tm2030258-11_s1a - block - 18.5095575s
As filed with the Securities and Exchange Commission on November 4, 2020.
Registration No. 333-249330
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 3
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Roman DBDR Tech Acquisition Corp.
(Exact name of registrant as specified in its charter)
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Delaware
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6770
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85-2749902
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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345 Lorton Avenue, Suite 400
Burlingame, California 94010
Telephone: (650) 618-2524
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Dr. Donald G. Basile
Dixon Doll, Jr.
Co-Chief Executive Officers
345 Lorton Avenue, Suite 400
Burlingame, California 94010
Telephone: (650) 618-2524
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Copies to:
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Douglas S. Ellenoff, Esq.
Stuart Neuhauser, Esq.
Joshua N. Englard, Esq.
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, New York 10105
Telephone: (212) 370-1300
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Christian O. Nagler, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
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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):
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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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
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Title of Each Class of Security Being Registered
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Amount Being
Registered
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Proposed Maximum
Offering Price
per Security(1)
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Proposed Maximum
Aggregate
Offering Price(1)
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Amount of
Registration
Fee
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Units, each consisting of one share of Class A common stock, $0.0001 par value, and one-half of one redeemable warrant(2)
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25,300,000 Units
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$ |
10.00 |
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$ |
253,000,000 |
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$ |
27,603 |
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Shares of Class A common stock included as part of the units(3)
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25,300,000 Shares
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— |
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— |
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—(4) |
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Redeemable warrants included as part of the units(3)
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12,650,000 Warrants
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— |
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— |
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—(4) |
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Total
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$ |
253,000,000 |
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$ |
27,603(5) |
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(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a).
(2)
Includes 3,300,000 units, consisting of 3,300,000 shares of Class A common stock and 1,650,000 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)
No fee pursuant to Rule 457(g) under the Securities Act.
(5)
Previously paid.
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, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this 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 it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION, DATED NOVEMBER 4, 2020
$220,000,000
Roman DBDR Tech Acquisition Corp.
22,000,000 Units
Roman DBDR Tech Acquisition Corp. 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 as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any 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-half of one redeemable warrant. Each whole 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 described herein. Only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the completion of our initial business combination or 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. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The underwriters have a 45-day option from the date of this prospectus to purchase up to an additional 3,300,000 units to cover over-allotments, if any. We will provide our public 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 do not complete our initial business combination within 18 months from the closing of this offering, we will redeem 100% of the public shares for cash, subject to applicable law and certain conditions as further described herein.
Our sponsor, Roman DBDR Tech Sponsor LLC, has agreed to purchase an aggregate of 10,375,000 warrants (or 11,695,000 warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full) each exercisable to purchase one share of our Class A common stock at a price of $11.50 per share, 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.
Our initial stockholders, which include our sponsor, own an aggregate of 6,325,000 shares of our Class B common stock (up to 825,000 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised), which will automatically convert into shares of Class A common stock at the time of our initial business combination.
Up to four qualified institutional buyers or institutional accredited investors who are not affiliated with any member of our management, who we refer to as the anchor investors, have expressed to us an interest to purchase up to 2,178,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investors such number of units. For a discussion of certain additional arrangements with our anchor investors, see “Summary — The Offering — Expressions of Interest.”
Currently, there is no public market for our units, Class A common stock or warrants. We have applied to list our units on The Nasdaq Capital Market, or Nasdaq, under the symbol “DBDRU”. We expect that our units will be listed on Nasdaq on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for listing on Nasdaq. We expect 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 B. Riley Securities, Inc. (“B. Riley”), the representative of the underwriters, which we refer to in this prospectus as B. Riley, informs us of its decision to allow earlier separate trading, subject to our satisfaction of 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 “DBDR” and “DBDRW,” respectively.
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
29 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 U.S. Securities and Exchange Commission (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.
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Per Unit
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Total
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Public offering price
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$ |
10.00 |
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220,000,000 |
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Underwriting discounts and commissions(1)
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$ |
0.55 |
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$ |
12,100,000 |
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Proceeds, before expenses, to Roman DBDR Tech Acquisition Corp.
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$ |
9.45 |
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$ |
207,900,000 |
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(1)
Includes $0.35 per unit, or $7,700,000 in the aggregate (or $8,855,000 if the over-allotment option is exercised in full) payable to the underwriters for deferred underwriting commissions which will be placed in a trust account located in the United States as described herein and will only be payable upon consummation of our initial business combination. Does not include certain fees and expenses payable to the underwriters in connection with this offering. See the section of this prospectus entitled “Underwriting” beginning on page 142 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, $224.4 million or $258.1 million if the underwriters’ over-allotment option is exercised in full ($10.20 per unit in either case) will be deposited into a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee and J.P. Morgan Chase acting as investment manager, and $1.575 million will be available to pay fees and expenses in connection with the closing of this offering and for working capital following the closing of this offering. 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.
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 , 2020.
Sole Book-Running Manager
B. Riley Securities
, 2020
TABLE OF CONTENTS
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PAGE
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1
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29
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62
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63
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67
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68
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70
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71
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77
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104
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113
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116
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119
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134
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143
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152
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152
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152
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F-1
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We are responsible for the information contained in this prospectus. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give to you. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
SUMMARY
This summary only highlights the more detailed information appearing elsewhere in this prospectus. You should read this entire prospectus carefully, including the information under the section of this prospectus entitled “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing. Unless otherwise stated in this prospectus, or the context otherwise requires, references to:
•
“anchor investors” are to certain qualified institutional buyers or institutional accredited investors, including B. Riley, each of which will become a member of our sponsor upon the consummation of this offering and has expressed to us an interest to purchase up to 2,178,000 units in this offering, as further described herein;
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“common stock” are to our Class A common stock and our Class B common stock, collectively;
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“founder shares” are to shares of our Class B common stock initially purchased by our sponsor in a private placement prior to this offering, and the shares of our Class A common stock issued upon the conversion thereof as provided herein;
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“initial stockholders” are to our sponsor and any other holders of our founder shares prior to this offering (or their permitted transferees);
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“management” or our “management team” are to our officers and directors;
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“private placement warrants” are to the warrants initially issued to our sponsor in a private placement simultaneously with the closing of this offering;
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“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);
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“public stockholders” are to the holders of our public shares, including our initial stockholders and 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;
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“public warrants” are to our redeemable warrants sold as part of the units in this offering (whether they are purchased in this offering or thereafter in the open market), to the private placement warrants if held by third parties other than our sponsor (or permitted transferees), and to any private placement warrants issued upon conversion of working capital loans that are sold to third parties that are not initial purchasers or executive officers or directors (or permitted transferees), in each case, following the consummation of our initial business combination;
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“sponsor” are to Roman DBDR Tech Sponsor LLC, a Delaware limited liability company; our officers and directors and the anchor investors will also be members of our sponsor upon the consummation of this offering;
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“warrants” are to our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent they are no longer held by the initial purchasers of the private placement warrants or their permitted transferees; and
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“we,” “us,” “company” or “our company” are to Roman DBDR Tech Acquisition Corp.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
Overview
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, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any stage of its corporate evolution or in any industry or sector, we intend to focus our search on companies in the
technology, media and telecom (“TMT”) industries. Our management team has had significant success sourcing, acquiring, growing and monetizing these types of companies. We believe this experience makes us well suited to identify, source, negotiate and execute an initial business combination with the ultimate goal of pursuing attractive risk-adjusted returns for our shareholders.
Management Team
We believe our management team is well positioned to identify and evaluate businesses within the TMT industries that would benefit from being a public company and from access to our expertise. We believe we can achieve this mission by utilizing our team’s extensive experience in growing and operating companies within the TMT industries as well as our broad network of contacts in the TMT industries.
Dr. Donald G. Basile
Dr. Donald G. Basile has served as our Chairman and Co-Chief Executive Officer since inception. Dr. Basile has also served as an executive officer and director at Monsoon Blockchain Corporation since November 2019 and as a director of GIBF, GP Inc. since September 2018. Dr. Basile previously served as a director of Violin Memory, Inc. from April 2009 to January 2014 and as its Chief Executive Officer from April 2009 to December 2013. He also served as Chief Executive Officer of FusionIO from January 2008 to March 2009 and as its Chairman from July 2006 to March 2009. Dr. Basile previously worked at AT&T Bell Labs, IBM, United Health Group and Lenfest Group (acquired by Comcast) and served as Managing Director of Raza Foundries and Vice President of Raza Microelectonics (RMI).
Dixon Doll, Jr.
Dixon Doll, Jr. has served as our Co-Chief Executive Officer since inception. Mr. Doll is currently also the Chief Executive Officer and Chairman of DBM Cloud Systems, Inc. since January 2016 and the Managing Director of Longstreet Ventures, Inc. since January 2003. From July 2009 to January 2014, Mr. Doll served as the Chief Operating Officer and as a director of Violin Memory, Inc. He has also previously worked as the Senior Vice President of Sales and Corporate Development at FusionIO from February 2008 to February 2009, as the Vice President of Corporate Development of NEON from May 1998 to July 2001 and as Vice President of Corporate Development of Recourse Technologies from July 2001 to August 2002. In addition, he was a Business Development Manager at Oracle Alliances Division from September 1994 to May 1998. Mr. Doll has previously served as a consultant to Oak Investment Partners, GTGR, Carlyle Group and DCM. He also is a partner at Birchwood Partners, an angel fund that helps early stage companies launch.
John C. Small
John C. Small has served as our Chief Financial Officer since inception. Mr. Small also serves as the Chief Operating Officer and Chief Financial Officer of Quanterra Capital Management LP since May 2019. He served as the Chief Operating Officer of Mode Media from April 2016 to September 2016, and the Chief Financial Officer of Viggle, Inc. (Nasdaq: VGGL) from September 2012 to October 2015. He served as Senior Vice President of Finance for Tsunami XR from October 2016 to May 2019. Mr. Small joined GLG Partners in 2000 as a Senior Asset Manager responsible for Telecom, Media, Technology and Renewable Energy investments for the GLG North American Opportunity Fund and served as the President of the GLG North America office from April 2000 to August 2011. He worked as a Telecom and Media analyst at Ulysses Management from January 1997 to March 2000 and as a Telecom analyst at Odyssey Partners from March 1996 to January 1997. He also worked as an equity research analyst at Dillon Read (from January 1992 to September 1993) and Morgan Stanley (from October 1993 to February 1996). Mr. Small has previously served as a director of Loyalty Alliance, Inc., PayEase Ltd., INFINIA Corporation, ViSole Energy, Inc., New Millennium Solar Equipment Co, ShortList Media Ltd, DraftDay Inc., and Spinvox Ltd.
Past performance of our management team and its affiliates is not a guarantee either (i) of success with respect to any business combination we may consummate, or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management team or its affiliates as indicative of our future performance, and no member of the management team has prior experience with special purpose acquisition companies. In addition, for a
list of members of our management team and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority that such entity has with respect to performance of obligations and presentation of business opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.
Business Strategy
Our acquisition strategy will focus broadly on the TMT industries with an emphasis on the cloud data storage and information security spaces. Both markets are experiencing substantive growth driven by the combination of increasing data sources and rapid adoption by society of the digital community enabled by this infrastructure.
We believe our management team has a unique combination of deal structuring experience to address the specific needs of our target market coupled with proven operating capabilities based upon its substantial technical expertise and deep understanding of the underlying technology path and business adoption cycle. The team, driven by these skills, has realized capital in various private companies that have exited via IPO and trade sale.
Our team has worked together for over 20 years across Silicon Valley, including roles as founders, technology executives and board directors, which has allowed our team to develop a pipeline of proprietary deal flow based upon our relationships with many C-Level executives / founders, former employees and associates, and deal partners across the leading venture capital and private equity groups.
We believe our management team’s experience and deal flow pipeline will allow us to create value for our stockholders over time.
The cloud computing market is expected to grow from approximately $371 billion in 2020 to over $832 billion by 2025, cloud storage is expected to grow from 33 zettabytes in 2018 to over 175 zettabytes in 2025 and the number of connected devices is expected to grow to over 55 billion by 2025. We believe these trends create an increased cyber risk, with an estimated over $5 trillion of risk over the next five years driving the demand for information security solutions.
The initial focus of our acquisition search will concentrate on companies driven by these three macro themes combining security, cloud computing and cloud data storage. The market for cloud-based solutions is accelerating with Bessemer Venture Partners predicting a majority of the software market will be in the cloud by 2025 and nearly 100% by 2032. This trend has created several recent cloud-based winners including Zoom, DataDog and Snowflake. The Covid-19 effect is accelerating the movement to the cloud across a variety of industries.
We will be targeting established companies with large and growing revenues and diversified customer bases that are selling well-developed and/or mature technologies and services into the new market segments that gave been created as part of the above technology trends, and/or are category leaders.
The selection process leverages our team’s relationships with experienced executive teams and VCs/ private sponsors, which we believe can be enhanced with our team’s business development assistance. Our management team has extensive relationships in the Stanford University and University of Michigan alumni networks and have a unique technical ability to assess market and product risk with substantial business development and operational skills to scale a business globally.
Our initial focus will be on U.S. companies, but we will also consider European and Asian entities that have established a proven business model and can use capital to rapidly scale. We intend to utilize our team’s many years of experience and relationships to work with top venture firms looking to efficiently scale their winning portfolio companies and partner with private equity firms looking to build further business value in the technology industry.
We believe our management team has a competitive advantage as a result of its experience identifying emerging market disruptive leaders and leading global technology companies, with strengths in company operations, business and corporate development and mergers and acquisitions coupled with the application of technologies in Fortune 5000 enterprise accounts. This is coupled with our team’s substantial deal
experience, where they have worked cooperatively with targets and companies to develop and execute financings on a primary and secondary basis, using different parts of the capital structure and financial structuring to support dividend recapitalizations and other corporate financing strategies to maximize the returns of stakeholders.
We believe that the deep technical domain expertise in both information security and cloud data storage will allow us to capitalize and partner with management teams looking to build multi-billion dollar companies. We believe our combined experience including technical expertise will enable us to offer public investors and target company stakeholders a differentiated approach to accelerating growth in key global markets by helping management enhance operational efficiency and scale. In the last decade, members of our management team have been investors and operators in multiple start-ups that completed an initial public offering. They have also been involved in seeding early-stage founders and helping raise the initial Series A funding while also running the companies to access the public markets through an initial public offering. In addition, they have executed secondary offerings and recapitalization strategies to serve the specific needs and goals of founders and early investors.
The management team has assisted in pioneering distinct markets including Network Intrusion Detection in the early 2000’s with investment and management as either a principal or board member at Recourse Technologies (acquired by Symantec in 2002) and Intruvert (acquired by McAfee). We also invested seed capital and were the initial management team for FusionIO, creating the nascent PCIe Card. Dr. Basile and Mr. Doll, Jr. transitioned from their executive roles at Fusion IO to Violin Memory in 2009 prior to Fusion IO’s IPO in 2011, after which the company’s shares traded up to $40.34 in November 2011 and then traded as low as $7.92 in June 2014 before being acquired in June 2014 for $11.22 per share by SanDisk. Violin Memory was one of the first developers of the Flash Array market, which according to MarketandMarkets, is expected to grow rapidly from an estimated $5.9 billion in 2018 to an expected $17.8 billion by 2023. Violin shares were offered to the public on the New York Stock Exchange in 2013, and Dr. Basile and Mr. Doll, Jr. left their executive roles in December 2013 when the company’s revenues were reduced by the shutdown of the United States federal government, a key company customer. Three years later, in December 2016, the company filed for Chapter 11 bankruptcy protection. Soros Management, a large equity and bond holder, acquired the assets of Violin Memory through bankruptcy procedures in April 2017.
Business Combination Criteria
Our business combination criteria will not be limited to a particular industry or geographic sector, however, given the experience of our management team and board, we intend to focus our search on companies in the TMT industries.
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
Size: We intend to focus on companies that alone, or through a strategic combination with another company, have a most recent enterprise valuation between $500 million and $1.5 billion. We believe at this scale we can most effectively apply the experience and resources of the management team to accelerate growth and enhance profitability.
Stage: From late stage venture through mature enterprise buyout.
Location: We are searching for attractive target acquisition opportunities globally, with an emphasis on companies in North America and Europe.
Focus: We plan to target companies in the Security and Cloud Data Storage Tech sectors globally. Within those broader sectors, we will concentrate on companies that are aligned to the secular trends of digitization, data-centricity and broader technology adoption and positioned for strong growth that can be enhanced through partnership with our management team.
Management Capability: We plan to target companies with strong management teams that are capable of scaling to operate successfully on a global basis. Our management team is committed to providing support, guidance and, where necessary, additional management talent to assist the target company in executing its value creation strategy and achieving its vision.
Differentiation: We are looking for potential acquisitions that have powerful competitive advantages, strong innovation capabilities and an adaptive management team committed to a positive culture grounded in strong values, including the importance of diversity and inclusion while serving the interests of a broader set of stakeholders.
Benefit from being a Public Company: We will evaluate companies that can benefit greatly from becoming a public company and the associated public profile and broader access to capital.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we find an opportunity that has characteristics more compelling to us than the characteristics described above, we would pursue such opportunity.
Competitive Strengths
We intend to leverage the following sources of competitive strength in seeking to achieve our business strategy:
• Management team’s industry knowledge and contacts.
• Deal flow and business development resources available from our sponsor and its affiliates.
• Management team’s experience and reputation in sourcing opportunities.
• Extensive relationships within the private equity community (a likely source of deal flow).
• Management team’s demonstrated ability to create value for their shareholders.
• Strong track record of operational excellence.
Our Acquisition, Investment and Post-Closing Process
In evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things: an analysis of overall industry and competitive conditions, a review of historical financial and operating data, meetings with incumbent management and employees, interaction with third-parties who are industry experts, on-site inspection of facilities and assets, discussion with customers and suppliers, legal and other reviews as we deem appropriate. We will also utilize the expertise of our management team and our sponsor’s and its affiliates’ resources in analyzing and evaluating operating plans, financial projections and determining the appropriate return expectations given the risk profile of the target business as well as the suitability of the target to become a public company.
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 investment banking firm or another independent firm that commonly renders fairness opinions that our initial business combination is fair to us from a financial point of view.
Our Business Combination Process
Members of our management team may directly or indirectly own our founders shares, common stock and/or private placement 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 were to be included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our 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, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business combination, as we believe any such opportunities presented would be smaller than what we are interested in, in different fields than what we would be interested in, or to entities that are not themselves in the business of engaging in business combinations. 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, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination.
Initial Business Combination
Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the “Investment Company Act”. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our
initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Corporate Information
Our executive offices are located at 345 Lorton Avenue, Suite 400, Burlingame, California 94010 and our telephone number is (650) 618-2524.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (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 stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30th, or (2) our annual revenues exceed $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.
THE OFFERING
In deciding 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 of this prospectus entitled “Risk Factors.”
22,000,000 units, at $10.00 per unit, each unit consisting of:
•
one share of Class A common stock; and
•
one-half of one redeemable warrant.
Units: “DBDRU”
Class A Common Stock: “DBDR”
Warrants: “DBDRW”
Trading commencement and separation of Class A common stock and warrants
The units will begin trading on or promptly after the date of this prospectus. We expect 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 B. Riley 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. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
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 three business days from the date of this prospectus. 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.
The units will be automatically separated in connection with the completion of our initial business combination.
Units:
Number outstanding before this offering
0
Number outstanding after this offering
22,000,000(1)
Common stock:
Number outstanding before this offering
6,325,000 shares of Class B common stock(2)
Number outstanding after this offering
27,500,000 shares of Class A common stock and Class B common stock(1)(3)
Redeemable Warrants:
Number of private placement warrants to be sold in a private placement simultaneously with this offering
10,375,000
Number of warrants to be outstanding after this offering and the private placement
21,375,000(1)
Each whole warrant is exercisable to purchase one share of our Class A common stock and only whole warrants are exercisable.
We structured each unit to contain one-half of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one whole share, in order to reduce the dilutive effect of the warrants upon completion of an initial business combination as compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive initial business combination partner for target businesses.
$11.50 per share, subject to adjustment as described herein. In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued
(1)
Assumes no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of 825,000 founder shares.
(2)
Includes up to 825,000 shares that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
(3)
Comprised of 22,000,000 shares of Class A common stock and 5,500,000 shares of Class B common stock (or founder shares). The Class B common stock is convertible into shares of our Class A common stock on a one-for-one basis, subject to adjustment as described below adjacent to the caption “Founder shares conversion and anti-dilution rights.”
Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our Class A common stock during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of:
•
30 days after the completion of our initial business combination, or
•
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 Class A 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 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 covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
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.
Once the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement warrants):
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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 (the “30-day redemption period”) to each warrantholder; and
•
if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders.
We will not redeem the warrants unless a 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 Class A 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 not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering.
If we call the warrants for redemption as described above, our management will have the option to require all holders that wish to exercise warrants 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. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the 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 of this prospectus entitled “Description of Securities — Redeemable 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 the sponsor or its permitted transferees.
In August 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain of our offering costs in consideration for 7,906,250 founder shares. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued. The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares after this offering. As such, our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). Neither our sponsor nor any of our officers or directors have expressed an intention to purchase any units in this offering. Up to 825,000 founder shares will be subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised so that our initial stockholders will maintain ownership of 20% of our common stock after this offering. We will effect a stock dividend or share contribution prior to this offering should the size of the offering change, in order to maintain such ownership percentage.
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, except that:
•
the founder shares are shares of Class B common stock that automatically convert into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein;
•
the founder shares are subject to certain transfer restrictions, as described in more detail below;
•
our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to (i) waive their redemption rights with respect to their founder shares and public shares in connection with the completion of our initial business combination, (ii) waive their redemption rights with respect to their founder shares and public shares in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to offer redemption rights in connection with any proposed initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, (iii) 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 18 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 initial business combination within the prescribed time frame and (iv) not sell any of their founder shares or public shares to us in any tender offer we undertake in connection with a proposed initial business combination;
•
pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares held by them and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. If we submit our initial business combination to our public stockholders for a vote, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,250,001, or 37.5%, of the 22,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any units in or after this offering) in order to have our initial business combination approved (assuming the over-allotment option is not exercised); and
•
the founder shares are entitled to registration rights.
Transfer restrictions on founder shares
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last 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, or (y) the date on which we complete a liquidation, merger, capital stock exchange or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
Founder shares conversion and anti-dilution rights
The shares of Class B common stock will automatically convert into shares of our Class A common stock at the time of our initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the
amounts offered in this prospectus and related to the closing of the initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination and any private placement-equivalent warrants issued to our sponsor or its affiliates upon conversion of loans made to us). Holders of founder shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of 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. Securities could be “deemed issued” for purposes of the conversion rate adjustment if such shares are issuable upon the conversion or exercise of convertible securities, warrants or similar securities.
Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, with each share of common stock entitling the holder to one vote, except for certain matters which will require the approval of holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class. See “Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws – Classified Board of Directors” and “– Class B Common Stock Consent Right.”
Private placement warrants
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 10,375,000 private placement warrants (or 11,695,000 private placement warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full), each exercisable to purchase one share of our Class A common stock at $11.50 per share, in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. A portion of the purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account such that at the time of closing $224.4 million (or $258.1 million if the underwriters exercise their over-allotment option in full) will be held in the trust account. If we do not complete our initial business combination within 18 months from the closing of this offering, the proceeds from the sale of the private
placement warrants held in the trust account will be used 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 and exercisable on a cashless basis so long as they are held by the sponsor or its permitted transferees. If the private placement warrants are held by holders other than the 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.
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 (except as described under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”).
