants   The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination.
     
Proceeds to be held in trust account  

The rules of NASDAQ provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the $203,500,000 (or $233,500,000 if the underwriters’ over-allotment option is exercised in full) in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full) ($10.00 per unit), will be deposited into a segregated trust account located in the United States and held at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee. An estimated $750,000 of the proceeds of this offering will be used to pay expenses in connection with the closing of this offering and an estimated $950,000 of the proceeds from this offering will be used for working capital following this offering. In addition, our sponsor has committed up to $1,000,000 in working capital loans to be provided to us to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination. The proceeds to be placed in the trust account include $8,000,000 (or $9,800,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions.

 

Except for the withdrawal of interest income to pay our taxes and to fund our working capital requirements, none of the funds held in the trust account will be released from the trust account until the earlier of the completion of our initial business combination and the redemption of 100% of our public shares if we are unable to complete our initial business combination within the allotted time period. The proceeds deposited in the trust account could become subject to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.

 

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Anticipated expenses and funding sources  

Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except for the withdrawal of interest income to pay our taxes and to fund our working capital requirements. Based upon current interest rates, we expect the trust account to generate approximately $2,000,000 of interest income per year. Unless and until we complete our initial business combination, we may pay our expenses only from:

 

·     the net proceeds of this offering not held in the trust account, which will be approximately $950,000 in working capital after the payment of approximately $750,000 in expenses relating to this offering;

·     any interest income earned from the trust account net of taxes payable and any amounts payable to us to fund working capital requirements; and

·     working capital loans from our sponsor, its affiliates or designees, who have committed up to $1,000,000 to be provided to us in the event funds held outside of the trust are insufficient to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination and may, but are not obligated to, loan us additional funds to fund our expenses relating to investigating and completing our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,000,000 of any such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender at the time of the business combination. The warrants would be identical to the private placement warrants issued to the initial stockholders

     
Conditions to completing our initial business combination  

There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. NASDAQ rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination.

 

If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of FINRA. We will complete our initial business combination only if the post-transaction company in which our public stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on the structure of the initial business combination and on valuations ascribed to the target and us in the business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test, provided that in the event that the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

 

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Permitted purchases of public shares by our affiliates  

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to refrain from purchasing shares during certain blackout periods and when they are in possession of any material nonpublic information and to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as such purchases will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either enter make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

 

We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our initial stockholders, directors, executive officers, advisors or their affiliates will not make any purchases if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

     
Redemption rights for public stockholders upon completion of our initial business combination   We will provide our stockholders with the opportunity to redeem all or a portion of their Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding Class A common stock issued in this initial public offering, subject to the limitations described herein.  The amount in the trust account is initially anticipated to be $10.00 per public share (regardless of whether or not the underwriters exercise any portion of the over-allotment option).  The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions that we will pay to the underwriters.  There will be no redemption rights upon the completion of our initial business combination with respect to our warrants.  Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares in connection with the completion of our business combination.
     
Manner of conducting redemptions   We will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either in connection with a stockholder meeting called to approve the business combination or by means of a tender offer.  The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement.  Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20.0% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval.  We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement or we choose to seek stockholder approval for business or other legal reasons.

 

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If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

 

·     conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, which regulate issuer tender offers, and

·     file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

 

Upon the public announcement of our business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our common stock in the open market, in order to comply with Rule 14e-5 under the Exchange Act.

 

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

 

If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will:

 

·     conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

·     file proxy materials with the SEC.

 

If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.

 

Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: cash consideration to be paid to the target or its owners, cash to be transferred to the target for working capital or other general corporate purposes or the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders thereof.

 

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Limitation on redemption rights of stockholders holding 10% or more of the shares sold in this offering if we hold stockholder vote   Notwithstanding the foregoing redemption rights, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 10% of the shares sold in this offering (unless such restriction is waived by us in our sole discretion).  We believe the restriction above will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as a means to force us or our management to purchase their shares at a significant premium to then-current market price or on other undesirable terms.  Absent this provision, a public stockholder holding more than an aggregate of 10% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our management at a premium to then-current market price or on other undesirable terms.  By limiting our stockholders’ ability to redeem to no more than 10% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.  However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold 10% or more of the shares sold in this offering) for or against our business combination.
     
Redemption rights in connection with proposed amendments to our certificate of incorporation   Some other blank check companies have a provision in their charter which prohibits the amendment of certain charter provisions.  Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended only if approved by holders of 65% of our common stock.  In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our common stock, subject to applicable provisions of the Delaware General Corporation Law, or the DGCL, or applicable stock exchange rules.  Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose.  Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares.  Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares in connection with the completion of our initial business combination.

 

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Release of funds in trust account on closing of our initial business combination   On the completion of our initial business combination, all amounts held in the trust account will be released to us.  We will use these funds to pay amounts due to any public stockholders who exercise their redemption rights as described above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay the underwriters their deferred cash underwriting commissions, to pay all or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial business combination.  If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
     
Redemption of public shares and distribution and liquidation if no initial business combination  

Our sponsor, executive officers, directors and director nominees have agreed that we will have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete our initial business combination within such time period, we will: cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), and less up to $50,000 to pay dissolution expenses, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the allotted time period.

 

Our initial stockholders have entered into letter agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering. However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted time frame. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the allotted time frame and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares.

 

Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules).

 

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Limited payments to insiders  

There will be no finder’s fees, reimbursements or cash payments made to our sponsor, officers or directors, or our or their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering held in the trust account prior to the completion of our initial business combination:

 

·     Repayment of up to $140,000 in loans and advances made to us by an affiliate of our sponsor, which it has committed to cover offering-related and organizational expenses;

·     Repayment of any working capital loans our sponsor, its affiliates or designees have committed to make to us to cover working capital costs and to finance transaction costs in connection with an intended initial business combination following this offering;

·     Payment to an affiliate of our sponsor of a total of $16,875 per month for office space, utilities and secretarial support;

·     Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination;

·     Repayment of loans (other than the $1,000,000 in loans which it has committed to make) which may be made by our sponsor or an affiliate of our sponsor or certain of our officers and directors to finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto; and

·     underwriting discounts, commissions and other fees and expenses payable to the underwriters.

 

There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf.

 

Nomura will be paid a market-based placement fee on the gross proceeds from the sale of the forward purchase shares upon the consummation of an initial business combination. In addition, the forward purchase agreement provides that Nomura (or its assignees) is entitled to registration rights with respect to the forward purchase shares. 

 

Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates.

     
Audit Committee   We have established and will maintain an audit committee, which will be composed entirely of independent directors to, among other things, monitor compliance with the terms described above and the other terms relating to this offering.  If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering.  For more information, see the section entitled “Management — Committees of the Board of Directors — Audit Committee.”

 

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Conflicts of Interest   Because Nomura will own 21.4% of our outstanding shares, prior to the consummation of this offering, consisting of 1,503,930 founder shares that our sponsor sold to Nomura, Nomura is deemed to have a “conflict of interest” under FINRA Rule 5121. Accordingly, this offering is being made in compliance with the applicable provisions of FINRA Rule 5121. FINRA Rule 5121 prohibits Nomura from making sales to discretionary accounts without the prior written approval of the account holder and requires that a “qualified independent underwriter,” as defined in FINRA Rule 5121, participate in the preparation of the registration statement and exercise its usual standards of due diligence with respect thereto. SunTrust Robinson Humphrey, Inc. is assuming the responsibilities of acting as the qualified independent underwriter in this offering and is undertaking the legal responsibilities and liabilities of an underwriter under the Securities Act, which specifically include those inherent in Section 11 thereunder. SunTrust Robinson Humphrey, Inc. will not receive any additional fees for serving as qualified independent underwriter in connection with this offering.

 

Risks

 

We are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.” You should carefully consider these and the other risks set forth in the section entitled “Risk Factors” beginning on page 24 of this prospectus.

 

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SUMMARY FINANCIAL DATA

 

The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus. We have not had any significant operations to date, so only balance sheet data is presented.

 

    December 31, 2017  
    Actual     As Adjusted  
Balance Sheet Data:                
Working capital (deficiency) (1)   $ (146,563 )   $ 192,971,221  
Total assets (2)   $ 192,804     $ 200,971,221  
Total liabilities (3)   $ 171,583     $ 8,000,000  
Value of Class A common stock that may be redeemed in connection with our initial business combination ($10.00 per share) (4)   $     $ 187,971,220  
Stockholders’ equity (5)   $ 21,221     $ 5,000,001  

  

(1) The “as adjusted” calculation includes $200,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants plus $950,000 in cash held outside the trust account, plus $21,221 of actual stockholders’ equity at December 31, 2017, less $8,000,000 of deferred cash underwriting commissions. The “as adjusted” calculation excludes gross proceeds of $50,000,000 from the sale of the forward purchase shares to occur concurrently with the consummation of our initial business combination.

(2) The “as adjusted” calculation equals $200,000,000 cash held in trust from the proceeds of this offering and the sale of the private placement warrants, plus $950,000 in cash held outside the trust account, plus $21,221 of actual stockholders’ equity at December 31, 2017.

(3) The “as adjusted” calculation includes $8,000,000 of deferred cash underwriting commissions.

(4) The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the “as adjusted” stockholders’ equity, which is set to approximate the minimum net tangible assets threshold of at least $5,000,001.

(5) Excludes 18,797,122 shares of Class A common stock purchased in the public market which are subject to redemption in connection with our initial business combination. The “as adjusted” calculation equals the “as adjusted” total assets, less the “as adjusted” total liabilities, less the value of common shares that may be redeemed in connection with our initial business combination (approximately $10.00 per share).

 

The “as adjusted” information gives effect to the sale of the units in this offering, the sale of the private placement warrants, repayment of an aggregate of $140,000 in loans and advances made to us by an affiliate of our sponsor, and the payment of the estimated expenses of this offering. The “as adjusted” total assets amount includes the $200,000,000 held in the trust account ($230,000,000 if the underwriters’ over-allotment option is exercised in full) for the benefit of our public stockholders, which amount, less deferred cash underwriting commissions, will be available to us only upon the completion of our initial business combination within 24 months from the closing of this offering. The “as adjusted” working capital and “as adjusted” total assets include $8,000,000 being held in the trust account (up to $9,800,000 if the underwriters’ over-allotment option is exercised in full) representing deferred cash underwriting commissions. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.

 

If no business combination is completed within the allotted time frame, the proceeds then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), will be used to fund the redemption of our public shares. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering.

 

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RISK FACTORS

 

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment.

 

We are a newly formed company with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.

 

We are a recently formed company with no operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete our business combination. If we fail to complete our business combination, we will never generate any operating revenues.

 

Our public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.

 

We may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder approval under applicable state law or the rules of NASDAQ or if we decide to hold a stockholder vote for business or other reasons. For instance, NASDAQ rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of our outstanding shares, we would seek stockholder approval of such business combination. However, except for as required by law, the decision as to whether we will seek stockholder approval of a proposed business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a majority of the outstanding shares of our common stock do not approve of the business combination we consummate. Please see the section entitled “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.

 

If we seek stockholder approval of our initial business combination, our initial stockholders have agreed to vote in favor of such initial business combination, regardless of how our public stockholders vote.

 

Unlike many other blank check companies in which the initial stockholders 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 their founder shares, as well as any public shares purchased during or after this offering, in favor of our initial business combination. Our initial stockholders will own approximately 23.9% (or 23.4% if the underwriters’ over-allotment option is exercised in full) of our outstanding shares of common stock immediately following the completion of this offering. Accordingly, if we seek stockholder approval of our initial business combination, it is more likely that the necessary stockholder approval will be received than would be the case in certain other blank check companies if our initial stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by our public stockholders.

 

Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the business combination.

 

At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents delivered to our public stockholders in which we describe our initial business combination.

 

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In evaluating a prospective target business for our initial business combination, our management will rely on the availability of all of the funds from the sale of the forward purchase shares to be used as part of the consideration to the sellers in the initial business combination. If the sale of some or all of the forward purchase shares fails to close, we may lack sufficient funds to consummate our initial business combination.

 

We have entered into the forward purchase agreement pursuant to which Nomura has agreed to purchase an aggregate of 5,065,494 forward purchase shares for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with our initial business combination. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The funds from the sale of forward purchase shares may be used as part of the consideration to the sellers in our initial business combination, expenses in connection with our initial business combination or for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination. However, if the sale of the forward purchase shares does not close by reason of the failure by Nomura and/or one or more of its assignees to fund the purchase price for their forward purchase shares, for example, we may lack sufficient funds to consummate our initial business combination. In addition to Nomura’s excusal right, each purchaser’s obligation to purchase the forward purchase shares is subject to termination prior to the closing of the sale of the forward purchase shares by mutual written consent of the company and such investor, or, automatically: (i) if this offering is not consummated on or prior to June 30, 2018; (ii) if the gross proceeds from this offering do not equal or exceed $150 million; (iii) if our initial business combination is not consummated within 24 months from the closing of this offering (unless extended in accordance with our amended and restated certificate of incorporation); (iv) if we or our sponsor becomes bankrupt or insolvent; or (v) if Nathan Leight is convicted in a criminal proceeding for a crime involving fraud or dishonesty. In the event of any such failure to fund by an investor or any obligation is so terminated, we may not be able to obtain additional funds to account for such shortfall on terms favorable to us or at all. Any such shortfall would also reduce the amount of funds that we have available for working capital of the post-business combination company. While Nomura has represented to us that it has sufficient funds to satisfy its obligations under the forward purchase agreement, we have not obligated Nomura to reserve funds for such obligations.

 

Nomura has the ability to excuse itself from its obligation to purchase forward purchase shares for any reason.

 

Pursuant to the forward purchase agreement with Nomura, Nomura has committed to purchase 5,065,494 forward purchase shares (unless one or more other investors assume all or a portion of its purchase obligations). Pursuant to such agreement, if, upon notification of our intention to enter into an initial business combination, Nomura decides not to purchase such forward purchase shares for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest, it will be excused from its obligation to purchase such forward purchase shares. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. This excusal right could give Nomura significant influence over our decision of whether or not to proceed with an initial business combination with a particular target business. We may not be able to obtain any or enough additional funds to account for such shortfall, which may impact our ability to consummate an initial business combination. Any such shortfall would also reduce the amount of funds that we have available for working capital of the post-business combination company.

 

If any potential assignees of Nomura’s obligation to purchase forward purchase shares purchase large amounts of public shares in the open market, they may attempt to leverage their redemption rights in order to affect the outcome of a potential initial business combination.

 

Any assignees of Nomura’s obligation to purchase forward purchase shares will have redemption rights with respect to any public shares they own, subject to the limitation that under the Company’s amended and restated certificate of incorporation, that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of Exchange Act), is restricted from redeeming its shares with respect to more than an aggregate of 10% or more of the shares of Class A common stock sold in this offering, without the prior consent of the Company. If management proposes an initial business combination that some or all of these investors (if any) are not in favor, such investors may decide to purchase public shares in the open market and seek to leverage their redemption rights to influence whether such business combination is consummated. This could result in our having to negotiate for more favorable terms for these investors, which could jeopardize our ability to successfully consummate an initial business combination.

 

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The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination with a target.

 

We may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. While we will have access to the proceeds from the sale of the forward purchase shares, subject to the conditions of the forward purchase agreement, if too many public stockholders exercise their redemption rights, we may not be able to meet such closing condition and, as a result, may not be able to proceed with the business combination. Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.

 

The ability of our stockholders to exercise redemption rights with respect to a large number of our shares may prevent us from completing a business combination and optimizing our capital structure.

 

At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. If a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to accommodate the resulting reduction in cash available in the trust account. As a result, raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure.

 

The ability of our stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.

 

If our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.

 

The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination on terms that would produce value for our stockholders.

 

Any potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination within 24 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the end of the allotted time frame. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.

 

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We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.

 

Our sponsor, executive officers, directors and director nominees have agreed that we must complete our initial business combination within 24 months from the closing of this offering. We may not be able to find a suitable target business and complete our initial business combination within such time period. If we have not completed our initial business combination within such time period, we will: cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

If we seek stockholder approval of our initial business combination, our sponsor, directors, executive officers, advisors and their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of our common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.

 

In addition, if such purchases are made, the public “float” of our common stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

 

We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. See “Proposed Business — Effecting our Initial Business Combination— Tendering stock certificates in connection with a tender offer or redemption rights.”

 

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You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

 

Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, and the redemption of our public shares if we are unable to complete an initial business combination within 24 months from the closing of this offering, subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we are unable to complete an initial business combination within the allotted time period is not completed for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders for approval prior to the distribution of the proceeds held in our trust account. In that case, public stockholders may be forced to wait beyond allotted time period before they receive funds from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

 

NASDAQ may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

Our units will be listed on NASDAQ on or promptly after the date of this prospectus and our Class A common stock and warrants will be listed on or promptly after their date of separation. Although after giving effect to this offering we expect to meet, on a pro forma basis, the minimum initial listing standards set forth in the NASDAQ listing standards, we cannot assure you that our securities will be, or will continue to be, listed on NASDAQ in the future or prior to our initial business combination. In order to continue listing our securities on NASDAQ prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 round-lot holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with NASDAQ’s initial listing requirements, which are more rigorous than NASDAQ’s continued listing requirements, in order to continue to maintain the listing of our securities on NASDAQ. For instance, our stock price would generally be required to be at least $4 per share and our stockholders’ equity would generally be required to be at least $5 million. We cannot assure you that we will be able to meet those initial listing requirements at that time.

 

If NASDAQ delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

 

·a limited availability of market quotations for our securities;
·reduced liquidity for our securities;
·a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
·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 we expect that our units and eventually our Class A common stock and warrants will be listed on NASDAQ, our units, Class A common stock and warrants will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the state of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on NASDAQ, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

 

You will not be entitled to protections normally afforded to investors of many other blank check companies.

 

Since the net proceeds of this offering and the sale of the private placement warrants are intended to be used to complete an initial business combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and the sale of the private placement warrants and will file a Current Report on Form 8-K, including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering to offerings that comply with Rule 419, please see “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”

 

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If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 10% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 10% of our Class A common stock.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 10% of the shares sold in this offering, which we refer to as the “Excess Shares.” However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our business combination. And as a result, you will continue to hold that number of shares exceeding 10% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.

 

Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option), on our redemption, and our warrants will expire worthless.

 

We expect to encounter intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if we are obligated to pay cash for the shares of Class A common stock redeemed and, in the event we seek stockholder approval of our business combination, we make purchases of our Class A common stock, potentially reducing the resources available to us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account and our warrants will expire worthless.

 

If the net proceeds of this offering not being held in the trust account are insufficient to allow us to operate for at least the next 24 months, we may be unable to complete our initial business combination.

 

The funds available to us outside of the trust account may not be sufficient to allow us to operate for at least the next 24 months, assuming that our initial business combination is not completed during that time. We believe that, upon the closing of this offering, the funds available to us outside of the trust account will be sufficient to allow us to operate for at least the next 24 months; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or to conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account and our warrants will expire worthless.

 

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If the net proceeds of this offering not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and to complete our initial business combination, leading to our dependence on loans from our sponsor or management team to fund our search, to pay our taxes and to complete our business combination.

 

Of the net proceeds of this offering, only approximately $950,000 will be initially available to us outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $750,000, we may fund additional offering expenses with funds not to be held in the trust account or with a portion of the working capital loans committed by our sponsor, its affiliates or designees. In such case, the amount of funds we intend to be held outside the trust account or otherwise available to us would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital other than the working capital loans, we would need to borrow funds from our sponsor, management team or other third parties to operate or we may be forced to liquidate. Other than the working capital loans of up to $1,000,000 in the aggregate, neither our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on our redemption of our public shares, and our warrants will expire worthless.

 

Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.

 

Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate effect on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission. 

 

If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option).

 

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 in which they would waive 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. 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. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.

 

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Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) initially held in the trust account, due to claims of such creditors. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) or such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes and fund working capital requirements, 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 this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such eventuality. We believe the likelihood of our sponsor having to indemnify the trust account is limited because we will endeavor to have all vendors and prospective target businesses as well as other entities execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account.

 

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 $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) or such waiver such lesser amount per share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option).

 

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.

 

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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 the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.

 

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing it and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.

 

If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our business combination.

 

If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:

 

·restrictions on the nature of our investments, and
·restrictions on the issuance of securities,
·each of which may make it difficult for us to complete our business combination.

