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Commitments
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS

NOTE 6. COMMITMENTS

 

Registration Rights

 

The holders of the Founder Shares and the holders of the Private Placement Warrants (which may include warrants granted in connection with working capital requirements following the Initial Public Offering) and the underlying securities are entitled to registration rights pursuant to a registration rights agreement entered into on December 10, 2018. The holders of a majority of such securities are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities under the Securities Act. The holders of a majority of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which the Founder Shares are to be released from escrow. The holders of a majority of the Private Placement Warrants (which may include warrants granted in connection with working capital requirements following the Initial Public Offering) and the underlying securities can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by the Company subsequent to its completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The registration rights agreement does not provide for any penalties associated with delays in registering the securities.

  

Underwriting Agreement

 

The Company granted the underwriters a 45-day option to purchase up to 1,950,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions of 2.0%. The underwriters’ over-allotment option expired unexercised in January 2019.

 

Business Combination Marketing Agreement

 

The Company engaged EarlyBirdCapital, Inc. as advisor in connection with the Company’s Business Combination to assist it in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with the potential Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay EarlyBirdCapital, Inc. a cash fee for such services upon the consummation of an initial Business Combination in an amount equal to $4,550,000; provided that the Company has the right to allocate up to 35% of the fee to any of the underwriters in the Initial Public Offering or other FINRA member firms it retains to assist the Company in connection with its initial Business Combination.

 

Business Combination Agreement

 

On July 25, 2020, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Clever Leaves, Clever Leaves Holdings Inc., a corporation organized under the laws of British Columbia, Canada and a wholly-owned subsidiary of the Company (“Holdco”), and Novel Merger Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of Holdco (“Merger Sub”), pursuant to which the Company agreed to combine with Clever Leaves in a Business Combination (the “Clever Leaves Business Combination”) that will result in both Clever Leaves and the Company becoming wholly-owned subsidiaries of Holdco. Pursuant to the Business Combination Agreement, as consideration for the Clever Leaves Business Combination, (i) the Company’s stockholders will receive one Holdco common share in exchange for each share of the Company’s common stock held by them and (ii) the Clever Leaves shareholders will receive aggregate consideration with a value (the “Arrangement Consideration”) equal to (a) $229,500,000, minus (b) Clever Leaves’ net debt, minus (c) the amount, if any, by which Clever Leaves’ transaction expenses exceed Clever Leaves’ transaction expenses cap, plus (d) the amount, if any, by which the Company’s transaction expenses exceed the Company’s transaction expenses cap, minus (e) the aggregate value of the issued and outstanding options and warrants of Clever Leaves that are being converted into options and warrants of Holdco in the Clever Leaves Business Combination. The Arrangement Consideration minus up to $7,500,000 in cash payable to certain Clever Leaves shareholders (the “Cash Arrangement Consideration”) will be paid to Clever Leaves shareholders in Holdco common shares, based on a price per share of $10.00, and the Cash Arrangement Consideration will be paid to certain Clever Leaves shareholders in cash.

 

The consummation of the Clever Leaves Business Combination is subject to a number of conditions set forth in the Business Combination Agreement including, among others, receipt of the requisite approval of the Company’s stockholders and the execution of the various transaction agreements.