Cashless exercise of private placement warrants
If holders of private placement warrants elect to exercise them on a cashless basis, they 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 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 the sponsor or its permitted transferees is because it is not known at this time whether they will be affiliated with us following an initial 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 sell the shares of Class A common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly restricted from doing so. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
Up to four qualified institutional buyers or institutional accredited investors, including B. Riley, who are not affiliated with any member of our management, who we refer to as the anchor investors, have expressed to us an interest to purchase up to 2,178,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investors such number of units. Further, each of the
anchor investors has entered into a separate agreement with our sponsor pursuant to which each such investor has agreed to purchase membership interests in our sponsor representing an indirect beneficial interest in 250,000 founder shares for $1.0 million. Neither the membership interests in our sponsor nor the founder shares to be indirectly owned by such investors will be subject to forfeiture (or any additional restrictions agreed to by our sponsor in connection with our initial business combination) without their consent. However, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A common stock and warrants. The founder shares to be indirectly owned by such investors will be otherwise identical to the founder shares owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to the subscription agreements with our sponsor, the anchor investors have not been granted any material additional stockholder or other rights, and are only being issued membership interests in our sponsor with no right to control our sponsor or vote or dispose of the anchor founder shares (which will continue to be held by our sponsor until following our initial business combination). Further, the anchor investors are not required to: (i) other as described above, hold any units, shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative votes from other public shareholders would be required to approve our initial business combination.
Proceeds to be held in trust account
Nasdaq rules provide that at least 90% of the gross proceeds from this offering and the sale of the private placement warrants be deposited in a trust account. Of the net proceeds of this offering and the sale of the private placement warrants, $224,400,000, or $10.20 per unit ($258,060,000, or $10.20 per unit, if the underwriters’ over-allotment option is exercised in full) will be placed into a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee J.P. Morgan Chase acting as investment manager. These proceeds include $7,700,000 (or $8,855,000 if the over-allotment option is exercised in full) in deferred underwriting commissions.
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations (less
up to $100,000 interest to pay dissolution expenses), the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest of (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, and (c) the redemption of our public shares if we are unable to complete our initial business combination within 18 months from the closing of this offering, subject to applicable law. 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.
Anticipated expenses and funding sources
Except as described above with respect to the payment of taxes, unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use. The proceeds held in the trust account will be invested only in U.S. government securities with a maturity of 185 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. We will disclose in each quarterly and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account are invested in U.S. government treasury obligations or money market funds or a combination thereof. Based upon current interest rates, we expect the trust account to generate approximately $440,000 of interest annually assuming an interest rate of 0.2% per year; however, we can provide no assurances regarding this amount. Unless and until we complete our initial business combination, we may pay our expenses only from:
•
the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $750,000 in working capital after the payment of approximately $825,000 in expenses relating to this offering; and any loans or additional investments from our sponsor, members of our management team or their affiliates or other third parties, although they are under no obligation to advance funds or invest in us, and provided that any such loans will not have any claim on the proceeds held in the trust account unless such proceeds are released to us upon completion of an initial business combination.
Conditions to completing our initial business combination
Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair
market value of our initial business combination. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
Permitted purchases of public shares and public warrants 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 sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initial stockholders, directors, officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
The purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
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 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be $10.20 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares held by them and any public shares they may acquire during or after this offering in connection with the completion of our initial business combination or otherwise.
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 a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer agent electronically using the 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.
Manner of conducting redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means of a tender offer.
The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirements. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain
and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
•
conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of 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.
Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
Whether or not we maintain our registration under the Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above. Upon the public announcement of our initial 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 Class A 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, we will not redeem any public shares unless our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder approval of the transaction is required by law or stock exchange listing requirements, 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 initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,250,001, or 37.5%, of the 22,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any shares in or after this offering). 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 initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates delivered, or shares tendered electronically, by public stockholders who elected to redeem their shares.
Our amended and restated certificate of incorporation will provide that in no event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate
purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on redemption rights of stockholders holding more than 15% 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 initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide 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 15% of the shares sold in this offering, without our prior consent. We believe the restriction described 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 the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against an initial business combination if such holder’s shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem to no more than 15% 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 initial business combination, particularly in connection with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination.
Redemption rights in
connection with proposed amendments to our certificate of incorporation
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 entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the Delaware General Corporation Law, or DGCL, or applicable stock exchange rules. Under our amended and restated certificate of incorporation, we may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation or on our initial business combination or that would entitle holders thereof to receive funds from the trust account. 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, and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to offer redemption rights in connection with any initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Our sponsor, officers and directors have entered into a letter agreement with us pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Release of funds in trust account
on closing of our initial
business combination
On the completion of our initial business combination, the funds held in the trust account will be used 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.” We will use the remaining funds to pay the underwriters their deferred 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 equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, 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 amended and restated certificate of incorporation provides that we will have only 18 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 18-month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 18-month time period.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 18 months from the closing of 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 18-month time period.
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 and subsequently liquidate 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.
Limited payments to insiders
There will be no finder’s fees, reimbursement, consulting fee, non-cash payments, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation
of our initial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, 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 an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
Payment to our sponsor of $10,000 per month, for up to 18 months, for office space, utilities and secretarial and administrative support;
•
Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
•
Repayment of non-interest bearing loans 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. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
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.
We will establish and 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 of this prospectus entitled “Management — Committees of the Board of Directors — Audit Committee.”
Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering
against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we believe it is unlikely that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
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 the section of this prospectus entitled “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 of this prospectus entitled “Risk Factors” beginning on page 28 of this prospectus.
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.
| |
|
|
August 28, 2020
(Audited)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
Working capital (deficiency)
|
|
|
|
$ |
(18,217) |
|
|
|
Total assets
|
|
|
|
$ |
42,500 |
|
|
|
Total liabilities
|
|
|
|
$ |
18,217 |
|
|
|
Stockholder’s equity
|
|
|
|
$ |
24,283 |
|
|
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 newly 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 an initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
As of August 28, 2020, we had no cash and deferred offering costs of $42,500. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address this need for capital through this offering are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The financial statements contained elsewhere in this prospectus do not include any adjustments that might result from our inability to consummate this offering or our inability to continue as a going concern.
Our public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public stockholders do not support such a combination.
We may choose not to hold a stockholder vote to approve our initial business combination unless the initial business combination would require stockholder approval under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons. Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve of the initial business combination we complete. Please see the section of this prospectus 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.
Pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares, as well as any public shares purchased during or after this offering (including in open market and privately negotiated transactions), in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,250,001, or 37.5%, of the 22,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any public shares) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Our initial stockholders will own shares representing 20% of our outstanding shares of common stock immediately
following the completion of this offering and the private placement. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders to vote in favor of our initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business combination.
Your only opportunity to affect the investment decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek stockholder approval of the initial business combination.
At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since our board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into an initial business combination with a target.
We may seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination. Furthermore, in no event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition, each as described above, we would not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into an initial business combination with us.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
At the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. Furthermore, this dilution would increase to the extent that the anti-dilution provision of the Class B common stock results in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock at the time of our business combination. The above considerations may limit our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount of the deferred underwriting commissions payable to the underwriters will not be adjusted for any shares that are redeemed in connection with an initial business combination. The per-share amount we will distribute to stockholders who properly exercise their redemption rights will not be reduced by the deferred underwriting commission and after such redemptions, the per-share value of shares held by non-redeeming stockholders will reflect our obligation to pay the deferred underwriting commissions.
The ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your stock in the open market.
The requirement that we complete our initial business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating an initial business combination and may decrease our ability to conduct due diligence on potential business combination targets as we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our stockholders.
Any potential target business with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial business combination within 18 months from the closing of this offering. Consequently, such target business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.20 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
Our amended and restated certificate of incorporation provides that we must complete our initial business combination within 18 months from the closing of 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: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive $10.20 per share, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share” and other risk factors below.
If we seek stockholder approval of our initial business combination, our sponsor, directors, officers, advisors and their affiliates may elect to purchase shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination and reduce the public “float” of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, directors,
officers, advisors or their affiliates may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants in such transactions.
Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements.
In addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number of beneficial holders of our securities may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national securities exchange.
If a stockholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its shares may not be redeemed. See the section of this prospectus entitled “Proposed Business — Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination — Tendering Stock Certificates in Connection with a Tender Offer or Redemption Rights.”
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity and (iii) the redemption of our public shares if we are unable to complete an initial business combination within 18 months from the closing of this offering, subject to applicable law and as further described herein. In no other circumstances will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We have applied to have our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on or promptly after the date of this prospectus. Following the date the shares of our Class A common stock and warrants are eligible to trade separately, we anticipate that the shares of our Class A common stock and warrants will be separately listed on Nasdaq. We cannot guarantee that our securities will be approved for listing on Nasdaq. 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 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
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a limited availability of market quotations for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage; and
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a decreased ability to issue additional securities or obtain additional financing in the future.
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, including in connection with our initial business combination.
You will not be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of 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 initial 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 the section of this prospectus entitled “Proposed Business — Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares in excess of 15% of our Class A common stock.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering without our prior consent, 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 initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We expect to encounter competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess similar technical, human and other resources to ours, and our financial resources 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, because we are obligated to pay cash for the shares of Class A common stock which our public stockholders redeem in connection with our initial business combination, target companies will be aware that this may reduce the resources available to us for our initial business combination. This may place us at a competitive disadvantage in successfully negotiating an initial business combination. If we are unable to complete our
initial business combination, our public stockholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20 per share upon our liquidation. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share” and other risk factors below.
If the net proceeds of this offering and the sale of the private placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial business combination and we will depend on loans from our sponsor or management team to fund our search for an initial business combination, to pay our taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of the net proceeds of this offering and the sale of the private placement warrants, only approximately $750,000 will be available to us initially outside the trust account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $825,000, 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. The amount held in the trust account will not be impacted as a result of such increase or decrease. Conversely, in the event that the offering expenses are less than our estimate of $825,000, 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, we would need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. None of our sponsor, members of our management team nor any of their affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account or from funds released to us upon completion of our initial business combination. Up to $1,500,000 of such loans may be convertible into private placement-equivalent warrants at a price of $1.00 per warrant at the option of the lender. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately $10.20 per share on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share” and other risk factors below.
Subsequent to the completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be present inside a particular target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining debt financing to partially finance the initial business combination. Accordingly, any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to
have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the initial business combination constituted an actionable material misstatement or omission.
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share.
Our placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.20 per share initially held in the trust account, due to claims of such creditors. Pursuant to the letter agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, it is unlikely that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of (i) $10.20 per share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust
account if less than $10.20 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below $10.20 per share.
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
We have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account and not to seek recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant to these indemnification provisions.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive damages.
If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
The securities in which we invest the funds held in the trust account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.20 per share.
The proceeds held in the trust account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations. While short-term U.S. government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event that we are unable to complete our initial business combination or make certain amendments to our amended and restated certificate of incorporation, our public shareholders are entitled to receive their pro-rata share of the proceeds held in the trust account, plus any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial business combination, $100,000 of interest). Negative interest rates could reduce the value of the assets held in trust such that the per-share redemption amount received by public shareholders may be less than $10.20 per share.
If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments; and
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restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination.
In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate structure; and
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reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations.
In order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete an initial business combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government securities or investment securities. The trust account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to
amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination within 18 months from the closing of this offering, our return of the funds held in the trust account to our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete an initial business combination or may result in our liquidation. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we 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, including our ability to negotiate and complete our initial business combination and results of operations.
Our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon as reasonably possible following the 18th month from the closing of this offering in the event we do not complete our initial business combination and, therefore, we do not intend to comply with the foregoing procedures.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of our trust account
distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on 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 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 except on a cashless basis. If the issuance of the shares upon exercise of warrants is not registered, qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
We 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 that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of Class A common stock issuable upon exercise of the warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the Class A common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. We will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and there is no exemption available. If the
issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of Class A common stock included in the units. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering. However, there may be instances in which holders of our public warrants may be unable to exercise such public warrants but holders of our private warrants may be able to exercise such private warrants.
If you exercise your public warrants on a “cashless basis,” you will receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
There are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another exemption. Second, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available; if that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. Third, if we call the public warrants for redemption, our management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise on a cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (as defined in the next sentence) by (y) the fair market value. The “fair market value” is the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive fewer shares of Class A common stock from such exercise than if you were to exercise such warrants for cash.
The grant of registration rights to our initial stockholders may make it more difficult to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant to an agreement 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 the private placement warrants, the shares of Class A common stock issuable upon exercise of the founder shares and the private placement warrants held, or to be held, by them and holders of warrants that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our initial stockholders or holders of working capital loans or their respective permitted transferees are registered.
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We are not limited to completing an initial business combination in any industry or geographical region, although we will not, under our amended and restated certificate of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you that an investment in our 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 our initial business combination could suffer a reduction in the value of their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained an actionable material misstatement or material omission.
Past performance by our management team and its affiliates may not be indicative of future performance of an investment in the Company.
Past performance by our management team and its affiliates is not a guarantee either (i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management team or its affiliates as indicative of our future performance, and no member of the management team has prior experience with special purpose acquisition companies. Additionally, in the course of their respective careers, members of our management team and their affiliates have been involved in businesses and transactions that were not successful.
We may seek business combination opportunities in industries or sectors which may or may not be outside of our management’s area of expertise.
Although we intend to focus on identifying companies in sectors where we have experience, we will consider an initial business combination outside of our management’s area of expertise if an initial business combination candidate is presented to us and we determine that such candidate offers an attractive business combination opportunity for our company or we are unable to identify a suitable candidate in this sector after having expanded a reasonable amount of time and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in an initial business combination candidate. In the event we elect to pursue a business combination outside of the areas of our management’s expertise, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors. Accordingly,
any stockholders who choose to remain stockholders following our initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business combination will not have all of these positive attributes. If we complete our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share” and other risk factors below.
We may seek business combination opportunities with a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete our initial business combination with a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain a fairness opinion, and consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation opinions that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer documents, as applicable, related to our initial business combination.
We may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock,
par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 178,000,000 and 14,500,000 (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 B common stock, respectively, available for issuance, which amount does not take into account the shares of Class A common stock reserved for issuance upon exercise of outstanding warrants nor the shares of Class A common stock issuable upon conversion of Class B common stock. Immediately after the consummation of this offering, there will be no shares of preferred stock issued and outstanding. Shares of Class B common stock are convertible into shares of our Class A common stock initially at a one-for-one ratio but subject to adjustment as set forth herein, including in certain circumstances in which we issue Class A common stock or equity-linked securities related to our initial business combination.
We may issue a substantial number of additional shares of common or preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business combination (although our amended and restated certificate of incorporation will provide that we may not issue securities that can vote with common stockholders on matters related to our pre-initial business combination activity). We may also issue shares of Class A common stock upon conversion of the Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution provisions contained in our amended and restated certificate of incorporation. However, our amended and restated certificate of incorporation will provide, among other things, that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with the approval of our stockholders. However, our executive officers, directors and director nominees have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
The issuance of additional shares of common or preferred stock:
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may significantly dilute the equity interest of investors in this offering;
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may subordinate the rights of holders of common stock if preferred stock is issued with rights senior to those afforded our common stock;
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could cause a change of control if a substantial number of shares of our common stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and
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may adversely affect prevailing market prices for our units, Class A common stock and/or warrants.
Resources could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.20 per share on the redemption of their shares. See “— If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.20 per share” and other risk factors below.
Our ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
Our ability to successfully effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial business combination, it is likely that some or all of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements. In addition, the officers and directors of an initial business combination candidate may resign upon completion of our initial business combination. The departure of an initial business combination target’s key personnel could negatively impact the operations and profitability of our post-combination business. The role of an initial business combination candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that certain members of an initial business combination candidate’s management team will remain associated with the initial business combination candidate following our initial business combination, it is possible that members of the management of an initial business combination candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
We are dependent upon our executive officers and directors and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends on the continued service of our executive officers and directors, at least until we have completed our initial business combination. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or executive officers. The unexpected loss of the services of one or more of our directors or executive officers could have a detrimental effect on us.
Our key personnel may negotiate employment or consulting agreements as well as reimbursement of out-of-pocket expenses, if any, with a target business in connection with a particular business combination. These agreements may provide for them to receive compensation or reimbursement for out-of-pocket expenses, if any, following our initial business combination and as a result, may cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection with the initial business combination. Additionally, they may negotiate reimbursement of any out-of-pocket expenses incurred on our behalf prior to the consummation of our initial business combination, should they choose to do so. Such negotiations would take place simultaneously with the negotiation of the initial business combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of the initial business combination, or as reimbursement for such out-of-pocket expenses. The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such individuals to remain with us after the completion of our initial
business combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial business combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who choose to remain stockholders following the initial business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Our officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for an initial business combination and their other businesses. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per week to our affairs. Our independent directors may also serve as officers or board members for other entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other business affairs, please see the section of this prospectus entitled “Management — Directors and Officers.”
Certain of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.
Following the completion of 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 sponsor and officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business, and our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Exchange Act even before we have entered into a definitive agreement regarding our initial business combination.
Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties.
Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to 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, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
For a complete discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see the sections of this prospectus entitled “Management — Directors and Officers,” “Management — Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In fact, we may enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or officers, although we do not intend to do so. We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
We may engage in an initial business combination with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers or directors. Our directors also serve as officers and board members for other entities, including, without limitation, those described under the section of this prospectus entitled “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 initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning an initial business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria for an initial business combination as set forth in the section of this prospectus entitled “Proposed Business — Selection of a Target Business and Structuring of our Initial Business Combination” and such transaction was approved by a majority of our disinterested directors. Despite our agreement to obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation opinions, regarding the fairness to our stockholders from a financial point of view of an initial business combination with one or more businesses affiliated with our officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the terms of the initial business combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Since our sponsor, officers and directors will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination.
In August 2020, our sponsor paid $25,000, or approximately $0.003 per share, to cover certain of our offering costs in consideration for 7,906,250 founder shares. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares after this offering. The founder shares will be worthless if we do not complete an initial business combination. In addition, our sponsor has committed to purchase an aggregate of 10,375,000 private placement warrants (or 11,695,000 private placement warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full), that will also be worthless if we do not complete an initial business combination.
Holders of founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination. In addition, we may obtain loans from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors may influence their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination.
We may issue notes or other debt securities, or otherwise incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
•
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;
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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;
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our inability to pay dividends on our common stock;
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes;
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and
•
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 services and limited operating activities. This lack of diversification may negatively impact our operating results and profitability.
Of the net proceeds from this offering and the sale of the private placement warrants, $224,400,000 (or $258,060,000 if the underwriters’ over-allotment option is exercised in full) will be available to complete our initial business combination and pay related fees and expenses (which includes up to $7,700,000, or up to $8,855,000 if the over-allotment option is exercised in full, for the payment of deferred underwriting commissions).
We may effectuate our initial business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate our
initial business combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. In addition, we intend to focus our search for an initial business combination in 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.
This lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and delay our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. With multiple business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination with a private company about which little information is available, which may result in an initial business combination with a company that is not as profitable as we suspected, if at all.
In pursuing our initial business combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in an initial business combination with a company that is not as profitable as we suspected, if at all.
Our management may not be able to maintain control of a target business after our initial business combination.
We may structure an initial business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of Class A common stock in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares of
common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business. New management may not possess the skills, qualifications or abilities necessary to profitably operate such business.
We do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete an initial business combination with which a substantial majority of our stockholders do not agree.
Our amended and restated certificate of incorporation will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (such that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, all shares of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders may not support.
In order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. To the extent we seek to amend our organizational documents in a way that would be deemed to fundamentally change the nature of any securities offered through this registration statement, we would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial business combination.
The provisions of our amended and restated certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing the release of funds from our trust account), may be amended with the approval of holders of 65% of our common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated certificate of incorporation will provide that any of its provisions related to pre-initial 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 and including to permit us to withdraw funds from the trust account such that the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated) may be amended if approved by
holders of 65% of our common stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our common stock entitled to vote thereon. In all other instances, our amended and restated certificate of incorporation may be amended by holders of a majority of our outstanding common stock entitled to vote thereon, subject to applicable provisions of the DGCL or applicable stock exchange rules. We may not issue additional securities that can vote on amendments to our amended and restated certificate of incorporation. Our initial stockholders, who will collectively beneficially own up to 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. As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-initial business combination behavior more easily than some other blank check companies, and this may increase our ability to complete an initial business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated certificate of incorporation.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares on a business combination if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, divided by the number of then outstanding public shares. These agreements are contained in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative action, subject to applicable law.
We may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular business combination.
We have not selected any specific business combination target but intend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants. As a result, we may be required to seek additional financing to complete such proposed initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate. Further, the amount of additional financing we may be required to obtain could increase as a result of future growth capital needs for any particular transaction, the depletion of the available net proceeds in search of a target business, the obligation to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination and/or the terms of negotiated transactions to purchase shares in connection with our initial business combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.20 per share plus any pro rata interest earned on the funds held in the trust account and not previously released to us to pay our taxes on the liquidation of our trust account and our warrants will expire worthless. In addition, even if we do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders may only receive approximately $10.20 per share on the liquidation of our trust account, and our warrants will expire worthless. Furthermore, as described in the risk factor entitled “If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received
by stockholders may be less than $10.20 per share,” under certain circumstances our public stockholders may receive less than $10.20 per share upon the liquidation of the trust account.
Our initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial stockholders will own shares representing 20% of our issued and outstanding shares of common stock (assuming they do not purchase any units in this offering). Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that you do not support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions. If our initial stockholders purchase any units in this offering or if our initial stockholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Factors that would be considered in making such additional purchases would include consideration of the current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our initial stockholders, is and will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior to the completion of our initial business combination, in which case all of the current directors will continue in office until at least the completion of the initial 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 initial business combination.
Our sponsor paid an aggregate of $25,000, or approximately $0.004 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase of our Class B common stock.
The difference between the public offering price per share (allocating all of the unit purchase price to the Class A common stock and none to the warrant included in the unit) 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 92.5% (or $9.25 per share, assuming no exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of $0.75 and the initial offering price of $10.00 per unit. In addition, because of the anti-dilution rights of the founder shares, any equity or equity-linked securities issued or deemed issued in connection with our initial business combination would be disproportionately dilutive to our Class A common stock.
Unlike many other similarly structured blank check companies, our initial stockholders will receive additional shares of Class A common stock if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A common stock at the time of our initial business combination, on a one-for-one basis, subject to adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities convertible or exercisable for Class A common stock, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial business combination, the ratio at which founder shares shall convert into Class A common stock will be adjusted so that the number of shares of Class A common stock issuable upon conversion of all founder shares will equal, in the aggregate, on an as-converted basis, 20% of the total number of all outstanding shares of common stock upon completion of the initial business combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the business combination and any private placement-equivalent warrants issued to our sponsor or its affiliates upon conversion of loans made to us. This is different from most other similarly structured blank check companies in which the initial stockholder will only be issued an aggregate of 20% of the total number of shares to be outstanding prior to the initial business combination. Additionally, the aforementioned adjustment will not take into account any shares of Class A common stock redeemed in connection with the business combination. Accordingly, the holders of the founder shares could receive additional shares of Class A common stock even if the additional shares of Class A common stock, or equity-linked securities convertible or exercisable for Class A common
stock, are issued or deemed issued solely to replace those shares that were redeemed in connection with the business combination. The foregoing may make it more difficult and expensive for us to consummate an initial business combination.
We may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased, the exercise period could be shortened and the number of shares of our Class A common stock purchasable upon exercise of a warrant could be decreased, all without your approval.
Our warrants 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 mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or correct any defective provision, but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the warrants into cash or stock, shorten the exercise period or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
Our warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.
We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided certain other conditions are met. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by the sponsor or its permitted transferees.