 

In addition, we may have burdensome requirements imposed upon us, including:

 

·registration as an investment company;
·adoption of a specific form of corporate structure; and
·reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.

 

We do not believe that our anticipated principal activities will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in United States government treasury bills with a maturity of 180 days or less or in money market funds investing solely in United States Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to consummate a business combination. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account and our warrants will expire worthless.

 

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.

 

We are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations, and their interpretation and application, may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.

 

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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 Delaware General Corporation Law, or 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. If we do not complete our initial business combination within the allotted time period, the pro rata distribution of the funds in our trust account to our public stockholders upon the redemption of our public shares may be considered a liquidation 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 can be made to stockholders), any liability stockholders may have 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. Any such liability of the stockholder that may arise would be barred after the third anniversary of the dissolution. However, in the event we do not complete our business combination, it is our intention to redeem our public shares as soon as reasonably possible following the 24th month from the closing of this offering and, therefore, we do not intend to comply with the procedures set forth in Section 280 of the DGCL.

 

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan based on facts known to us at the time of the adoption of the plan that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder. 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 potentially be 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. It is important to note that, in the event we do not complete our initial business combination within the allotted time period, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares is not considered a liquidation 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 the three years that would apply in the case of a liquidation distribution.

 

We do not currently intend to hold an annual meeting of stockholders until after our consummation of a business combination and you will not be entitled to any of the corporate protections provided by such a meeting.

 

We do not currently intend to hold an annual meeting of stockholders until after we consummate a business combination (unless required by NASDAQ), and thus may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting of stockholders be held for the purposes of electing directors in accordance with a company’s bylaws unless such election is made by written consent in lieu of such a meeting. Therefore, if our stockholders want us to hold an annual meeting prior to our consummation of a business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

 

We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

 

We are not registering the shares of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed, as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, to use our best efforts to file a registration statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so, for example, if any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct, or if 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, unless an exemption is available. Notwithstanding the above, if our Class A common stock is, at the time of any exercise of a warrant, not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws. 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 the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying shares of Class A common stock for sale under all applicable state securities laws.

 

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The grant of registration rights to our initial stockholders and holders of our private placement warrants and private placement units may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.

 

Pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted transferees can demand that we register their 7,016,373 founder shares after they convert those shares to Class A shares. In addition, holders of our private placement warrants and their permitted transferees can demand that we register the 3,500,000 private placement warrants and the 3,500,000 shares of Class A common stock issuable upon exercise of the private placement warrants. Pursuant to the forward purchase agreement, we have agreed that we will use our commercially reasonable efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares, (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of  (A) the date on which the initial purchaser ceases to hold the securities covered thereby, (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act, and (C) the second anniversary of the date of effectiveness of such registration statement, subject to certain conditions and limitations set forth in the forward purchase agreement. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative effect on the market price of our Class A common stock that is expected when the securities owned by our initial stockholders, holders of our private placement units or holders of our private placement warrants or their respective permitted transferees are registered.

 

Because we are not limited to a particular industry or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.

 

Because we have not yet identified or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our business combination, we may be affected by numerous risks inherent in the operations of the business with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely affect a target business. We also cannot assure you that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission.

 

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Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.

 

Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business, legal, or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account and our warrants will expire worthless.

 

We may seek investment opportunities with a financially unstable business or an entity lacking an established record of revenue or earnings.

 

To the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings and difficulties in retaining and obtaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely affect a target business.

 

We may not be required to obtain an opinion from an independent accounting firm or an independent investment banking firm, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.

 

Unless we complete our business combination with an affiliated entity, we are not required to obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of FINRA that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial business combination.

 

We may issue additional shares of Class A common stock, and may issue shares of preferred stock, to complete our initial business combination. We may also issue additional shares of Class A common stock upon the conversion of the Class F stock, in connection with anti-dilution provisions related to certain financings at the time of our initial business combination, or under an employee incentive plan after completion of our initial business combination, any one of which would dilute the interest of our stockholders and likely present other risks.

 

Our amended and restated certificate of incorporation authorizes the issuance of up to 150,000,000 shares of Class A common stock, par value $0.0001 per share, 50,000,000 shares of Class F common stock, par value $0.0001 per share, and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 130,000,000 and 43,733,627 (assuming in each case that the underwriters have not exercised their over-allotment option) authorized but unissued shares of Class A common stock and Class F common stock, respectively, available for issuance, which amount of shares of Class A common stock does not take into account shares reserved for issuance upon exercise of outstanding warrants, shares issuable upon conversion of the Class F common stock or the forward purchase shares. Shares of Class F common stock are convertible into our Class A common stock, initially at a one-for-one ratio, but subject to adjustment as set forth herein. Immediately after this offering, there will be no shares of preferred stock issued and outstanding.

 

We may issue a substantial number of additional shares of Class A common stock, and may issue shares of preferred stock, in order to complete our initial business combination. We may also issue additional shares of Class A common stock upon conversion of the Class F common stock in connection with anti-dilution provisions related to certain financings at the time of our initial business combination, or under an employee incentive plan after the completion of our initial business combination. Our amended and restated certificate of incorporation provides, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (a) receive funds from the trust account or (b) vote on any initial business combination.

 

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The issuance of additional shares of common or preferred stock:

 

·will significantly dilute the equity interest of investors in this offering;
·may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
·could cause a change in control if a substantial number of common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and
·may adversely affect prevailing market prices for our units, common stock and/or warrants.

 

Resources could be expended in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire worthless.

 

We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention, and substantial costs for accountants, attorneys and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account and our warrants will expire worthless.

 

We are dependent upon our executive officers and directors and their departure could adversely affect our ability to operate.

 

Our operations are dependent upon a relatively small group of individuals including, but not limited to, our executive officers and directors. We believe that our success depends on the continued service of our executive officers and directors, at least until we have completed our business combination. In addition, our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key person insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.

 

Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively affect the operations and profitability of our post-combination business.

 

Our ability to successfully effect our business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage after our business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements, with such time potentially interfering with their ability to do their jobs.

 

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Our key personnel may attempt to negotiate employment or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation following our business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

 

Our key personnel may be able to remain with the company after the completion of our business combination only if they are able to negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.

 

We may have a limited ability to assess the management of a prospective target business and, as a result, this may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.

 

When evaluating the desirability of affecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we believed they possessed. Should the target’s management not have the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively affected. Accordingly, any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the tender offer materials or proxy statement relating to the business combination contained an actionable material misstatement or material omission.

 

Our executive officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative effect on our ability to complete our initial business combination.

 

Our executive officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination, and their other businesses. We do not intend to have any full-time employees prior to the completion of our business combination. Each of our executive officers is engaged in several other business endeavors for which such individual may be entitled to substantial compensation and our executive officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors also serve as officers and board members for other entities. If our executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative effect on our ability to complete our initial business combination. For a complete discussion of our executive officers’ and directors’ other business affairs, please see “Management — Directors and Executive Officers.”

 

Our sponsor, and its affiliates, have no obligation to provide us with potential investment opportunities or to devote any specified amount of time or support to our company’s business.

 

Although we expect to benefit from our sponsor’s network of relationships and processes for evaluating and allocating investment opportunities among itself, us, and other parties, our sponsor has no legal or contractual obligation to seek on our behalf or to present to us investment opportunities that might be suitable for our business. Our sponsor may allocate potential investments at its discretion to any of Terrapin, Nomura, us, or other parties. We have no investment management, advisory, consulting or other agreement in place with our sponsor that obligates it to undertake efforts on our behalf or that govern the manner in which they will allocate investment opportunities. Even if our sponsor refers an opportunity to us, no assurance can be given that such opportunity will result in an acquisition agreement or an initial business combination.

 

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Certain of our executive officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

 

Following the completion of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more businesses. Our executive officers and directors are, or may in the future become, affiliated with entities that are engaged in a similar business.

 

Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

 

For a more thorough discussion of our executive officers’ and directors’ business affiliations and the potential conflicts of interest that may arise, please see “Management — Directors and Executive Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Transactions.”

 

Our executive officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.

 

We have not adopted a policy that expressly prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated with our sponsor, our directors or executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.

 

We may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated with our executive officers, directors or existing holders which may raise potential conflicts of interest.

 

In light of the involvement of our sponsor, executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, executive officers and directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described under “Management — Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination as set forth in “Proposed Business — Effecting our Initial Business Combination — Selection of a target business and structuring of our initial business combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent accounting firm or independent investment banking firm that is a member of FINRA regarding the fairness to our company from a financial point of view of a business combination with one or more businesses affiliated with our executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.

 

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Since our sponsor will lose its entire investment in us if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 

In June 2017, our sponsor and an affiliate purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000. Prior to the initial investment in the company of $25,000 by our sponsor and its affiliate, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura for an aggregate purchase price of $4,587.71, or approximately $0.0022 per share. Also prior to the consummation of this offering, our sponsor sold an aggregate of 75,000 founder shares to Messrs. Kagan, Pollack, Rosston and Valner, each an independent director nominee, and Mr. Jeffrey Brown, a director nominee, for a purchase price of approximately $0.0022 per share. Prior to the consummation of this offering, the initial stockholders will forfeit an aggregate of 4,483,627 founder shares, such that at the time of this offering the initial stockholders own an aggregate of 7,016,373 founder shares (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased). Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction. In addition, our sponsor has committed to purchase an aggregate of 3,500,000 private placement warrants, each exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, for an aggregate purchase price of $3,500,000, that will also be worthless if we do not complete a business combination.

 

With certain exceptions, as described below under “Description of Securities,” the founder shares are identical to the shares of Class A common stock included in the units being sold in this offering. However, the holders have agreed (i) to vote any shares owned by them in favor of any proposed business combination and (ii) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination. The personal and financial interests of our executive officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination, and influencing the operation of the business following the initial business combination.

 

Since our sponsor, executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if our business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.

 

At the closing of our initial business combination, our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our sponsor, executive officers and directors may influence their motivation in identifying and selecting a target business combination and completing an initial business combination.

 

Nomura and its affiliates may represent a client to acquire potential target businesses in competition with us, thereby causing conflicts of interest that limit our ability to pursue potential targets. These conflicts of interest could have a negative effect on our ability to consummate a business combination.

 

Nomura, or its affiliates, engage in a broad spectrum of activities including principal investing, specialized investment vehicle management, asset management, financial advisory, securities underwriting, sales and trading, investment research, lending and other activities. In the ordinary course of business, they engage in activities where their interests or the interests of their clients may conflict with our interests. Accordingly, there may be situations in which Nomura has an obligation or an interest that actually or potentially conflicts with our interests. You should assume that these conflicts will not be resolved in our favor and, as a result, we may be denied certain acquisition opportunities or otherwise disadvantaged in certain situations by our relationship to Nomura.

 

Nomura, its affiliates and their clients make investments in a variety of different businesses and may directly compete with us for acquisition opportunities provided or created by Nomura that meet our initial business combination objectives. Nomura is under no specific obligation to offer potential acquisition opportunities to us and may allocate them at its discretion to us or other parties, and we will not have any priority in respect of acquisition opportunities provided or created by Nomura. You should assume that Nomura and its affiliates and clients will have priority over us in terms of access to acquisition opportunities.

 

Clients of Nomura, and its affiliates, may also compete with us for investment opportunities meeting our initial business combination objectives. If Nomura is engaged to act for any such clients, we may be precluded from pursuing opportunities that would conflict with Nomura’s obligations to such client. In addition, investment ideas generated within Nomura may be suitable for our company or a client of Nomura, and may be directed to any of such persons or entities rather than to us. Nomura may also be engaged to advise the seller of a company, business or assets that would qualify as an acquisition opportunity for us. In such cases, we may be precluded from participating in the sale process or from purchasing the company, business or assets. If, however, we are permitted to pursue the opportunity, the interests of Nomura or its obligations to the seller may diverge from our interests.

 

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We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and thus negatively affect the value of our stockholders’ investment in us.

 

Other than working capital loans which have been committed by our sponsor, although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete our business combination (including pursuant to the forward financing). We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt (including pursuant to the forward financing) could have a variety of negative effects, including:

 

·default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
·acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
·our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;
·our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
·our inability to pay dividends on our common stock;
·using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
·limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
·increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
·limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 

We may only be able to complete one business combination with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products or services. This lack of diversification may negatively affect our operations and profitability.

 

The net proceeds from this offering and the private placement of warrants will provide us with $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full) that we may use to complete our business combination (excluding $8,000,000, or up to $9,800,000 if the over-allotment option is exercised in full, of deferred cash underwriting commissions being held in the trust account).

 

We may effectuate our business combination with a single target business or multiple target businesses, either simultaneously or within a short period of time. However, we may not be able to effectuate our business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of the several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:

 

·solely dependent upon the performance of a single business, property or asset, or
·dependent upon the development or market acceptance of a single or limited number of products, processes or services.

 

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This lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse effect upon the particular industry in which we may operate subsequent to our business combination.

 

We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our business combination and give rise to increased costs and risks that could negatively affect our operations and profitability.

 

If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to multiple possible negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively affect our profitability and results of operations.

 

We may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

In pursuing our acquisition strategy, we may seek to effectuate our initial business combination with a privately held company. By definition, very little public information exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.

 

Our management may not be able to maintain control of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.

 

We may structure a business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may ultimately own collectively a minority interest in the post-business combination company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control of the target business.

 

We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of our stockholders do not agree.

 

Our amended and restated certificate of incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates.

 

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If we have inadequate cash simultaneously to meet the closing requirements of a business combination and redeem all shares submitted at that time for redemption, we will return any shares submitted for redemption and continue to pursue an alternative transaction. If you redeemed in order to liquidate your investment at that time, you may be forced to sell your public shares, potentially at a loss.

 

In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

 

The exercise price for the public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.

 

The exercise price of the public warrants is higher than is typical in many similar blank check companies in the past. Historically, 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 public 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.

 

In order to effectuate our initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders may not support.

 

In order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and changed industry focus. We cannot assure you that we will not seek to amend our charter or governing instruments in order to effectuate our initial business combination.

 

The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account) may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation to facilitate the completion of an initial business combination that some of our stockholders may not support.

 

Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination activity, without approval by a certain percentage of the company’s stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders. Our amended and restated certificate of incorporation provides that any of its provisions related to pre-business combination activity (including the requirement to deposit proceeds of this offering and the private placement of warrants into the trust account and not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved by holders of 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our common stock, subject to applicable provisions of the DGCL or applicable stock exchange rules. Our initial stockholders, who will collectively beneficially own 20.0% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-business combination behavior more easily than some other blank check companies, and this may increase our ability to complete a business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.

 

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Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares. These agreements are contained in letter agreements that we have entered into with our sponsor, executive officers, directors and director nominees. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, executive officers, directors or director nominees for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.

 

We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.

 

Although we believe that the net proceeds of this offering and the sale of the private placement warrants and the forward purchase shares will be sufficient to allow us to complete our initial business combination, because we have not yet identified any prospective target business we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering and the sale of the private placement warrants and the forward purchase shares prove to be insufficient, either because of the size of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. In the current economic environment, it may be difficult for companies to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing to complete our business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our business combination. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) on the liquidation of our trust account, and our warrants will expire worthless.

 

Our initial stockholders control a substantial interest in us and thus may exert substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.

 

Upon the closing of this offering, our initial stockholders will own approximately 23.9% (or 23.4% if the underwriters’ over-allotment option is exercised in full) of the issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering), including shares that are subject to forfeiture if all or part of the forward purchase shares are not purchased. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional shares of Class A common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither our initial stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our sponsor, is and will be divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our business combination, in which case all of the current directors will continue in office until at least the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will continue to exert control at least until the completion of our business combination, and, due to the conversion of the Class F common stock into our Class A common stock, the anti-dilution rights of the Class F common stock and the sale of the forward purchase shares to Nomura, potentially after consummation of our initial business combination.

 

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Our sponsor paid an aggregate of $25,000, or approximately $0.0022 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class A common stock.

 

The difference between the public offering price per share and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to you and the other investors in this offering. Our sponsor acquired the founder shares at a nominal price, significantly contributing to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and the other public stockholders will incur an immediate and substantial dilution of approximately 91.9% (or $9.19 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.81 and the initial offering price of $10.00 per unit.

 

This dilution would increase to the extent that the anti-dilution provisions of the Class F common stock result in issuance of additional Class A shares to our initial stockholders and would become exacerbated to the extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked raisings would be disproportionately dilutive to our Class A common stock.

 

We may amend the terms of the warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of then outstanding public warrants.

 

Our warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of then outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the warrants with the consent of at least 65% of then outstanding public warrants is unlimited, examples of such amendments could be amendments, among other things, to increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise of a warrant.

 

We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

 

We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share 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 exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, to sell your warrants at then-current market price when you might otherwise wish to hold your warrants or to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.

 

Our warrants may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our business combination.

 

We will be issuing warrants to purchase 20,000,000 shares of our Class A common stock (or 23,000,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 3,500,000 private placement warrants, each exercisable to purchase one share of Class A common stock. In addition, if our sponsor makes any working capital loans, it may convert those loans into up to an additional 1,000,000 private placement warrants, at the price of  $1.00 per warrant. To the extent we issue shares of Class A common stock to effectuate a business transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, may increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business transaction or increase the cost of acquiring the target business.

 

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The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, they will not be redeemable by us, they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination and they may be exercised by the holders on a cashless basis. 

 

The determination of the offering price of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of such units than you would have in a typical offering of an operating company.

 

Prior to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with the representative of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, pricing and terms of the units, including the Class A common stock and warrants underlying the units, include:

 

·the history and prospects of companies whose principal business is the acquisition of other companies;
·prior offerings of those companies;
·our prospects for acquiring an operating business at attractive values;
·a review of debt to equity ratios in leveraged transactions;
·our capital structure;
·an assessment of our management and their experience in identifying operating companies;
·general conditions of the securities markets at the time of this offering; and
·other factors as were deemed relevant.

 

Although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular industry since we have no historical operations or financial results.

 

There is currently no market for our securities and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.

 

There is currently no market for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

 

Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.

 

The federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.

 

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We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

 

We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

 

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our business combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.

 

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2019. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 

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Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.

 

Our amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of, and issue new series of, preferred shares, which may make 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.

 

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.

 

If we effect our initial business combination with a company located in the United States but with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively affect our operations.

 

If we effect our initial business combination with a company located in the United States but with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:

 

·costs and difficulties inherent in managing cross-border business operations;
·rules and regulations regarding currency redemption;
·complex corporate withholding taxes on individuals;
·laws governing the manner in which future business combinations may be effected;
·tariffs and trade barriers;
·regulations related to customs and import/export matters;
·longer payment cycles;
·tax issues, such as tax law changes and variations in tax laws as compared to the United States;
·currency fluctuations and exchange controls;
·rates of inflation;
·challenges in collecting accounts receivable;
·cultural and language differences;
·employment regulations;
·crime, strikes, riots, civil disturbances, terrorist attacks and wars; and
·deterioration of political relations with the United States.

 

We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely affect our results of operations and financial condition.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The statements contained in this prospectus that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:

 

·our ability to complete our initial business combination;

 

·our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 

·our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination, as a result of which they would then receive expense reimbursements;

 

·the proceeds of the forward purchase shares being available to us;

 

·our potential ability to obtain additional financing to complete our initial business combination, by means of the forward financing or otherwise;

 

·our pool of prospective target businesses;

 

·the ability of our officers and directors to generate a number of potential investment opportunities;

 

·our public securities’ potential liquidity and trading;

 

·the lack of a market for our securities;

 

·the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; or

 

·our financial performance following this offering.

 

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” beginning on page 24. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

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USE OF PROCEEDS

 

We are offering 20,000,000 units at an offering price of $10.00 per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private placement warrants will be used as set forth in the following table.

 

    Without
 Over-
Allotment Option
    Over-Allotment 
Option Exercised
 
Gross proceeds                
Gross proceeds from units offered to public (1)   $ 200,000,000     $ 230,000,000  
Gross proceeds from private placement warrants offered in the private placement     3,500,000       3,500,000  
Total gross proceeds   $ 203,500,000       233,500,000  
Offering expenses (2)                
Underwriting commissions (3)   $ 1,800,000       1,800,000  
Legal fees and expenses     300,000       300,000  
Printing and engraving expenses     35,000       35,000  
Accounting fees and expenses     42,500       42,500  
SEC Expenses     37,350       37,350  
FINRA Expenses     45,500       45,500  
Travel and road show     40,000       40,000  
NASDAQ listing and filing fees     75,000       75,000  
Directors and officers insurance     160,000       160,000  
Miscellaneous expenses     14,650       14,650  
Total offering expenses (other than underwriting commissions)   $ 750,000     $ 750,000  
Proceeds after offering expenses   $ 200,950,000       230,950,000  
Held in trust account (3)   $ 200,000,000     $ 230,000,000  
% of public offering size     100 %     100 %
Not held in trust account   $ 950,000     $ 950,000  

 

The following table shows the use of the approximately $950,000 of net proceeds not held in the trust account, as well as up to $1,000,000 in working capital loans committed by our sponsor, its affiliates or designees, but not including interest earned on funds held in the trust account. (4) (6)

 

    Amount     % of Total  
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination (5)   $ 900,000       46.1 %
Legal and accounting fees related to regulatory reporting obligations     150,000       7.7 %
Payment for office space, administrative and support services     405,000       20.8 %
Reserve for liquidation expenses     50,000       2.6 %
NASDAQ continued listing fees     75,000       3.8 %
Other miscellaneous expenses (including franchise taxes net of anticipated interest income)     370,000       19.0 %
Total   $ 1,950,000       100.0 %

 

(1)Includes amounts payable to public stockholders who properly redeem their shares in connection with our successful completion of our initial business combination.
(2)

A portion of the offering expenses have been paid from the proceeds of loans and advances from an affiliate of our sponsor of $140,000 as described in this prospectus. These loans will be repaid upon completion of this offering.

(3) The underwriters have agreed to defer cash underwriting commissions equal to 4.0% of the gross proceeds of this offering (or approximately 4.3% of the gross proceeds of this offering if the underwriters’ over-allotment option is exercised in full). Upon completion of our initial business combination, up to $8,000,000, which constitutes the underwriters’ deferred commissions (or up to $9,800,000 if the underwriters’ over-allotment option is exercised in full) will be paid to the underwriters from the funds held in the trust account, and the remaining funds will be released to us and can be used to pay all or a portion of the purchase price of the business or businesses with which our initial business combination occurs or for general corporate purposes, including payment of principal or interest on indebtedness incurred in connection with our initial business combination, to fund the purchases of other companies or for working capital. The underwriters will not be entitled to any interest accrued on the deferred underwriting discounts and commissions.
(4) These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating and structuring a business combination based upon the level of complexity of such business combination. In the event we identify an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the table above does not include interest available to us from the trust account. Based on the current interest rate environment, we would expect approximately $2,000,000 to be available to us per year from interest earned on the funds held in the trust account; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate of 1.0% per annum based upon current yields of securities in which the trust account may be invested.

 

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(5)Includes estimated amounts that may also be used in connection with our business combination to fund a “no shop” provision and commitment fees for financing. This amount does not include any investment banking fees which may be payable upon consummation of a business combination. No funds will be paid out of the trust to fund any such fee payments and it is not expected that any fees would be paid prior to the consummation of a business combination. The actual amount of fees received will vary significantly based on the size of any transaction and the extent to which other investment banks are involved.
(6)In order to finance transaction costs in connection with an intended initial business combination, our sponsor, its affiliates or designees have committed up to $1,000,000 to be provided to us to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination.

 

The rules of the NASDAQ Capital Market provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full), including $8,000,000 (or up to $9,800,000 if the underwriters’ over-allotment option is exercised in full) of deferred cash underwriting commissions, will be placed in a trust account located in the United States and held at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee and will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Based upon current interest rates, we expect the trust account to generate approximately $2,000,000 of interest income per year. We will not be permitted to withdraw any of the principal or interest held in the trust account, except for the withdrawal of interest to pay taxes and to fund working capital requirements, until the earlier of the completion of our initial business combination or the redemption of 100% of our public shares if we are unable to complete a business combination within 24 months from the closing of this offering (subject to the requirements of law).

 

The net proceeds held in the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our business combination. If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination, we may apply the balance of the cash released from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

 

We believe that amounts not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of our management team or their affiliates, but such persons are not under any obligation to advance funds to, or invest in, us.

 

We intend to enter into an Administrative Services Agreement pursuant to which we will pay an affiliate of our sponsor a total of $16,875 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 

Prior to the closing of this offering, an affiliate of our sponsor has loaned and advanced us $140,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2018 or the closing of this offering.

 

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In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor, its affiliates or designees, have committed up to $1,000,000 to be provided to us in the event that funds held outside of the trust are insufficient to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination and may, but are not obligated to, loan us additional funds to fund our expenses relating to investigating and completing our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,000,000 of any such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to the initial stockholders.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The funds from the forward purchase agreement will be used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement may be used for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination, subject to the satisfaction of the conditions to funding. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may also purchase shares in privately negotiated transactions either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

We may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) and the agreement for our business combination may require as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or the business combination, and instead may search for an alternate business combination.

 

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A public stockholder will be entitled to receive funds from the trust account only upon the earlier to occur of: our completion of an initial business combination, and then only in connection with those shares of our Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein or the redemption of our public shares if we are unable to complete our business combination within 24 months following the closing of this offering, subject to applicable law and as further described herein and any limitations (including but not limited to cash requirements) created by the terms of the proposed business combination. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust account.

 

Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. In addition, 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 our business combination within the prescribed time frame. However, if our initial stockholders or any of our officers, directors or affiliates acquires public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the prescribed time frame.

 

DIVIDEND POLICY

 

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of the offering pursuant to Rule 462(b) under the Securities Act, in which case we will effect a stock dividend (or, potentially, a split) immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

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DILUTION

 

The difference between the public offering price per share of Class A common stock, assuming no value is attributed to the warrants included in the units we are offering pursuant to this prospectus or the private placement warrants, and the pro forma net tangible book value per share of our Class A common stock after this offering constitutes the dilution to investors in this offering. Such calculation does not reflect any dilution associated with the sale and exercise of warrants, including the private placement warrants, which would cause the actual dilution to the public stockholders to be higher, particularly where a cashless exercise is utilized. Net tangible book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities (including the value of Class A common stock which may be redeemed for cash), by the number of outstanding shares of our Class A common stock.

 

At December 31, 2017, our net tangible book value was $(146,563), or approximately $(0.01) per share of Class F common stock. After giving effect to the sale of 20,000,000 shares of Class A common stock included in the units we are offering by this prospectus, the sale of the private placement warrants and the deduction of cash underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at December 31, 2017 would have been $5,000,001, or $0.81 per share, representing an immediate increase in net tangible book value (as decreased by the value of the approximately 18,797,122 shares of Class A common stock that may be redeemed for cash and assuming no exercise of the underwriters’ over-allotment option) of $10.00 per share to our initial stockholders as of the date of this prospectus and an immediate dilution of $10.00 per share or 100% to our public stockholders not exercising their redemption rights. Total dilution to public stockholders from this offering will be $9.19 per share. The dilution to new investors if the underwriters exercise the over-allotment option in full would be an immediate dilution of $9.29 per share.

 

The following table illustrates the dilution to the public stockholders on a per-share basis, assuming no value is attributed to the warrants included in the units, the founder shares or the private placement warrants:

 

Public offering price           $ 10.00  
Net tangible book value before this offering     (0.01 )        
Increase attributable to public stockholders     9.20          
Decrease attributable to public shares subject to redemption     (10.00 )        
Pro forma net tangible book value after this offering and the sale of the private placement warrants           $ 0.81  
Dilution to public stockholders           $ 9.19  

 

For purposes of presentation, we have reduced our pro forma net tangible book value after this offering (assuming no exercise of the underwriters’ over-allotment option) by $187,971,220 because holders of up to approximately 94.7% of our public shares may redeem their shares for a pro rata share of the aggregate amount then on deposit in the trust account at a per-share redemption price equal to the amount in the trust account as set forth in our tender offer or proxy materials (initially anticipated to be the aggregate amount held in trust two days prior to the commencement of our tender offer or stockholders meeting, including interest income (net of taxes payable and net of any amounts released to us to fund working capital requirements), divided by the number of shares of Class A common stock sold in this offering.

 

The following table sets forth information with respect to our initial stockholders and the public stockholders:

 

    Shares Purchased     Total Consideration     Average
Price per
Share
 
    Number     Percentage     Amount     Percentage        
Initial Stockholders (1) (2)     5,000,000       20.0 %   $ 25,000       0.01 %   $ 0.005  
Public Stockholders     20,000,000       80.0 %     200,000,000       99.99 %   $ 10.000  
      25,000,000       100.00 %   $ 200,025,000       100.00 %        

 

(1)

Assumes (a) the over-allotment option has not been exercised and the resulting forfeiture of 750,000 founder shares held by our initial stockholders has occurred and (b) that none of the intended forward purchase shares are purchased and the resulting forfeiture of 1,266,373 founder shares held by our initial stockholders has occurred.

(2)Assumes conversion of Class F common stock to Class A common stock on a 1-for-1 basis. The dilution to public stockholders would increase to the extent that the anti-dilution provisions of the Class F common stock result in issuance of additional Class A shares to our initial stockholders.

 

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The pro forma net tangible book value per share after the offering is calculated as follows:

 

Numerator:        
Net tangible book value before this offering   $ (146,563 )
Proceeds from this offering and sale of the private placement warrants, net of expenses     200,950,000  
Offering costs excluded from net tangible book value before this offering     167,784  
Less:  deferred underwriters’ commissions payable     (8,000,000 )
Less:  amount of Class A common stock subject to redemption to maintain net tangible assets of $5,000,001     (187,971,220 )
    $ 5,000,001  
Denominator:        
Shares of Class F common stock outstanding prior to this offering     7,016,373  
Founder shares to be forfeited if the over-allotment option is not exercised     (750,000 )
Founder shares to be forfeited if no forward purchase shares are purchased     (1,266,373 )
Shares of Class A common stock included in the units offered     20,000,000  
Less:  shares subject to redemption to maintain net tangible assets of $5,000,001     (18,797,122 )
      6,202,878  

 

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CAPITALIZATION

 

The following table sets forth our capitalization as of December 31, 2017, and as adjusted to give effect to the filing of our amended and restated certificate of incorporation, the sale of our units in this offering and the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities:

 

    December 31, 2017  
    Actual    

As Adjusted(1)

 
Deferred cash underwriting commissions   $     $ 8,000,000  
Notes payable              
Class A common stock, subject to redemption (2)           187,971,220  
Stockholders’ equity:                
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding            
Class A Common stock, $0.0001 par value, 150,000,000 shares authorized; 0 shares issued and outstanding (actual); 20,000,000 shares issued and outstanding (excluding 18,797,122 shares subject to redemption) (as adjusted)           121  
Class F Common stock, $0.0001 par value, 50,000,000 shares authorized; 11,500,000 shares issued and outstanding (actual); 6,266,373 shares issued and outstanding (as adjusted)     1,150       626  
Additional paid-in capital     23,850       5,003,033  
Accumulated deficit     (3,779 )     (3,779 )
Total stockholders’ equity     21,221       5,000,001  
Total capitalization   $ 21,221     $ 200,971,221  

 

(1)

Includes the $3,500,000 we will receive from the sale of the private placement warrants. Assumes the over-allotment option has not been exercised and the resulting forfeiture of 750,000 founder shares held by our initial stockholders (other than our independent director nominees) has occurred.

(2)Upon the completion of our initial business combination, we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed business combination.

 

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

 

Overview

 

We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.

 

The issuance of additional shares of our stock in a business combination:

 

·may significantly dilute the equity interest of investors in this offering;

·may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;

·could cause a change of control if a substantial number of shares of our Class A common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;

·may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and

·may adversely affect prevailing market prices for our Class A common stock and/or warrants.

 

Similarly, if we issue debt securities, it could result in:

 

·default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;

·acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

·our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

·our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;

·our inability to pay dividends on our common stock;

·using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;

·limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;

·increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and

·limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.

 

As indicated in the accompanying financial statements, at December 31, 2017, we had approximately $25,020 in cash and deferred offering costs of $167,784. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.

 

Results of Operations and Known Trends or Future Events

 

We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of this offering.

 

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Liquidity and Capital Resources

 

Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the founder shares to our sponsor and through loans and advances made by our sponsor. We estimate that the net proceeds from the sale of the units in this offering, after deducting offering expenses of approximately $750,000, cash underwriting commissions of $1,800,000 (excluding deferred cash underwriting commissions of $8,000,000 (or up to $9,800,000 if the underwriters’ over-allotment option is exercised in full), and the sale of the private placement warrants for a purchase price of $3,500,000, will be $200,950,000 (or $230,950,000 if the underwriters’ over-allotment option is exercised in full). $200,000,000 (or $230,000,000 if the underwriters’ over-allotment option is exercised in full) will be held in the trust account, which includes $8,000,000 (or up to $9,800,000 if the underwriters’ over-allotment option is exercised in full) of deferred underwriting commissions. The remaining approximately $950,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (net of taxes payable and net of any amounts released to us to fund working capital requirements), excluding deferred cash underwriting commissions, to complete our initial business combination.

 

We may withdraw interest to pay taxes, if any, and to fund working capital requirements. We estimate our annual franchise tax obligations, based on the number of shares of our common stock authorized and outstanding after the completion of this offering, to be $200,000. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect that the interest earned on the amount in the trust account will be sufficient to pay our taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

 

Prior to the completion of our initial business combination, we will have available to us the approximately $950,000 of proceeds held outside the trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.

 

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor and its affiliates or designees have committed up to $1,000,000 to be provided to us in the event that funds held outside of the trust are insufficient to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination and may, but are not obligated to, loan us additional funds to fund our expenses relating to investigating and completing our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,000,000 of any such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to the initial stockholders.

 

We expect our primary liquidity requirements during that period to include approximately $900,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $75,000 for NASDAQ continued listing fees and other regulatory fees, $405,000 for office space, administrative and support services; $50,000 as a reserve for liquidation expenses; and approximately $370,000 for general working capital that will be used for miscellaneous expenses and reserves.

 

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These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

 

We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover, we may need to obtain additional financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination. In the current economic environment, it may be difficult to obtain acquisition financing. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

 

Controls and Procedures

 

We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2019. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

 

Prior to the closing of this offering, we have not completed an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our business combination may have internal controls that need improvement in areas such as:

 

·staffing for financial, accounting and external reporting areas, including segregation of duties;
·reconciliation of accounts;
·proper recording of expenses and liabilities in the period to which they relate;
·evidence of internal review and approval of accounting transactions;
·documentation of processes, assumptions and conclusions underlying significant estimates; and
·documentation of accounting policies and procedures.

 

Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.

 

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Once our management’s report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion on such report when required by Section 404. The independent auditors may identify additional issues concerning a target business’s internal controls while performing their audit of internal control over financial reporting.

 

Quantitative and Qualitative Disclosures about Market Risk

 

The net proceeds of this offering and the sale of the private placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

 

Related Party Transactions

 

In June 2017, our sponsor and an affiliate thereof purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000. Prior to the initial investment in the company of $25,000 by our sponsor and its affiliate, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura for an aggregate purchase price of $4,587.71, or approximately $0.0022 per share. Also prior to the consummation of this offering, our sponsor sold an aggregate of 75,000 founder shares to Messrs. Kagan, Pollack, Rosston and Valner, each an independent director nominee, and Mr. Brown, a director nominee, for a purchase price of approximately $0.0022 per share. Prior to the consummation of this offering, the initial stockholders will forfeit an aggregate of 4,483,627 founder shares, such that at the time of this offering the initial stockholders own an aggregate of 7,016,373 founder shares (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased). Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction. Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering), calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares (Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing). Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors, amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions other than approval of our initial business combination. Up to 750,000 founder shares will be subject to forfeiture by certain of our initial stockholders depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 founder shares are subject to forfeiture by certain of our initial stockholders (or their permitted transferees) depending on the extent to which the forward purchase shares are purchased.

 

We intend to enter into an Administrative Services Agreement pursuant to which we will pay an affiliate of our sponsor a total of $16,875 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.

 

Prior to the closing of this offering, an affiliate of our sponsor has loaned and advanced us $140,000 to be used for a portion of the expenses of this offering. These loans are non-interest bearing, unsecured and are due at the earlier of June 30, 2018 or the closing of this offering.

 

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor and its affiliates or designees have committed up to $1,000,000 to be provided to us in the event that funds held outside of the trust are insufficient to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination and may, but are not obligated to, loan us additional funds to fund our expenses relating to investigating and completing our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,000,000 of any such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to the initial stockholders.

 

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Our sponsor has committed to purchase an aggregate of 3,500,000 private placement warrants at a price of $1.00 per warrant, or $3,500,000 in the aggregate, in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment as provided herein. Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including our executive officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our business combination. The private placement warrants will be non-redeemable so long as they are held by our sponsor or its permitted transferees (except as described below under “Principal Stockholders — Transfers of Founder Units and Private Placement Warrants”). The private placement warrants may also be exercised by our sponsor or its permitted transferees for cash or on a cashless basis. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Nomura will be paid a market-based placement fee on the gross proceeds from the sale of the forward purchase shares upon the consummation of an initial business combination. In addition, the forward purchase agreement provides that Nomura (or its assignees) is entitled to registration rights with respect to the forward purchase shares. 

 

We have agreed that Nomura will not be asked to render a fairness opinion with respect to the Business Combination as it may have a conflict of interest by virtue of its affiliation with us. As a consequence, we may be required to retain another firm to render such an opinion if one is required.

 

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Pursuant to a registration rights agreement we will enter into with our initial stockholders and initial purchaser of the private placement warrants, and Nomura (or any assignees of Nomura’s obligations under the forward purchase agreement) on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. Our sponsor and Nomura are entitled under the registration rights agreement to make up to three demands and two demands, respectively, that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until the securities covered thereby are released from any applicable lock-up restrictions, as described herein. We will bear the costs and expenses of filing any such registration statements. See “Certain Relationships and Related Party Transactions.”

 

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results

 

As of December 31, 2017, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have conducted no operations to date.

 

JOBS Act

 

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

 

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not be required to, among other things, provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

 

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PROPOSED BUSINESS

 

Introduction

 

We are a newly organized blank check company incorporated in June 2017 as a Delaware corporation 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. We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to identifying any business combination target. We do not have any specific business combination under consideration. Our officers and directors have neither individually identified nor considered a target business nor have they had any discussions regarding possible target businesses amongst themselves or with our underwriters or other advisors. Nomura, through its financial advisory business, is continuously made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination. We will not consider a business combination with any company that has been identified by or to Nomura or any of its affiliates as an acquisition candidate for our initial business combination prior to the closing of this offering. Additionally, we have not, nor has anyone on our behalf, taken any measure, directly or indirectly, to identify or locate any suitable acquisition candidate, nor have we engaged or retained any agent or other representative to identify or locate any such acquisition.

 

Objective

 

We intend to focus our efforts on seeking an initial business combination with a company that has an enterprise value of between $500 million and $2 billion, although a target entity with a smaller or larger enterprise value may be considered. Following the initial business combination, our objective will be to implement or support the acquired company’s operating strategies in order to generate additional value for shareholders. General goals may include additional acquisitions and operational improvements. Our efforts to identify a prospective target business will not be limited to a particular industry.

 

We believe that private equity firms, venture capital funds and others will find the opportunity to enter into the initial business combination with us attractive for the following reasons:

 

·Track Record of Our Team. Members of our management team have served in management of three other blank check companies that completed business combinations. Nathan Leight served as chairman of Aldabra Acquisition Corporation, or Aldabra 1, which completed a merger with affiliates of and into Great Lakes Dredge & Dock Corporation, or GLDD (NASDAQ: GLDD), in 2006. Mr. Leight later served as chairman of Aldabra 2 Acquisition Corp., or Aldabra 2, which completed a merger in 2008 with certain paper and packaging businesses of Boise Cascade Company. The resulting company was subsequently listed on the New York Stock Exchange as Boise, Inc. or Boise. Mr. Leight served as the Chairman of Terrapin 3 Acquisition Corporation, or Terrapin 3, from its initial public offering in 2014 until its business combination with Yatra Online, Inc., or YTRA (NASDAQ: YTRA), in 2016. YTRA is the second largest online travel agency in India. Mr. Plotkin served as a key member of the team for Aldabra 1, Aldabra 2, and Terrapin 3. Mr. Barudin served as a key member of the team for both Aldabra 2 and Terrapin 3. Mr. Schifrin and Ms. Carpov served as key members of the team for Terrapin 3. Mr. McMillan was an advisor to Aldabra 2 in the Boise transaction, has maintained a long relationship with our team, and has an extensive track record advising special purpose acquisition companies like Terrapin in the process of closing their business combinations. We believe private equity firms and venture capital funds will view the consummation of the Aldabra 1, Aldabra 2 and Terrapin 3 mergers as positive factors in considering whether to sell a portfolio company to us.