Our warrants and founder shares may have an adverse effect on the market price of our Class A common stock and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 11,000,000 shares of our Class A common stock (or to purchase up to 12,650,000 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 warrants to purchase an aggregate of 10,375,000 shares (or 11,695,000 shares if the over-allotment option is exercised in full) of Class A common stock at $11.50 per share. Our initial stockholders currently own an aggregate of 6,325,000 founder shares. The founder shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment as set forth herein. In addition, if our sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
To the extent we issue shares of Class A common stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants and conversion rights could make us a less attractive business combination vehicle to a target business. Any such issuance will increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of Class A common stock issued to complete the initial business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate an initial business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination and (iii) they may be exercised by the holders on a cashless basis.
Because each unit contains one-half of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. This is different from other offerings similar to ours whose units include one share of common stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants
upon completion of an initial business combination since the warrants will be exercisable in the aggregate for one third of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if they included a warrant to purchase one whole share.
A provision of our warrant agreement may make it more difficult for use to consummate an initial business combination.
Unlike most blank check companies, if
(i)
we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share;
(ii)
the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and
(iii)
the Market Value is below $9.20 per share,
then the exercise price of the warrants will be adjusted to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination with a target business.
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 representatives 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, prices 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;
•
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.
An investment in this offering may result in uncertain or adverse U.S. federal income tax consequences.
An investment in this offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address instruments similar to the units we are issuing in this offering, their treatment for U.S. federal income tax purposes is uncertain, and the allocation an investor makes with respect to the purchase price of a unit between the share of Class A common stock and the one-half of one redeemable warrant included in each unit could be challenged by the Internal Revenue Service (“IRS”) or the courts. In addition, if we are determined to be a personal holding company for U.S. federal income tax purposes, our taxable income would be subjected to an additional 20% federal income tax, which would reduce the net after-tax amount of interest income earned on the funds placed in our trust account. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in the units we are issuing in this offering is unclear under current law. Finally, it is unclear whether the redemption rights with respect to our shares suspend the running of a U.S. holder’s holding period for purposes of determining whether (i) any gain or loss realized by such holder on the sale or exchange of Class A common stock is long-term capital gain or loss, (ii) any dividends we pay would be considered “qualified dividends” for U.S. federal income tax purposes and (iii) any dividend we pay would be eligible for the corporate dividends-received deduction. See the section entitled “U.S. Federal Income Tax Considerations” for a summary of the principal U.S. federal income tax consequences of an investment in our securities. Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding or disposing of our securities.
Because we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective target businesses.
The federal proxy rules require that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We are an “emerging growth company” and “smaller reporting company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies and smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and
proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources, and increase the time and costs of completing an initial business combination.
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, 2021. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target company with which we seek to complete our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination.
Provisions in our amended and restated certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Our amended and restated certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make the removal of management more difficult and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will, subject to certain exceptions, be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation. This choice of forum provision may limit or make more costly a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations.
If we effect our initial business combination with a company with operations or opportunities outside of the United States, we would be subject to any special considerations or risks associated with companies operating in an international setting, including any of the following:
•
higher costs and difficulties inherent in managing cross-border business operations and complying with different commercial and legal requirements of overseas markets;
•
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 and challenges in collecting accounts receivable;
•
tax issues, including but not limited to tax law changes and variations in tax laws as compared to the United States;
•
currency fluctuations and exchange controls;
•
rates of inflation;
•
cultural and language differences;
•
employment regulations;
•
changes in industry, regulatory or environmental standards within the jurisdictions where we operate;
•
crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
•
deterioration of political relations with the United States; and
•
government appropriations of assets.
We may not be able to adequately address these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations and financial condition.
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent coronavirus (COVID-19) pandemic.
The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and
services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.
We may face risks related to businesses in the TMT industries.
Business combinations with businesses in the TMT industries entail special considerations and risks. If we are successful in completing a business combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:
•
if we do not develop successful new products or improve existing ones, our business will suffer;
•
we may invest in new lines of business that could fail to attract or retain users or generate revenue;
•
we will face significant competition and if we are not able to maintain or improve our market share, our business could suffer;
•
the loss of one or more members of our management team, or our failure to attract and retain other highly qualified personnel in the future, could seriously harm our business;
•
if our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users’ ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business;
•
mobile malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of our products could seriously harm our business and reputation;
•
if we are unable to successfully grow our user base and further monetize our products, our business will suffer;
•
if we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed;
•
we may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business;
•
components used in our products may fail as a result of a manufacturing, design, or other defect over which we have no control, and render our devices inoperable;
•
an inability to manage rapid change, increasing consumer expectations and growth;
•
an inability to build strong brand identity and improve subscriber or customer satisfaction and loyalty;
•
an inability to deal with our subscribers’ or customers’ privacy concerns;
•
an inability to license or enforce intellectual property rights on which our business may depend;
•
an inability by us, or a refusal by third parties, to license content to us upon acceptable terms;
•
potential liability for negligence, copyright, or trademark infringement or other claims based on the nature and content of materials that we may distribute;
•
competition for the leisure and entertainment time and discretionary spending of subscribers or customers, which may intensify in part due to advances in technology and changes in consumer expectations and behavior; and
•
disruption or failure of our networks, systems or technology as a result of misappropriation of data or other malfeasance, as well as outages, natural disasters, terrorist attacks, accidental releases of information or similar events.
Any of the foregoing could have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses will not be limited to the TMT industries. Accordingly, if we acquire a target business in another industry, we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. 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,” “intend,” “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 select an appropriate target business or businesses in the TMT industries;
•
our ability to complete our initial business combination;
•
our expectations around the performance of the prospective target business or businesses;
•
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;
•
our potential ability to obtain additional financing to complete our initial business combination;
•
our pool of prospective target businesses in the TMT industries;
•
risks associated with acquiring an operating company or business in the TMT industries;
•
the ability of our officers and directors to generate a number of potential acquisition 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
•
the trust account not being subject to claims of third parties; 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 section of this prospectus entitled “Risk Factors.” 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.
USE OF PROCEEDS
We are offering 22,000,000 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
|
|
|
|
$ |
220,000,000 |
|
|
|
|
$ |
253,000,000 |
|
|
|
Gross proceeds from private placement warrants offered in the private placement
|
|
|
|
|
10,375,000 |
|
|
|
|
|
11,695,000 |
|
|
|
Total gross proceeds
|
|
|
|
$ |
230,375,000 |
|
|
|
|
$ |
264,695,000 |
|
|
|
Offering expenses(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting commissions (2% of gross proceeds from units offered to public, excluding deferred portion)(2)
|
|
|
|
$ |
4,400,000 |
|
|
|
|
$ |
5,060,000 |
|
|
|
Legal fees and expenses
|
|
|
|
|
250,000 |
|
|
|
|
|
250,000 |
|
|
|
Accounting fees and expenses
|
|
|
|
|
50,000 |
|
|
|
|
|
50,000 |
|
|
|
SEC/FINRA Expenses
|
|
|
|
|
66,053 |
|
|
|
|
|
66,053 |
|
|
|
Travel and road show
|
|
|
|
|
25,000 |
|
|
|
|
|
25,000 |
|
|
|
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
75,000 |
|
|
|
Director and Officer liability insurance premiums
|
|
|
|
|
200,000 |
|
|
|
|
|
200,000 |
|
|
|
Printing and engraving expenses
|
|
|
|
|
35,000 |
|
|
|
|
|
35,000 |
|
|
|
Miscellaneous(3)
|
|
|
|
|
123,947 |
|
|
|
|
|
123,947 |
|
|
|
Total offering expenses (other than underwriting commissions)
|
|
|
|
$ |
825,000 |
|
|
|
|
$ |
825,000 |
|
|
|
Proceeds after offering expenses
|
|
|
|
$ |
225,150,000 |
|
|
|
|
$ |
258,810,000 |
|
|
|
Held in trust account
|
|
|
|
$ |
224,400,000 |
|
|
|
|
$ |
258,060,000 |
|
|
|
% of public offering size
|
|
|
|
|
102% |
|
|
|
|
|
102% |
|
|
|
Not held in trust account
|
|
|
|
$ |
750,000 |
|
|
|
|
$ |
750,000 |
|
|
The following table shows the use of the approximately $750,000 of net proceeds not held in the trust account(3).
| |
|
|
Amount
|
|
|
% of Total
|
|
|
Legal, accounting, due diligence, travel, and other expenses in connection with any business combination
|
|
|
|
$ |
300,000 |
|
|
|
|
|
40.0% |
|
|
|
Legal and accounting fees related to regulatory reporting obligations
|
|
|
|
|
100,000 |
|
|
|
|
|
13.3% |
|
|
|
Payment for office space, utilities and secretarial and administrative support
|
|
|
|
|
180,000 |
|
|
|
|
|
24.0% |
|
|
|
Nasdaq continued listing fees
|
|
|
|
|
75,000 |
|
|
|
|
|
10.0% |
|
|
|
Other miscellaneous expenses
|
|
|
|
|
95,000 |
|
|
|
|
|
12.7% |
|
|
|
Total
|
|
|
|
$ |
750,000 |
|
|
|
|
|
100.0% |
|
|
(1)
A portion of the offering expenses have been paid from the proceeds of loans from our sponsor of up to $300,000 as described in this prospectus. As of August 28, 2020, we had borrowed $13,217 under the promissory note with our sponsor. These loans will be repaid upon completion of this offering out of the proceeds that have been allocated for the payment of offering expenses (other than underwriting commissions) and amounts not to be held in the trust account. In the event that offering expenses are less than as set forth in this table, any such amounts will be used for post-closing working capital
expenses. In the event that the offering expenses are more than as set forth in this table, we may fund such excess with funds not held in the trust account.
(2)
The underwriters have agreed to defer underwriting commissions equal to 3.5% of the gross proceeds of this offering. Upon completion of our initial business combination, $7,700,000 (or $8,855,000 if the over-allotment option is exercised in full), which constitutes the underwriters’ deferred commissions will be paid to the underwriters from the funds held in the trust account, and the remaining funds, less amounts released by the trustee to pay redeeming shareholders, 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.
(3)
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 our initial business combination based upon the level of complexity of such business combination. In the event we identify an initial business combination 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.
Of the net proceeds of this offering and the sale of the private placement warrants, $224,400,000 (or $258,060,000 if the underwriters’ over-allotment option is exercised in full), including $7,700,000 (or $8,855,000 if the over-allotment option is exercised in full) of deferred underwriting commissions, will be placed in a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee and J.P. Morgan Chase acting as investment manager, and will be invested only in U.S. government treasury bills with a maturity of 185 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. We estimate that the interest earned on the trust account will be approximately $440,000 per year, assuming an interest rate of 0.2% per year; however, we can provide no assurance regarding this amount. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations (and the up to $100,000 of interest which may be released to us pay dissolution expenses if we are unable to complete our initial business combination), the proceeds from this offering and the sale of the private placement warrants will not be released from the trust account until the earliest to occur of: (a) the completion of our initial business combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (c) the redemption of our public shares if we are unable to complete our initial business combination within 18 months from the closing of this offering, subject to applicable 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 initial business combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination, 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. There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination.
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 business combination, only after we have negotiated and signed a letter of intent or other preliminary agreement that addresses the terms of an initial business combination. However, if our estimate of the costs of undertaking in-depth due diligence and negotiating an initial 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.
Commencing on the date of this prospectus, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative 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, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of August 28, 2020, we had borrowed $13,217 under the promissory note with our sponsor 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 March 31, 2021 or the closing of this offering. The loan will be repaid upon the closing of this offering out of offering proceeds not held in the trust account.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. 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 $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination. See “Proposed Business — Permitted purchases of our securities” for a description of how our sponsor, initial stockholders, directors, officers, advisors or any of their affiliates will select which stockholders to purchase securities from in any private transaction.
The purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
In no event will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) and the agreement for our initial 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 initial business combination, and instead may search for an alternate business combination.
A public stockholder will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of our public shares if we are unable to complete our initial business combination within 18 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 initial 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 sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. In addition, our initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within the prescribed time frame. However, if our sponsor 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. If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering. Further, if we incur any indebtedness in connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
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 August 28, 2020, our net tangible book deficit was $18,217, or approximately $(0.00) per share of common stock. After giving effect to the sale of 22,000,000 shares of Class A common stock included in the units we are offering by this prospectus (or 25,300,000 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full), the sale of the private placement warrants and the deduction of underwriting commissions and estimated expenses of this offering, our pro forma net tangible book value at August 28, 2020 would have been $5,000,001, or approximately $0.75 per share (or $0.66 per share if the underwriters’ over-allotment option is exercised in full), representing an immediate increase in net tangible book value (as decreased by the value of the approximately 20,830,812 shares of Class A common stock that may be redeemed for cash, or 24,017,576 shares of Class A common stock if the underwriters’ over-allotment option is exercised in full) of $0.75 per share (or $0.66 per share if the underwriters’ over-allotment option is exercised in full) to our initial stockholders as of the date of this prospectus and dilution to public stockholders from this offering will be $9.25 per share (or $9.34 if the underwriters’ over-allotment option is exercised in full). The number of shares that may be redeemed may exceed the 20,830,812 share amount (or 24,017,576 shares if the underwriters’ over-allotment option is exercised in full) so long as it would not cause our net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of our initial business combination.
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 or the private placement warrants:
| |
|
|
No exercise of
over-allotment
option
|
|
|
Exercise of
over-allotment
option in full
|
|
|
Public offering price
|
|
|
|
$ |
10.00 |
|
|
|
|
$ |
10.00 |
|
|
|
Net tangible book value before this offering
|
|
|
|
|
(0.00) |
|
|
|
|
|
(0.00) |
|
|
|
Increase attributable to new investors and private sales
|
|
|
|
|
0.75 |
|
|
|
|
|
0.66 |
|
|
|
Pro forma net tangible book value after this offering
|
|
|
|
|
0.75 |
|
|
|
|
|
0.66 |
|
|
|
Dilution to new investors
|
|
|
|
|
9.25 |
|
|
|
|
|
9.34 |
|
|
|
Percentage of dilution to new investors
|
|
|
|
|
92.5% |
|
|
|
|
|
93.4% |
|
|
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 $212,474,282 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 earned on the funds held in the trust account and not previously released to us to pay our taxes), 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)
|
|
|
|
|
5,500,000 |
|
|
|
|
|
20.0% |
|
|
|
|
$ |
25,000 |
|
|
|
|
|
0.01% |
|
|
|
|
$ |
0.005 |
|
|
|
Public Stockholders
|
|
|
|
|
22,000,000 |
|
|
|
|
|
80.0% |
|
|
|
|
|
220,000,000 |
|
|
|
|
|
99.99% |
|
|
|
|
$ |
10.00 |
|
|
| |
|
|
|
|
27,500,000 |
|
|
|
|
|
100.0% |
|
|
|
|
$ |
220,025,000 |
|
|
|
|
|
100.00% |
|
|
|
|
|
|
|
|
(1)
Assumes no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of an aggregate of 825,000 shares of Class B common stock held by our sponsor.
The pro forma net tangible book value per share after the offering is calculated as follows:
| |
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Numerator:
|
|
|
|
|
Net tangible book value before this offer
|
|
|
|
$ |
(18,217) |
|
|
|
|
$ |
(18,217) |
|
|
|
Proceeds from this offering and the sale of the private placement
warrants, net of expenses(1)
|
|
|
|
|
225,150,000 |
|
|
|
|
|
258,810,000 |
|
|
|
Offering costs excluded from the net tangible book value before this offering
|
|
|
|
|
42,500 |
|
|
|
|
|
42,500 |
|
|
|
Less: deferred underwriters’ commissions payable
|
|
|
|
|
(7,700,000) |
|
|
|
|
|
(8,855,000) |
|
|
|
Less: amount of Class A common stock subject to redemption to maintain net tangible assets of $5,000,001(2)
|
|
|
|
|
(212,474,282) |
|
|
|
|
|
(244,979,275) |
|
|
| |
|
|
|
|
5,000,001 |
|
|
|
|
|
5,000,008 |
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of Class B common stock outstanding prior to this offering
|
|
|
|
|
6,325,000 |
|
|
|
|
|
6,325,000 |
|
|
|
Shares of Class B common stock forfeited if over-allotment is not exercised
|
|
|
|
|
(825,000) |
|
|
|
|
|
— |
|
|
|
Shares of Class A common stock included in the units
offering
|
|
|
|
|
22,000,000 |
|
|
|
|
|
25,300,000 |
|
|
|
Less: shares of Class A common stock subject to redemption
|
|
|
|
|
(20,830,812) |
|
|
|
|
|
(24,017,576) |
|
|
| |
|
|
|
|
6,669,188 |
|
|
|
|
|
7,607,424 |
|
|
(1)
Expenses applied against gross proceeds include offering expenses of $825,000 and underwriting commissions of $4,400,000 (excluding deferred underwriting fees). See “Use of Proceeds.”
(2)
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial business combination, the number of shares of Class A common stock subject to redemption will be reduced by the amount of any such purchases, increasing the pro forma net tangible book value per share. See “Proposed Business — Effecting Our Initial Business Combination — Permitted Purchases of Our Securities.”
CAPITALIZATION
The following table sets forth our capitalization at August 28, 2020, and as adjusted to give effect to the sale of our units in this offering and the sale of the private placement warrants and the application of the estimated net proceeds derived from the sale of such securities, assuming no exercise by the underwriters of its over-allotment option:
| |
|
|
August 28, 2020
|
|
| |
|
|
Actual
|
|
|
As Adjusted(1)
|
|
|
Deferred underwriting commission
|
|
|
|
|
|
|
|
|
|
$ |
7,700,000 |
|
|
|
Promissory note to affiliate(2)
|
|
|
|
$ |
13,217 |
|
|
|
|
|
|
|
|
|
Class A common stock, 20,830,812 shares subject to redemption(3)
|
|
|
|
|
|
|
|
|
|
|
212,474,282 |
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.0001 par value, 1,000,000 shares authorized (actual and as adjusted); none issued or outstanding (actual and as adjusted)
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Class A common stock, $0.0001 par value, 200,000,000 shares authorized (actual
and as adjusted); none issued or outstanding (actual) and 1,169,188 shares
issued and outstanding (excluding 20,830,812 shares subject to redemption) as
adjusted)
|
|
|
|
|
— |
|
|
|
|
|
117 |
|
|
|
Class B common stock, $0.0001 par value, 20,000,000 shares authorized (actual and as adjusted); 6,325,000 shares issued and outstanding (actual); 5,500,000 shares issued and outstanding (as adjusted)(4)
|
|
|
|
|
633 |
|
|
|
|
|
551 |
|
|
|
Additional paid-in-capital
|
|
|
|
|
24,367 |
|
|
|
|
|
5,000,050 |
|
|
|
Accumulated deficit
|
|
|
|
|
(717) |
|
|
|
|
|
(717) |
|
|
|
Total Stockholders’ equity:
|
|
|
|
|
24,283 |
|
|
|
|
|
5,000,001 |
|
|
|
Total capitalization
|
|
|
|
$ |
37,500 |
|
|
|
|
$ |
225,174,283 |
|
|
(1)
Assumes the over-allotment option has not been exercised and the resulting forfeiture of 825,000 founder shares held by the sponsor has occurred.
(2)
Our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of August 28, 2020, we had borrowed $13,217 under the promissory note with our sponsor to be used for a portion of the expenses of this offering.
(3)
Upon 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, 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. The number of shares that may be redeemed may exceed this number so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination.
(4)
Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted amount assumes no exercise of the underwriters’ over-allotment option.
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 selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with 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, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional shares in connection with an initial business combination to the owners of the target or other investors:
•
may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution provisions in the Class B common stock resulted in the issuance of Class A shares on a greater than one-to-one basis upon conversion of the Class B common stock;
•
may subordinate the rights of holders of our 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 shares of our 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;
•
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 or otherwise incur significant debt to bank or other lenders or the owners of a target, 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, our ability to pay expenses, make capital expenditures and acquisitions, and fund 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;
•
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and 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 August 28, 2020, we had no cash and deferred offering costs of $42,500. Further, we expect to continue to incur significant costs in the pursuit of our initial business combination 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 expenses as we conduct due diligence on prospective business combination candidates. We expect our expenses to increase substantially after the closing of this offering.
Liquidity and Capital Resources
As indicated in the accompanying financial statements, at August 28, 2020, we had no cash and a working capital deficit of $18,217. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. We cannot assure you that our plans to raise capital or to consummate an initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Management’s plans to address this uncertainty through this offering are discussed above.
Our liquidity needs have been satisfied prior to completion of this offering through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $300,000 in loans from our sponsor under an unsecured promissory note. As of August 28, 2020, we had borrowed $13,217 under the unsecured promissory note. We estimate that the net proceeds from (i) the sale of the units in this offering, after deducting offering expenses of approximately $825,000 and underwriting commissions of $4,400,000, or $5,060,000 if the over-allotment option is exercised in full) (excluding deferred underwriting commissions of $7,700,000 (or up to $8,855,000 if the underwriters’ over-allotment option is exercised in full)), and (ii) the sale of the private placement warrants for a purchase price of $10,375,000, (or $11,695,000 if the over-allotment option is exercised in full) will be $225,150,000 (or $258,810,000 if the underwriters’ over-allotment option is exercised in full). Of this amount, $224,400,000 or $258,060,000 if the underwriters’ over-allotment option is exercised in full, including $7,700,000 (or up to $8,855,000 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions) will be deposited into a trust account. The funds in the trust account will be invested only in specified U.S. government treasury bills or in specified money market funds. The remaining $750,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $825,000 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 $825,000, 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 (less deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes. 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, which is the maximum amount of annual franchise taxes payable by us as a Delaware corporation per annum, which we may pay from funds from this offering held outside
of the trust account or from interest earned on the funds held in our trust account and released to us for this purpose. 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 the interest earned on the amount in the trust account will be sufficient to pay our income 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 $750,000 of proceeds held outside the trust account. We will use these funds 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, and structure, negotiate and complete an initial business combination.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a non-interest basis as may be required. If we complete our initial business combination, we would repay such loaned amounts. 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 for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $300,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $100,000 for legal and accounting fees related to regulatory reporting requirements; $180,000 for office space, utilities and secretarial and administrative support; $75,000 for Nasdaq continuing listing fees; and approximately $95,000 for other miscellaneous expenses. These amounts are estimates and may differ materially from our actual expenses.
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 initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In 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, 2021. 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 has our independent registered public accounting firm 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 initial business combination may have internal controls that need improvement in areas such as:
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staffing for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation of accounts;
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proper recording of expenses and liabilities in the period to which they relate;
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evidence of internal review and approval of accounting transactions;
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documentation of processes, assumptions and conclusions underlying significant estimates; and
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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 expense 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.
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 of the Sarbanes-Oxley Act. The independent registered public accounting firm 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 185 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 August 2020, our sponsor purchased 7,906,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of this offering. The per share purchase price of the founder shares was determined by dividing the amount of cash contributed to the company by the aggregate number of founder shares issued. If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the
ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering.
Commencing on the date of this prospectus, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying monthly fees.
Our sponsor, 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.
Prior to the consummation of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of August 28, 2020, we had borrowed $13,217 under the promissory note with our sponsor 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 March 31, 2021 or the closing of this offering. The loan will be repaid upon the closing of this offering out of the offering proceeds that has been allocated to the payment of offering expenses (other than underwriting commissions).
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a non-interest basis as may be required. If we complete our initial business combination, we would repay such loaned amounts. 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 for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
Our sponsor has committed to purchase an aggregate of 10,375,000 private placement warrants (or 11,695,000 private placement warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including our officers and directors and other persons or entities affiliated with or related to it, but the transferees receiving such securities will be subject to the same agreements with respect to such securities as the sponsor. Otherwise, these warrants will not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our initial business combination. The private placement warrants will be non-redeemable so long as they are held by our sponsor or its permitted transferees. The private placement warrants may also be exercised by the sponsor and 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, including as to exercise price, exercisability and exercise period.
Pursuant to a registration and shareholder rights agreement we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration and shareholder rights agreement to make up to three demands 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.
We will bear the costs and expenses of filing any such registration statements. See the section of this prospectus entitled “Certain Relationships and Related Party Transactions.”
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of August 28, 2020, 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, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) 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, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) 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 this offering or until we are no longer an “emerging growth company,” whichever is earlier.
PROPOSED BUSINESS
Overview
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, which we refer to throughout this prospectus as our initial business combination. We have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. While we may pursue an initial business combination target in any stage of its corporate evolution or in any industry or sector, we intend to focus our search on companies in the technology, media and telecom (“TMT”) industries. Our management team has had significant success sourcing, acquiring, growing and monetizing these types of companies. We believe this experience makes us well suited to identify, source, negotiate and execute an initial business combination with the ultimate goal of pursuing attractive risk-adjusted returns for our shareholders.
Management Team
We believe our management team is well positioned to identify and evaluate businesses within the TMT industries that would benefit from being a public company and from access to our expertise. We believe we can achieve this mission by utilizing our team’s extensive experience in growing and operating companies within the TMT industries as well as our broad network of contacts in the TMT industries.
Dr. Donald G. Basile
Dr. Donald G. Basile has served as our Chairman and Co-Chief Executive Officer since inception. Dr. Basile has also served as an executive officer and director at Monsoon Blockchain Corporation since November 2019 and as a director of GIBF, GP Inc. since September 2018. Dr. Basile previously served as a director of Violin Memory, Inc. from April 2009 to January 2014 and as its Chief Executive Officer from April 2009 to December 2013. He also served as Chief Executive Officer of FusionIO from January 2008 to March 2009 and as its Chairman from July 2006 to March 2009. Dr. Basile previously worked at AT&T Bell Labs, IBM, United Health Group and Lenfest Group (acquired by Comcast) and served as Managing Director of Raza Foundries and Vice President of Raza Microelectonics (RMI).
Dixon Doll, Jr.
Dixon Doll, Jr. has served as our Co-Chief Executive Officer since inception. Mr. Doll is currently also the Chief Executive Officer and Chairman of DBM Cloud Systems, Inc. since January 2016 and the Managing Director of Longstreet Ventures, Inc. since January 2003. From July 2009 to January 2014, Mr. Doll served as the Chief Operating Officer and as a director of Violin Memory, Inc. He has also previously worked as the Senior Vice President of Sales and Corporate Development at FusionIO from February 2008 to February 2009, as the Vice President of Corporate Development of NEON from May 1998 to July 2001 and as Vice President of Corporate Development of Recourse Technologies from July 2001 to August 2002. In addition, he was a Business Development Manager at Oracle Alliances Division from September 1994 to May 1998. Mr. Doll has previously served as a consultant to Oak Investment Partners, GTGR, Carlyle Group and DCM. He also is a partner at Birchwood Partners, an angel fund that helps early stage companies launch.
John C. Small
John C. Small has served as our Chief Financial Officer since inception. Mr. Small also serves as the Chief Operating Officer and Chief Financial Officer of Quanterra Capital Management LP since May 2019. He served as the Chief Operating Officer of Mode Media from April 2016 to September 2016, and the Chief Financial Officer of Viggle, Inc. (Nasdaq: VGGL) from September 2012 to October 2015. He served as Senior Vice President of Finance for Tsunami XR from October 2016 to May 2019. Mr. Small joined GLG Partners in 2000 as a Senior Asset Manager responsible for Telecom, Media, Technology and Renewable Energy investments for the GLG North American Opportunity Fund and served as the President of the GLG North America office from April 2000 to August 2011. He worked as a Telecom and Media analyst at
Ulysses Management from January 1997 to March 2000 and as a Telecom analyst at Odyssey Partners from March 1996 to January 1997. He also worked as an equity research analyst at Dillon Read (from January 1992 to September 1993) and Morgan Stanley (from October 1993 to February 1996). Mr. Small has previously served as a director of Loyalty Alliance, Inc., PayEase Ltd., INFINIA Corporation, ViSole Energy, Inc., New Millennium Solar Equipment Co, ShortList Media Ltd, DraftDay Inc., and Spinvox Ltd.
Past performance of our management team and its affiliates is not a guarantee either (i) of success with respect to any business combination we may consummate, or (ii) that we will be able to identify a suitable candidate for our initial business combination. You should not rely on the historical performance record of our management team or its affiliates as indicative of our future performance, and no member of the management team has prior experience with special purpose acquisition companies. In addition, for a list of members of our management team and entities for which a conflict of interest may or does exist between such persons and the company, as well as the priority that such entity has with respect to performance of obligations and presentation of business opportunities to us, please refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.
Business Strategy
Our acquisition strategy will focus broadly on the TMT industries with an emphasis on the cloud data storage and information security spaces. Both markets are experiencing substantive growth driven by the combination of increasing data sources and rapid adoption by society of the digital community enabled by this infrastructure.
We believe our management team has a unique combination of deal structuring experience to address the specific needs of our target market coupled with proven operating capabilities based upon its substantial technical expertise and deep understanding of the underlying technology path and business adoption cycle. The team, driven by these skills, has realized capital in various private companies that have exited via IPO and trade sale.
Our team has worked together for over 20 years across Silicon Valley, including roles as founders, technology executives and board directors, which has allowed our team to develop a pipeline of proprietary deal flow based upon our relationships with many C-Level executives / founders, former employees and associates, and deal partners across the leading venture capital and private equity groups.
We believe our management team’s experience and deal flow pipeline will allow us to create value for our stockholders over time.
The cloud computing market is expected to grow from approximately $371 billion in 2020 to over $832 billion by 2025, cloud storage is expected to grow from 33 zettabytes in 2018 to over 175 zettabytes in 2025 and the number of connected devices is expected to grow to over 55 billion by 2025. We believe these trends create an increased cyber risk, with an estimated over $5 trillion of risk over the next five years driving the demand for information security solutions.
The initial focus of our acquisition search will concentrate on companies driven by these three macro themes combining security, cloud computing and cloud data storage. The market for cloud-based solutions is accelerating with Bessemer Venture Partners predicting a majority of the software market will be in the cloud by 2025 and nearly 100% by 2032. This trend has created several recent cloud-based winners including Zoom, DataDog and Snowflake. The Covid-19 effect is accelerating the movement to the cloud across a variety of industries.
We will be targeting established companies with large and growing revenues and diversified customer bases that are selling well-developed and/or mature technologies and services into the new market segments that gave been created as part of the above technology trends, and/or are category leaders.
The selection process leverages our team’s relationships with experienced executive teams and VCs/ private sponsors, which we believe can be enhanced with our team’s business development assistance. Our management team has extensive relationships in the Stanford University and University of Michigan alumni networks and have a unique technical ability to assess market and product risk with substantial business development and operational skills to scale a business globally.
Our initial focus will be on U.S. companies, but we will also consider European and Asian entities that have established a proven business model and can use capital to rapidly scale. We intend to utilize our team’s many years of experience and relationships to work with top venture firms looking to efficiently scale their winning portfolio companies and partner with private equity firms looking to build further business value in the technology industry.
We believe our management team has a competitive advantage as a result of its experience identifying emerging market disruptive leaders and leading global technology companies, with strengths in company operations, business and corporate development and mergers and acquisitions coupled with the application of technologies in Fortune 5000 enterprise accounts. This is coupled with our team’s substantial deal experience, where they have worked cooperatively with targets and companies to develop and execute financings on a primary and secondary basis, using different parts of the capital structure and financial structuring to support dividend recapitalizations and other corporate financing strategies to maximize the returns of stakeholders.
We believe that the deep technical domain expertise in both information security and cloud data storage will allow us to capitalize and partner with management teams looking to build multi-billion dollar companies. We believe our combined experience including technical expertise will enable us to offer public investors and target company stakeholders a differentiated approach to accelerating growth in key global markets by helping management enhance operational efficiency and scale. In the last decade, members of our management team have been investors and operators in multiple start-ups that completed an initial public offering. They have also been involved in seeding early-stage founders and helping raise the initial Series A funding while also running the companies to access the public markets through an initial public offering. In addition, they have executed secondary offerings and recapitalization strategies to serve the specific needs and goals of founders and early investors.
The management team has assisted in pioneering distinct markets including Network Intrusion Detection in the early 2000’s with investment and management as either a principal or board member at Recourse Technologies (acquired by Symantec in 2002) and Intruvert (acquired by McAfee). We also invested seed capital and were the initial management team for FusionIO, creating the nascent PCIe Card. Dr. Basile and Mr. Doll, Jr. transitioned from their executive roles at Fusion IO to Violin Memory in 2009 prior to Fusion IO’s IPO in 2011, after which the company’s shares traded up to $40.34 in November 2011 and then traded as low as $7.92 in June 2014 before being acquired in June 2014 for $11.22 per share by SanDisk. Violin Memory was one of the first developers of the Flash Array market, which, according to MarketandMarkets, is expected to grow rapidly from an estimated $5.9 billion in 2018 to an expected $17.8 billion by 2023. Violin shares were offered to the public on the New York Stock Exchange in 2013, and Dr. Basile and Mr. Doll, Jr. left their executive roles in December 2013 when the company’s revenues were reduced by the shutdown of the United States federal government, a key company customer. Three years later, in December 2016, the company filed for Chapter 11 bankruptcy protection. Soros Management, a large equity and bond holder, acquired the assets of Violin Memory through bankruptcy procedures in April 2017.
Business Combination Criteria
Our business combination criteria will not be limited to a particular industry or geographic sector, however, given the experience of our management team and board, we intend to focus our search on companies in the TMT industries.
Consistent with our business strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating prospective target businesses. We will use these criteria and guidelines in evaluating initial business combination opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines.
Size We intend to focus on companies that alone, or through a strategic combination with another company, have a most recent enterprise valuation between $500 million and $1.5 billion. We believe at this scale we can most effectively apply the experience and resources of the management team to accelerate growth and enhance profitability.
Stage: From late stage venture through mature enterprise buyout.
Location: We are searching for attractive target acquisition opportunities globally, with an emphasis on companies in North America and Europe.
Focus: We plan to target companies in the Security and Cloud Data Storage Tech sectors globally. Within those broader sectors, we will concentrate on companies that are aligned to the secular trends of digitization, data-centricity and broader technology adoption and positioned for strong growth that can be enhanced through partnership with our management team.
Management Capability: We plan to target companies with strong management teams that are capable of scaling to operate successfully on a global basis. Our management team is committed to providing support, guidance and, where necessary, additional management talent to assist the target company in executing its value creation strategy and achieving its vision.
Differentiation: We are looking for potential acquisitions that have powerful competitive advantages, strong innovation capabilities and an adaptive management team committed to a positive culture grounded in strong values, including the importance of diversity and inclusion while serving the interests of a broader set of stakeholders.
Benefit from being a Public Company: We will evaluate companies that can benefit greatly from becoming a public company and the associated public profile and broader access to capital.
These criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our management team may deem relevant. In the event that we find an opportunity that has characteristics more compelling to us than the characteristics described above, we would pursue such opportunity.
Competitive Strengths
We intend to leverage the following sources of competitive strength in seeking to achieve our business strategy:
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Management team’s industry knowledge and contacts.
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Deal flow and business development resources available from our sponsor and its affiliates.
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Management team’s experience and reputation in sourcing opportunities.
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Extensive relationships within the private equity community (a likely source of deal flow).
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Management team’s demonstrated ability to create value for their shareholders.
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Strong track record of operational excellence.
Our Acquisition, Investment and Post-Closing Process
In evaluating prospective business combinations, we expect to conduct a thorough due diligence review process that will encompass, among other things: an analysis of overall industry and competitive conditions, a review of historical financial and operating data, meetings with incumbent management and employees, interaction with third-parties who are industry experts, on-site inspection of facilities and assets, discussion with customers and suppliers, legal and other reviews as we deem appropriate. We will also utilize the expertise of our management team and our sponsor’s and its affiliates’ resources in analyzing and evaluating operating plans, financial projections and determining the appropriate return expectations given the risk profile of the target business as well as the suitability of the target to become a public company.
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 investment banking firm or another independent
firm that commonly renders fairness opinions that our initial business combination is fair to us from a financial point of view.
Our Business Combination Process
Members of our management team may directly or indirectly own our founders shares, common stock and/or private placement 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 were to be included by a target business as a condition to any agreement with respect to our initial business combination.
Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our 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, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business combination, as we believe any such opportunities presented would be smaller than what we are interested in, in different fields than what we would be interested in, or to entities that are not themselves in the business of engaging in business combinations. 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, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Exchange Act even before we have entered into a definitive agreement regarding our initial business combination.
Our Management Team
Members of our management 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 any member of our management 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. We believe our management team’s operating and transaction experience and relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our management team have developed a broad network of contacts and corporate relationships in many industries. This network has grown through the activities of our management team sourcing, acquiring and financing businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions under varying economic and financial market conditions. See the section of this prospectus entitled “Management” for a more complete description of our management team’s experience.
Status as a Public Company
We believe our structure will make us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to the traditional initial public offering through a merger or other business combination with us. Following an initial business combination, we believe the target business would have greater access to capital and additional means of creating management incentives that are better aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with us, the owners of the target business may,
for example, exchange their shares of stock in the target business for our shares of Class A common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing us to tailor the consideration to the specific needs of the sellers.
Although there are various costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering. The typical initial public offering process takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts and commissions, marketing and road show efforts that may not be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed initial business combination is completed, the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe the target business would then have greater access to capital and an additional means of providing management incentives consistent with stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any proposed initial business combination, negatively.
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Additionally, we are a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of the prior June 30th, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30th.
Financial Position
With funds available for an initial business combination initially in the amount of $216,700,000, after payment of $7,700,000 of deferred underwriting fees (or $249,205,000 after payment of up to $8,855,000 of deferred underwriting fees if the underwriters’ over-allotment option is exercised in full), in each case before fees and expenses associated with our initial business combination, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.
Effecting Our Initial Business Combination
We are not presently engaged in, and we will not engage in, any operations for an indefinite period of time following this offering. 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, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial business combination or used for redemptions of our Class A common stock, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account. In addition, we intend to target businesses larger than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, and may as a result be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination. In the case of an initial business combination funded with assets other than the trust account assets, our proxy materials or tender offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we would seek stockholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as our sponsor and their affiliates, may also bring to our attention target business candidates that they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or conventions. In addition,
we expect to receive a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our sponsor and their respective industry and business contacts as well as their affiliates. While we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account. In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation by the company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion of our initial business combination (regardless of the type of transaction that it is). Although none of our sponsor, executive officers or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees from a prospective business combination target in connection with a contemplated initial business combination, we do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. We have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support and to reimburse our sponsor for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination. Some of our officers and directors may enter into employment or consulting agreements with the post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not be used as a criterion in our selection process of an initial business combination candidate.
We are not prohibited from pursuing an initial business combination with an initial business combination target that is affiliated with our sponsor, officers or directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor, officers or directors. In the event we seek to complete our initial business combination with an initial business combination target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm or from another independent entity that commonly renders valuation opinions 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 the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has pre-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring of our Initial Business Combination
Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value of our initial business
combination, it may be unable to do so if it is less familiar or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar company with nominal operations. We anticipate structuring our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders. However, we will only complete an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the “Investment Company Act”. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken into account for purposes of Nasdaq’s 80% fair market value test. If the initial business combination involves more than one target business, the 80% fair market value test will be based on the aggregate value of all of the transactions and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking stockholder approval, as applicable.
To the extent we effect our initial business combination with a company or business that may be financially unstable or in its early stages of development or growth we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
The time required to select and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business with which our initial business combination is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. In addition, we intend to focus our search for an initial business combination in a single industry. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and
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cause us to depend on the marketing and sale of a single product or limited number of products or services.
Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of the members of our management team will remain with the combined company will be made at the time of our initial business combination. While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination. Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations of the particular target business.
We cannot assure you that any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following an initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial Business Combination
We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval is currently required under Delaware law for each such transaction.
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Type of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No |
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Purchase of stock of target not involving a merger with the company
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No |
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Merger of target into a subsidiary of the company
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No |
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Merger of the company with a target
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Yes |
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Under Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we issue shares of Class A common stock that will be equal to or in excess of 20% of the number of shares of our Class A common stock then outstanding;
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any of our directors, officers or substantial stockholders (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
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the issuance or potential issuance of common stock will result in our undergoing a change of control.
Permitted Purchases of our Securities
If we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such transactions prior to completion of our initial business combination.
The purpose of any such purchases of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their affiliates may pursue privately negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection with our initial business combination. To the extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy with respect to our initial business combination. Our sponsor, officers, directors, advisors or their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal securities laws.
Any purchases by our sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our Initial Business Combination
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.20 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. The redemption rights will include the requirement that a beneficial holder must identify itself in order to validly redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under the law or stock exchange listing requirement. Under Nasdaq rules, asset acquisitions and stock purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would require stockholder approval. If we structure an initial business combination with a target company in a manner that requires stockholder approval, we will not have discretion as to whether to seek a stockholder vote to approve the proposed initial business combination. We may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the SEC unless stockholder approval is required by law or stock exchange listing requirements or we choose to seek stockholder approval for business or other legal reasons. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply with such rules.
If a stockholder vote is not required and we do not decide to hold a stockholder vote for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer tender offers, and
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file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Upon the public announcement of our initial business combination, we or our sponsor will terminate any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, we will not redeem any public shares unless our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
If, however, stockholder approval of the transaction is required by law or stock exchange listing requirement, or we decide to obtain stockholder approval for business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation:
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conduct the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the tender offer rules, and
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file proxy materials with the SEC.
In the event that we seek stockholder approval of our initial business combination, we will distribute proxy materials and, in connection therewith, provide our public stockholders with the redemption rights described above upon completion of the initial business combination.
If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial stockholders will count toward this quorum and pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. For purposes of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,250,001, or 37.5%, of the 22,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted and our sponsor, officers and directors do not purchase any public shares) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). 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 initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction.
Our amended and restated certificate of incorporation will provide that we may not redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed initial business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance with the terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock submitted for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing, if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares.” Such restriction shall also be applicable to our affiliates. We believe this
restriction will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed initial business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in 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 the then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering Stock Certificates in Connection with 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 meeting held to approve a proposed initial business combination by a date set forth in the proxy materials mailed to such holders or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option. The proxy materials 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 proxy materials until the date set forth in such proxy materials to tender its shares if it wishes to seek to exercise its redemption rights. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public shares.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $80.00 and it would be up to the broker whether or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights to tender their shares. The need to deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.
The foregoing is different from the procedures used by many blank check companies. In order to perfect redemption rights in connection with their business combinations, many blank check companies would distribute proxy materials for the stockholders’ vote on an initial business combination, and a holder could simply vote against a proposed initial business combination and check a box on the proxy card indicating such holder was seeking to exercise his or her redemption rights. After the initial business combination was approved, the company would contact such stockholder to arrange for him or her to deliver his or her certificate to verify ownership. As a result, the stockholder then had an “option window” after the completion of the initial business combination during which he or she could monitor the price of the company’s stock in the market. If the price rose above the redemption price, he or she could sell his or her shares in the open market before actually delivering his or her shares to the company for cancellation. As a result, the redemption rights, to which stockholders were aware they needed to commit before the stockholder meeting, would become “option” rights surviving past the completion of the initial business combination until the redeeming holder delivered its certificate. The requirement for physical or electronic delivery prior to the meeting ensures that a redeeming holder’s election to redeem is irrevocable once the initial business combination is approved.
Any request to redeem such shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials. Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed initial business combination is not completed, we may continue to try to complete an initial business combination with a different target until 18 months from the closing of this offering.
Redemption of Public Shares and Liquidation if no Initial Business Combination
Our amended and restated certificate of incorporation provides that we will have only 18 months from the closing of this offering to complete our initial business combination. If we are unable to complete our initial business combination within such 18-month period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 18-month time period.
Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 18 months from the closing of this offering. However, if our sponsor, officers or directors 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 18-month time period.
Our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes divided by the number of then outstanding public shares. However, we may not redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy the net tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our public shares at such time.
We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $750,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of the net proceeds of this offering and the sale of the private placement warrants, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received by stockholders upon our dissolution would be approximately $10.20. 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 $10.20. 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, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the trust account including but not limited to fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain an advantage with respect to a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative. Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. Marcum LLP, our independent registered public accounting firm, and the underwriters of the offering will not execute agreements with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.20 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced below (i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action
is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor would be able to satisfy those obligations. Accordingly, we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.20 per public share.
We will seek to reduce the possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. We will have access to up to approximately $750,000 from the proceeds of this offering with which to pay any such potential claims. 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 $825,000, 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 $825,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering may be considered a liquidating distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete our initial business combination within 18 months from the closing of this offering, is not considered a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating distribution. If we are unable to complete our initial business combination within 18 months from the closing of this offering, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 18th month and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of such date.
Because we will not be complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement, we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure that the amounts in the trust account are not reduced below (i) $10.20 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net of the amount of interest withdrawn to pay taxes and will not be liable as to any claims under our indemnity of the underwriters of 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.
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 $10.20 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.
Our public stockholders will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend any provisions of our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to offer redemption rights in connection with any proposed initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if we are unable to complete our business combination within 18 months from the closing of this offering, subject to applicable law. In no other circumstances will a stockholder have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial business combination, a stockholder’s voting in connection with the initial business combination alone will not result in a stockholder’s redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also exercised its redemption rights as described above. These provisions of our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Comparison of Redemption or Purchase Prices in Connection with Our Initial Business Combination and if We Fail to Complete Our Initial 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 do not complete our initial business combination within 18 months from the closing of this offering.
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Redemptions in Connection
with our Initial Business
Combination
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Other Permitted Purchases of
Public Shares by us or our
Affiliates
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Redemptions if we fail to
Complete an Initial Business
Combination
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Calculation of redemption price
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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 $10.20 per public share), including interest earned on the funds held in the trust account and not previously released to us to pay our taxes 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 as described elsewhere in this prospectus and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation of terms of a proposed initial business combination.
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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 prior to or following completion of our initial business combination. There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions.
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If we do not complete our initial business combination within 18 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 $10.20 per public share including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares.
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Impact to remaining stockholders
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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 underwriting commissions and taxes payable.
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If the permitted purchases described above are made there would be no impact to our remaining stockholders because the purchase price would not be paid by us.
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The redemption of our public shares if we fail to complete our initial 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.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Escrow of offering proceeds
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$224,400,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a trust account in the United States at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee and J.P. Morgan Chase acting as investment manager.
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Approximately $194,040,000 of the offering proceeds would 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.
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Investment of net proceeds
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$224,400,000 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 185 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.
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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.
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Receipt of interest on escrowed funds
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Interest on proceeds from the trust account to be paid to stockholders is reduced by (i) any taxes paid or payable, and (ii) in the event of our liquidation for failure to complete our initial business combination within the allotted time, up to $100,000 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.
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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.
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Limitation on fair value or net assets of target business
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Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable 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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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
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Terms Under a Rule 419 Offering
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Trading of securities issued
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We expect 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 B. Riley 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 three business days from the date of this prospectus. If the over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, an additional Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the over-allotment option.
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No trading of the units or the underlying Class A 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.
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Exercise of the warrants
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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.
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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.
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Election to remain an investor
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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 earned on the funds held in the trust account and not previously released to us to pay our taxes, upon the completion of our initial business combination, subject to the limitations described herein.
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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 it elects to remain a stockholder of the company or require the return of 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
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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We may not be required by law to hold a stockholder vote. 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 initial business combination. 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. 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. 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. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination. Additionally, each public stockholder may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
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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
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Terms Under a Rule 419 Offering
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Business combination deadline
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If we do not complete an initial business combination within 18 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 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 earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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If a business combination 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.