 

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  · Minimum Funding Available as a Result of the $50 Million Forward Purchase Agreement and the Up to $450 Million Forward Financing. Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The funds from the forward purchase agreement will be used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement may be used for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination, subject to the satisfaction of the conditions to funding. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

  

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Nomura is a wholly owned subsidiary of Nomura Holding America Inc., which, in turn, is a wholly owned subsidiary of Nomura Holdings, Inc., or the Nomura Group (TSE: 8604; NYSE: NMR).  The Nomura Group is an Asia-headquartered global investment bank with an integrated network spanning over 30 countries. The Nomura Group services the needs of individuals, institutions, corporates and governments through three business divisions: Retail, Asset Management, and Wholesale (Global Markets and Investment Banking).  As of September 30, 2017, the Nomura Group had $391.6 billion in total assets and 28,857 employees globally (2,348 in the Americas, 3,047 in Europe, Middle East, and Africa, 6,756 in Asia excluding-Japan and 16,706 in Japan).

 

The Nomura Group’s Wholesale Division comprises Global Markets, which offers research, sales and trading of global securities, and Investment Banking, which offers capital raising and advisory services.  The Investment Banking platform provides a variety of advisory and capital-raising solutions to corporations, financial institutions, private equity, governments and public-sector organizations around the world. Collaborating across geographies, industries and products, Nomura provides comprehensive and innovative financing, advisory and risk solutions to clients.  Product offerings include:

 

·Mergers and Acquisitions: The Nomura Group acts as a financial advisor to identify and facilitate strategic merger and acquisition, sale of business or alliance opportunities for corporate, financial institutions and sponsor clients, with dedicated M&A teams in Asia, EMEA and the Americas work across borders and time zones to deliver holistic support to its clients globally;

 

·Capital Raising:  In Equity Capital Markets, the Nomura Group originates and executes equity and equity-linked transactions, including IPOs, rights issues, accelerated bookbuilds and convertibles.  Debt Capital Markets helps clients execute local and foreign-currency debt transactions with specialized teams servicing financial institutions, corporates, public sector agencies and sovereigns. Acquisition and Leveraged Finance arranges financing for leveraged buyouts and corporate acquisitions along with on-going refinancing needs using a variety of debt products;

 

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·Solutions: Solutions teams apply a broad range of Fixed Income solutions, Equity related solutions and Insurance solutions to address the various risks faced by clients.  The team is also dedicated to understanding the capital and risk management needs of insurance companies and developing cutting-edge Insurance Solutions to help them respond to these challenges. These include securitization products, structured reinsurance and derivative hedging solutions for complex insurance-specific asset and liability risks.

 

The Nomura Group’s Investment Banking platform offers services to a variety of industry sectors, including:

 

·Business Services;

 

·Consumer / Retail;

 

·Financial Institutions;

 

·Healthcare;

 

·Industrials;

 

·Natural Resources & Power;

 

·Real Estate / Gaming / Lodging / Leisure; and

 

·Telecom / Media / Technology.

 

We believe private equity firms, venture capital firms and management teams will view the track record of our team and the Nomura Group’s financial commitments, deal sourcing, and execution capabilities as positive attributes contributing to our ability to identify attractive acquisition opportunities, and structure and complete a successful business combination.

 

With respect to the above transactions, past performance by Mr. Leight, our team and Nomura is not a guarantee either of success with respect to any business combination we may consummate or that we will be able to locate a suitable candidate for our initial business combination.

 

Business Opportunity

 

We believe certain non-public companies and their shareholders can benefit from a transaction with us. Acquisition candidates are entities that may need stable, permanent equity financing, but may currently have limited access to the public markets. While targets may be either independent entities or divisions of larger organizations, we believe there is an opportunity for us to provide value to current owners of targets that fall into four general categories.

 

(1)Private Equity Fund Portfolio Companies — Substantial amounts of capital have been invested by private equity and venture capital firms. According to PitchBook Data, Inc., U.S. private equity funds raised approximately $2.3 trillion from 2007 through 2017 in more than 2,120 different funds. Venture capital funds raised approximately $292 billion in the U.S. during the same period. From 2007 through 2016, the median hold time of companies held by private equity funds increased from approximately 3.6 years to more than 5.2 years. Therefore, we believe that there should be a significant number of portfolio companies available for sale from private equity firms in the coming years as they seek liquidity. These funds have an ongoing need for investment realizations, particularly in older vintage portfolios.

 

(2)Entities Struggling with Complex or Failed Transactions — Public market exits are increasingly challenging for many private company shareholders. According to JP Morgan Asset Management, the number of publicly-traded companies declined from more than 8,000 to less than 4,400 between 1996 and 2016. According to Bloomberg Data and SEC filings, the number of IPOs completed annually between the 1996 and 2016 declined at a compound average rate of 10% annually. Companies seeking to access the public market through traditional IPOs or to sell to financial buyers may face obstacles to closing those transactions. Failed auctions and failed IPOs occur for a variety of reasons. Public or strategic investors may have previously judged these transactions to be too complicated to close in a timely manner. Public markets may simply be inaccessible for IPOs due to economic conditions or negative investor sentiment at the time the transaction was prepared to begin. A business combination with us can be a solution for investors in firms that have experienced these types of failed transactions.

 

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(3)Entities Held by Non-Traditional Investors — Financial institutions, banks, non-bank lenders, hedge funds, or any other investor who does not typically hold and manage operating assets, may be anxious to divest their holdings. In the event that those types of investors are experiencing liquidation or other pressures in their core businesses, they may need to divest certain holdings in order to maximize the return on their portfolios or from their other assets.

 

(4)Divestiture of Non-Core Assets by Large Conglomerates — Certain multi-unit companies may face the need to rationalize their business by sale or spin-off of operating units due to pressures from lenders, customers, suppliers, or shareholders.

 

We may or may not consummate our business combination with a company that falls into one of the categories above.

 

Strategy and Execution

 

We have identified certain general criteria and guidelines for evaluating prospective target businesses. We will use these criteria and guidelines, but we may decide to enter into our initial business combination with a target business that does not meet some or all of these criteria and guidelines. Fundamentally, we intend to focus on companies with positive operating cash flow, significant assets, and experienced and successful management teams that are also well-positioned to capitalize on one or more of the following investment themes.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant.

 

·Fundamental Changes in Socio-Economics and Demographics. We may focus on candidates who would benefit from global and regional socio-economic and demographic trends including, but not limited to, growing consumer demand in emerging markets and aging populations in developed markets. While these trends provide opportunities for broad market growth of sales and profits, we believe that certain companies may not have altered their strategy to specifically prepare for such trends. If we acquire such a company, we intend to support strategies aimed at accelerating its ability to benefit from the effect of these types of fundamental economic changes on its business.

 

·Under-managed Intellectual Property, Proprietary Business Practices and/or Other Intangible Assets. We intend to focus on companies that have potentially underexploited intellectual property, proprietary business practices or other under-managed assets. If we acquire such a company, we intend to focus on applying new resources, technologies, or business models to leverage or more fully develop its intangible assets, and thereby increase growth and improve profitability.

 

·Competitive Advantage. We will seek targets that can take advantage of barriers to entry of competition for its products or services. For example, companies with assets that are difficult to replicate, either due to proprietary technology, location, or simply because their replacement cost exceeds the capacity of competitors to invest, may be able to earn sustainable profits.

 

·Fundamental Changes in Competitive Dynamics. We may seek targets in industries in which fundamental changes, regardless of their source, are altering the relative advantages enjoyed by new and old competitors. Certain markets may be undergoing disruptive change or shifts in historic patterns of competition. This may occur in both rapidly growing and mature, stable industries. We believe there are good investments not only in high-growth industries but also in more mature sectors in which significant restructuring drives better asset utilization and improved pricing discipline.

 

·Increasingly Networked Economies. We may focus on targets that benefit from increasing connectivity between production and consumption in geographic markets or industrial sectors. We believe that accelerated change in the deployment of telecommunication grids and electronic commerce in both developing and developed economies, and more intensive use of air, rail, road, and maritime transportation to link markets, may create growth opportunities for target companies that may benefit from funding in the public markets available through a business combination with us.

 

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·Technology Disrupting Markets. We may seek candidates either benefiting from new technology or providing technology products or services that fundamentally change the competitive environment in their target markets. Continuing and accelerating advances in hardware, software, and materials sciences create opportunities to disrupt traditional industries and also may profoundly influence the development of new types of businesses. In particular, the novel use of technology to innovate the gathering and analysis of large amounts of data may accelerate business growth and shifts in market share.

 

·Increasingly Large Private Technology Companies. We may seek targets among the increasingly large number of private technology companies. According to Bloomberg Data, funds raised in 2006 or earlier held more than $210 billion of unrealized assets as of June 2016. As a result, the number of large private companies has increased, particularly in the technology sector. PitchBook Data, Inc. listed 215 privately held U.S. technology companies with valuations in excess of $1.0 billion as of February 9, 2018. We believe investors in these entities will want liquidity at some point and that a business combination with us can provide flexibility not available in traditional IPOs.

 

These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant.

 

We will use a disciplined process to searching for, screening, and researching targets. We believe a systematic approach to applying our investment criteria will result in an efficient use of our resources.

 

Members of our management team has experience working together on previous blank check companies and applying similar criteria in search of transactions similar to our proposed initial business combination.

 

Over the course of their careers, the members of our management team and board of directors have developed a broad network of contacts and corporate relationships that we believe will serve as a useful source of investment opportunities. This network has been developed through our management team’s:

 

·experience in sourcing, acquiring, operating, developing, growing, financing and selling businesses; and

·experience in executing transactions under varying economic and financial market conditions.

 

This network has provided our management team with a flow of referrals that have resulted in numerous transactions. We believe that the network of contacts and relationships of our management team will provide us with an important source of investment opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.

 

In addition, Nomura is a diversified financial services firm with an international network of holdings. We will have access to this global institutional network from which to source possible transactions and will incorporate outreach to those relationships as part of our systematic search process.

 

In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us.

 

Competitive Advantage

 

We believe the ability of a blank check company to represent that it has the experience and resources to negotiate and close an initial business combination while minimizing financing risk will represent a competitive advantage for a blank check company relative to other buyers of an acquisition candidate.

 

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We believe that private equity firms, venture capital funds and others will find the opportunity to enter into the initial business combination with us attractive for the following reasons:

 

·Track Record of Our Team. Members of our management team have served in management of three other blank check companies that completed business combinations. Nathan Leight served as chairman of Aldabra Acquisition Corporation, or Aldabra 1, which completed a merger with affiliates of and into Great Lakes Dredge & Dock Corporation, or GLDD (NASDAQ: GLDD) in 2006. Mr. Leight later served as chairman of Aldabra 2 Acquisition Corp., or Aldabra 2, which completed a merger in 2008 with certain paper and packaging businesses of Boise Cascade Company. The resulting company was subsequently listed on the New York Stock Exchange as Boise, Inc. or Boise. Mr. Leight served as the Chairman of Terrapin 3 Acquisition Corporation, or Terrapin 3, from its initial public offering in 2014 until its business combination with Yatra Online, Inc., or YTRA (NASDAQ: YTRA) in 2016. YTRA is the second largest online travel agency in India. Mr. Plotkin served as a key member of the team for Aldabra 1, Aldabra 2, and Terrapin 3. Mr. Barudin served as a key member of the team for both Aldabra 2 and Terrapin 3. Mr. Schifrin and Ms. Carpov served as key members of the team for Terrapin 3. Mr. McMillan was an advisor to Aldabra 2 in the Boise transaction, has maintained a long relationship with our team, and has an extensive track record advising special purpose acquisition companies like Terrapin in the process of closing their business combinations. We believe private equity firms and venture capital funds will view the consummation of the Aldabra 1, Aldabra 2 and Terrapin 3 mergers as positive factors in considering whether to sell a portfolio company to us.

 

  · Minimum Funding Available as a Result of the $50 Million Forward Purchase Agreement and the Up to $450 Million Forward Financing. Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura is unable to identify an investor to assume Nomura’s purchase obligation under the forward purchase agreement and Nomura instead exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The funds from the forward purchase agreement will be used as part of the consideration to the sellers in the initial business combination; any excess funds from this private placement may be used for working capital in the post-transaction company. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock and provide us with a minimum funding level for the initial business combination, subject to the satisfaction of the conditions to funding. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Summary of Aldabra Acquisition Corporation Merger with Great Lakes Dredge & Dock Corporation

 

Mr. Leight served as chairman of Aldabra 1, a blank check company formed for the purpose of effecting a business combination with an operating business. Aldabra 1 raised gross proceeds of $55.2 million in its initial public offering in 2005. In 2006, Aldabra 1 completed a merger with Great Lakes Dredge & Dock Corporation, a portfolio company of a private equity firm for total consideration of approximately $410 million. GLDD is the largest dredging company in North America. Great Lakes trades on NASDAQ under the symbol “GLDD.” Mr. Leight served as a member of the board of GLDD starting in 2006 and served as chairman of GLDD from 2011 until October 2015.

 

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Summary of Aldabra 2 Acquisition Corp. Acquisition of Certain Assets of Boise Cascade, L.L.C.

 

Mr. Leight also served as chairman of Aldabra 2, a blank check company formed for the purpose of effecting a business combination with an operating business. Aldabra 2 raised gross proceeds of $414 million in its initial public offering in 2007. In 2007, Aldabra 2 entered into an initial definitive agreement for a business combination with the paper and packaging divisions of Boise Cascade, L.L.C., a portfolio company of a private equity firm, for total consideration of approximately $1.6 billion, and subsequently listed as Boise, Inc. on the NYSE in 2008. In October 2013, Packaging Corp of America, Inc. or Packaging Corp. completed the acquisition of all the common shares outstanding of Boise for $12.55 per share. From the time of its listing on the NYSE to the acquisition by Packaging Corp., Boise, Inc. paid a total of approximately $200.0 million of dividends on its common shares or approximately $2.00 per average share outstanding during the time in which it was publicly listed.

 

Summary of Terrapin 3 Acquisition Corporation Business Combination with Yatra Online, Inc.

 

Mr. Leight also served as chairman of Terrapin 3, a blank check company formed for the purpose of effecting a business combination with an operating business. Terrapin 3 raised gross proceeds of approximately $212.8 million in an initial public offering in July 2014. In July 2016, Terrapin 3 entered into an initial definitive agreement for a business combination with YTRA, the second largest online travel agency in India, which subsequently listed as YTRA on the NASDAQ in December 2016.

 

With respect to the above transactions, past performance by Mr. Leight is not a guarantee of success with respect to any business combination we may consummate. The benefits Mr. Leight received in connection with his prior three special purpose acquisition companies were the same as, or similar to, those received by all other sponsors, and included the ownership of founders’ equity prior to the initial public offering and the acquisition of warrants in connection with the public offering. Mr. Leight received no finder’s fees, management fees, or other compensation of any nature either in anticipation of, or at the time of, the business combinations of Aldabra Acquisition Corporation, Aldabra 2 Acquisition Corp. or Terrapin 3 Acquisition Corporation, or at any time after the consummation of either such business combination, other than fees paid to Mr. Leight as compensation for serving as a director of Aldabra 1 and Aldabra 2 following each such business combination, which in each case were approved by a compensation committee composed of independent directors.

 

Summary of the Nomura Group

 

Nomura is a wholly owned subsidiary of Nomura Holding America Inc., which, in turn, is a wholly owned subsidiary of Nomura Holdings, Inc., or the Nomura Group (TSE: 8604; NYSE: NMR).  The Nomura Group is an Asia-headquartered global investment bank with an integrated network spanning over 30 countries. The Nomura Group services the needs of individuals, institutions, corporates and governments through three business divisions: Retail, Asset Management, and Wholesale (Global Markets and Investment Banking).  As of September 30, 2017, the Nomura Group had $391.6 billion in total assets and 28,857 employees globally (2,348 in the Americas, 3,047 in Europe, Middle East, and Africa, 6,756 in Asia excluding-Japan and 16,706 in Japan).

 

The Nomura Group’s Wholesale Division comprises Global Markets, which offers research, sales and trading of global securities, and Investment Banking, which offers capital raising and advisory services.  The Investment Banking platform provides a variety of advisory and capital-raising solutions to corporations, financial institutions, private equity, governments and public-sector organizations around the world. Collaborating across geographies, industries and products, Nomura provides comprehensive and innovative financing, advisory and risk solutions to clients.  Product offerings include:

 

·Mergers and Acquisitions: The Nomura Group acts as a financial advisor to identify and facilitate strategic merger and acquisition, sale of business or alliance opportunities for corporate, financial institutions and sponsor clients, with dedicated M&A teams in Asia, EMEA and the Americas work across borders and time zones to deliver holistic support to its clients globally;

 

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·Capital Raising:  In Equity Capital Markets, the Nomura Group originates and executes equity and equity-linked transactions, including IPOs, rights issues, accelerated bookbuilds and convertibles.  Debt Capital Markets helps clients execute local and foreign-currency debt transactions with specialized teams servicing financial institutions, corporates, public sector agencies and sovereigns. Acquisition and Leveraged Finance arranges financing for leveraged buyouts and corporate acquisitions along with on-going refinancing needs using a variety of debt products;

 

·Solutions: Solutions teams apply a broad range of Fixed Income solutions, Equity related solutions and Insurance solutions to address the various risks faced by clients.  The team is also dedicated to understanding the capital and risk management needs of insurance companies and developing cutting-edge Insurance Solutions to help them respond to these challenges. These include securitization products, structured reinsurance and derivative hedging solutions for complex insurance-specific asset and liability risks.

 

The Nomura Group’s Investment Banking platform offers services to a variety of industry sectors, including:

 

·Business Services;

 

·Consumer / Retail;

 

·Financial Institutions;

 

·Healthcare;

 

·Industrials;

 

·Natural Resources & Power;

 

·Real Estate / Gaming / Lodging / Leisure; and

 

·Telecom / Media / Technology.

 

With respect to the above transactions, past performance by the Nomura Group and its affiliates are not guarantees of success with respect to any business combination we may consummate.

 

Initial Business Combination

 

NASDAQ rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent accounting firm or independent investment banking firm that is a member of FINRA, with respect to the satisfaction of such criteria.

 

We anticipate structuring our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.

 

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Status as a Public Company

 

We believe our structure will make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the target business would exchange their shares of stock in the target business for shares of our stock or for a combination of shares of our stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent in connection with a business combination with us.

 

Furthermore, once a proposed business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could prevent the offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests. It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

 

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

 

Financial Position

 

With funds available for a business combination initially in the amount of approximately $239,500,000 including the proceeds from the $50,000,000 forward purchase agreement and proceeds from the private placement warrants, assuming no redemptions, and after payment of estimated offering expenses, $8,000,000 of deferred cash underwriting fees (or $267,700,000 after payment of up to $9,800,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full) and a placement fee to Nomura on account of the forward purchase, as well as access to the forward financing of up to $450,000,000 from Nomura, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.

 

Effecting our Initial Business Combination

 

General

 

We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial business combination using cash from the proceeds of this offering, from the private placement of the private placement warrants, from the $50,000,000 forward purchase agreement with Nomura (or its assignees) and from up to $450,000,000 from the forward financing from Nomura. We may also use our capital stock, debt or a combination of these as consideration to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

 

If our initial business combination is paid for using stock or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our business combination or used for redemptions of purchases of our Class A common stock, we may apply the balance of the cash released to us from the trust account, as well as the $50,000,000 proceeds from the forward purchase agreement and up to $450,000,000 from the forward financing, for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

 

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We have not identified any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions with respect to identifying any business combination target. From the period prior to our formation through the date of this prospectus, there have been no communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly, to locate or contact a target business. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target business.