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Limitation on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
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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 will provide that a public stockholder (including our affiliates), 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 (more than an aggregate of 15% of the shares sold in this offering). Our public stockholders’ inability to
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Many blank check companies provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in connection with an initial business combination.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they could suffer a material loss on their investment in us if they sell any Excess Shares in open market transactions.
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Tendering stock certificates in connection with a tender offer or redemption rights
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We may require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s DWAC System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the initial business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.
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In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed initial business combination and check a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.
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Terms of Our Offering
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Terms Under a Rule 419 Offering
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Release of funds
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Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering and the sale of the private placement warrants held in the trust account will not be released from the trust account until the earliest to occur of: (i) the completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-business combination activity and (iii) the redemption of 100% of our public shares if we are unable to complete an initial business combination within the required time frame (subject to the requirements of applicable law). On the completion of our initial business combination, all amounts held in the trust account will be released to us, less amounts released to a separate account controlled by the trustee for disbursal to redeeming stockholders. 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 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.
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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.
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Competition
In identifying, evaluating and selecting a target business for our initial business combination, we may encounter competition from other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully negotiating an initial business combination.
Facilities
Our executive offices are located at 345 Lorton Avenue, Suite 400, Burlingame, California 94010 and our telephone number is (650) 618-2524. Our executive offices are provided to us by our sponsor. Commencing on the date of this prospectus, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. We consider our current office space adequate for our current operations.
Employees
We currently have three officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for our initial business combination and the stage of the initial business combination process we are in. We do not intend to have any full-time employees prior to the completion of our initial business combination.
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 accountants.
We will provide stockholders with audited financial statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared in accordance with, or reconciled to, GAAP, or IFRS, depending on the circumstances, and the historical financial statements may be required to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame. We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation will be material.
We will be required to evaluate our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to have our
internal control procedures audited. A target company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. 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 initial business combination.
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 shares of Class A common stock that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.
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.
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors and director nominees are as follows:
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Name
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Age
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Position
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Dr. Donald G. Basile
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54
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Chairman and Co-Chief Executive Officer
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Dixon Doll, Jr.
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52
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Co-Chief Executive Officer
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John C. Small
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52
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Chief Financial Officer
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Dixon Doll
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77
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Senior Director Nominee
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Alan Clingman
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60
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Director Nominee
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Paul Misir
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47
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Director Nominee
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Arun Abraham
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38
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Director Nominee
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Dr. Donald G. Basile has served as our Chairman and Co-Chief Executive Officer since inception. Dr. Basile has also served as an executive officer and director at Monsoon Blockchain Corporation since November 2019 and as a director of GIBF, GP Inc. since September 2018. Dr. Basile previously served as a director of Violin Memory, Inc. from April 2009 to January 2014 and as its Chief Executive Officer from April 2009 to December 2013. He also served as Chief Executive Officer of FusionIO from January 2008 to March 2009 and as its Chairman from July 2006 to March 2009. Dr. Basile previously worked at AT&T Bell Labs, IBM, United Health Group and Lenfest Group (acquired by Comcast) and served as Managing Director of Raza Foundries and Vice President of Raza Microelectonics (RMI). Dr. Basile received a Ph.D. degree in Electrical Engineering with a focus on distributed computing from Stanford University, a MS in Electrical Engineering focused on advanced computer architecture from Stanford University and a BS in Electrical Engineering with a minor in economics from Rensselaer Polytechnic Institute. We believe Dr. Basile is well qualified to serve as a member of our board of directors due to his depth of investment experience and vast network of relationships.
Dixon Doll, Jr. has served as our Co-Chief Executive Officer since inception. Mr. Doll is currently also the Chief Executive Officer and Chairman of DBM Cloud Systems, Inc. since January 2016 and the Managing Director of Longstreet Ventures, Inc. since January 2003. From July 2009 to January 2014, Mr. Doll served as the Chief Operating Officer and as a director of Violin Memory, Inc. He has also previously worked as the Senior Vice President of Sales and Corporate Development at FusionIO from February 2008 to February 2009, as the Vice President of Corporate Development of NEON from May 1998 to July 2001 and as Vice President of Corporate Development of Recourse Technologies from July 2001 to August 2002. In addition, he was a Business Development Manager at Oracle Alliances Division from September 1994 to May 1998. Mr. Doll has previously served as a consultant to Oak Investment Partners, GTGR, Carlyle Group and DCM. He also is a partner at Birchwood Partners, an angel fund that helps early stage companies launch. Mr. Doll is the son of Dixon Doll, one of our director nominees. Mr. Doll holds a bachelors of arts from Georgetown University and has been a member of the board of advisors to the dean of the College of Liberal Arts since 2012. He holds an MBA from The University of Michigan.
John C. Small has served as our Chief Financial Officer since inception. Mr. Small also serves as the Chief Operating Officer and Chief Financial Officer of Quanterra Capital Management LP since May 2019. He served as the Chief Operating Officer of Mode Media from April 2016 to September 2016, and the Chief Financial Officer of Viggle, Inc. (Nasdaq: VGGL) from September 2012 to October 2015. He served as Senior Vice President of Finance for Tsunami XR from October 2016 to May 2019. Mr. Small joined GLG Partners in 2000 as a Senior Asset Manager responsible for Telecom, Media, Technology and Renewable Energy investments for the GLG North American Opportunity Fund and served as the President of the GLG North America office from April 2000 to August 2011. He worked as a Telecom and Media analyst at Ulysses Management from January 1997 to March 2000 and as a Telecom analyst at Odyssey Partners from March 1996 to January 1997. He also worked as an equity research analyst at Dillon Read (from January 1992 to September 1993) and Morgan Stanley (from October 1993 to February 1996). Mr. Small has previously served as a director of Loyalty Alliance, Inc., PayEase Ltd., INFINIA Corporation, ViSole
Energy, Inc., New Millennium Solar Equipment Co, ShortList Media Ltd, DraftDay Inc., and Spinvox Ltd. Mr. Small received a BA in Economics concentrating in International Relations from Cornell University.
Dixon Doll will serve as a Senior Director as of the effective date of the registration statement of which this prospectus forms a part. Mr. Doll currently serves on the Advisory Board for the Stanford Institute for Economic Policy Research Institute (SIEPR). Previously, Mr. Doll served as the Chairman of Network Equipment Technologies (NWK) and as a director of DIRECTV (DTV). Mr. Doll was elected to the Board of the National Venture Capital Association in 2005 and served on the Executive Committee and as Chairman from 2008 to 2009. Mr. Doll led DCM Ventures’ investments in About.com (acquired by The New York Times Co.), @Motion (acquired by Openwave), Clearwire (Nasdaq: CLWR), Coradiant (acquired by BMC), Force10 Networks (acquired by Dell), Foundry Networks (Nasdaq: FDRY), Internap (Nasdaq: INAP), Ipivot (acquired by Intel), and Neutral Tandem (Nasdaq: TNDM). He is a Board Member of Papal Foundation Rome and the University of San Francisco. He received his B.S. degree (cum laude) from Kansas State University and M.S. and Ph.D. degrees in Electrical Engineering from the University of Michigan, where he was a National Science Foundation scholar. Mr. Doll is the father of Dixon Doll, Jr., our Co-Chief Executive Officer. We believe that Mr. Doll is well qualified to serve as a member of our board because of his extensive investment, his service as a current and former director of public companies, and his vast network of relationships.
Alan Clingman will serve as one of our directors as of the effective date of the registration statement of which this prospectus forms a part. Since January 2008, Mr. Clingman has served as the founder and Chief Executive Officer of Yellow River Asset Management. He has also served as the co-founder of LRG Energy since February 2018. Mr. Clingman started his first business, Coal & Carbon Industries, in 1981 and purchased AIOC, a small commodities trading company in New York, in 1988. He also served as the CEO and Chairman of Marquis Jet from March 2001 to April 2003 and founded Cortiva Education from November 2003 to January 2007, which was acquired by Steiner Leisure (NASDAQ: STNR). We believe Mr. Clingman is well qualified to serve as a member of our board due to his strategic expertise, deep business knowledge and vast network of relationships.
Paul Misir will serve as one of our directors as of the effective date of the registration statement of which this prospectus forms a part. Since May 2013, Mr. Misir has served as the founder and Managing Partner of Notos LLC, where he consults boards of late stage private and public telecom, data, and technology companies on corporate strategy and the development of capital markets offerings. From July 2001 to December 2011, Mr. Misir served as the Founder and Managing Partner of Morning Street Capital and its related funds (including as Founder and CEO of its predecessor merchant bank and market research advisor, Columbia Strategy LLC). Mr. Misir holds an M.B.A. from Columbia University and a B.A. from the University of Chicago. We believe Mr. Misir is well qualified to serve as a member of our board of directors due to his depth of investment experience and vast network of relationships.
Arun Abraham will serve as one of our directors as of the effective date of the registration statement of which this prospectus forms a part. Mr. Abraham is an executive director at M. Klein and Company, a global strategic advisory firm, where he advises technology, FinTech, media, sports and other companies and select financial sponsors, sovereign wealth funds and other large private investors. Since joining M. Klein and Company in July 2017, Mr. Abraham has also helped execute various special purpose acquisition company (SPAC) processes and transactions for both SPACs sponsored by M. Klein and for third-party advisory clients. Previously, Mr. Abraham was an investment banker at Lazard Frères & Co. from August 2016 to June 2017 and at Evercore Partners from May 2013 to August 2016, where he advised technology, media, FinTech, healthcare and other leading global companies and investors. From 2007 to 2011, he served as an attorney at Cadwalader, Wickersham & Taft and is a member of the New York State Bar. Mr. Abraham holds an MBA from the University of Chicago Booth School of Business, a J.D. from USC Law School and a B.A. from Yale University. We believe Mr. Abraham is well qualified to serve as a member of our board of directors due to his depth of experience with strategic investment, M&A and SPAC transactions including with companies in the technology sector, capital markets experience, and his broad network of relevant investor, financial and technology industry relationships.
Number and Terms of Office of Officers and Directors
We will have five directors upon completion of this offering. Our board of directors will be divided into three 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 three-year term. In accordance with 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. The term of office of the first class of directors, consisting of Alan Clingman, will expire at our first annual meeting of stockholders. The term of office of the second class of directors, consisting of Dixon Doll and Paul Misir, will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of Dr. Donald G. Basile and Arun Abraham, will expire at the third annual meeting of stockholders.
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office, other than the Chairman of the Board which is appointed to a three year term and can only be removed for cause. 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 Chairman of the Board, one or more Chief Executive Officers, Chief Financial Officer, Vice Presidents, Secretary, Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.
Pursuant to an agreement to be entered into on or prior to the closing of this offering, our sponsor, upon and following consummation of an initial business combination, will be entitled to nominate three individuals for election to our board of directors, as long as the sponsor holds any securities covered by the registration and shareholder rights agreement.
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. Clingman, Misir and Abraham are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.
Officer and Director Compensation
None of our officers has received any cash compensation for services rendered to us. Commencing on the date of this prospectus, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. No compensation of any kind, including any finder’s fee, reimbursement or consulting fee, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, these individuals 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. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. 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. Any such payments prior to an initial business combination will be made using funds held outside the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in place governing our reimbursement payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating an initial business combination.
After the completion of our initial business combination, directors or members of our management team who remain with us may be paid consulting or management 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 initial business combination. We have not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It is unlikely the amount of such compensation
will be known at the time of the proposed initial business combination, because the directors of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of 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 officers and directors may negotiate employment or consulting arrangements to remain with us after our 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 officers and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Our board of directors will have two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors.
Audit Committee
Prior to the consummation of this offering, we will establish an audit committee of the board of directors. Arun Abraham, Paul Misir and Alan Clingman will serve as members of our audit committee, and Mr. Abraham will chair the audit committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent. Each of Arun Abraham, Paul Misir and Alan Clingman meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the audit committee is financially literate and our board of directors has determined that Mr. Abraham qualifies as an “audit committee financial expert” as defined in applicable SEC rules.
We will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
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the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;
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pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
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setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;
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setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
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obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) 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 and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;
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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
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reviewing with management, the independent registered 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
Prior to the consummation of this offering, we will establish a compensation committee of the board of directors. Arun Abraham, Paul Misir and Alan Clingman will serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent. Each of Arun Abraham, Paul Misir and Alan Clingman are independent and Mr. Misir will chair the compensation committee.
We will adopt a compensation committee charter, which will detail the principal functions of the compensation committee, including:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, 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 based on such evaluation;
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reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;
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reviewing on an annual basis our executive compensation policies and plans;
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implementing and administering our incentive compensation equity-based remuneration plans;
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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 officers and employees;
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if required, producing a report on executive compensation to be included in our annual proxy statement; and
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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
Notwithstanding the foregoing, as indicated above, other than the payment to our sponsor of $10,000 per month, for up to 18 months, for office space, utilities and secretarial and administrative support and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business combination.
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 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 will participate in the consideration and recommendation of director nominees are Arun Abraham, Paul Misir and Alan Clingman. In accordance with Rule 5605 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 our board of directors 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.
Code of Ethics
Prior to the consummation of this offering, we will have adopted a Code of Ethics applicable to our directors, officers and employees. We will file a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the registration statement of which this prospectus is 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 the section of this prospectus entitled “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 other entities (including investment vehicles that may pursue investment opportunities suitable for us) pursuant to which such officer or director is or will be required to present a business combination opportunity.
Accordingly, if any of our 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 to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers or directors will not materially affect our ability to complete our initial business combination, as we believe any such opportunities presented would be smaller than what we are interested in, in different fields than what we would be interested in, or to entities that are not themselves in the business of engaging in business combinations. 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, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our officers and directors may become an officer or director of another special purpose acquisition company with a class of securities intended to be registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, even before we have entered into a definitive agreement regarding our initial business combination.
Potential investors should also be aware of the following other potential conflicts of interest:
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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.
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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 (including investment vehicles that may pursue investment opportunities suitable for us) with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
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Our initial stockholders have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination. Additionally, our initial stockholders have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination within 18 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 held in the trust account 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 by our sponsor until the earlier of: (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) 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, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property. With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants, will not be transferable, assignable or saleable by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination. Since our sponsor and officers and directors may directly or indirectly own 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.
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Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition to any agreement with respect to our initial business combination.
•
Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.
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 our company and its stockholders for the opportunity not to be brought to the attention of the corporation.
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 (including investment vehicles that may pursue investment opportunities suitable for us). Furthermore, 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, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Below is a table summarizing the entities to which our executive officers, directors and director nominees currently have fiduciary duties:
|
Individual
|
|
|
Entity
|
|
|
Entity’s Business
|
|
|
Affiliation
|
|
|
Dr. Donald G. Basile
|
|
|
Monsoon Blockchain Corporation
|
|
|
Blockchain
|
|
|
Officer and Director
|
|
| |
|
|
GIBF, GP Inc.
|
|
|
Digital Assets
|
|
|
Director
|
|
|
Dixon Doll, Jr.
|
|
|
DBM Cloud Systems, Inc.
|
|
|
Software
|
|
|
Chairman and Chief Executive Officer
|
|
| |
|
|
Longstreet Ventures, Inc.
|
|
|
|
|
|
Managing Director
|
|
|
John C. Small
|
|
|
Quanterra Capital Management LP
|
|
|
Investment Manager
|
|
|
Executive Officer
|
|
|
Dixon Doll
|
|
|
Stanford Institute for Economic Policy Research Institute
|
|
|
Academic Institution
|
|
|
Advisory Board
|
|
|
Alan Clingman
|
|
|
Yellow River Asset Management
|
|
|
Financial Management
|
|
|
Chief Executive Officer
|
|
|
Paul Misir
|
|
|
Notos LLC
|
|
|
Consulting
|
|
|
Managing Partner
|
|
|
Arun Abraham
|
|
|
M. Klein & Company
|
|
|
Strategic Advisory
|
|
|
Executive Director
|
|
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 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 are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors (including any investment vehicles to which any of the foregoing provide investment advice). 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 investment banking firm or from another independent entity that commonly renders valuation opinions, that such an initial business combination is fair to our company from a financial point of view.
In the event that we submit our initial business combination to our public stockholders for a vote, pursuant to the letter agreement, our sponsor, officers and directors have agreed to vote any founder shares held by them and any public shares purchased during or after the offering (including in open market and privately negotiated transactions) in favor of our initial business combination.
Limitation on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation will provide 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 will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived an improper personal benefit from their actions as directors.
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 will permit us to secure 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. Except with respect to any public shares they may acquire in this offering or thereafter (in the event we do not consummate an initial business combination), our officers and directors have agreed to waive (and any other persons who may become an officer or director prior to the initial business combination will also be required to waive) any right, title, interest or claim of any kind in or to any monies in the trust account, and not to seek recourse against the trust account for any reason whatsoever, including with respect to such indemnification.
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 directors’ and officers’ liability insurance and the indemnity agreements are necessary to attract and retain talented and experienced officers and directors.
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, directors and director nominees 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.
In August 2020, our sponsor purchased 7,906,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). The following table presents the number of shares and percentage of our common stock owned by our initial stockholders before and after this offering. The post-offering numbers and percentages presented assume that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 825,000 founder shares on a pro rata basis, and that there are 27,500,000 shares of our common stock, consisting of (i) 22,000,000 shares of our Class A common stock and (ii) 5,500,000 shares of our Class B common stock, issued and outstanding after this offering.
| |
|
|
Before Offering
|
|
|
After Offering
|
|
|
Name and Address of Beneficial Owner(1)
|
|
|
Number
of Shares
Beneficially
Owned(2)
|
|
|
Approximate
Percentage of
Outstanding
Common Stock
|
|
|
Number
of Shares
Beneficially
Owned(2)
|
|
|
Approximate
Percentage of
Outstanding
Common Stock
|
|
|
Roman DBDR Tech Sponsor LLC(3)
|
|
|
|
|
6,325,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
5,500,000 |
|
|
|
|
|
20.0% |
|
|
|
Dixon Doll, Jr.
|
|
|
|
|
6,325,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
5,500,000 |
|
|
|
|
|
20.0% |
|
|
|
Dr. Donald G. Basile
|
|
|
|
|
6,325,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
5,500,000 |
|
|
|
|
|
20.0% |
|
|
|
John C. Small
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Dixon Doll
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Alan Clingman
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Paul Misir
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
Arun Abraham
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
All executive officers, directors and director nominees as a group (7 individuals)
|
|
|
|
|
6,325,000 |
|
|
|
|
|
100.0% |
|
|
|
|
|
5,500,000 |
|
|
|
|
|
20.0% |
|
|
*
less than 1%
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 345 Lorton Avenue, Suite 400, Burlingame, California 94010.
(2)
Interests shown consist solely of founder shares, classified as shares of Class B common stock. Such shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment, as described in the section of this prospectus entitled “Description of Securities.”
(3)
Our sponsor is the record holder of such shares. Dr. Donald G. Basile, our Chairman and Co-Chief Executive Officer, and Dixon Doll, Jr., our Co-Chief Executive Officer, are the managing members of our sponsor. As such, they have voting and investment discretion with respect to the common stock held
of record by our sponsor and may be deemed to have shared beneficial ownership of the common stock held directly by our sponsor.
(4)
Each of these individuals holds a direct or indirect interest in our sponsor. Each such person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly.
Immediately after this offering, our initial stockholders will beneficially own 20% of the then-issued and outstanding shares of our common stock (assuming they do not purchase any units in this offering). Neither our sponsor nor any of our officers or directors have expressed an intention to purchase any units in this offering. If we increase or decrease the size of the offering, we will effect a stock dividend or a share contribution back to capital, or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering. 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, including approval of our initial business combination.
Each of our anchor investors, including B. Riley, has expressed to us an interest to purchase up to 2,178,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investor such number of units. Further, each of the anchor investors has entered into a separate agreement with our sponsor pursuant to which each such investor has agreed to purchase membership interests in our sponsor representing an indirect beneficial interest in 250,000 founder shares for $1.0 million. Neither the membership interests in our sponsor nor the founder shares to be indirectly owned by such investors will be subject to forfeiture (or any additional restrictions agreed to by our sponsor in connection with our initial business combination) without their consent. However, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A common stock and warrants. The founder shares to be indirectly owned by such investors will be otherwise identical to the founder shares owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to the subscription agreements with our sponsor, the anchor investors have not been granted any material additional stockholder or other rights, and are only being issued membership interests in our sponsor with no right to control our sponsor or vote or dispose of the anchor founder shares (which will continue to be held by our sponsor until following our initial business combination). Further, the anchor investors are not required to: (i) other as described above, hold any units, shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative votes from other public shareholders would be required to approve our initial business combination.
The holders of the founder shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and (B) not to redeem any shares in connection with a stockholder vote to approve a proposed 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.
Restrictions on Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in a
letter agreement with us to be entered into by our sponsor, officers and directors. Those lock-up provisions provide that such securities are not transferable or salable (i) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) 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, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (ii) in the case of the private placement warrants and the 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, (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 an initial business combination at prices no greater than the price at which the shares or warrants were originally purchased; (f) in the event of our liquidation prior to the completion of our initial business combination; (g) by virtue of the laws of Delaware or our sponsor’s limited liability company agreement upon dissolution of our sponsor; or (h) in the event of our liquidation, merger, capital stock exchange, reorganization or other similar transaction which results in all of our stockholders having the right to exchange their shares of 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), these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreements and by the same agreements entered into by our sponsor with respect to such securities (including provisions relating to voting, the trust account and liquidation distributions described elsewhere in this prospectus).
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of our securities held by them pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering. These holders will be entitled to make up to three demands, 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 their securities in other registration statements filed by us.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In August 2020, our sponsor purchased 7,906,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). The number of founder shares issued was determined based on the expectation that such founder shares would represent 20% of the outstanding shares upon completion of this offering. If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering. Up to 825,000 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. The founder shares (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder.
Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 10,375,000 private placement warrants (or 11,695,000 private placement warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full) in a private placement that will occur simultaneously with the closing of this offering. As such, our sponsor’s interest in this transaction is valued at $10,375,000, (or $11,695,000 if the over-allotment option is exercised in full) depending on the number of private placement warrants purchased. Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share. The private placement warrants (including the Class A common stock issuable upon exercise thereof) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holder until 30 days after the completion of our initial business combination.
Each of our anchor investors has expressed to us an interest to purchase up to 2,178,000 units each in this offering and we have agreed to direct the underwriters to sell to the anchor investor such number of units. Further, each of the anchor investors has entered into a separate agreement with our sponsor pursuant to which each such investor has agreed to purchase membership interests in our sponsor representing an indirect beneficial interest in 250,000 founder shares for $1.0 million. Neither the membership interests in our sponsor nor the founder shares to be indirectly owned by such investors will be subject to forfeiture (or any additional restrictions agreed to by our sponsor in connection with our initial business combination) without their consent. However, the anchor investors will be restricted from selling any units purchased in this offering until the earlier of (i) 30 days from the closing of this offering and (ii) the separation of the units into shares of Class A common stock and warrants. The founder shares to be indirectly owned by such investors will be otherwise identical to the founder shares owned by our sponsor. Our discussions with each anchor investor were separate and our arrangements with them are not contingent on each other. Further, to our knowledge, the anchor investors are not affiliated with each other and are not acting together with regards to our company.
Pursuant to the subscription agreements with our sponsor, the anchor investors have not been granted any material additional stockholder or other rights, and are only being issued membership interests in our sponsor with no right to control our sponsor or vote or dispose of the anchor founder shares (which will continue to be held by our sponsor until following our initial business combination). Further, the anchor investors are not required to: (i) other as described above, hold any units, shares or warrants they may purchase in this offering or thereafter for any amount time, (ii) vote any shares they may own at the applicable time in favor of our initial business combination or (iii) refrain from exercising their right to redeem their public shares at the time of our initial business combination.
There can be no assurance that the anchor investors will acquire any units in this offering, or as to the amount of such units the anchor investors will retain, if any, prior to or upon the consummation of our initial business combination. In the event that the anchor investors purchase such units (either in this offering or after) and vote in favor of our initial business combination, a smaller portion of affirmative votes from other public shareholders would be required to approve our initial business combination.
As more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest,” if any of our officers or directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which he or she has 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 other entity. Our officers and directors currently have certain relevant fiduciary duties or contractual obligations that may take priority over their duties to us.
Commencing on the date of this prospectus, we have agreed to pay our sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees.
Other than the foregoing, no compensation of any kind, including any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers and directors, or any affiliate of our sponsor or officers, prior to, or in connection with any services rendered in order to effectuate, the consummation of an initial business combination (regardless of the type of transaction that it is). However, these individuals 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. We do not have a policy that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement of out-of-pocket expenses by a target business. 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.
Prior to the closing of this offering, our sponsor has agreed to loan us up to $300,000 to be used for a portion of the expenses of this offering. As of August 28, 2020, we had borrowed $13,217 (of up to $300,000 available to us) under the promissory note with our sponsor 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 March 31, 2021 or the closing of this offering. The loan will be repaid upon the closing of this offering out of the estimated $825,000 of offering proceeds that has been allocated to the payment of offering expenses (other than underwriting commissions). The value of our sponsor’s interest in this transaction corresponds to the principal amount outstanding under any such loan.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds on a non-interest bearing basis as may be required. If we complete an initial business combination, we would repay such loaned amounts. In the event that the 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 for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
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 will enter into a registration and shareholder rights agreement with respect to the private placement warrants, the warrants issuable upon conversion of working capital loans (if any) and the shares of Class A common stock issuable upon exercise of the foregoing and upon conversion of the founder shares, which is described under the section of this prospectus entitled “Description of Securities — Registration Rights.”
Related Party Policy
We have not yet adopted a formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.
Prior to the consummation of this offering, we will adopt a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part.
In addition, our audit committee, pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction. A form of the audit committee charter that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part. We also require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.
These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.
To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from independent investment banking firm or from another independent entity that commonly renders valuation opinions that our initial business combination is fair to our company from a financial point of view. Furthermore, no finder’s fees, reimbursements, consulting fee, monies in respect of any payment of a loan or other compensation will be paid by us to our sponsor, officers or directors, or any affiliate of our sponsor or officers, for services rendered to us prior to, or in connection with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). However, the following payments will be made to our sponsor, officers or directors, or our or their affiliates, 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 an aggregate of $300,000 in loans made to us by our sponsor to cover offering-related and organizational expenses;
•
Payment to our sponsor of $10,000 per month, for up to 18 months, for office space, utilities and secretarial and administrative support;
•
Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and
•
Repayment of non-interest bearing loans 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. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender.
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.
DESCRIPTION OF SECURITIES
Pursuant to our amended and restated certificate of incorporation, our authorized capital stock consists of 200,000,000 shares of Class A common stock, $0.0001 par value, 20,000,000 shares of Class B 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 whole share of Class A common stock and one-half of one redeemable warrant. Each whole 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 described in this prospectus. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant.
We expect 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 B. Riley 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 which includes this audited balance sheet upon the completion of this offering, which is anticipated to take place three business days after the date of this prospectus. 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, 27,500,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’ over-allotment option and the corresponding forfeiture of 825,000 founder shares by our sponsor), consisting of:
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22,000,000 shares of Class A common stock underlying the units being offered in this offering; and
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5,500,000 shares of Class B common stock held by our initial stockholders.
If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering.
Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders, except as required by law or for certain matters which will require the approval of holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class. See “Certain Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws — Classified Board of Directors” and “— Class B Common Stock Consent Right.” 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 shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our board of directors will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. 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.
Because our amended and restated certificate of incorporation authorizes the issuance of up to 200,000,000 shares of Class A common stock, if we were to enter into an initial business combination, we may (depending on the terms of such an initial business combination) be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the initial business combination to the extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following our listing on 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 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust account is initially anticipated to be approximately $10.20 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination. 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 will require 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 initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
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 initial
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 voted, non-votes will have no effect on the approval of our initial 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 initial business combination. These quorum and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
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 will provide 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 15% of the shares of common stock 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 initial business combination. Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the initial business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If we seek stockholder approval in connection with our initial business combination, pursuant to the letter agreement our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need only 8,250,001, or 37.5%, of the 22,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised). Additionally, each public stockholder may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant to our amended and restated certificate of incorporation, if we do not complete our initial business combination within 18 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) 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 earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 18 months from the closing of 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 prescribed time period.
In the event of a liquidation, dissolution or winding up of the company after an initial 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, upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are identical to the shares of Class A common stock included in the units being sold in this offering, and holders of founder shares have the same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer restrictions, as described in more detail below, (ii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect to their founder shares and public shares in connection with a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (x) to modify the substance or timing of our obligation to allow redemption rights in connection with any proposed initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (y) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity and (C) to waive their rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within 18 months from the closing of 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 initial business combination within such time period, (iii) the founder shares are shares of our Class B common stock that will automatically convert into shares of our Class A common stock at the time of our initial business combination, subject to adjustment as described herein, and (iv) are entitled to registration rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have agreed pursuant to the letter agreement to vote any founder shares held by them and any public shares purchased during or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in this prospectus and related to the closing of the initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon completion of this offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial business combination (excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial business combination, and any private placement-equivalent warrants issued to our sponsor or its affiliates upon conversion of loans made to us). We cannot determine at this time whether a majority of the holders of our Class B common stock at the time of any future issuance would agree to waive such adjustment to the conversion ratio. They may waive such adjustment due to (but not limited to) the following: (i) closing conditions which are part of the agreement for our initial business combination; (ii) negotiation with Class A stockholders on structuring an initial business combination; or (iii) negotiation with parties providing financing which would trigger the anti-dilution provisions of the Class B common stock. If such adjustment is not waived, the issuance would not reduce the percentage ownership of holders of our Class B common stock, but would reduce the percentage ownership of holders of our Class A common stock. If such adjustment is waived, the issuance would reduce the percentage ownership of holders of both classes of our common stock. Holders of founder shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for shares of Class A common stock issues in a financing transaction in
connection with our initial business combination, including but not limited to a private placement of equity or debt. Securities could be “deemed issued” for purposes of the conversion rate adjustment if such shares are issuable upon the conversion or exercise of convertible securities, warrants or similar securities.
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 sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) 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, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
Our amended and restated certificate of incorporation will provide 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 shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being issued or registered in this offering.
Redeemable Warrants
Public Stockholders’ Warrants
Each whole warrant entitles the registered holder to purchase one whole share of our Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from the closing of this offering or 30 days after the completion of our initial business combination. Pursuant to the warrant agreement, a warrantholder may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrantholder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly, unless you purchase at least two units, you will not be able to receive or trade a whole warrant. 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 and we will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. 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 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 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 covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrantholders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Once the warrants become exercisable, we may call the warrants for redemption:
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in whole and not in part;
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at a price of $0.01 per warrant;
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upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrantholder; and
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if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption to the warrantholders.
If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering.
We have established the last of the redemption criteria 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 warrantholder will be entitled to exercise 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 adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $11.50 warrant exercise price 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 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 warrantholders would have been required to use had all warrantholders 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 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of Class A 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-up of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend, split-up 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) and (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 (i) 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 (ii) 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.
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) to satisfy the redemption rights of the holders of Class A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our Class A common stock if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, 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. 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 Class A 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 Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants in order to determine and realize the option value component of the warrant. This formula is to compensate the warrant holder for the loss of the option value portion of the warrant due to the requirement that the warrant holder exercise the warrant within 30 days of the event. The Black-Scholes model is an accepted pricing model for estimating fair market value where no quoted market price for an instrument is available.
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 is 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 mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants and the warrant agreement set forth in this prospectus, or to correct any defective provision, but requires the approval by the holders of at least a majority of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
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 warrantholders 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 (1) vote for each share held of record on all matters to be voted on by stockholders.
In addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination at a Newly Issued Price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our sponsor or its affiliates, without taking into account any founder shares held by our sponsor or such affiliates, as
applicable, prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial business combination (net of redemptions), and (z) the Market Value is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
No fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of Class A common stock to be issued to the warrantholder.
We have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. See “Risk Factors — Our warrant agreement will designate the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole and exclusive forum.
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 the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants,” 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. Our sponsor, or its permitted transferees, has the option to exercise the private placement warrants on a cashless basis. Except as described below, 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, including as to exercise price, exercisability and exercise period. If the private placement warrants are held by holders other than the 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 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 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 the sponsor or its permitted transferees is because it is not known at this time whether they will be affiliated with us following an initial 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 sell the shares of Class A common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly restricted from doing so. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period. The terms of such working capital loans by our sponsor or its affiliates, or our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.
Our sponsor has agreed not to transfer, assign or sell any of the private placement warrants (including the Class A common stock issuable upon exercise of any of these warrants) until the date that is 30 days after the date we complete our initial business combination, except that, among other limited exceptions as described under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants” made to our officers and directors and other persons or entities affiliated with our sponsor.
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 an 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 conditions subsequent to completion of an initial business combination. The payment of any cash dividends subsequent to an initial business combination will be within the discretion of our board of directors at such time. If we increase or decrease the size of the offering we will effect a stock dividend or a share contribution back to capital or other appropriate mechanism, as applicable, with respect to our Class B common stock immediately prior to the consummation of the offering in such amount as to maintain the ownership of our initial stockholders at 20.0% of the issued and outstanding shares of our common stock upon the consummation of this offering. 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 claims and losses 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 will contain 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 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), 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:
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If we do not complete our initial business combination within 18 months from the closing of this offering, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter 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 earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly
as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law;
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Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote on any initial business combination;
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Although we do not intend to enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or our 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 investment banking firm or from another independent entity that commonly renders valuation opinions that such an initial business combination is fair to our company from a financial point of view;
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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 of 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; whether or not we maintain our registration under the our Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above;
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So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that (i) we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination and (ii) any initial business combination must be approved by a majority of our independent directors;
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If our stockholders approve an amendment to our amended and restated certificate of incorporation (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of this offering or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, 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 earned on the funds held in the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares; and
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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 will provide that under no circumstances will we redeem our public shares unless our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and commissions.
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:
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a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);
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an affiliate of an interested stockholder; or
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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:
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our board of directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;
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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
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on or subsequent to the date of the transaction, the initial 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 will provide that our board of directors will be classified into three 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.
Exclusive forum for certain lawsuits
Our amended and restated certificate of incorporation will require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and certain other actions may be brought only in the Court of Chancery in the State of Delaware, except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction. If an action is brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision benefits us by providing increased consistency in the application of law in the types of lawsuits to which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated certificate of incorporation will provide that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
Special meeting of stockholders
Our bylaws provide that special meetings of our stockholders may be called only by a three-fourths vote of our board of directors, by a Chief Executive Officer 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 company secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. 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.
Action by written consent
Subsequent to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders other than with respect to our Class B common stock.
Classified Board of Directors
Our board of directors will initially be divided into three classes, Class I, Class II and Class III, with members of each class serving staggered three-year terms. Our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the board of directors. Any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class, including, for so long as any shares of Class B common stock remain outstanding, a majority of the shares of Class B common stock then outstanding, voting separately as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled only by vote of a majority of our directors then in office.
Class B Common Stock Consent Right
For so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter or repeal (i) any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class B common stock or (ii) certain provisions of our amended and restated certificate of incorporation and our bylaws. Any action required or permitted to be taken at any meeting of the holders of Class B common stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were present and voted.
Securities Eligible for Future Sale
Immediately after the consummation of this offering (assuming no exercise of the underwriters’ over-allotment option) we will have 27,500,000 (or 31,625,000 if the underwriters’ over-allotment option is exercised in full) shares of common stock outstanding. Of these shares, the 22,000,000 shares (or 25,300,000 if the underwriters’ 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 5,500,000 (or 6,325,000 if the underwriters’ over-allotment option is exercised in full) shares and all 10,375,000 (or 11,695,000 if the over-allotment option exercised in full) private placement warrants are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering, and the shares of Class B common stock and private placement warrants are subject to transfer restrictions as set forth elsewhere in this prospectus. These restricted securities will be entitled to registration rights as more fully described below under “— Registration Rights.”
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 (i) 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 (ii) 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:
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1% of the total number of shares of Class A common stock then outstanding, which will equal 220,000 shares immediately after this offering (or 253,000 if the underwriters exercise their over-allotment option in full); or
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the average weekly reported trading volume of the Class A 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:
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the issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
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the issuer of the securities has filed all Exchange Act reports and materials 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 Current Reports on Form 8-K; and
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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.
Registration Rights
The holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of Class A common stock issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans
and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of this offering, requiring us to register such securities for resale (in the case of the founder shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. We will bear the expenses incurred in connection with the filing of any such registration statements.
Listing of Securities
We have applied to list our units, Class A common stock and warrants on Nasdaq under the symbols “DBDRU,” “DBDR” and “DBDRW,” respectively. We expect that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the date the shares of our Class A 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. We cannot guarantee that our securities will be approved for listing on Nasdaq.
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our units (each consisting of one share of our Class A common stock and one-half of one redeemable warrant) that are purchased in this offering by U.S. Holders (as defined below) and Non-U.S. Holders (as defined below). Because the components of a unit are generally separable at the option of the holder, the holder of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying share of our Class A common stock and one-half of one warrant components of the unit. As a result, the discussion below with respect to holders of shares of our Class A common stock and warrants should also apply to holders of units (as the deemed owners of the underlying share of our Class A common stock and warrants that constitute the units).
This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our securities who are initial purchasers of a unit pursuant to this offering and hold the unit and each component of the unit as capital assets within the meaning of Section 1221(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment). This discussion assumes that the shares of our Class A common stock and warrants will trade separately and that any distributions made (or deemed made) by us on the shares of our Class A common stock and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of our securities will be in U.S. dollars. This discussion is a summary only and does not consider all aspects of U.S. federal income taxation that may be relevant to the acquisition, ownership and disposition of a unit by a prospective investor in light of its particular circumstances or that is subject to special rules under the U.S. federal income tax laws, including, but not limited to:
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our sponsor, officers, directors or other holders of our Class B common stock or private placement warrants;
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banks and other financial institutions or financial services entities;
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broker-dealers;
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mutual funds;
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retirement plans, individual retirement accounts or other tax-deferred accounts;
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taxpayers that are subject to the mark-to-market tax accounting rules;
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tax-exempt entities;
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S-corporations, partnerships or other flow-through entities and investors therein;
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governments or agencies or instrumentalities thereof;
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insurance companies;
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regulated investment companies;
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real estate investment trusts;
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passive foreign investment companies;
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controlled foreign corporations;
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qualified foreign pension funds;
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expatriates or former long-term residents of the United States;
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persons that actually or constructively own five percent or more of our voting shares;
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persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation or in connection with services;
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persons required for U.S. federal income tax purposes to conform the timing of income accruals to their financial statements under Section 451 of the Code;
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persons subject to the alternative minimum tax;
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persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar transaction; or
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U.S. Holders (as defined below) whose functional currency is not the U.S. dollar.
The discussion below is based upon current provisions of the Code, applicable U.S. Treasury regulations promulgated under the Code (“Treasury Regulations”), judicial decisions and administrative rulings of the IRS, all as in effect on the date hereof, and all of which are subject to differing interpretations or change, possibly on a retroactive basis. Any such differing interpretations or change could alter the U.S. federal income tax consequences discussed below. Furthermore, this discussion does not address any aspect of U.S. federal non-income tax laws, such as gift, estate or Medicare contribution tax laws, or state, local or non-U.S. tax laws.
We have not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.
As used herein, the term “U.S. Holder” means a beneficial owner of units, shares of our Class A common stock or warrants that is for U.S. federal income tax purposes: (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or (B) it has in effect a valid election under Treasury Regulations to be treated as a United States person.
This discussion does not consider the tax treatment of partnerships or other pass-through entities (including branches) or persons who hold our securities through such entities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partner and the partnership. If you are a partner or a partnership holding our securities, we urge you to consult your own tax advisor.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR UNITS. EACH PROSPECTIVE INVESTOR IN OUR UNITS IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR UNITS, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-UNITED STATES TAX LAWS
Personal Holding Company Status
We could 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 (a “PHC”) for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in a given taxable year if (i) 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 (ii) 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).
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 may 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 be 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.
Allocation of Purchase Price and Characterization of a Unit
No statutory, administrative or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes, and therefore, that 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-half of one warrant, with each whole warrant exercisable to acquire one share of our Class A common stock, and we intend to treat the acquisition of a unit in this manner. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of our Class A common stock and the one-half of one warrant based on the relative fair market value of each at the time of issuance. Under U.S. federal income tax law, each investor must make its own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult its tax advisor regarding the determination of value for these purposes. The price allocated to each share of our Class A common stock and one-half of one warrant should constitute the holder’s initial tax basis in such share and one-half of one warrant, respectively. Any disposition of a unit should be treated for U.S. federal income tax purposes as a disposition of the share of our Class A common stock and one-half of one warrant comprising the unit, and the amount realized on the disposition should be allocated between the share of our Class A common stock and one-half of one warrant based on their respective relative fair market values at the time of disposition. Neither the separation of the share of our Class A common stock and the one-half of one warrant constituting a unit nor the combination of thirds of warrants into a single warrant should be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of the shares of our Class A common stock and warrants and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that directly address 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. Accordingly, each prospective investor is urged to consult its tax advisor regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
U.S. Holders
Taxation of Distributions
If we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S. Holders 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 shares of our Class A common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the shares of our 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 Our Class A Common Stock and Warrants” below.
Dividends we pay to a corporate U.S. Holder generally will qualify for the dividends received deduction if certain holding period requirements are met. With certain exceptions (including, but not limited to, 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 be taxed as qualified dividend income at the preferential tax rate for long-term capital gains. It is
unclear whether the redemption rights with respect to the shares of our 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. If the holding period requirements are not met, then a corporation may not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to qualified dividend income.
Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants
A U.S. Holder generally will recognize capital gain or loss on a sale or other taxable disposition of our shares of Class A common stock or warrants (including on our dissolution and liquidation if we do not complete an initial business combination within the required time period). Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such shares of our Class A common stock or warrants exceeds one year. Long-term capital gains recognized by a non-corporate U.S. holder are currently eligible to be taxed preferential rates. It is unclear, however, whether certain redemption rights described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running of the holding period for the Class A common stock is suspended, then non-corporate U.S. Holders may not be able to satisfy the one-year holding period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. The deductibility of capital losses is subject to limitations.
The amount of gain or loss recognized on a sale or other taxable disposition generally will be equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition (or, if the shares of our Class A common stock or warrants are held as part of units at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the shares of our Class A common stock or warrants based upon the then relative fair market values of the shares of our Class A common stock and the warrants included in the units) and (ii) the U.S. Holder’s adjusted tax basis in its shares of our Class A common stock or warrants so disposed of. A U.S. Holder’s adjusted tax basis in its shares of our Class A common stock and warrants generally will equal the U.S. Holder’s acquisition cost (that is, the portion of the purchase price of a unit allocated to a share of our Class A common stock or one-half of one warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) reduced, in the case of a share of our Class A common stock, by any prior distributions treated as a return of capital. See “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” below for a discussion regarding a U.S. Holder’s tax basis in a share of our Class A common stock acquired pursuant to the exercise of a warrant.
Redemption of Our Class A Common Stock
In the event that a U.S. Holder’s shares of our Class A common stock are redeemed pursuant to the redemption provisions described in this prospectus under “Description of Securities — Common Stock” or if we purchase a U.S. Holder’s shares of our Class A common stock in an open market transaction (each referred to herein as a “redemption”), the treatment of the redemption for U.S. federal income tax purposes will depend on whether it qualifies as a sale or exchange of the shares of our Class A common stock under Section 302 of the Code. If the redemption qualifies as a sale or exchange of the shares of our Class A common stock under the tests described below, the U.S. Holder will be treated as described under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants” above. If the redemption does not qualify as a sale or exchange of the shares of our Class A common stock, the U.S. Holder will be treated as receiving a corporate distribution with the tax consequences described above under “U.S. Holders — Taxation of Distributions.” Whether a redemption qualifies for sale or exchange treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder as described in the following paragraph) relative to all of our shares outstanding both before and after such redemption. The redemption of our Class A common stock generally will be treated as a sale or exchange of the shares of our Class A common stock (rather than as a corporate distribution) if, within the meaning of Section 302 of
the Code, such redemption (i) is “substantially disproportionate” with respect to the U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. Holder.
In determining whether any of the foregoing tests are satisfied, a U.S. Holder must take into account not only shares of our 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 shares of our Class A common stock which could be acquired pursuant to the exercise of the warrants. In order to meet the “substantially disproportionate” test, the percentage of our outstanding voting shares actually and constructively owned by the U.S. Holder immediately following the redemption of shares of our Class A common stock must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination, the shares of our Class A common stock may not be treated as voting shares for this purpose and, consequently, this substantially disproportionate test may not be applicable. There will be a complete termination of a U.S. Holder’s interest if either (i) all of our shares actually and constructively owned by the U.S. Holder are redeemed or (ii) all of our shares 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 shares owned by certain family members and the U.S. Holder does not constructively own any other shares of our stock. The redemption of the shares of our Class A common stock will not be essentially equivalent to a dividend with respect to a U.S. Holder if it 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. However, 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 should consult with its own tax advisors as to the tax consequences of a redemption.
If none of the foregoing tests are satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as 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 shares of our Class A common stock will be added to the U.S. Holder’s adjusted tax basis in its remaining shares, 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.
Exercise, Lapse or Redemption of a Warrant
Except as discussed below with respect to the cashless exercise of a warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of a share of our Class A common stock on the exercise of a warrant for cash. A U.S. Holder’s initial tax basis in a share of our Class A common stock received upon exercise of the warrant generally will equal the sum of the U.S. Holder’s initial investment in the warrant (that is, the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrant. It is unclear whether a U.S. Holder’s holding period for the share of our Class A common stock received upon exercise of the warrants will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant; in either case, the holding period will not include the period during which the U.S. Holder held the warrant. If a warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the warrant.
The tax consequences of a cashless exercise of a warrant are not clear under current law. A cashless exercise may not be taxable, 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 shares of our Class A common stock received generally would equal the U.S. Holder’s tax basis in the warrants exercised therefor. If the cashless exercise were not a realization event, it is unclear whether a U.S. Holder’s holding period for the shares of our Class A common stock will commence on the date of exercise of the warrant or the day following the date of exercise of the warrant. If the cashless exercise were
treated as a recapitalization, the holding period of the shares of our Class A common stock would include the holding period of the warrants exercised therefor.
It is also possible that a cashless exercise could be treated in whole or in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder could be deemed to have surrendered a number of warrants having an aggregate value (as measured by the excess of the fair market value of our Class A common stock over the exercise price of the warrants) equal to the exercise price for the total number of warrants to be exercised (i.e., the warrants underlying the number of shares of our Class A common stock actually received by the U.S. Holder pursuant to the cashless exercise). The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the value of the warrants deemed surrendered and the U.S. Holder’s tax basis in such warrants. Such gain or loss would be long-term or short-term, depending on the U.S. holder’s holding period 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 tax basis in the warrants exercised 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 following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include the period during which the U.S. Holder held the warrant.
Alternative characterizations are also possible (including as a taxable exchange of all of the warrants surrendered by the U.S. Holder for shares of our Class A common stock received upon exercise). 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 should consult their tax advisors regarding the tax consequences of a cashless exercise.