 

In addition to the $50,000,000 forward purchase and up to $450,000,000 forward financing, we may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. Subject to compliance with applicable securities laws, we would complete such financing only simultaneously with the completion of our business combination. In the case of an initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

 

Origination and Sourcing of Target Business Opportunities

 

We believe there will be a large number of target acquisitions in need of stable, permanent equity financing, but with limited access to the public markets. Acquisition sources may include private equity fund portfolio companies, entities struggling with complex or failed transactions, entities held by non-traditional investors and divestitures of non-core assets by large conglomerates, each as described in more detail in the section entitled “Proposed Business” above.

 

We believe that the members of the board and our management team have an extensive network of contacts and relationships in the private equity, corporate management, and investment banking markets that will be a source of acquisitions candidates, both for our initial business combination and for future potential add-on acquisition opportunities. Further, we intend to focus on opportunities which are proprietary or where a limited group of potential buyers have been invited to participate in the sale process. We anticipate that target business candidates will also be brought to our attention from various unaffiliated sources, including investment bankers, private investment funds, large business enterprises, and other intermediaries.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, executive officers or directors, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, executive officers or directors. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, executive officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent accounting firm or independent investment banking firm that is a member of FINRA that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

 

As more fully discussed in “Management — Conflicts of Interest,” if any of our executive officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. All of our executive officers currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

 

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Target businesses may be brought to our attention by unaffiliated sources as a result of being solicited by us through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the track record and business relationships of our officers and directors.

 

Selection of a target business and structuring of our initial business combination

 

NASDAQ rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from independent accounting firm or independent investment banking firm that is a member of FINRA with respect to the satisfaction of such criteria. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations.

 

In any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be valued for purposes of the 80% of net assets test. There is no basis for investors in this offering to evaluate the possible merits or risks of any target business with which we may ultimately complete our business combination.

 

To the extent we effect our business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

 

In evaluating a prospective target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial and other information which will be made available to us.

 

The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.

 

Lack of business diversification

 

For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our business combination with only a single entity, our lack of diversification may:

 

·subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse effect on the particular industry in which we operate after our initial business combination, and
·cause us to depend on the marketing and sale of a single product or limited number of products or services.

 

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Limited ability to evaluate the target’s management team

 

Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our business combination with that business, our assessment of the target business’s management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following our business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.

 

We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.

 

Following a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

 

Stockholders may not have the ability to approve our initial business combination

 

We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.

 

Type of Transaction

 

Whether Stockholder Approval is
Required

Purchase of assets   No
Purchase of stock of target not involving a merger with the company   No
Merger of target into a subsidiary of the company   No
Merger of the company with a target   Yes

 

Under NASDAQ’s listing rules, stockholder approval would be required for our initial business combination if, for example:

 

·we issue common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding;
·any of our directors, officers or substantial shareholders (as defined by NASDAQ rules) has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or otherwise and the present or potential issuance of common stock could result in an increase in outstanding common shares or voting power of 5% or more; or
·the issuance or potential issuance of common stock will result in our undergoing a change of control.

 

Permitted purchases of our securities

 

In the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares in such transactions. They will not make any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to: refrain from purchasing shares during certain blackout periods and when they are in possession of any material nonpublic information and to clear all trades with our legal counsel prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either enter make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.

 

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In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules.

 

The purpose of such purchases would be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would otherwise not be met. This may result in the completion of our business combination that may not otherwise have been possible.

 

In addition, if such purchases are made, the public “float” of our common stock may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.

 

Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against the business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M and the other federal securities laws.

 

Any open market purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of Class A common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.

 

Redemption rights for public stockholders upon completion of our initial business combination

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination, including interest income (net of taxes payable and net of any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option). The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares.

 

Manner of Conducting Redemptions

 

We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either in connection with a stockholder meeting called to approve the business combination or by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We intend to conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirement or we choose to seek stockholder approval for business or other legal reasons.

 

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If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

 

·conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, which regulate issuer tender offers, and

·file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A under the Exchange Act, which regulates the solicitation of proxies.

 

Upon the public announcement of our business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.

 

In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of public shares which are not purchased by our sponsor, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.

 

If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:

 

·conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and

·file proxy materials with the SEC.

 

In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.

 

If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of Class A common stock voted are voted in favor of the business combination. In such case, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition, our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of a business combination.

 

Our amended and restated certificate of incorporation provides that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: cash consideration to be paid to the target or its owners, cash to be transferred to the target for working capital or other general corporate purposes or the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.

 

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Limitation on redemption upon completion of our initial business combination if we seek stockholder approval

 

Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to Excess Shares. We believe this restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase their shares at a significant premium to then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 10% of the shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or our management at a premium to then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 10% of the shares sold in this offering, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination.

 

Tendering stock certificates in connection with a tender offer or redemption rights

 

We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.

 

There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $35.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

 

The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved.

 

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Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the tender offer materials or the date of the stockholder meeting set forth in our proxy materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our business combination.

 

If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public stockholders who elected to redeem their shares.

 

If our initial proposed business combination is not completed, we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.

 

Redemption of public shares and liquidation if no initial business combination

 

Our sponsor, executive officers, directors and director nominees have agreed that we will have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete our business combination within such 24-month period, we will: cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our business combination within the allotted time period.

 

Our initial stockholders have entered into letter agreements with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our initial business combination within the allotted time period. However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time period.

 

Our sponsor, executive officers, directors and director nominees have agreed, pursuant to a written letter agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements), divided by the number of then outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject to the SEC’s “penny stock” rules).

 

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $950,000 of proceeds held outside the trust account, the $1,000,000 in loans committed by affiliates of our sponsor, or provided through additional working capital loans from our sponsor, although we cannot assure you that there will be sufficient funds for such purpose. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes or not released to fund our working capital requirements, we may request the trustee to release to us an additional amount of up to $50,000 of such accrued interest to pay those costs and expenses.

 

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If we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.00. Under Section 281(b) of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.

 

Although we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. 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. In order to protect the amounts held in the trust account, our sponsor has agreed that it will be liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) or such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest which may be withdrawn to pay taxes or for working capital purposes, 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 this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor will not be responsible to the extent of any liability for such third-party claims. We cannot assure you, however, that our sponsor would be able to satisfy its obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

 

In the event that the proceeds in the trust account are reduced below $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) or such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest which may be withdrawn to pay taxes or fund our working capital requirements, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option).

 

We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $950,000 from the proceeds of this offering and the $1,000,000 in loans committed to us by affiliates of our sponsor with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $50,000). In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors. In the event that our offering expenses exceed our estimate of $750,000, we may fund such excess with funds from the funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.

 

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Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination within 24 months from the closing of this offering may be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.

 

Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our business combination within 24 months from the closing of this offering, is not considered a liquidation 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 liquidation distribution. If we are unable to complete our business combination within 24 months from the closing of this offering, we will: cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.

 

Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account.

 

As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) or such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets other than due to the failure to obtain such waiver, in each case net of the amount of interest withdrawn to pay taxes or to fund our working capital requirements and less any per-share amounts distributed from our trust account to our public stockholders in the event we are unable to complete our business combination within 24 months from the closing of this offering and will not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims.

 

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If we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option) to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

 

Our public stockholders will be entitled to receive funds from the trust account only in the event of the redemption of our public shares if we do not complete our business combination within 24 months from the closing of this offering or if they redeem their respective shares for cash upon the completion of the initial business combination. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights described above.

 

Amended and Restated Certificate of Incorporation

 

Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the consummation of our initial business combination. If we seek to amend any provisions of our amended and restated certificate of incorporation relating to stockholders’ rights or pre-business combination activity, we will provide dissenting public stockholders with the opportunity to redeem their public shares in connection with any such vote. Our initial stockholders have agreed to waive any redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

 

·prior to the consummation of our initial business combination, we shall either (1) seek stockholder approval of our initial business combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and net of any amounts released to us to fund our working capital requirements) or (2) provide our stockholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and net of any amounts released to us to fund our working capital requirements) in each case subject to the limitations described herein;
·we will consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, solely if we seek stockholder approval, a majority of the outstanding shares of common stock voted are voted in favor of the business combination;
·if our initial business combination is not consummated within 24 months from the closing of this offering, then our existence will terminate and we will distribute all amounts in the trust account; and
·prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to receive funds from the trust account or vote on any initial business combination.

 

These provisions cannot be amended without the approval of holders of 65% of our common stock. In the event we seek stockholder approval in connection with our initial business combination, our amended and restated certificate of incorporation provides that we may consummate our initial business combination only if approved by a majority of the shares of common stock voted by our stockholders at a duly held stockholders meeting.

 

Comparison of redemption or purchase prices in connection with our initial business combination and if we fail to complete our business combination.

 

The following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion of our initial business combination and if we are unable to complete our business combination within 24 months from the closing of this offering.

 

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Redemptions in 
Connection with our Initial
 Business Combination

Other Permitted Purchases
of Public Shares by our
Affiliates

Redemptions if we fail to
Complete an Initial
Business Combination

Calculation of redemption price  

Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote.  The redemption price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote.  In either case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share, including interest income (net of taxes payable and net of any amounts released to us to fund our working capital requirements), divided by the number of then outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets to be less than $5,000,001 and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination.

 

  If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following completion of our initial business combination.  Such purchases will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act.  None of the funds in the trust account will be used to purchase shares in such transactions.  

If we are unable to complete our business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.00 per share (regardless of whether or not the underwriters exercise any portion of their over-allotment option)), including interest income (net of taxes payable and net of any amounts released to us to fund our working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares.

Effect to remaining stockholders   The redemptions in connection with our initial business combination will reduce the book value per share for our remaining stockholders, who will bear the burden of the deferred cash underwriting commissions and interest withdrawn in order to pay taxes and any amounts released to us to fund our working capital requirements (to the extent not paid from amounts accrued as interest on the funds held in the trust account).   If the permitted purchases described above are made, there will be no effect to our remaining stockholders because the purchase price would not be paid by us.   The redemption of our public shares if we fail to complete our business combination will reduce the book value per share for the shares held by our initial stockholders, who will be our only remaining stockholders after such redemptions.

 

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Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419

 

The following table compares the terms of this offering to the terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds, underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419 apply to our offering.

 

 

Terms of Our Offering

Terms Under a Rule 419 Offering

Escrow of offering proceeds  

The rules of the NASDAQ Capital Market provide that at least 90% of the gross proceeds from this offering and the private placement be deposited in a trust account.  Approximately $200,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a trust account located in the United States and held at JPMorgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee.

 

  Approximately $171,180,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account.
Investment of net proceeds  

Approximately $200,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.

 

  Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
Receipt of interest on escrowed funds  

Interest on proceeds from the trust account to be paid to stockholders is reduced by any taxes paid or payable, any amounts released to us to fund working capital requirements and in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $50,000 of net interest that may be released to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.

 

  Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination.
Limitation on fair value or net assets of target business   NASDAQ rules require that our initial business combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions, taxes payable on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination.   The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds.

 

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Terms of Our Offering

Terms Under a Rule 419 Offering

Trading of securities issued  

The units will begin trading on or promptly after the date of this prospectus. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the date of this prospectus unless Nomura, as the representative of the underwriters, informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. We will file the Current Report on Form 8-K promptly after the closing of this offering, which is anticipated to take place two business days from the first trading of the units on NASDAQ. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option. 

 

No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination.  During this period, the securities would be held in the escrow or trust account.
Exercise of the warrants   The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months from the closing of this offering.  

The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.

 

Election to remain an investor   We will provide our public stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest income, net of taxes payable and any amounts released to us for working capital purposes, upon the completion of our initial business combination, subject to the limitations described herein.  We may not be required by law to hold a stockholder vote.  If we are not required by law and do not otherwise decide to hold a stockholder vote, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules.  If, however, we hold a stockholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.  If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination.  Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.   A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor.  Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a stockholder of the company or require the return of his, her or its investment.  If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the stockholder.  Unless a sufficient number of investors elect to remain investors, all funds on deposit in the escrow account must be returned to all of the investors and none of the securities are issued.

 

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Terms of Our Offering

Terms Under a Rule 419 Offering

Business combination deadline  

If we are unable to complete an initial business combination within 24 months from the closing of this offering, we will cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.

 

  If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors.
Release of funds   Except for the withdrawal of interest to pay taxes and fund our working capital requirements, none of the funds held in trust (including the interest on such funds) will be released from the trust account until the earlier of the completion of our initial business combination or the redemption of 100% of our public shares if we are unable to complete a business combination within the required time frame (subject to the requirements of applicable law).  Based upon current interest rates, we expect the trust account to generate approximately $2,000,000 of interest income per year, which could be released to pay taxes and fund our working capital requirements.   The proceeds held in the escrow account are not released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.

 

Competition

 

In identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.

 

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Facilities

 

We currently maintain our business address at 2655 South Le Jeune Road, Suite 550, Coral Gables, Florida 33134. The cost for a portion of this location and the spaces in which we maintain our offices is included in the $16,875 per month fee that we intend to pay an affiliate of our sponsor for office space, utilities and secretarial support. We consider our current office space adequate for our current operations.

 

Employees

 

We currently have two executive officers and no employees. Members of our team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time that Mr. Leight or any other members of our team will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the current stage of the business combination process.

 

Periodic Reporting and Financial Information

 

We will register our units, Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited and reported on by our independent registered public auditors.

 

We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with GAAP. We cannot assure you that any particular target business identified by us as a potential acquisition candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with GAAP. To the extent that this requirement cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential acquisition candidates, we do not believe that this limitation will be material.

 

We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2019 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.

 

Prior to the date of this prospectus, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our business transaction.

 

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.

 

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.

 

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We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th , and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated with it in the JOBS Act.

 

Legal Proceedings

 

There is no material litigation, arbitration or governmental proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members of our management team have not been subject to any such proceeding in the 12 months preceding the date of this prospectus.

 

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MANAGEMENT

 

Directors and Executive Officers

 

Our directors, officers and director nominees are as follows:

 

Name

Age

Title

Nathan Leight   58   Chairman of the Board of Directors and Chief Executive Officer
Guy Barudin   57   Chief Operating Officer, Chief Financial Officer
Jonathan Kagan   61   Director Nominee*
Bruce Pollack   58   Director Nominee*
Steven Rosston   58   Director Nominee*
Sandor Valner   56   Director Nominee*
Jeffrey Brown   44   Director Nominee*

 

* This individual has indicated his assent to occupy such position on the effective date of the registration statement of which this prospectus forms a part.

 

Nathan Leight. Mr. Leight, our Chairman and Chief Executive Officer since inception, is the senior managing member of Terrapin Partners, LLC, and has been since 1998. He is also chairman and chief investment officer of Terrapin Asset Management, LLC as well as chairman of its specialty finance lending affiliate, Terrapin Lending Company. From June 2014 to December 2016, Mr. Leight was chairman of Terrapin 3 Acquisition Corporation, a blank check company that raised approximately $212.8 million of gross proceeds in its initial public offering and later consummated a business combination with Yatra Online Inc. (NASAQ:YTRA), the second largest online travel agent based in India.  Mr. Leight served as chairman of Aldabra 2, another blank check company which raised $414 million of gross proceeds in its 2007 initial public offering and later acquired the paper and packaging assets of Boise Cascade, LLC to form Boise, Inc. (NYSE:BZ) in a transaction valued at more than $1.6 billion. Mr. Leight served as a director of Boise Inc. for five years, from 2007 to 2012. Mr. Leight was chairman of Aldabra 1, a blank check company that raised $55.2 million of gross proceeds in its 2005 initial public offering and later merged with and into affiliates of Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the largest provider of dredging services in North America, in a transaction valued at more than $400 million. Mr. Leight initially served as a director of the company following the business combination, and served as chairman from 2011 to October 2015. From 2009 to 2011, Mr. Leight served on the board of TradeStation Group, Inc., now a wholly-owned subsidiary of Monex Group, Inc. (Tokyo Stock Exchange: 8698). Previously, from 1995 to 1998, Mr. Leight was the chief investment officer of Gabriel Capital LP, managing more than $1 billion. Gabriel Capital specialized in bankruptcies, under-valued securities, emerging markets, private equity and merger arbitrage. Prior to joining Gabriel Capital, from 1991 to 1995 Mr. Leight established and oversaw the proprietary trading department at Dillon Read & Co. Inc., which specialized in bankruptcy and distressed situations as well as risk arbitrage. Mr. Leight graduated cum laude from Harvard College. Mr. Leight is well qualified to serve as director due to his more than 30 years of experience in capital markets, asset and portfolio management, venture capital and private equity investing.

 

Guy Barudin. Mr. Barudin, our Chief Operating Officer and Chief Financial Officer since inception, is also a managing director with Terrapin Partners, LLC. From June 2014 to December 2016, Mr. Barudin served as chief financial officer and chief operating officer of Terrapin 3 Acquisition Corporation. Mr. Barudin continues to serve as a chief operating officer of Yatra USA Corp., the U.S.-based affiliate of Yatra Online, Inc. Mr. Barudin joined Terrapin in 2007 to focus on its business development and private equity efforts. In addition to supporting Terrapin’s private equity activities, he manages a portfolio of alternative assets including real estate, energy, private equity, venture capital, hedge funds and fund of funds. Mr. Barudin joined Terrapin from Medco Health Solutions, where from 2000 to 2007 he held various business development and finance positions and concentrated on strategic transactions related to healthcare information technology and pharmacy benefit strategy. Prior to Medco, from 1996 to 1999 Mr. Barudin was Vice President for Alliances and New Ventures at MasterCard International. Prior to Mastercard, he held positions in corporate finance at Merrill Lynch, PaineWebber Group Inc., and Dillon Read & Co., Inc. Mr. Barudin received an MS from Massachusetts Institute of Technology Sloan School of Management and a BSE from Princeton University cum laude. Mr. Barudin is well qualified to serve as a director due to his extensive experience with special purpose acquisition companies, corporate development, and capital markets.

 

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Jonathan Kagan. Mr. Kagan, our director nominee, has been a Managing Principal of Corporate Partners LLC since 2006, where he oversees the investment of privately negotiated investments in public and private companies. Mr. Kagan began his career in the investment banking division of Lazard Frères Co. LLC where he held a variety of positions from 1980 until 2009 including Managing Director of Lazard Alternative Investments LLC. Previously, Mr. Kagan was also a Managing Director of Corporate Partners I LP, and of Centre Partners Management LLC, where he managed the Centre Capital Funds. Mr. Kagan served as a director of Terrapin 3 Acquisition Corporation from the closing of its initial public offering in July 2014 until the consummation of its business combination with Yatra in December 2016. Mr. Kagan received an MA (1 Hon) from Oxford University and his AB, summa cum laude and Phi Beta Kappa from Harvard College. Mr. Kagan is well qualified to serve as director due to his extensive experience with corporate finance, capital markets and institutional investments, and due to his extensive experience as a member of the board of directors of numerous companies.

 

Bruce Pollack. Mr. Pollack, our director nominee, has served as Managing Partner at Centre Partners Management LLC, a private equity fund manager, since 1991. Prior to Center Partners, Mr. Pollack began his career in the investment banking division of Becker Paribas Incorporated and Merrill Lynch Capital Markets. Mr. Pollack currently serves as a director of publicly listed, Lifetime Brands, Inc. (NASD: LCUT) and as a director of the following private companies: Taylor Precision Products, Inc., K2 Pure Solutions, L.P., Nearly Natural, LLC, Sun Orchard, Inc. and U.S. Retirement & Benefits Partners, Inc.  Mr. Pollack previously served on the Boards of a number of companies, including Bellisio Foods, Inc., Bumble Bee Foods, L.P., Captain D's Holding Corp., the Connors Bros. Income Fund, Distant Lands Trading Co., Inc., Garden Fresh Holdings, Inc., The Johnny Rockets Group, Inc., KIK Corporation Holdings, Inc., Salton, Inc., Ross Aviation, LLC and several other private companies. He is on the Board of Governors of the Weizmann Institute of Science and serves as a Trustee at Brandeis University. Mr. Pollack received a B.A. from Brandeis University. We believe Mr. Pollack is well qualified to serve as a director due, among other things, to his extensive experience in private and public company investing, and due to his extensive experience as a member of the board of directors of numerous companies.