If we redeem warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants” or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants.”
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of shares of our 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 entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants.” Depending on the circumstances, such adjustments may be treated as constructive distributions. An adjustment which has the effect of preventing dilution pursuant to a bona fide reasonable adjustment formula generally is not taxable. The U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the warrant holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of our Class A common stock that would be obtained upon exercise or through a decrease to the exercise price) as a result of a taxable distribution of cash or other property to the holders of shares of our Class A common stock. Any such constructive distribution would generally be subject to tax as described under “U.S. Holders — Taxation of Distributions” above in the same manner as if the U.S. Holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest resulting from the adjustment.
Non-U.S. Holders
This section applies to “Non-U.S. Holders.” As used herein, the term “Non-U.S. Holder” means a beneficial owner of our units, Class A common stock or warrants that is not a U.S. Holder and is not a partnership or other entity classified as a partnership for U.S. federal income tax purposes, but such term generally does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our securities.
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. Provided such dividends are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (or, if required pursuant to an applicable income tax treaty, are not attributable to a permanent establishment of fixed base maintained by the Non-U.S. Holder in 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 shares of our 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 Our Class A Common Stock and Warrants” below. In addition, if we determine that we are or are likely to be classified as a “United States real property holding corporation” (see “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits, including a distribution in redemption of shares of our Class A common stock. See also “Non-U.S. Holders — Possible Constructive Distributions” for potential U.S. federal tax consequences with respect to constructive distributions.
Dividends that 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 (and, if a tax treaty applies, are attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States) will 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, the effectively connected dividends will be subject to regular U.S. federal income tax as if the Non-U.S. Holder were a U.S. resident, unless an applicable income tax treaty provides otherwise. A Non-U.S. Holder that is a foreign corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
Exercise, Lapse or Redemption of a Warrant
The U.S. federal income tax treatment of a Non-U.S. Holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. Holder, generally will correspond to the U.S. federal income tax treatment of the exercise or lapse of a warrant by a U.S. Holder, as described under “U.S. Holders — Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the consequences would be similar to those described below under “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants.” The U.S. federal income tax treatment for a Non-U.S. Holder of a redemption of warrants for cash (or if we purchase warrants in an open market transaction) would be similar to that described below in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants.”
Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants
Subject to the discussion of FATCA and backup withholding below, a Non-U.S. Holder generally will 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 shares of our Class A common stock (including upon a dissolution and liquidation if we do not complete an initial business combination within the required time period) or warrants (including an expiration or redemption of our warrants), in each case without regard to whether such 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 permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States); 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 advisor regarding the application of these rules.
Unless an applicable treaty provides otherwise, gain described in the first bullet point above will generally be subject to tax at the applicable U.S. federal income tax rates as if the Non-U.S. Holder were a U.S. resident. 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 treaty rate).
If the second 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 generally be subject to tax at applicable U.S. federal income tax rates as if the Non-U.S. Holder were a U.S. resident. In addition, a buyer of our Class A common stock or warrants from such holder may be required to withhold U.S. federal 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. In general, we would 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.
Redemption of Our Class A Common Stock
The characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. Holder’s shares of our Class A common stock pursuant to the redemption provisions described in the section of this prospectus entitled “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 shares of our Class A common stock, as described under “U.S. Holders — Redemption of Our 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, Taxable Exchange or Other Taxable Disposition of Our Class A Common Stock and Warrants,” as applicable.
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number of shares of our 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 entitled “Description of Securities — Redeemable Warrants — Public Stockholders’ Warrants.” Depending on the circumstances, such adjustments may be treated as constructive distributions. An adjustment which has the effect of preventing dilution pursuant to a bona fide reasonable adjustment formula generally is not taxable. The Non-U.S. Holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the warrant holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of shares of our Class A common stock that would be obtained upon exercise or through a decrease to the exercise price) as a result of a taxable distribution of cash or other property to the holders of shares of our Class A common stock. Any such constructive distribution would generally be taxed as described under “Non-U.S. Holders — Taxation of Distributions” above, in the same manner as if
the Non-U.S. Holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest resulting from the adjustment.
Information Reporting and Backup Withholding
Dividend payments (including constructive dividends) with respect to our Class A common stock and proceeds from the sale, exchange or redemption of shares of our Class A common stock or warrants may be subject to information reporting to the IRS and possible United States backup withholding. Backup withholding will not apply, however, to payments made to a U.S. Holder who furnishes a correct taxpayer identification number and makes other required certifications, or who is otherwise exempt from backup withholding and establishes such exempt status. Payments made to a Non-U.S. Holder generally will not be subject to backup withholding if the Non-U.S. Holder provides certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption.
Backup withholding is not an additional tax. Amounts withheld under the backup withholding rules may be credited against a holder’s U.S. federal income tax liability, and a holder generally may obtain a refund of any excess amounts withheld by timely filing the appropriate claim for refund with the IRS and furnishing any required information. All holders should consult their tax advisors regarding the application of information reporting and backup withholding to them.
FATCA Withholding Taxes
Sections 1471 through 1474 of the Code and the Treasury Regulations and administrative guidance promulgated thereunder (commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA”) generally impose withholding of 30% in certain circumstances on payments of dividends (including constructive dividends) and, subject to the proposed Treasury Regulations discussed below, on proceeds from sales or other disposition of our securities paid to “foreign financial institutions” (which is broadly defined for this purpose and includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied or an exemption applies (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution will be entitled to a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Similarly, dividends and, subject to the proposed Treasury Regulations discussed below, proceeds from sales or other disposition in respect of our units held by an investor that is a non-financial non-U.S. entity that does not qualify under certain exceptions generally will be subject to withholding at a rate of 30%, unless such entity either (i) certifies to us or the applicable withholding agent that such entity does not have any “substantial United States owners” or (ii) provides certain information regarding the entity’s “substantial United States owners,” which will in turn be provided to the U.S. Department of the Treasury. The U.S. Department of the Treasury has proposed regulations which eliminate the federal withholding tax of 30% applicable to the gross proceeds of a sale or other disposition of our securities. Withholding agents may rely on the proposed Treasury Regulations until final regulations are issued. Prospective investors should consult their tax advisors regarding the possible effects of FATCA on their investment in our securities.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S PARTICULAR SITUATION. HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR CLASS A COMMON STOCK AND WARRANTS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, ESTATE, NON-U.S. AND OTHER TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement between us and B. Riley, as the representative of the underwriters named below and the sole book-running manager of this offering, we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us, the respective number of units shown opposite its name below:
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Underwriter
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Number of
Units
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B. Riley Securities, Inc.
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Total
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22,000,000 |
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The underwriting agreement provides that the obligations of the several underwriters are subject to certain conditions precedent such as the receipt by the underwriters of officers’ certificates and legal opinions and approval of certain legal matters by their counsel. The underwriting agreement provides that the underwriters will purchase all of the units if any of them are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated. We have agreed to indemnify the underwriters and certain of their controlling persons against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.
The underwriters have advised us that, following the completion of this offering, they currently intend to make a market in the units as permitted by applicable laws and regulations. However, the underwriters are not obligated to do so, and the underwriters may discontinue any market-making activities at any time without notice in their sole discretion. Accordingly, no assurance can be given as to the liquidity of the trading market for the units, that you will be able to sell any of the units held by you at a particular time or that the prices that you receive when you sell will be favorable.
The underwriters are offering the units subject to their acceptance of the units from us and subject to prior sale. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part. In addition, the underwriters have advised us that they do not intend to confirm sales to any account over which they exercise discretionary authority.
Commission and Expenses
The underwriters have advised us that they propose to offer the units to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers, which may include the underwriters, at that price less a concession not in excess of $ per unit. The underwriters may allow, and certain dealers may reallow, a discount from the concession not in excess of $ per unit to certain brokers and dealers. After the offering, the initial public offering price, concession and reallowance to dealers may be reduced by the representative. No such reduction will change the amount of proceeds to be received by us as set forth on the cover page of this prospectus.
The following table summarizes the compensation and estimated expenses we will pay.
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Per Unit(1)
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Total(1)
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Without
Over-allotment
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With
Over-allotment
|
|
|
Without
Over-allotment
|
|
|
With
Over-allotment
|
|
|
Underwriting Discounts and Commissions paid
by us
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
0.55 |
|
|
|
|
$ |
12,100,000 |
|
|
|
|
$ |
13,915,000 |
|
|
(1)
Includes $0.35 per unit, or $7,700,000 in the aggregate payable to the underwriters (or $8,855,000 if the over-allotment option is exercised in full) will be deposited in the trust account as deferred underwriting commissions. The deferred commissions will be released to the underwriters only on completion of an initial business combination.
If we do not complete our initial business combination within 18 months from the closing of this offering, the underwriters have agreed that (i) they will forfeit any rights or claims to their deferred
underwriting discounts and commissions, including any accrued interest thereon, then in the trust account and (ii) that the deferred underwriters’ discounts and commissions will be distributed on a pro rata basis, together with any accrued interest thereon (which interest will be net of taxes payable) to the public stockholders.
We estimate expenses payable by us in connection with this offering, other than the underwriting discounts and commissions referred to above, will be approximately $825,000. We have agreed to pay for FINRA-related fees and expenses of the underwriters’ legal counsel, not to exceed $15,000, and the expenses of investigations and background checks of our officers and directors, not to exceed $3,500.
Determination of Offering Price
Prior to this offering, there has not been a public market for our securities. Consequently, the initial public offering price for our units was determined by negotiations between us and the representative. Among the factors considered in these negotiations were the history and prospects of companies whose principal business is the acquisition of other companies, prior offerings of those companies, our management, our capital structure, and currently prevailing general conditions in equity securities markets, including current market valuations of publicly traded companies considered comparable to our company.
We offer no assurances that the initial public offering price will correspond to the price at which the units will trade in the public market subsequent to the offering or that an active trading market for the units will develop and continue after the offering.
Sponsor Investment
In its capacity as an anchor investor, B. Riley expects to enter into a separate agreement with our sponsor to purchase membership interests in our sponsor representing an indirect beneficial interest in 250,000 founder shares for $1.0 million. Neither the membership interests in our sponsor nor the founder shares to be indirectly owned by B. Riley will be subject to forfeiture (or any additional restrictions agreed to by our sponsor in connection with our initial business combination) without its consent. The founder shares to be indirectly owned by B. Riley will be otherwise identical to the founder shares owned by our sponsor. Pursuant to the subscription agreement with our sponsor, B. Riley has not been granted any material additional stockholder or other rights, and is only being issued membership interests in our sponsor with no right to control our sponsor or vote or dispose of the anchor founder shares (which will continue to be held by our sponsor until following our initial business combination). There can be no assurance that B. Riley will acquire any units in this offering, or as to the amount of such units B. Riley will retain, if any, prior to or upon the consummation of our initial business combination.
These securities have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement of which this prospectus forms a part pursuant to Rule 5110(e)(1) of the FINRA Manual. Pursuant to FINRA Rule 5110(e)(1), these securities will not be sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement of which this prospectus forms a part or commencement of sales of the public offering, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners, provided that all securities so transferred remain subject to the lockup restriction above for the remainder of the time period.
Listing
We intend to apply to have our units listed on Nasdaq under the trading symbol “DBDRU”. We expect that our Class A common stock and warrants will be listed under the symbols “DBDR” and “DBDRW”, respectively, once the Class A common stock and warrants begin separate trading.
Stamp Taxes
If you purchase units offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.
Option to Purchase Additional Units
We have granted to the underwriters an option, exercisable for 45 days from the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of 3,300,000 units from us at the public offering price set forth on the cover page of this prospectus, less underwriting discounts and commissions. If the underwriters exercise this option, each underwriter will be obligated, subject to specified conditions, to purchase a number of additional units proportionate to that underwriter’s initial purchase commitment as indicated in the table above. This option may be exercised only if the underwriters sell more units than the total number set forth on the cover page of this prospectus.
Letter Agreements
We, our sponsor and our officers and directors have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of B. Riley, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any units, warrants, shares of common stock or any other securities convertible into, or exercisable, or exchangeable for, shares of common stock, provided, however, that we may (1) issue and sell the private placement warrants, (2) issue and sell the additional units to cover our underwriters’ over-allotment option (if any), (3) register with the SEC pursuant to an agreement to be entered into concurrently with the issuance and sale of the securities in this offering, the resale of the private placement warrants and shares of Class A common stock issuable upon exercise of the warrants and the founder shares and (4) issue securities in connection with an initial business combination. B. Riley in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination, (x) if the last reported sale price of 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, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property (except as described herein under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees will be subject to the same restrictions and other agreements of our initial stockholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up.
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 with respect to permitted transferees as described herein under the section of this prospectus entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants”).
Stabilization
The underwriters have advised us that they, pursuant to Regulation M under the Securities Exchange Act of 1934, as amended, and certain persons participating in the offering may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the units at a level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered” short sales or “naked” short sales.
“Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional units in this offering. The underwriters may close out any covered short position by either exercising their option to purchase additional units or purchasing units in the open market. In determining the source of units to close out the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through the option to purchase additional units.
“Naked” short sales are sales in excess of the option to purchase additional units. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our units in the open market after pricing that could adversely affect investors who purchase in this offering.
A stabilizing bid is a bid for the purchase of units on behalf of the underwriters for the purpose of fixing or maintaining the price of the units. A syndicate covering transaction is the bid for or the purchase of units on behalf of the underwriters to reduce a short position incurred by the underwriters in connection with the offering. Similar to other purchase transactions, the underwriter’s purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our units or preventing or retarding a decline in the market price of our units. As a result, the price of our units may be higher than the price that might otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriters to reclaim the selling concession otherwise accruing to a syndicate member in connection with the offering if the units originally sold by such syndicate member are purchased in a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our units. The underwriters are not obligated to engage in these activities and, if commenced, any of the activities may be discontinued at any time.
The underwriters may also engage in passive market making transactions in our units on Nasdaq in accordance with Rule 103 of Regulation M during a period before the commencement of offers or sales of our units in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.
Electronic Distribution
A prospectus in electronic format may be made available by e-mail or on the web sites or through online services maintained by one or more of the underwriters or their affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of units for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriters on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriters’ web sites and any information contained in any other web site maintained by any of the underwriters is not part of this prospectus, has not been approved and/or endorsed by us or the underwriters and should not be relied upon by investors.
Other Activities and Relationships
We are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and have no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in raising additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date that is 60 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriters’ compensation in connection with this offering and we may pay the underwriters of this offering or any entity with which they are affiliated a finder’s fee or other compensation for services rendered to us in connection with the completion of a business combination.
The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and certain of their affiliates have, from time to time, performed, and
may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, for which they received or will receive customary fees and expenses.
In the ordinary course of their various business activities, the underwriters and certain of their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments issued by us and our affiliates. The underwriters and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Selling Restrictions
Canada
Resale Restrictions
The distribution of the securities in Canada is being made only in the provinces of Ontario, Quebec, Alberta and British Columbia on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of these securities are made. Any resale of the securities in Canada must be made under applicable securities laws which may vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the securities.
Representations of Canadian Purchasers
By purchasing the securities in Canada and accepting delivery of a purchase confirmation, a purchaser is representing to us and the dealer from whom the purchase confirmation is received that:
•
the purchaser is entitled under applicable provincial securities laws to purchase the securities without the benefit of a prospectus qualified under those securities laws as it is an “accredited investor” as defined under National Instrument 45-106 — Prospectus Exemptions,
•
the purchaser is a “permitted client” as defined in National Instrument 31-103 — Registration Requirements, Exemptions and Ongoing Registrant Obligations,
•
where required by law, the purchaser is purchasing as principal and not as agent, and
•
the purchaser has reviewed the text above under Resale Restrictions.
Conflicts of Interest
Canadian purchasers are hereby notified that B. Riley is relying on the exemption set out in section 3A.3 or 3A.4, if applicable, of National Instrument 33-105 — Underwriting Conflicts from having to provide certain conflict of interest disclosure in this document.
Statutory Rights of Action
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the prospectus (including any amendment thereto) such as this document contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser of these securities in Canada should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.
Taxation and Eligibility for Investment
Canadian purchasers of the securities should consult their own legal and tax advisors with respect to the tax consequences of an investment in the securities in their particular circumstances and about the eligibility of the securities for investment by the purchaser under relevant Canadian legislation.
Australia
This prospectus is not a disclosure document for the purposes of Australia’s Corporations Act 2001 (Cth) of Australia, or Corporations Act, has not been lodged with the Australian Securities & Investments Commission and is only directed to the categories of exempt persons set out below. Accordingly, if you receive this prospectus in Australia:
You confirm and warrant that you are either:
•
a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;
•
a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to the Company which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made;
•
a person associated with the Company under Section 708(12) of the Corporations Act; or
•
a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act.
To the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this prospectus is void and incapable of acceptance.
You warrant and agree that you will not offer any of the securities issued to you pursuant to this prospectus for resale in Australia within 12 months of those securities being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.
European Economic Area
The units are not intended to be offered or sold to and should not be offered or sold to any retail investor in the European Economic Area (the “EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC, as amended (the “Insurance Mediation Directive”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Directive 2003/71/EC (as amended, the “Prospectus Directive”). No key information document required by Regulation (EU) No 1286/2014, as amended (the “PRIIPs Regulation”) for offering or selling the units or otherwise making them available to retail investors in the EEA has been prepared. Offering or selling the units or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPS Regulation. This prospectus has been prepared on the basis that any offer of the units in any Member State of the EEA will be made pursuant to an exemption under the Prospectus Directive from a requirement to publish a prospectus for offers of units. This prospectus is not a prospectus for the purpose of the Prospectus Directive.
Hong Kong
No securities have been offered or sold, and no securities may be offered or sold, in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rules made under that Ordinance; or in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong (“CO”) or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO. No document, invitation or advertisement relating to the securities has been issued or may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under that Ordinance.
This prospectus has not been registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong. Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.
Israel
This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the units is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum, or the Addendum, to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
Japan
The offering has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 of Japan, as amended), or FIEL, and the Initial Purchaser will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.
Singapore
This prospectus has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities may not be circulated or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance
with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
•
a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
•
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,
securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the securities pursuant to an offer made under Section 275 of the SFA except:
•
to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
•
where no consideration is or will be given for the transfer;
•
where the transfer is by operation of law;
•
as specified in Section 276(7) of the SFA; or
•
as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.
Notification under Section 309B(1)(c) of the Securities and Futures Act: Solely for the purposes of its obligations pursuant to sections 309B(1)(a) and 309B(1)(c) of the Securities and Futures Act and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A of the SFA) that the securities offered are (A) prescribed capital markets products (as defined in the CMP Regulations 2018) and (B) Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
Switzerland
The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the offering, the Company or the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of securities.
United Kingdom
This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated (each such person being referred to as a “relevant person”).
This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.
LEGAL MATTERS
Ellenoff Grossman & Schole LLP, New York, New York, has passed upon the validity of the securities offered hereby on behalf of us. Certain legal matters will be passed upon on behalf of the underwriters by Kirkland & Ellis LLP, New York, New York.
EXPERTS
The financial statements of Roman DBDR Tech Acquisition Corp. as of August 28, 2020 and for the period from August 21, 2020 (inception) through August 28, 2020, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report, thereon (which contains an explanatory paragraph relating to substantial doubt about the ability of Roman DBDR Tech Acquisition Corp. to continue as a going concern as described in Note 1 to the financial statements), appearing elsewhere in this prospectus, and are included in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the securities we are offering by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information about us and our securities, you should refer to the registration statement and the exhibits and schedules filed with the registration statement. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are materially complete but may not include a description of all aspects of such contracts, agreements or other documents, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.
Upon completion of this offering, we will be subject to the information requirements of the Exchange Act and will file annual, quarterly and current event reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website at www.sec.gov.
ROMAN DBDR TECH ACQUISITION CORP.
INDEX TO FINANCIAL STATEMENTS
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F-2
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F-3
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F-4
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F-5
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F-6
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F-7
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholder and Board of Directors of
Roman DBDR Tech Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Roman DBDR Tech Acquisition Corp. (the “Company”) as of August 28, 2020, and the related statements of operations, changes in stockholder’s equity and cash flows for the period from August 21, 2020 (inception) through August 28, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 28, 2020, and the results of its operations and its cash flows for the period from August 21, 2020 (inception) through August 28, 2020 in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph — Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company’s ability to execute its business plan is dependent upon its completion of the proposed initial public offering described in Note 3 to the financial statements. The Company has a working capital deficiency as of August 28, 2020 and lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are also described in Notes 1 and 3. The financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s auditor since 2020.
New York, NY
September 4, 2020, except for the first paragraph of Note 5 and the second paragraph of Note 8 as to which the date is November 3, 2020.
ROMAN DBDR TECH ACQUISITION CORP.
BALANCE SHEET
AUGUST 28, 2020
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ASSETS
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Deferred offering costs
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$ |
42,500 |
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Total Assets
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$ |
42,500 |
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LIABILITIES AND STOCKHOLDER’S EQUITY
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| |
Current liabilities
|
|
|
|
|
|
|
|
| |
Accrued offering costs
|
|
|
|
$ |
5,000 |
|
|
| |
Promissory note – related party
|
|
|
|
|
13,217 |
|
|
| |
Total Liabilities
|
|
|
|
|
18,217 |
|
|
| |
Commitments
|
|
|
|
|
|
|
|
| |
Stockholder’s Equity
|
|
|
|
|
|
|
|
| |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized, none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class A common stock, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding
|
|
|
|
|
— |
|
|
| |
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 6,325,000 shares issued
and outstanding(1)
|
|
|
|
|
633 |
|
|
| |
Additional paid-in capital
|
|
|
|
|
24,367 |
|
|
| |
Accumulated deficit
|
|
|
|
|
(717) |
|
|
| |
Total Stockholder’s Equity
|
|
|
|
|
24,283 |
|
|
| |
Total Liabilities and Stockholder’s Equity
|
|
|
|
$ |
42,500 |
|
|
(1)
Includes up to 825,000 Class B shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 5). On October 26, 2020, the Sponsor returned to the Company, at no cost, an aggregate of 1,581,250 Class B shares which the Company cancelled, resulting in an aggregate of 6,325,000 Class B shares outstanding (see Note 5).
The accompanying notes are an integral part of the financial statements.
ROMAN DBDR TECH ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 21, 2020 (INCEPTION) THROUGH AUGUST 28, 2020
| |
Formation costs
|
|
|
|
$ |
717 |
|
|
| |
Net loss
|
|
|
|
$ |
(717) |
|
|
| |
Weighted average shares outstanding, basic and diluted(1)
|
|
|
|
|
5,500,000 |
|
|
| |
Basic and diluted net loss per common share
|
|
|
|
$ |
(0.00) |
|
|
(1)
Excludes up to 825,000 Class B shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 5). On October 26, 2020, the Sponsor returned to the Company, at no cost, an aggregate of 1,581,250 Class B shares which the Company cancelled, resulting in an aggregate of 6,325,000 Class B shares outstanding (see Note 5).
The accompanying notes are an integral part of the financial statements.
ROMAN DBDR TECH ACQUISITION CORP.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE PERIOD FROM AUGUST 21, 2020 (INCEPTION) THROUGH AUGUST 28, 2020
| |
|
|
Class B Common Stock(1)
|
|
|
Additional
Paid-in
Capital
|
|
|
Accumulated
Deficit
|
|
|
Stockholder’s
Equity
|
|
| |
|
|
Shares
|
|
|
Amount
|
|
|
Balance – August 21, 2020 (Inception)
|
|
|
|
|
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
Issuance of Class B common stock to
Sponsor(1)
|
|
|
|
|
6,325,000 |
|
|
|
|
|
633 |
|
|
|
|
|
24,367 |
|
|
|
|
|
— |
|
|
|
|
|
25,000 |
|
|
|
Net loss
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(717) |
|
|
|
|
|
(717) |
|
|
|
Balance – August 28, 2020
|
|
|
|
|
6,325,000 |
|
|
|
|
$ |
633 |
|
|
|
|
$ |
24,367 |
|
|
|
|
$ |
(717) |
|
|
|
|
$ |
24,283 |
|
|
(1)
Includes up to 825,000 Class B shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 5). On October 26, 2020, the Sponsor returned to the Company, at no cost, an aggregate of 1,581,250 Class B shares which the Company cancelled, resulting in an aggregate of 6,325,000 Class B shares outstanding (see Note 5).