 

Steven Rosston. Mr. Rosston, our director nominee, has served as Executive Chairman and as a director of Procare Software, a leading provider of childcare management software and integrated payment processing in the United States, since August 2015. Mr. Rosston has served as a director and as a consultant to the CEO of Click Diagnostics, Inc., a life sciences technology company since February 2015.  Mr. Rosston was a founding investor in Workiva (NYSE:WK), a software-as-a-service business, and he served on the Advisory Board and then Senior Advisor to the CEO from 2008 to November 2017. Mr. Rosston also served as a director and as the Executive Chairman of Maintenance Connection from April 2016 to September 2017.  Mr. Rosston served as a Partner, General Partner, Managing Director and Senior Advisor at Glynn Capital Management, LLC, a venture capital and public company investment firm, from 1990 through December 2015, investing in software, Internet, semiconductor, business service, medical device, and medical instrumentation companies. Prior to Glynn Capital, Mr. Rosston served as a product manager, marketing manager and group product manager at ROLM from 1986 to 1990. Mr. Rosston received his MBA (Arjay Miller Scholar) and JD degrees from Stanford University and his BA, magna cum laude, from Harvard College.  We believe Mr. Rosston is well-qualified to serve as a director due, among other things, to his experience as a public and private company investor and his extensive experience as a member of board of directors of numerous companies.

 

Sandor Valner. Mr. Valner, our director nominee, has been associated with Walton Street Capital since 2006.  He is a Managing Principal for Mexico and Latin America at Walton Street Capital, a global real estate private equity firm. Prior to Walton, Mr. Valner was CEO of VALOR, a real estate merchant banking firm he founded in 2001. Prior to founding VALOR, Mr. Valner was a Partner at EMVA since 1995.  He headed Credit Suisse /First Boston’s operations in Mexico from 1990 to 1995 and was part of the Latin America executive committee in New York. Before joining Credit Suisse, Mr. Valner worked for JP Morgan in corporate finance and mergers & acquisitions in New York from 1986 to 1990. Mr. Valner is currently a member on the board of directors of six publicly listed Mexican real estate funds. Mr. Valner received an MBA degree and an MS degree in Engineering from Stanford University in 1986. He obtained his BS in Engineering summa cum laude from the UAM University in Mexico in 1983.  Mr. Valner is well qualified to serve on the board because of his many years of experience in fund management and investment banking.

 

Jeffrey Brown. Mr. Brown, our director nominee, is a managing director at Terrapin Partners, LLC and TICO Management Company, LP.  Mr. Brown joined Terrapin in December 2017 as CIO and Portfolio Manager of TICO and is primarily responsible for investment decisions for TICO fund vehicles which focus on debt-related and special situations investments. Mr. Brown leads the TICO investment committee and contributes significant global private credit and special situations investment expertise to the Fund’s team. Prior to TICO, Mr. Brown was a Partner and Managing Director with J.H. Whitney Investment Management LLC from October 2014 to July 2017 and, earlier, from 2010 to July 2014, a Founding Partner and member of the investment committee of True Green Capital Management LLC, a special situations investment firm with over $700 million current assets under management focused on non-traditional sectors undergoing disruption and social impact-accredited end markets. Mr. Brown was earlier a Senior Vice President and Senior Research Analyst with Plainfield Asset Management LLC, a special situations hedge fund based in Greenwich, CT with more than $5 billion in peak assets under management. Mr. Brown was earlier an analyst at W.R. Huff Investment Management, a $14 billion high yield and private equity manager in Morristown, NJ.  Mr. Brown’s prior board and bond holder committee directorships include, among others, Solsil Inc (GSM:NASDAQ), HelioSphera SA, Recycled Paper Greetings, Bioenergy Holdings LLC, WR-TGC Solar Generation IV, Atkins Nutraceuticals and TCBY (MF Holdings). Mr. Brown received an M.B.A. from MIT Sloan School of Management and a B.A., with distinction, from Yale University. Mr. Brown is well qualified to serve on the board given his extensive experience as a credit and equity investor across industries, his structuring and transaction management experience, as well as his experience serving as board director for diverse companies in both traditional and emerging sectors.

 

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Other Team Members

 

In addition to our management, our team will include the Terrapin employees noted below. None of these individuals are required to commit any specified amount of time to our affairs; however, we expect that certain of these individuals will on average dedicate a significant amount of their professional time on our affairs.

 

David McMillan, Capital Markets. Mr. McMillan is a managing director of Terrapin Partners, LLC and TICO Management Company, LP. Mr. McMillan joined Terrapin in May 2017 to focus on the SPAC business and direct lending business. David has extensive experience in investment banking and capital markets with a 37 year career on Wall Street in all aspects of equity and debt capital markets. Mr. McMillan also has extensive experience with SPAC IPOs and back-end executions including the Aldabra 2 Acquisition Corp/Boise Inc. business combination.  Prior to joining the firm, Mr. McMillan was a managing director and head of international equity capital markets at MUFG Securities, Inc. from October 2012 to May 2017. He was mandated to build a new equity/equity linked capital markets team to originate and distribute new issue securities.  He achieved record revenues in all five years of his tenure at MUFG Securities. Previously, Mr. McMillan was a managing director at Lazard Capital Markets, head of equity and fixed-income corporate syndicate departments. During his 26 years at Lazard, he also served on the management and underwriting committees. Before joining Lazard, Mr. McMillan was a vice president in equity capital markets at Drexel Burnham Lambert after starting his career at Teachers Insurance Annuity Association as an advisory officer. Mr. McMillan received a BA from Hobart and William Smith Colleges. He is a Registered Representative with Corporate Partners & Co. LLC.

 

Stephen Schifrin, Legal. Mr. Schifrin, our Corporate Secretary since inception, is chief compliance officer of Terrapin Asset Management, LLC, an investment adviser registered with the SEC that manages alternative investments, including multi-manager hedge fund portfolios and niche-oriented private funds, and its affiliated specialty finance lending company, Terrapin Lending Company, which makes asset-based loans to small businesses. Mr. Schifrin also manages regulatory compliance and legal affairs for Terrapin Partners, LLC. Mr. Schifrin served as corporate secretary for Terrapin 3, managing all legal and regulatory compliance matters for the Terrapin team’s third SPAC in connection with its IPO, target search, and business combination with Yatra Online, Inc. Mr. Schifrin continues to serve as a board observer for Yatra Online, Inc. and as chief legal officer of Yatra USA Corp., the U.S.-based affiliate of Yatra Online, Inc. Mr. Schifrin is a director of Legacy Bank of Florida, a community bank headquartered in Broward and Palm Beach Counties. He received his J.D. from the University of Texas School of Law, where he served as chair of the Board of Advocates and was a member of the Texas Journal for Civil Liberties & Civil Rights. He interned for the Honorable Diana Saldana, in the U.S. District Court for the Southern District of Texas. Mr. Schifrin received his B.A. from the University of California, Santa Barbara. He is a member of the State Bar of California.

 

Irina Carpov, Finance. Ms. Carpov is currently the head of finance at Terrapin Asset Management, LLC and TICO Management Company, LP where she oversees operations of diverse base of investment vehicles, including hedge funds, direct lending funds, funds of funds as well as management companies. Irina joined Terrapin in 2010.  Ms. Carpov served as head of finance for Terrapin 3 Acquisition Corporation, overseeing financial reporting and analysis from that firm’s IPO through its business combination with Yatra Online, Inc. Previously, Ms. Carpov was a member of the alternative investments audit group at Marcum LLP, and prior to that worked in audit/tax group at New York based public accounting firm Farkouh Furman and Faccio LLP. Previously, Ms. Carpov was a business analyst at Accenture LLP. Ms. Carpov received a BA in accounting from Zicklin School of Business, Baruch College, is a certified public accountant and a certified global management accountant.

 

Robert Plotkin, Corporate Development. Mr. Plotkin is director of technology at Terrapin Partners, LLC where he leads technology and operational due diligence for private equity and venture investments as well as managing that firm’s corporate IT infrastructure.   Mr. Plotkin previously served in similar corporate development and research capacities for all of Terrapin’s prior special purpose acquisition companies: Aldabra Acquisition Corporation, Aldabra 2 Acquisition Corp., and Terrapin 3 Acquisition Corporation.  Mr. Plotkin joined Terrapin Partners, LLC in 2000 from IBM’s T.J. Watson Research Center, where he worked for 10 years on projects including the development of parallel supercomputers, MPEG video systems, digital library management systems, and interactive web technologies. Mr. Plotkin received a masters degree in computer science from NYU Polytechnic School of Engineering and a BS in electrical engineering from Columbia University.

 

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Number and Terms of Office of Officers and Directors

 

Our board of directors is divided into two classes with only one class of directors being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving a two-year term. The term of office of the first class of directors, consisting of Messrs. Pollack, Rosston and Valner, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Leight, Brown and Kagan, will expire at the second annual meeting of stockholders. We do not currently intend to hold an annual meeting of stockholders until after we consummate our initial business combination.

 

Our officers are elected by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of a Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, Secretary, Assistant Secretaries, Treasurer and such other offices as may be determined by the board of directors.

 

Director Independence

 

NASDAQ listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Messrs. Kagan, Pollack, Rosston and Valner are “independent directors” as defined in the NASDAQ listing standards and applicable SEC rules. We intend to appoint an additional independent director to our board within one year following completion of this offering pursuant to the NASDAQ phase-in provisions for initial public offerings. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

 

Executive Officer and Director Compensation

 

None of our executive officers, directors or director nominees has received any cash (or non-cash) compensation for services rendered to us. Commencing on the date that our securities are first listed on NASDAQ through the earlier of consummation of our initial business combination and our liquidation, we will not pay our independent directors annual compensation. We intend to pay an affiliate of our sponsor a total of $16,875 per month for office space, utilities and secretarial support. Our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our independent directors will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates.

 

After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting, management or other fees from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive and director compensation. Any compensation to be paid to our officers will be determined by a compensation committee constituted solely by independent directors.

 

We do not intend to take any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination, although it is possible that some or all of our executive officers and directors may negotiate employment or consulting arrangements to remain with us after the initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our executive officers and directors that provide for benefits upon termination of employment.

 

Our sponsor was formed in 2017 by some of the members of our management team for the purpose of serving as our sponsor. Mr. Leight, our Chairman and Chief Executive Officer, is the sole managing member and majority owner of our sponsor. In addition, Mr. Barudin, our Chief Operating Officer, and Chief Financial Officer, has an ownership interest in our sponsor. The interests of certain members of our management team in our sponsor will be dependent on the value, following the consummation of our initial business combination, of the founders shares and the private placement warrants held by our sponsor.

 

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Committees of the Board of Directors

 

Upon the effective date of the registration statement of which this prospectus forms a part, our board of directors will have two standing committees: an audit committee and a compensation committee. Both our audit committee and our compensation committee will be composed solely of independent directors.

 

Audit Committee

 

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will establish an audit committee of the board of directors. Messrs. Kagan, Rosston and Valner will serve as members of our audit committee. Mr. Kagan will serve as chairman of the audit committee. Under the NASDAQ listing standards and applicable SEC rules, we are required to have three members of the audit committee, all of whom must be independent. Messrs. Kagan, Rosston and Valner are independent.

 

Each member of the audit committee is financially literate and our board of directors has determined that Mr. Kagan qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

 

Responsibilities of the audit committee include:

 

·the appointment, compensation, retention, replacement, and oversight of the work of the independent registered independent public accounting firm and any other independent registered public accounting firm engaged by us;
·pre-approving all audit and non-audit services to be provided by the independent registered independent public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
·reviewing and discussing with the independent registered independent public accounting firm all relationships the registered independent public accounting firm have with us in order to evaluate their continued independence;
·setting clear hiring policies for employees or former employees of the independent registered independent public accounting firm;
·setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
·obtaining and reviewing a report, at least annually, from the independent registered independent public accounting firm describing the independent registered independent public accounting firm’s internal quality-control procedures and any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within, the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
·reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
·reviewing with management, the independent registered independent public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

 

Compensation Committee

 

Upon the effectiveness of the registration statement of which this prospectus forms a part, and subject to the requirements of law or the NASDAQ market rules, we will establish a compensation committee of the board of directors. The members of our Compensation Committee will be Messrs. Kagan, Rosston and Pollack. Mr. Rosston will serve as chairman of the compensation committee. We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:

 

·reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer’s based on such evaluation in executive session at which the Chief Executive Officer is not present;
·reviewing and approving the compensation of all of our other executive officers;
·reviewing our executive compensation policies and plans;
·implementing and administering our incentive compensation equity-based remuneration plans;
·assisting management in complying with our proxy statement and annual report disclosure requirements;

 

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·approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
·producing a report on executive compensation to be included in our annual proxy statement; and
·reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

 

The charter will also provide that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by NASDAQ and the SEC.

 

Director Nominations

 

We do not have a standing nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law or NASDAQ rules. In accordance with Rule 5605(e)(2) of the NASDAQ rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. The directors who shall participate in the consideration and recommendation of director nominees are Messrs. Kagan, Pollack and Valner. In accordance with Rule 5605(e)(1)(A) of the NASDAQ rules, all such directors are independent. As there is no standing nominating committee, we do not have a nominating committee charter in place.

 

The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws.

 

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

 

Compensation Committee Interlocks and Insider Participation

 

None of our executive officers currently serves, and in the past year has not served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors.

 

Code of Ethics

 

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our form of Code of Ethics and our audit committee charter as exhibits to the registration statement of which this prospectus forms a part. You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K. See “Where You Can Find Additional Information.”

 

Conflicts of Interest

 

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant to which such officer or director is required to present a business combination opportunity to such entity. Accordingly, if any of the above executive officers becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that the fiduciary duties or contractual obligations of our executive officers will materially affect our ability to complete our business combination. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

 

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Our sponsor and our executive officers, directors and director nominees have agreed, pursuant to a written letter agreement, not to participate in the formation of, or become an officer or director of, another blank check company that is seeking an initial business combination requiring total consideration to the seller of less than $1.25 billion until we have entered into a definitive agreement regarding our initial business combination or we have failed to complete our initial business combination within the time frame set forth in this prospectus.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Nomura will be paid a market-based placement fee on the gross proceeds from the sale of the forward purchase shares upon the consummation of an initial business combination. In addition, the forward purchase agreement provides that Nomura (or its assignees) is entitled to registration rights with respect to the forward purchase shares. 

 

Nomura or its affiliates engage in a broad spectrum of activities including principal investing, specialized investment vehicle management, asset management, financial advisory, securities underwriting, sales and trading, investment research, lending and other activities. In the ordinary course of business, they engage in activities where their interests or the interests of their clients may conflict with our interests. Accordingly, there may be situations in which Nomura has an obligation or an interest that actually or potentially conflicts with our interests. You should assume that these conflicts will not be resolved in our favor and, as a result, we may be denied certain acquisition opportunities or otherwise disadvantaged in certain situations by our relationship to Nomura.

 

Nomura, its affiliates and their clients make investments in a variety of different businesses and may directly compete with us for acquisition opportunities provided or created by Nomura that meet our initial business combination objectives. Nomura is under no specific obligation to offer potential acquisition opportunities to us and may allocate them at its discretion to us or other parties. We will not have any priority in respect of acquisition opportunities provided or created by Nomura. You should assume that Nomura and its affiliates and clients will have priority over us in terms of access to acquisition opportunities.

 

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Clients of Nomura, and its affiliates, may also compete with us for investment opportunities meeting our initial business combination objectives. If Nomura is engaged to act for any such clients, we may be precluded from pursuing opportunities that would conflict with Nomura’s obligations to such client. In addition, investment ideas generated within Nomura may be suitable for our company or a client of Nomura, and may be directed to any of such persons or entities rather than to us. Nomura may also be engaged to advise the seller of a company, business or assets that would qualify as an acquisition opportunity for us. In such cases, we may be precluded from participating in the sale process or from purchasing the company, business or assets. If, however, we are permitted to pursue the opportunity, the interests of Nomura or its obligations to the seller may diverge from our interests.

 

Potential investors should also be aware of the following other potential conflicts of interest:

 

·None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
·In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete description of our management’s other affiliations, see “Management — Directors and Executive Officers.”
·Our initial stockholders have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to such founder shares if we fail to consummate our initial business combination within 24 months after the closing of this offering. If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our initial stockholders until the earlier of (1) one year after the completion of our initial business combination and (2) the date on which we consummate a liquidation, merger, capital stock exchange, reorganization, or other similar transaction after our initial business combination that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of our Class A 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 our initial business combination, the founder shares will be released from the lock-up. With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own Class A common stock and warrants following this offering, our officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
·Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our initial business combination.

 

The conflicts described above may not be resolved in our favor.

 

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

 

·the corporation could financially undertake the opportunity;
·the opportunity is within the corporation’s line of business; and
·it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

 

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Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Furthermore, our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have. Below is a table summarizing the entities to which our executive officers, directors and director nominees currently have fiduciary duties or contractual obligations:

 

Individual

 

Entity

 

Entity’s Business

 

Affiliation

Nathan Leight   Terrapin Partners, LLC   Private equity   Managing member
    Terrapin Asset Management, LLC   Hedge fund management and advisory activity   Chairman and chief investment officer
    TICO Management Company, LP   Direct lending   Chairman
Guy Barudin   Terrapin Partners, LLC   Private equity   Managing Director
    Terrapin Asset Management, LLC   Private equity fund-of-funds   Portfolio Manager
Jonathan Kagan   Corporate Partners LLC   Private equity   Managing Principal
    BIH Holdings LLC   Produce   Director
    Drill Partners LLC   Oil and gas production   Director
    Gumps, Inc.   Retail   Director
    Ironshore, Inc.   Insurance   Director
    Lee Antimicrobial Solutions LLC   Disinfection products   Director, Chairman of the board
    Mapleton Communications LLC   Radio stations   Director, Chairman of the board
    Ovation LLC   Cable network   Observer
    Universal Trailer Holdings Corp.   Transport manufacturing   Director
    WWRD Holdings   Luxury goods   Director
Bruce Pollack   Centre Partners   Private equity   Managing Partner
    Lifetime Brands, Inc.   Home products   Director
    Filament Brands, Inc.   Home products   Director
    K2 Pure Solutions, L.P.   Water treatment   Director
    Sun Orchard, Inc.   Food and beverage   Director
    U.S. Retirement & Benefits Partners, Inc.   Financial services   Director
Steven Rosston   Procare Software   Software   Director, Executive Chairman
    Click Diagnostics, Inc.   Life sciences   Director
Sandor Valner   Walton Street Capital Mexico   Private equity   Managing Partner, Mexico and Latin America
    Funds associated with Walton Street Capital Mexico   Private equity   Director
    Grupo Calidra, S.A. de C.V.   Construction materials   Director
    Fibra Hotelera, SC   Real Estate investment Trust   Director
Jeffrey Brown   Terrapin Partners, LLC   Private equity   Managing Director
    TICO Management Company, LP   Direct lending   Portfolio Manager

   

Accordingly, if any of the above executive officers, directors or director nominees becomes aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity, and only present it to us if such entity rejects the opportunity. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to complete our business combination. Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

 

Each of Messrs. Leight, Brown and Barudin are currently involved with Terrapin Partners, LLC or its affiliates and therefore know each other well. Although it may be beneficial to us that the members of our management team know each other and work together, these previous and/or existing relationships may influence the roles taken by our officers and directors with respect to us. For example, one of our directors or officers may be less likely to object to a course of action with respect to our activities because it may jeopardize his relationships in another enterprise. Therefore, such persons may not protect our interests as strenuously as would persons who had no previous relationship with each other.

 

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent accounting firm or independent investment banking firm which is a member of FINRA that such an initial business combination is fair to our company from a financial point of view.

 

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In the event that we submit our initial business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after the offering in favor of our initial business combination and our officers and directors have also agreed to vote any public shares purchased during or after the offering in favor of our initial business combination.

 

Our sponsor and our executive officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws. None of our sponsor, executive officers or directors have received any item of value other than as disclosed in this prospectus.

 

Limitation on Liability and Indemnification of Officers and Directors

 

Our amended and restated certificate of incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the DGCL.

 

We will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification provided for in our amended and restated certificate of incorporation. Our bylaws also permit us to maintain insurance on behalf of any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit such indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations to indemnify our officers and directors.

 

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.

 

We believe that these provisions, the insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.

 

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PRINCIPAL STOCKHOLDERS

 

The following table sets forth information regarding the beneficial ownership of our common stock as of the date of this prospectus, and as adjusted to reflect the sale of our common stock included in the units offered by this prospectus, and assuming no purchase of units in this offering, by

 

·each person known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock;
·each of our executive officers, directors and director nominees that beneficially owns shares of our common stock; and
·all our executive officers and directors as a group.

 

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this prospectus.

 

The post-offering ownership percentage column below assumes that the underwriters do not exercise their over-allotment option, none of the forward purchase shares are purchased, our initial stockholders forfeit an aggregate of 2,016,373 founder shares and there are 25,000,000 shares of our common stock issued and outstanding after this offering.

 

Name and Address of Beneficial Owner (1) (5)   Number of Shares
Owned (2)
    Approximate
Percentage of 
Outstanding
Common Stock
 
          Before
Offering
    After
Offering
 
Nathan Leight (3)     5,437,443       77.5 %     14.9 %
Jeffrey Brown     15,000       *       *  
Guy Barudin (4)     0       -       -  
Terrapin 4 Sponsor Partnership, LLC (5)     4,507,075       64.2 %     12.4 %
Terrapin Partners Employee Partnership 4, LLC (5)     930,368       13.3 %    

2.5

%
Nomura Securities International, Inc. (6)     1,503,930       21.4 %     4.8 %
Jonathan Kagan     15,000       *       *  
Bruce Pollack     15,000       *       *  
Steven Rosston     15,000       *       *  
Sandor Valner     15,000       *       *  
All directors and executive officers as a group (7 individuals)     5,512,443       78.6 %     15.2 %

  

*Less than 1%

(1)Unless otherwise noted, the business address of each of the following entities or individuals is c/o Terrapin Partners, 2655 South Le Jeune Road, Suite 550, Coral Gables, Florida 33134.

(2)Interests shown consist solely of founders shares, classified as shares of Class F common stock. Such shares are convertible as of the date of this prospectus into shares of Class A common stock on a one-for-one basis but are subject to adjustment, as described below in the section entitled “Description of Securities.” Excludes the forward purchase shares, as such shares may not be voted or disposed of by Nomura (or its assignees) within 60 days of the date of this prospectus.

(3)

Represents 4,507,075 shares held by our sponsor and 930,368 shares held by Terrapin Partners Employee Partnership 4, LLC for the benefit of employees of Terrapin Partners, LLC and affiliates, and includes 750,000 founder shares which are subject to forfeiture depending on the extent to which the over-allotment option is exercised and 962,443 founder shares which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Nathan Leight, our chairman and CEO, is the sole managing member of Apple Orange LLC, which is the sole managing member of our sponsor. Our sponsor is the sole managing member of Terrapin Partners Employee Partnership 4, LLC. Accordingly, all shares held by our sponsor and Terrapin Partners Employee Partnership 4, LLC may be deemed to be beneficially owned by Mr. Leight. Mr. Leight disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. 

(4)

Excludes beneficial interest in shares allocated to Mr. Barudin by our sponsor. Mr. Barudin has no right to vote or dispose of the shares underlying his respective membership interest until the shares are distributed by our sponsor.

(5)

Shares held by our sponsor and Terrapin Partners Employee Partnership 4, LLC include 621,672 and 128,328 shares, respectively, which are subject to forfeiture depending on the extent to which the over-allotment option is exercised and 797,765 and 164,678 shares, respectively, which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased.

 

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(6)

Includes 303,930 shares which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. The business address of Nomura Securities International, Inc. is Worldwide Plaza, 309 West 49th Street, New York, New York 10019-7316.

 

Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering), calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares (Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing). Because of this ownership block, our initial stockholders may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including the election of directors, amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions other than approval of our initial business combination.

 

Our sponsor has committed to purchase an aggregate of 3,500,000 warrants at a price of $1.00 per warrant, or $3,500,000 in the aggregate, in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. The purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account pending our completion of our business combination. If we do not complete our business combination within 24 months from the closing of this offering, the proceeds of the sale of the private placement warrants will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are subject to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares, are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

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Our sponsor and our executive officers and directors are deemed to be our “promoters” as such term is defined under the federal securities laws.

 

Transfers of Shares and Warrants Held by Our Initial Stockholders

 

The founder shares, private placement warrants and any shares of Class A common stock issued upon exercise of the private placement warrants are each subject to transfer restrictions pursuant to lock-up provisions in the letter agreements with us to be entered into by our initial stockholders. Those lock-up provisions provide that such securities are not transferable or salable, in the case of the founder shares, until the earlier of (x) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the Class A 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 our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and in the case of the private placement warrants and the respective shares of Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, any members of our sponsor, or any affiliates of our sponsor, directors or officers, (b) in the case of an individual, by gift to a member of one of the members of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of a business combination at prices no greater than the price at which the shares were originally purchased; (f) in the event of our liquidation prior to our completion of our initial business combination; (g) by virtue of the laws of Delaware or any of our initial stockholders’ limited liability company operating agreements upon dissolution of such stockholder; or (h) in the event of our completion of a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property subsequent to our completion of our initial business combination; provided, however, that in the case of clauses (a) through (e) and (g) these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions.

 

Registration Rights

 

The holders of the founder shares, private placement warrants, private placement units, and their respective constituent securities, will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of the registration statement of which this prospectus forms a part. Our sponsor and Nomura will be entitled to make up to three demands and two demands, respectively, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of any applicable lock-up period, which occurs in the case of the founder shares, upon the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the Class A 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 our initial business combination, or (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and in the case of the private placement warrants and the shares of Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. In the case of the private placement units and their constituent securities, we may file a registration statement immediately following the business combination. We will bear the costs and expenses of filing any such registration statements.

 

Pursuant to the forward purchase agreement, we have agreed that we will use our commercially reasonable efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares, (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of  (A) the date on which the applicable purchaser ceases to hold the securities covered thereby, (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (C) the second anniversary of the date of effectiveness of such registration statement, subject to certain conditions and limitations set forth in the forward purchase agreement. We will bear the costs and expenses of filing such registration statement.

 

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

 

In June 2017, our sponsor and an affiliate thereof purchased an aggregate of 11,500,000 founder shares for an aggregate purchase price of $25,000. Prior to the initial investment in the company of $25,000 by our sponsor and its affiliate, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura for an aggregate purchase price of $4,587.71, or approximately $0.0022 per share. Also prior to the consummation of this offering, our sponsor sold an aggregate of 75,000 founder shares to Messrs. Kagan, Pollack, Rosston and Valner, each an independent director nominee, and Mr. Jeffrey Brown, a director nominee, for a purchase price of approximately $0.0022 per share. Prior to the consummation of this offering, the initial stockholders will forfeit an aggregate of 4,483,627 founder shares, such that at the time of this offering the initial stockholders own an aggregate of 7,016,373 founder shares (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased). Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

The number of founder shares issued was determined based on the expectation that such founder shares would represent 20.0% of the outstanding shares upon completion of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. Prior to the initial investment in the company of $25,000 by our sponsor and its affiliate, the company had no assets, tangible or intangible. The purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the number of founder shares issued.

 

Immediately after this offering, our initial stockholders will beneficially own 20.0% of the then issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering), calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or a share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing.

 

Up to 750,000 founder shares are subject to forfeiture by certain of our initial stockholders depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 founder shares are subject to forfeiture by certain of our initial stockholders (or their permitted transferees) depending on the extent to which the forward purchase shares are purchased.

 

Our sponsor has committed to purchase an aggregate of 3,500,000 warrants at a price of $1.00 per warrant, or $3,500,000 in the aggregate, in a private placement that will close simultaneously with the closing of this offering. Each private placement warrant is exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein. Only whole warrants may be exercised. No fractional warrants will be issued upon separation of the units. Only whole warrants will trade. The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until 30 days after the completion of our initial business combination.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

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Nomura has also agreed, if so requested by us, to underwrite, arrange and/or syndicate up to $450 million of additional financing for us in the form of equity or debt (or a combination thereof) in connection with our initial business combination. We will not be obligated to engage Nomura in connection with any such forward financing. The terms of any such forward financing will be based upon then-current general economic and market conditions and subject to terms and conditions satisfactory in all respects to Nomura in its sole judgement and determination if Nomura is so engaged. Any such forward financing will be without regard to any redemptions that may be tendered to us. Nomura has agreed to allow the Company to disclose the terms, conditions and assumptions under which Nomura would be highly confident of executing financing documents of a predetermined size, as part of the financing in the letter of intent delivered to each potential business combination counterparty, subject to certain conditions.

 

Nomura will be paid a market-based placement fee on the gross proceeds from the sale of the forward purchase shares upon the consummation of an initial business combination. In addition, the forward purchase agreement provides that Nomura (or its assignees) is entitled to registration rights with respect to the forward purchase shares.

 

As more fully discussed in “Management — Conflicts of Interest,” if any of our officers or directors (other than our independent directors) becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has then current fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our executive officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.

 

We intend to enter into an Administrative Services Agreement with Terrapin Partners, LLC, an affiliate of our sponsor, pursuant to which we will pay a total of $16,875 per month for office space, utilities and secretarial support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes 24 months, our sponsor’s affiliate will be paid a total of $405,000 ($16,875 per month) for office space, utilities and secretarial support and will be entitled to be reimbursed for any out-of-pocket expenses.

 

Our sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

 

As of the date of this prospectus, an affiliate of our sponsor provided an aggregate of $140,000 to our company under an unsecured promissory note and in advances, to be used for a portion of the expenses of this offering. These loans and advances are non-interest bearing, unsecured and are due at the earlier of June 30, 2018 or the closing of this offering. The loans and advances will be repaid upon the closing of this offering.

 

In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor and its affiliates or designees have committed up to $1,000,000 to be provided to us in the event that funds held outside of the trust are insufficient to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this offering and prior to our initial business combination and may, but are not obligated to, loan us additional funds to fund our expenses relating to investigating and completing our initial business combination. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans would be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,000,000 of any such working capital loans may be convertible into warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants purchased by the initial stockholders.

 

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After our initial business combination, members of our management team who remain with us may be paid consulting, management or other fees from the combined company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders. It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-combination business to determine executive and director compensation.

 

We have entered into a registration rights agreement with respect to the founder shares, the private placement warrants, the private placement units and their respective constituent securities, which is described under the heading “Principal Stockholders — Registration Rights.”

 

Following this offering, our Audit Committee must review and approve any related person transaction we propose to enter into. Our Audit Committee Charter details the policies and procedures relating to transactions that may present actual, potential or perceived conflicts of interest and may raise questions as to whether such transactions are consistent with the best interest of the company and our stockholders. A summary of such policies and procedures is as follows:

 

Any potential related party transaction that is brought to the Audit Committee’s attention will be analyzed by the Audit Committee, in consultation with outside counsel or members of management, as appropriate, to determine whether the transaction or relationship does, in fact, constitute a related party transaction. At each of its meetings, the Audit Committee will be provided with the details of each new, existing or proposed related party transaction, including the terms of the transaction, any contractual restrictions that the company has already committed to, the business purpose of the transaction, and the benefits to us and to the relevant related party.

 

In determining whether to approve a related party transaction, the Audit Committee must consider, among other factors, the following factors to the extent relevant:

 

·whether the terms of the transaction are fair to us and on the same basis as would apply if the transaction did not involve a related party;
·whether there are business reasons for us to enter into the transaction;
·whether the transaction would impair the independence of an outside director;
·whether the transaction would present an improper conflict of interests for any director or executive officer; and
·any pre-existing contractual obligations.

 

Any member of the Audit Committee who has an interest in the transaction under discussion must abstain from voting on the approval of the transaction, but may, if so requested by the Chairman of the Audit Committee, participate in some or all of the Committee’s discussions of the transaction. Upon completion of its review of the transaction, the Audit Committee may determine to permit or to prohibit the transaction.

 

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DESCRIPTION OF SECURITIES

 

Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 150,000,000 shares of Class A common stock, $0.0001 par value, 50,000,000 shares of Class F common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001 par value. The following description summarizes the material terms of our capital stock. Because it is only a summary, it may not contain all the information that is important to you.

 

Units

 

Each unit has an offering price of $10.00 and consists of one share of Class A common stock and one warrant. Each warrant entitles the holder thereof to purchase one share of our Class A common stock. The Class A common stock and warrants comprising the units will begin separate trading on the 52nd day following the closing of this offering unless Nomura, as the representative of the underwriters, informs us of its decision to allow earlier separate trading, subject to our having filed the Current Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the shares of Class A common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units into shares of Class A common stock and warrants.

 

In no event will the Class A common stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K which includes an audited balance sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file a Current Report on Form 8-K promptly after the closing of this offering which will include this audited balance sheet, which is anticipated to take place two business days from the first trading of the units on NASDAQ. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option.

 

Common Stock

 

Upon the closing of this offering, 26,266,373 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 750,000 founder shares held by certain of our initial stockholders), consisting of:

 

  · 20,000,000 shares of our Class A common stock underlying the units being offered in this offering; and

 

  · 6,266,373 shares of our Class F common stock held by our initial stockholders (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 750,000 founder shares held by certain of our initial stockholders), up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased.

 

If we increase or decrease the size of the offering pursuant to Rule 462(b) under the Securities Act, we will effect a stock dividend or share contribution back to capital, as applicable, immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20.0% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing.

 

Nomura has entered into a forward purchase agreement with us which provides for the purchase by Nomura of an aggregate of 5,065,494 shares of our Class A common stock for an aggregate purchase price of $50,000,000 in a private placement to occur concurrently with the closing of our initial business combination. The forward purchase shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that the forward purchase shares are subject to transfer restrictions and certain registration rights, as described herein. The forward purchase agreement allows Nomura to approach other institutional and accredited investors and, with our consent, which will not be unreasonably withheld, delayed or conditioned, enter into agreements with any such investor to assume Nomura’s purchase obligation under the forward purchase agreement. The forward purchase agreement also allows Nomura to be excused from its purchase obligation in connection with a specific business combination if, within five business days following written notice delivered by us of our intention to enter into such business combination, Nomura notifies us that it has decided not to proceed with the purchase for any reason, including, without limitation, if it has determined that such purchase would constitute a conflict of interest. In the event Nomura exercises its right of excusal, Nomura has agreed to waive its right to receive the placement fee earned from the sale of the forward purchase shares and the underwriters will waive their right to receive a portion of the deferred underwriting discount. The obligations under the forward purchase agreement are not affected by any redemptions by our public stockholders of shares of our Class A common stock. Prior to the consummation of this offering our sponsor sold 2,110,346 of its founder shares to Nomura. Prior to the consummation of this offering, Nomura will forfeit 606,416 founder shares. Of the 1,503,930 founder shares held by Nomura, up to 303,930 are subject to forfeiture depending on the extent to which the forward purchase shares are purchased. Of the 1,503,930 founder shares held by Nomura, 220,000 were sold to Nomura in connection with the underwriting of this transaction.

 

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The founder shares (classified as Class F common stock) are identical to the units being sold in this offering (classified as Class A common stock), and holders of founder shares contained in the founder shares have the same stockholder rights as public stockholders, except that the founder shares are subject to certain transfer restrictions, as described in more detail below under the heading “— Founder Shares”; our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our business combination and (B) to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our business combination within 24 months from the closing of this offering, although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our business combination within such time period. If we submit our business combination to our public stockholders for a vote, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination; and the founder shares are subject to certain anti-dilution rights, as described in more detail below under the heading “— Founder Shares.”

 

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the DGCL or applicable stock exchange rules, the affirmative vote of a majority of our common shares that are voted is required to approve any such matter voted on by our stockholders. Our board of directors is divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.

 

In accordance with the NASDAQ corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on NASDAQ. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.

 

We will provide our Class A stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of our initial business combination, including interest income (net of taxes payable and any amounts released to us to fund our working capital requirements), divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.00 per public share (regardless of whether or not the underwriters exercise any portion of their over-allotment option). The per-share amount we will distribute to investors who properly redeem their Class A shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our business combination. Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination. Our amended and restated certificate of incorporation requires these tender offer documents to contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the business combination. However, the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described in this prospectus), if any, could result in the approval of our business combination even if a majority of our public stockholders vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock, non-votes will have no effect on the approval of our business combination once a quorum is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken to approve our business combination.

 

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If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to Excess Shares. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our business combination.

 

If we seek stockholder approval in connection with our business combination, our initial stockholders have agreed to vote their founder shares and any public shares purchased during or after this offering in favor of our initial business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction.

 

Pursuant to our amended and restated certificate of incorporation, if we are unable to complete our business combination within 24 months from the closing of this offering, we will cease all operations except for the purpose of winding up, as promptly as reasonably possible but no more than ten business days thereafter, subject to lawfully available funds therefor, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund our working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our initial stockholders have entered into letter agreements with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares if we fail to complete our business combination within 24 months from the closing of this offering. However, if our initial stockholders acquire public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our business combination within the prescribed time period.

 

In the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, including interest income (which interest shall be net of taxes payable and net of any amounts released to us to fund our working capital requirements) upon the completion of our initial business combination, subject to the limitations described herein.

 

Founder Shares

 

The founder shares (classified as Class F common stock) are convertible at the time of this offering into shares of Class A common stock at a ratio of one-for-one. In the case that additional shares of Class A common stock, or equity-linked securities, are deemed issued in excess of the amounts offered in this prospectus and related to the closing of the business combination, the ratio at which shares of Class F common stock shall convert into shares of Class A common stock will be adjusted so that the number of shares of Class A common stock issuable upon conversion of all shares of Class F common stock will equal, in the aggregate, on an as-converted basis, 20% of the total number of all shares of Class A common stock sold pursuant to the prospectus, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares, plus all common shares or equity-linked securities deemed to be issued in connection with the business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination or pursuant to warrants issued to the sponsor. Nomura has agreed to waive its rights to any additional Class A common stock pursuant to the foregoing.

 

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With certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated with our initial stockholders, each of whom will be subject to the same transfer restrictions) until the earlier of one year after the completion of our initial business combination or earlier if, (x) subsequent to our business combination, the last sale price of the Class A 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 our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property. Up to 750,000 founder shares will be subject to forfeiture by certain of our initial stockholders on a pro rata basis depending on the exercise of the underwriters’ over-allotment option, and up to 1,266,373 founder shares are subject to forfeiture by certain of our initial stockholders (or their permitted transferees), on a pro rata basis depending on the extent to which the forward purchase shares are purchased.

 

In addition, holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination.

 

Preferred Stock

 

Our amended and restated certificate of incorporation provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend to issue any additional shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being registered in this offering.

 

Warrants

 

Public Stockholders’ Warrants

 

Each warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as provided below. The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

 

We will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect to registration. 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, unless an exemption is available. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

 

We have agreed that as soon as practicable, but in no event later than fifteen (15) business days, after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants. We will use our best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws.

 

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Once the warrants become exercisable, we may call the warrants for redemption:

 

·in whole and not in part;

·at a price of $0.01 per warrant;

·upon not less than 30 days’ prior written notice of redemption to each warrant holder; and

·if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date we send to 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.

 

We have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below the $18.00 redemption trigger price as well as the $11.50 warrant exercise price (for whole shares) after the redemption notice is issued.

 

If we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of shares of Class A common stock issuable upon the exercise of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption will contain the information necessary to calculate the number of shares of Class A common stock to be received upon exercise of the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants for redemption and our management does not take advantage of this option, our sponsor and its permitted transferees would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.

 

A holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the shares of common stock outstanding immediately after giving effect to such exercise.

 

If the number of outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A common stock, or by a split of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding shares of Class A common stock. A rights offering to holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product of (i) the number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for Class A common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of Class A common stock paid in such rights offering divided by (y) the fair market value. For these purposes if the rights offering is for securities convertible into or exercisable for Class A common stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and fair market value means the volume weighted average price of Class A common stock as reported during the ten (10) trading day period ending on the trading day prior to the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

 

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In addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to the holders of Class A common stock on account of such shares of Class A common stock (or other shares of our capital stock into which the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy the redemption rights of the holders of Class A common stock in connection with a proposed initial business combination, (d) as a result of the repurchase of shares of Class A common stock by the company if the proposed initial business combination is presented to the stockholders of the company for approval, or (e) in connection with the redemption of our public shares upon our failure to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of Class A common stock in respect of such event.

 

If the number of outstanding shares of our Class A common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.

 

Whenever the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock so purchasable immediately thereafter.

 

In case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described above or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of Class A common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of our Class A common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company as provided for in the company’s amended and restated certificate of incorporation or as a result of the repurchase of shares of Class A common stock by the company if a proposed initial business combination is presented to the stockholders of the company for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of Class A common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes value (as defined in the warrant agreement) of the warrant.

 

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The warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement of which this prospectus forms a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.

 

The warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A common stock and any voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance of shares of Class A common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.

 

Private Placement Warrants

 

The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other limited exceptions as described under “Principal Stockholders — Transfers of Shares and Warrants Held by Our Initial Stockholders,” to our officers and directors and other persons or entities affiliated with our sponsor) and they will not be redeemable by us so long as they are held by our sponsor or its permitted transferees. Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.

 

If holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by our sponsor and permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders who could exercise their warrants and sell the shares of Class A common stock received upon such exercise freely in the open market in order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

 

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Dividends

 

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of a business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any cash dividends subsequent to a business combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future, except if we increase the size of the offering pursuant to Rule 462(b) under the Securities Act, in which case we will effect a stock dividend immediately prior to the consummation of the offering in such amount as to maintain the ownership of our stockholders prior to this offering at 20% of our issued and outstanding shares of our common stock upon the consummation of this offering, calculated on a pro forma basis assuming the issuance of all of the forward purchase shares. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

 

Our Transfer Agent and Warrant Agent

 

The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.

 

Our Amended and Restated Certificate of Incorporation

 

Our amended and restated certificate of incorporation contains certain requirements and restrictions relating to this offering that will apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of at least 65% of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing of this offering (assuming they do not purchase any units in this offering), calculated on a pro forma basis assuming the issuance of all of the forward purchase shares, will participate in any vote to amend our amended and restated certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation provides, among other things, that:

 

·if we are unable to complete our initial business combination within 24 months from the closing of this offering, we will cease all operations except for the purpose of winding up, as promptly as reasonably possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund our working capital requirements, and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;
·prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to receive funds from the trust account or vote on any initial business combination;
·although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors or our executive officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of FINRA that such a business combination is fair to our company from a financial point of view;
·if a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E under the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
·Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of our assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination;

 

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·If our stockholders approve an amendment to our amended and restated certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our business combination within 24 months from the closing of this offering, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest income (net of taxes payable and any amounts released to us to fund our working capital requirements), divided by the number of then outstanding public shares; and
·we will not effectuate our initial business combination with another blank check company or a similar company with nominal operations.

 

In addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001.

 

Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws

 

We will be subject to the provisions of Section 203 of the DGCL regulating corporate takeovers upon completion of this offering. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

 

·a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
·an affiliate of an interested stockholder; or
·an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

 

A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

 

·our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
·after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or
·on or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

 

Our amended and restated certificate of incorporation provides that our board of directors will be classified into two classes of directors. As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or more annual meetings.

 

Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

Special meetings of stockholders

 

Our bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our CEO or by our chairman.

 

Advance notice requirements for stockholder proposals and director nominations

 

Our bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by the secretary to our principal executive offices not later than the close of business on the 90th day or earlier than the opening of business on the 120th day prior to the scheduled date of the annual meeting of stockholders. Our bylaws also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

 

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Securities Eligible for Future Sale

 

Immediately after this offering (assuming no exercise of the underwriters’ over-allotment option) we will have 26,266,373 (or 30,016,373 if the underwriters’ over-allotment option is exercised in full) shares of Class A common stock outstanding. Of these shares, the 20,000,000 shares (or 23,000,000 shares if the over-allotment option is exercised in full) sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining founder shares, and all the private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. All the 7,016,373 shares of Class F common stock that will be issued and outstanding as of the time of this offering (up to 750,000 of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, and up to 1,266,373 of which are subject to forfeiture depending on the extent to which the forward purchase shares are purchased) are subject to restrictions as set forth elsewhere in this prospectus.

 

Rule 144

 

Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as we were required to file reports) preceding the sale.

 

Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

 

·

1% of the total number of shares of common stock then outstanding, which will equal 262,664 shares immediately after this offering (or 300,164 if the underwriters exercise their over-allotment option in full); or

·the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

 

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

 

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

 

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

 

·the issuer of the securities that was formerly a shell company has ceased to be a shell company;
·the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
·the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
·at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

 

As a result, our initial stockholders will be able to sell their founder shares and private placement warrants, as applicable, pursuant to Rule 144 without registration one year after we have completed our initial business combination.

 

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Registration Rights

 

The holders of the founder shares, private placement warrants, private placement units, and their respective constituent securities, will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration rights agreement to be signed prior to or on the effective date of the registration statement of which this prospectus forms a part. Our sponsor and Nomura will be entitled to make up to three demands and two demands, respectively, excluding short form registration demands, that we register such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include such securities in other registration statements filed by us and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of any applicable lock-up period, which occurs in the case of the founder shares, upon the earlier of (A) one year after the completion of our initial business combination or earlier if, subsequent to our business combination, the last sale price of the Class A 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 our initial business combination, or (B) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property, and in the case of the private placement warrants and the shares of Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. In the case of the private placement units and their constituent securities, we may file a registration statement immediately following the business combination. We will bear the costs and expenses of filing any such registration statements.

 

Pursuant to the forward purchase agreement, we have agreed that we will use our commercially reasonable efforts (i) to file within 30 days after the closing of the initial business combination a registration statement with the SEC for a secondary offering of the forward purchase shares, (ii) to cause such registration statement to be declared effective promptly thereafter and (iii) to maintain the effectiveness of such registration statement until the earliest of  (A) the date on which the applicable purchaser ceases to hold the securities covered thereby, (B) the date all of the securities covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and (C) the second anniversary of the date of effectiveness of such registration statement, subject to certain conditions and limitations set forth in the forward purchase agreement. We will bear the costs and expenses of filing such registration statement.

 

Listing of Securities

 

We have applied to list our units, Class A common stock and warrants on NASDAQ under the symbols “TRTLU,” “TRTL” and “TRTLW,” respectively. Our units will be listed on NASDAQ on or promptly after the effective date of the registration statement of which this prospectus forms a part. Following the date the shares of our common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be listed separately and as a unit on NASDAQ.

 

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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

 

The following discussion is a summary of the U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our units, Class A common stock and warrants, which we refer to collectively as our securities. This summary is based upon U.S. federal income tax law as of the date of this prospectus, which is subject to change or differing interpretations, possibly with retroactive effect. This summary does not discuss all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, partnerships and their partners, tax-exempt organizations (including private foundations), taxpayers that have elected mark-to-market accounting, S corporations, regulated investment companies, real estate investment trusts, investors that will hold Class A common stock or warrants as part of a straddle, hedge, conversion, or other integrated transaction for U.S. federal income tax purposes, former citizens or residents of the United States or investors that have a functional currency other than the U.S. dollar), all of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss other U.S. federal tax consequences (e.g., estate or gift tax), any state, local, or non-U.S. tax considerations or the Medicare tax or alternative minimum tax. In addition, this summary is limited to investors that will hold our securities as “capital assets” (generally, property held for investment) under the Internal Revenue Code of 1986, as amended, (the “Code”), and that acquired the securities pursuant to this offering (or, in the case of Class A common stock, upon exercise of warrants so acquired). No ruling from the Internal Revenue Service, (the “IRS”) has been or will be sought regarding any matter discussed herein. No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax aspects set forth below.

 

For purposes of this summary, a “U.S. Holder” is a beneficial holder of securities who or that, for U.S. federal income tax purposes is:

 

·an individual who is a United States citizen or resident of the United States;

 

·a corporation or other entity treated as a corporation for United States federal income tax purposes created in, or organized under the laws of, the United States or any state or political subdivision thereof;

 

·an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or

 

·a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under applicable Treasury regulations to be treated as a United States person.

 

A “non-U.S. Holder” is a beneficial holder of shares who or that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.

 

If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our securities, the tax treatment of a partner in such partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. If you are a partner of a partnership holding our securities, you are urged to consult your tax advisor regarding the tax consequences of the ownership and disposition of our securities.

 

THIS DISCUSSION OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. WE URGE PROSPECTIVE HOLDERS TO CONSULT THEIR TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF OUR SECURITIES, AS WELL AS THE APPLICATION OF ANY, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.

 

Personal Holding Company Status

 

We would be subject to a second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company, or PHC, for U.S. federal income tax purposes. A U.S. corporation will generally be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (1) at any time during the last half of such taxable year, five or fewer individuals (without regard to their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds, and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by value and (2) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and, under certain circumstances, rents).

 

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Depending on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In addition, depending on the concentration of our stock in the hands of individuals, including the members of our sponsor and certain tax-exempt organizations, pension funds, and charitable trusts, it is possible that more than 50% of our stock will be owned or deemed owned (pursuant to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we will not become a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain adjustments.

 

General Treatment of Units

 

There is no authority directly addressing the treatment, for U.S. federal income tax purposes, of instruments with terms substantially the same as the units and, therefore, their treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition of one share of our Class A common stock and one warrant to acquire one share of our Class A common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you agree to adopt such treatment for tax purposes. Each holder of a unit must allocate the purchase price paid by such holder for such unit between the share of Class A common stock and the warrant based on their respective relative fair market values at the time of issuance. A holder’s initial tax basis in the Class A common stock and the warrant included in each unit should equal the portion of the purchase price of the unit allocated thereto. The separation of the Class A common stock and warrant components constituting a unit should not be a taxable event for U.S. federal income tax purposes.

 

The foregoing treatment of the units and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there is no authority that directly addresses instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the characterization described above or the discussion below. Each prospective investor is urged to consult its own tax advisors regarding the U.S. federal, state, local and any foreign tax consequences of an investment in a unit (including alternative characterizations of a unit and its components). The following discussion is based on the assumption that the characterization of the Class A common stock and warrants and the allocation described above are accepted for U.S. federal income tax purposes.

 

U.S. Holders

 

Taxation of Distributions

 

If we pay cash distributions to U.S. Holders of shares of our Class A common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the Class A common stock and will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock” below.

 

Dividends we pay to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. Holder will generally constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains. It is unclear whether the redemption rights with respect to the Class A common stock described in this prospectus may prevent a U.S. Holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential tax rate on qualified dividend income, as the case may be.

 

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Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock

 

A U.S. Holder will recognize gain or loss on the sale, taxable exchange or other taxable disposition (which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering) of our Class A common stock. Any such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder’s holding period for the Class A common stock so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect to the Class A common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. The amount of gain or loss recognized will generally be equal to the difference between (1) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the Class A common stock is held as part of a unit at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the Class A common stock based upon the then fair market values of the Class A common stock and the warrant included in the unit) and (2) the U.S. Holder’s adjusted tax basis in its Class A common stock so disposed of. A U.S. Holder’s adjusted tax basis in its Class A common stock will generally equal the U.S. Holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit allocated to a share of Class A common stock or, as discussed below, the U.S. Holder’s initial basis for Class A common stock received upon exercise of a warrant) less any prior distributions treated as a return of capital. The deductibility of capital losses is subject to limitations.

 

Redemption of Class A Common Stock

 

In the event that a U.S. Holder’s Class A common stock is redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock”, the treatment of the transaction for U.S. federal income tax purposes will depend on whether the redemption qualifies as sale of the Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale of Class A common stock under the tests described below, the tax consequences to the U.S. Holder will be the same as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock” above. If the redemption does not qualify as a sale of Class A common stock, the U.S. Holder will be treated as receiving a corporate distribution, the tax consequences of which are described above under “U.S. Holders — Taxation of Distributions”. Whether the redemption qualifies for sale treatment will depend primarily on the total number of shares of our stock treated as held by the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) both before and after the redemption. The redemption of Class A common stock will generally be treated as a sale of the Class A common stock (rather than as a corporate distribution) if the redemption (1) is “substantially disproportionate” with respect to the U.S. Holder, (2) results in a “complete termination” of the U.S. Holder’s interest in us or (3) is “not essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.

 

In determining whether any of the foregoing tests are satisfied, a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are constructively owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock the U.S. Holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of the warrants. A redemption of a U.S. Holder’s stock will be substantially disproportionate with respect to the U.S. Holder if the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately following the redemption of common stock is, among other requirements, less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (1) all of the shares of our stock actually and constructively owned by the U.S. Holder are redeemed or (2) all of the shares of our stock actually owned by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock (including any stock constructively owned by the U.S. Holder as a result of owning warrants). The redemption of the Class A common stock will not be essentially equivalent to a dividend if the redemption results in a “meaningful reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. The IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder is urged to consult its tax advisors as to the tax consequences of a redemption, including the application of the constructive ownership rules described above.

 

If none of the foregoing tests is satisfied, the redemption will be treated as a corporate distribution, the tax consequences of which are described under “U.S. Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A common stock should be added to the U.S. Holder’s adjusted tax basis in its remaining stock, or, if it has none, to the U.S. Holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.

 

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Exercise of a Warrant

 

Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder will not recognize gain or loss upon the exercise of a warrant. The U.S. Holder’s tax basis in the share of our Class A common stock received upon exercise of the warrant will generally be an amount equal to the sum of the U.S. Holder’s initial investment in the warrant (i.e., the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— General Treatment of Units”) and the exercise price of such warrant. It is unclear whether a U.S. Holder’s holding period for the Class A common stock would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant; however, in either case the holding period will not include the period during which the U.S. Holder held the warrants.

 

The tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the Class A common stock received would generally equal the holder’s tax basis in the warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding period for the Class A common stock would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant. If, however, the cashless exercise were treated as a recapitalization, the holding period of the Class A common stock would include the holding period of the warrant.

 

It is also possible that a cashless exercise could be treated as a taxable exchange in which gain or loss is recognized. In such event, a U.S. Holder would be deemed to have surrendered warrants equal to the number of shares of Class A common stock having a value equal to the exercise price for the total number of warrants to be exercised. The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the Class A common stock represented by the warrants deemed surrendered and the U.S. Holder’s tax basis in the warrants deemed surrendered. In this case, a U.S. Holder’s tax basis in the Class A common stock received would equal the sum of the U.S. Holder’s initial investment in the warrants exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under ‘‘— General Treatment of Units’’) and the exercise price of such warrants. It is unclear whether a U.S. Holder’s holding period for the Class A common stock would commence on the date of exercise of the warrant or the day following the date of exercise of the warrant.

 

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with respect to the Class A common stock received, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders are urged to consult their tax advisors regarding the tax consequences of a cashless exercise.

 

Sale, Exchange, Redemption or Expiration of a Warrant

 

Upon a sale, exchange (other than by exercise), redemption, or expiration of a warrant, a U.S. Holder will recognize taxable gain or loss in an amount equal to the difference between (1) the amount realized upon such disposition or expiration (or, if the warrant is held as part of a unit at the time of the disposition of the unit, the portion of the amount realized on such disposition that is allocated to the warrant based on the then fair market values of the warrant and the Class A common stock constituting such unit) and (2) the U.S. Holder’s tax basis in the warrant (that is, the portion of the U.S. Holder’s purchase price for a unit that is allocated to the warrant, as described above under “— General Treatment of Units”). Such gain or loss will generally be treated as long-term capital gain or loss if the warrant is held by the U.S. Holder for more than one year at the time of such disposition or expiration. The deductibility of capital losses is subject to certain limitations.

 

Possible Constructive Distributions

 

The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities — Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A common stock that would be obtained upon exercise) as a result of a distribution of cash to the holders of shares of our Class A common stock which is taxable to such U.S. Holders as described under “U.S. Holders — Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if such U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest.

 

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Information Reporting and Backup Withholding

 

In general, information reporting requirements may apply to dividends paid to a U.S. Holder and to the proceeds of the sale or other disposition of our units, shares of common stock and warrants, unless the U.S. Holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. Holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn). Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. Holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

 

Non-U.S. Holders

 

Taxation of Distributions

 

In general, any distributions (including constructive distributions) we make to a non-U.S. Holder of shares of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the non-U.S. Holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). In the case of any constructive dividend, it is possible that this tax would be withheld from any amount owed to a non-U.S. Holder by the applicable withholding agent, including cash distributions on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the non-U.S. Holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the non-U.S. Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the Class A common stock, which will be treated as described under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock and Warrants” below. In addition, if we determine that we are classified as a “United States real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Class A Common Stock or Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.

 

Dividends we pay to a non-U.S. Holder that are effectively connected with such non-U.S. Holder’s conduct of a trade or business within the United States (or if a tax treaty applies are attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. Holder) will generally not be subject to U.S. withholding tax, provided such non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders. If the non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).

 

Exercise of a Warrant

 

The U.S. federal income tax treatment of a non-U.S. Holder’s exercise of a warrant generally will correspond to the U.S. federal income tax treatment of the exercise of a warrant by a U.S. Holder, as described under “U.S. Holders — Exercise of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the tax consequences to the non-U.S. Holder would be the same as those described below in “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition of Class A Common Stock or Warrants.”

 

Gain on Sale, Exchange or Other Taxable Disposition of Class A Common Stock or Warrants

 

A non-U.S. Holder will generally not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our Class A common stock, which would include a dissolution and liquidation in the event we do not complete an initial business combination within 24 months from the closing of this offering, or warrants (including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of a unit, unless:

 

·the gain is effectively connected with the conduct of a trade or business by the non-U.S. Holder within the United States (and, under certain income tax treaties, is attributable to a U.S. permanent establishment or fixed place of business maintained by the non-U.S. Holder);

 

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·the non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or

 

·we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. Holder held our Class A common stock, and, in the case where shares of our Class A common stock are regularly traded on an established securities market, the non-U.S. Holder has owned, directly or constructively, more than 5% of our Class A common stock at any time within the shorter of the five-year period preceding the disposition or such non-U.S. Holder’s holding period for the shares of our Class A common stock. There can be no assurance that our Class A common stock will be treated as regularly traded on an established securities market for this purpose. These rules may be modified for non-U.S. Holders of warrants. If we are or have been a “United States real property holding corporation” and you own warrants, you are urged to consult your own tax advisors regarding the application of these rules.

 

Gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates. Any gains described in the first bullet point above of a non-U.S. Holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower applicable treaty rate). Gain described in the second bullet point above will generally be subject to a flat 30% U.S. federal income tax. Non-U.S. Holders are urged to consult their tax advisors regarding possible eligibility for benefits under income tax treaties.

 

If the third bullet point above applies to a non-U.S. Holder, gain recognized by such holder on the sale, exchange or other disposition of our Class A common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. income tax at a rate of 15% of the amount realized upon such disposition. We cannot determine whether we will be a United States real property holding corporation in the future until we complete an initial business combination. We will be classified as a United States real property holding corporation if the fair market value of our “United States real property interests” equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.

 

Possible Constructive Distributions

 

The terms of each warrant provide for an adjustment to the number of shares of Class A common stock for which the warrant may be exercised or to the exercise price of the warrant in certain events, as discussed in the section of this prospectus captioned “Description of Securities — Warrants — Public Stockholders’ Warrants.” An adjustment which has the effect of preventing dilution is generally not a taxable event. Nevertheless, a non-U.S. Holder of warrants would be treated as receiving a constructive distribution from us if, for example, the adjustment increases the holder’s proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of Class A common stock that would be obtained upon exercise) as a result of a distribution of cash to the holders of shares of our Class A common stock which is taxable to such non-U.S. Holders as described under “Non-U.S. Holders — Taxation of Distributions” above. A non-U.S. Holder would be subject to U.S. federal income tax withholding under that section in the same manner as if such non-U.S. Holder received a cash distribution from us equal to the fair market value of such increased interest without any corresponding receipt of cash.

 

Redemption of Class A Common Stock

 

The characterization for U.S. federal income tax purposes of the redemption of a non-U.S. Holder’s Class A common stock pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock” will generally correspond to the U.S. federal income tax characterization of such a redemption of a U.S. Holder’s Class A common stock, as described under “U.S. Holders — Redemption of Class A Common Stock” above, and the consequences of the redemption to the non-U.S. Holder will be as described above under “Non-U.S. Holders — Taxation of Distributions” and “Non-U.S. Holders — Gain on Sale, Exchange or Other Taxable Disposition of Class A Common Stock or Warrants,” as applicable.

 

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Foreign Account Tax Compliance Act

 

Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder (commonly referred as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding at a rate of 30% in certain circumstances on dividends in respect of, and, after December 31, 2018, gross proceeds from the sale or other disposition of, our securities which are held by or through certain foreign financial institutions (including investment funds), unless any such institution (1) enters into, and complies with, an agreement with the IRS to report, on an annual basis, information with respect to interests in, and accounts maintained by, the institution that are owned by certain U.S. persons and by certain non-U.S. entities that are wholly or partially owned by U.S. persons and to withhold on certain payments, or (2) if required under an intergovernmental agreement between the United States and an applicable foreign country, reports such information to its local tax authority, which will exch