The accompanying notes are an integral part of the financial statements.
ROMAN DBDR TECH ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 21, 2020 (INCEPTION) THROUGH AUGUST 28, 2020
| |
Cash flows from Operating Activities:
|
|
|
|
|
|
|
|
| |
Net loss
|
|
|
|
$ |
(717) |
|
|
| |
Net cash used in operating activities
|
|
|
|
|
(717) |
|
|
| |
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
| |
Proceeds from promissory note – related party
|
|
|
|
|
13,217 |
|
|
| |
Payment of offering costs
|
|
|
|
|
(12,500) |
|
|
| |
Net cash provided by financing activities
|
|
|
|
|
717 |
|
|
| |
Net Change in Cash
|
|
|
|
|
— |
|
|
| |
Cash – Beginning
|
|
|
|
|
— |
|
|
| |
Cash – Ending
|
|
|
|
$ |
— |
|
|
| |
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
|
|
| |
Offering costs included in accrued offering costs
|
|
|
|
$ |
5,000 |
|
|
| |
Payment of deferred offering costs by the Sponsor in exchange for the issuance of Class B common stock
|
|
|
|
$ |
25,000 |
|
|
The accompanying notes are an integral part of the financial statements.
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Roman DBDR Tech Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on August 21, 2020. The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”).The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of August 28, 2020, the Company had not yet commenced any operations. All activity for the period August 21, 2020 (inception) through August 28, 2020 relates to the Company’s formation and the proposed initial public offering (the “Proposed Offering”). The Company has selected December 31 as its fiscal year end.
The Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a proposed initial public offering of 22,000,000 units at $10.00 per unit (or 25,300,000 units if the underwriter’s over-allotment option is exercised in full) (the “Units” and, with respect to the shares of Class A common stock included in the Units being offered, the “Public Shares”) which is discussed in Note 3 and the sale of 10,375,000 warrants (or 11,695,000 warrants if the underwriter’s over-allotment option is exercised in full) (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant that will close in a private placement to Roman DBDR Tech Sponsor, LLC (the “Sponsor”) simultaneously with the closing of the Proposed Offering (see Note 4).
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Proposed Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the 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 (as defined below) (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination 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 (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Proposed Offering, management has agreed that $10.20 per Unit sold in the Proposed Offering, including the proceeds from the sale of the Private Placement Warrants, will be held in a trust account (the “Trust Account”) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the Company may seek stockholder approval of a 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 a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued)
If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to more than 15% of the Public Shares without the Company’s prior written consent.
The public stockholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $10.20 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. These shares of Class A common stock will be recorded at a redemption value and classified as temporary equity upon the completion of the Proposed Offering, in accordance with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.”
If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.
The Company’s Sponsor has agreed (a) to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Proposed Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) into the right to receive cash from the Trust Account in connection with a stockholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek stockholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Certificate of Incorporation relating to stockholders’ rights of pre-Business Combination activity and (d) that the Founder Shares shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Proposed Offering if the Company fails to complete its Business Combination.
If the Company is unable to complete a Business Combination within 18 months from the closing of the Proposed Offering (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued)
in the event the Company does not complete a Business Combination within the Combination Period 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 the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than the amount initially deposited into the Trust Account ($10.20).
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.20 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Proposed Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Going Concern Consideration
At August 28, 2020, the Company had no cash and a working capital deficit of $18,217. The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Management plans to address this uncertainty through the Proposed Offering as discussed in Note 3. There is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful or successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it 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
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has 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, the Company, 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 the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of August 28, 2020.
Deferred Offering Costs
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Offering and that will be charged to stockholder’s equity upon the completion of the Proposed Offering. Should the Proposed Offering prove to be unsuccessful, these deferred costs, as well as additional expenses incurred, will be charged to operations.
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of August 28, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The provision for income taxes was deemed to be de minimis for the period from August 21, 2020 (inception) through August 28, 2020.
Net Loss Per Common Share
Net loss per share of common stock is computed by dividing net loss by the weighted average number of common shares outstanding during the period, excluding shares of common stock subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 825,000 shares of Class B common stock that are subject to forfeiture if the over-allotment option is not exercised by the underwriter (see Note 5). At August 28, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
NOTE 3. PROPOSED OFFERING
Pursuant to the Proposed Offering, the Company will offer for sale up to 22,000,000 Units (or 25,300,000 Units if the underwriter’s overallotment option is exercised in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one share of the Company’s Class A common stock, $0.0001 par value, and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (see Note 7).
NOTE 4. PRIVATE PLACEMENT
The Sponsor has agreed to purchase an aggregate of 10,375,000 Private Placement Warrants (or 11,695,000 Private Placement Warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full), each exercisable to purchase one share of Class A common stock at a price of $11.50 per share, in a private placement that will close simultaneously with the closing of the Proposed Offering. The proceeds from the sale of the Private Placement Warrants will be added to the net proceeds from the Proposed Offering held in
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 4. PRIVATE PLACEMENT (continued)
the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On August 26, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration for 7,906,250 shares of Class B common stock (the “Founder Shares”). On October 26, 2020, the Sponsor returned to the Company, at no cost, an aggregate of 1,581,250 Founder Shares which the Company cancelled, resulting in an aggregate of 6,325,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock cancellation. The Founder Shares include an aggregate of up to 825,000 shares subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment is not exercised in full or in part, so that the Sponsor will collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Proposed Offering (assuming the Sponsor does not purchase any Public Shares in the Proposed Offering).
The Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s 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 the Business Combination, the Founder Shares will be released from the lock-up.
Promissory Note — Related Party
On August 26, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Offering pursuant to a promissory note (the “Note”). The Note is non-interest bearing and is payable on the earlier of March 31, 2021 or the completion of the Proposed Offering. As of August 28, 2020, the Company had $13,217 outstanding under the Note.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.00 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Administrative Support Agreement
The Company intends to enter into an agreement, commencing on the effective date of the Proposed Offering, the Company will agree to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination or the Company’s
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 5. RELATED PARTY TRANSACTIONS (continued)
liquidation, the Company will cease paying these monthly fees.
NOTE 6. COMMITMENTS
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Proposed Offering, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriter’s Agreement
The Company will grant the underwriter a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments at the Proposed Offering price, less the underwriting discounts and commissions.
The underwriter will be entitled to a cash underwriting discount of $0.20 per Unit, or $4,400,000 in the aggregate (or $5,060,000 if the underwriters’ over-allotment option is exercised in full), payable upon the closing of the Proposed Offering. In addition, the underwriters will be entitled to a deferred fee of $0.35 per Unit, or $7,700,000 in the aggregate (or $8,855,000 in the aggregate if the underwriters’ over-allotment option is exercised in full). The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Anchor Investments
Certain qualified institutional buyers or institutional accredited investors not affiliated with any member of the Company’s management (the “anchor investors”) have expressed an interest to purchase up to 2,178,000 Units each in the Proposed Offering and the Company has agreed to direct the underwriters to sell to the anchor investors such number of Units. Further, each of the anchor investors has entered into a separate agreement with the Sponsor pursuant to which each such investor has agreed to purchase membership interests in the Sponsor representing an indirect beneficial interest in 250,000 Founder Shares upon the closing of the Proposed Offering for $1.0 million. Neither the membership interests in the Sponsor nor the Founder Shares to be indirectly owned by such investors will be subject to forfeiture or any additional restrictions agreed to by the Sponsor in connection with a Business Combination without their consent. However, the anchor investors will be restricted from selling any units purchased in the Proposed Offering until the earlier of (i) 30 days from the closing of the Proposed Offering and (iii) the separation of the units into shares of Class A common stock and warrants.
There can be no assurance that the anchor investors will acquire any Units in the Proposed Offering, or as to the amount of such Units the anchor investors will retain, if any, prior to or upon the consummation of a Business Combination. In the event that the anchor investors purchase such Units (either in the Proposed Offering or after) and vote in favor of a Business Combination, a smaller portion of affirmative votes from other public shareholders would be required to approve a Business Combination.
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 7. STOCKHOLDER’S EQUITY
Preferred Stock — The Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At August 28, 2020, there were no shares of preferred stock issued or outstanding.
Class A Common Stock— The Company is authorized to issue up to 200,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At August 28, 2020, there were no shares of Class A common stock issued or outstanding.
Class B Common Stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s common stock are entitled to one vote for each share. At August 28, 2020, after giving effect to the surrender of shares described in Note 8, there were 6,325,000 shares of Class B common stock issued and outstanding, of which an aggregate of up to 825,000 shares are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part so that the Sponsor will own 20% of the Company’s issued and outstanding common stock after the Proposed Offering (assuming the Sponsor does not purchase any Public Shares in the Proposed Offering).
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders, except as required by law.
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Proposed Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Proposed Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the closing of the Proposed Offering. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants, to cause such
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 7. STOCKHOLDER’S EQUITY (continued)
registration statement to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the foregoing, if a registration statement covering the Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act of 1933, as amended, or the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis.
Once the Public Warrants become exercisable, the Company may redeem the Public Warrants for redemption:
•
in whole and not in part;
•
at a price of $0.01 per Public 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 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.
If and when the Public Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is unable to effect such registration or qualification.
The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common shares issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.
In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue
ROMAN DBDR TECH ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 7. STOCKHOLDER’S EQUITY (continued)
price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Offering, except that the Private Placement Warrants will and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
NOTE 8. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to September 4, 2020, the date that the financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
On October 26, 2020, the Sponsor returned to the Company, at no cost, an aggregate of 1,581,250 Founder Shares which the Company cancelled, resulting in an aggregate of 6,325,000 Founder Shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock cancellation.
22,000,000 Units
ROMAN DBDR TECH ACQUISITION CORP.
PRELIMINARY PROSPECTUS
, 2020
Sole Book-Running Manager
B. Riley Securities
Until , 2020 (25 days after the date of this prospectus), all dealers that buy, sell or trade our Class A common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions) will be as follows:
| |
Legal fees and expenses
|
|
|
|
$ |
250,000 |
|
|
| |
Accounting fees and expenses
|
|
|
|
|
50,000 |
|
|
| |
SEC/FINRA Expenses
|
|
|
|
|
66,053 |
|
|
| |
Travel and road show
|
|
|
|
|
25,000 |
|
|
| |
Nasdaq listing and filing fees
|
|
|
|
|
75,000 |
|
|
| |
Director and Officer liability insurance premiums(1)
|
|
|
|
|
200,000 |
|
|
| |
Printing and engraving expenses
|
|
|
|
|
35,000 |
|
|
| |
Miscellaneous expenses
|
|
|
|
|
123,947 |
|
|
| |
Total offering expenses
|
|
|
|
$ |
825,000 |
|
|
(1)
This amount represents the approximate amount of annual director and officer liability insurance premiums the registrant anticipates paying following the completion of its initial public offering and until it completes an initial business combination.
Item 14. Indemnification of Directors and officers.
Our amended and restated certificate of incorporation will provide that all of our directors, officers, employees and agents shall be entitled to be indemnified by us to the fullest extent permitted by Section 145 of the DGCL. Section 145 of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification of officers, directors, employees and agents; insurance.
(a)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person’s conduct was unlawful.
(b)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably
incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)
To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
(d)
Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders.
(e)
Expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys’ fees) incurred by former officers and directors or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)
The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office. A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence of the act or omission that is the subject of the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
(g)
A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section.
(h)
For purposes of this section, references to “the corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)
For purposes of this section, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this section.
(j)
The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)
The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any by law, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation’s obligation to advance expenses (including attorneys’ fees).
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of the DGCL, our amended and restated certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted under the DGCL. The effect of this provision of our amended and restated certificate of incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s duty of care.
If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our amended and restated certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our amended and restated certificate of incorporation limiting or eliminating the liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law)
be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the liability of directors on a retroactive basis.
Our amended and restated certificate of incorporation will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense, liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding.
Notwithstanding the foregoing, a person eligible for indemnification pursuant to our amended and restated certificate of incorporation will be indemnified by us in connection with a proceeding initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to indemnification.
The right to indemnification which will be conferred by our amended and restated certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our amended and restated certificate of incorporation or otherwise.
The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our amended and restated certificate of incorporation may have or hereafter acquire under law, our amended and restated certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
Any repeal or amendment of provisions of our amended and restated certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision. Our amended and restated certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other that those specifically covered by our amended and restated certificate of incorporation.
Our bylaws, which we intend to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification rights consistent with those which will be set forth in our amended and restated certificate of incorporation. In addition, our bylaws provide for a right of indemnity to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
We will enter into indemnification agreements with each of our officers and directors a form of which is to be filed as an exhibit to this Registration Statement. These agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the underwriters and the underwriters have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
In August 2020, our sponsor purchased 7,906,250 founder shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2020, our sponsor returned to us, at no cost, an aggregate of 1,581,250 founder shares which we cancelled, resulting in an aggregate of 6,325,000 founder shares outstanding and held by our sponsor (up to 825,000 of which are subject to forfeiture by our sponsor if the underwriters’ over-allotment option is not exercised in full). The number of founder shares issued was determined based on the expectation that the founder shares would represent 20% of the outstanding shares of common stock upon completion of this offering. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
In addition, our sponsor has committed, pursuant to a written agreement, to purchase from us an aggregate of 10,375,000 private placement warrants (or 11,695,000 private placement warrants if the over-allotment option is exercised in full) at a price of $1.00 per warrant ($10,375,000 in the aggregate, or $11,695,000 if the over-allotment option is exercised in full). This purchase will take place on a private placement basis simultaneously with the completion of our initial public offering. This issuance will be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
(a)
Exhibits. The list of exhibits preceding the signature page of this registration statement is incorporated herein by reference.
(b)
Financial Statements. See page F-1 for an index to the financial statements and schedules included in the registration statement.
Item 17. Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
(b)
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
For the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(4)
For the purpose of determining liability of a registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of an undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
EXHIBIT INDEX
*
Previously filed
**
Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burlingame, State of California, on the 4th day of November, 2020.
ROMAN DBDR TECH ACQUISITION CORP.
By:
/s/ Donald G. Basile
Dr. Donald G. Basile
Co-Chief Executive Officer
By:
/s/ Dixon Doll, Jr.
Dixon Doll, Jr.
Co-Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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/s/ Donald G. Basile
Dr. Donald G. Basile
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Co-Chief Executive Officer and
Chairman of the Board
(Co-Principal Executive Officer)
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November 4, 2020
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/s/ Dixon Doll, Jr.
Dixon Doll, Jr.
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Co-Chief Executive Officer
(Co-Principal Executive Officer)
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November 4, 2020
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/s/ John C. Small
John C. Small
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Chief Financial Officer
(Principal Financial Officer)
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November 4, 2020
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Exhibit 1.1
22,000,000
Units1
Roman DBDR Tech Acquisition Corp.
UNDERWRITING AGREEMENT
[●], 2020
B. Riley Securities, Inc.
299 Park Avenue
New York, NY 10171
As Representative of the several Underwriters
Ladies and Gentlemen:
Roman DBDR Tech
Acquisition Corp., a Delaware corporation (the “Company”),
proposes to sell to you and, as applicable, to the several underwriters named in Schedule I hereto (collectively, the
“Underwriters”), for whom you (the “Representative”)
are acting as representative, 22,000,000 units (the “Units”) of
the Company (said Units to be issued and sold by the Company being hereinafter called the “Underwritten
Securities”). The Company also proposes to grant to the Underwriters an option to purchase up to 3,300,000
additional units to cover over-allotments, if any (the “Option
Securities”). The Option Securities and the Underwritten Securities are hereinafter collectively called the
“Securities.” To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representative as used herein shall mean you, as Underwriter, and the term
Underwriter shall mean either the singular or plural as the context requires. Certain capitalized terms used herein and not
otherwise defined are defined in Section 21 hereof.
Each Unit consists
of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Shares”),
and one-half of one redeemable warrant, where each whole warrant entitles the holder to purchase one Share (the “Warrants”).
The Shares and the Warrants included in the Units will not trade separately until the 52nd day following the date of the Prospectus
(unless the Representative informs the Company of its decision to allow earlier separate trading), subject to (a) the Company’s
preparation of an audited balance sheet reflecting the receipt by the Company of the proceeds of the Offering (as defined below),
(b) the filing of such audited balance sheet with the Commission on a Current Report on Form 8-K or similar form by the Company
that includes such audited balance sheet, and (c) the Company having issued a press release announcing when such separate
trading will begin. Each whole Warrant entitles its holder, upon exercise, to purchase one Share at a price of $11.50 per Share
during the period commencing on the later of thirty (30) days after the completion of the Company’s initial Business Combination
(as defined below) or twelve (12) months from the date of the consummation of the Offering and terminating on the five-year anniversary
of the date of the completion of such initial Business Combination or earlier upon redemption or Liquidation (as defined below).
As used herein, the term “Business Combination” (as described more
fully in the Registration Statement, as defined below) shall mean a merger, capital stock exchange, asset acquisition, share purchase,
reorganization or other similar business combination with one or more businesses.
1 Plus
an option to purchase from the Company up to 3,300,000 additional Units to cover over-allotments, if any.
The Company has entered
into an Investment Management Trust Agreement, effective as of [●], 2020, with Continental Stock Transfer & Trust Company
(“CST”), as trustee, in substantially the form filed as an exhibit
to the Registration Statement (the “Trust Agreement”), pursuant to
which certain proceeds from the sale of the Private Placement Warrants (as defined below) and certain proceeds from the Offering
will be deposited and held in a U.S.-based trust account (the “Trust Account”)
for the benefit of the Company, the Underwriters and the holders of the Underwritten Securities and the Option Securities, if and
when issued.
The Company has entered
into a Warrant Agreement, effective as of [●], 2020, with respect to the Warrants and the Private Placement Warrants with
CST, as warrant agent, in substantially the form filed as an exhibit to the Registration Statement (the “Warrant
Agreement”), pursuant to which CST will act as warrant agent in connection with the issuance, registration, transfer,
exchange, redemption, and exercise of the Warrants and the Private Placement Warrants.
The Company has
entered into a Securities Subscription Agreement, dated as of [●], 2020 (the “Founder’s
Purchase Agreement”), with Roman DBDR Tech Sponsor LLC, a Delaware limited liability company (the
“Sponsor”), pursuant to which the Sponsor purchased an aggregate
of 7,906,250 shares of Class B common stock, par value $0.0001 per share, of the Company (including the Shares issuable upon
conversion thereof, where applicable, the “Founder Shares”),
1,581,250 of which were subsequently canceled pursuant to a Cancellation Agreement dated as of October 26, 2020, for an
aggregate purchase price of $25,000. The Founder Shares are substantially similar to the Shares included in the Units except
as described in the Registration Statement, the General Disclosure Package and the Prospectus.
The
Company has entered into a private placement warrants purchase agreement, dated as of [●], 2020 (the “Private
Placement Agreement”), with the Sponsor, pursuant to which the Sponsor agreed to purchase an aggregate of
10,375,000 warrants (or up to 11,695,000 warrants if the Underwriters’ over-allotment option is exercised in
full) for $1.00 per warrant, each Private Placement Warrant entitling the holder, upon exercise, to purchase one Share (the
“Private Placement Warrants”). The Private Placement Warrants are
substantially similar to the Warrants, except as described in the Registration Statement, the General Disclosure Package and
the Prospectus.
The Company has entered
into a Registration and Shareholder Rights Agreement, dated as of [●], 2020, with the Sponsor and the other parties thereto,
in substantially the form filed as an exhibit to the Registration Statement (the “Registration
and Shareholder Rights Agreement”), pursuant to which the Company has granted certain registration rights in respect
of the Founder Shares, the Private Placement Warrants, the warrants that may be issued upon conversion of working capital loans
(which will be substantially similar to the Private Placement Warrants), and the Shares underlying such warrants and Private Placement
Warrants.
The Company has caused
to be duly executed and delivered a Letter Agreement, dated October 15, 2020, by and among the Sponsor and each of the Company’s
officers, directors, and director nominees, in substantially the form filed as an exhibit to the Registration Statement (the “Insider
Letter”).
The Company has entered
into an Administrative Support Agreement, dated as of [●], 2020, with the Sponsor, in substantially the form filed as an
exhibit to the Registration Statement (the “Administrative Support Agreement”),
pursuant to which the Company will pay to the Sponsor an aggregate monthly fee of $10,000 for certain office space, utilities and
secretarial and administrative support from the date of the Prospectus that the Company will file in accordance with Rule 424(b)
until the earlier of (x) the consummation of an initial Business Combination and (y) the Liquidation.
1.
Representations and Warranties. The Company
represents and warrants to, and agrees with, each Underwriter as set forth below in this Section 1.
(a)
The Company has prepared and filed with the Commission the registration statement (File No. 333-249330) on Form S-1 (the
“Registration Statement”), including the related Preliminary Prospectus, for registration under the Act of the
offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution
Time, has become effective. The Company has filed one or more amendments thereto, including the related Preliminary Prospectus,
each of which has previously been furnished to the Representative. The Company will file with the Commission the Prospectus in
accordance with Rule 424(b). As filed, such Prospectus shall contain all information required by the Act and, except to the extent
the Representative shall agree in writing to a modification, shall be in all substantive respects in the form furnished to the
Representative prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Company has advised
you and that has been approved by you, prior to the Execution Time, will be included or made therein. The Company has complied,
to the Commission’s satisfaction, with all requests of the Commission for additional or supplemental information.
(b)
On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing
Date (an “Additional Closing Date”), the Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable requirements of the Act; on the Effective Date and at the Execution
Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein not misleading; any individual Written
Testing-the-Waters Communication (as defined herein), as of its date of use, complied in all material respects with the Act, and,
when considered together with the General Disclosure Package, did not and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date and any Additional Closing Date, the Prospectus (together with any supplement thereto) will not include any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter
through the Representative specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto),
it being understood and agreed that the only such information furnished by any Underwriter consists of the information described
as such in Section 8(b) hereof.
(c)
The General Disclosure Package, as of the Applicable Time, did not and will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Company makes no representations or warranties
as to the information contained in or omitted from the General Disclosure Package in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through the Representative specifically for use therein,
it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8(b) hereof.
(d)
The Company has filed with the Commission a Form 8-A (File No. 001-[●]) providing for the registration under the Exchange
Act of the Securities, which registration is currently effective on the date hereof. The Securities have been authorized for listing,
subject to official notice of issuance and evidence of satisfactory distribution, on The Nasdaq Capital Market, and the Company
knows of no reason or set of facts that is likely to adversely affect such authorization.
(e)
The Commission has not issued any order or, to the Company’s knowledge, threatened to issue any order preventing or
suspending the effectiveness of the Registration Statement or the use of any Preliminary Prospectus, the Prospectus or any part
thereof, and has not instituted or, to the Company’s knowledge, threatened to institute any proceedings with respect to such
an order.
(f)
(i) At the time of filing the Registration Statement and (ii) as of the Execution Time (with such date being used
as the determination date for purposes of this clause (ii)), the Company was and is an Ineligible Issuer (as defined in Rule
405).
(g)
The Company has not prepared or used a Free Writing Prospectus in connection with the Offering (as defined below).
(h)
The Company has been duly incorporated and is validly existing as a company in good standing under the laws of the State
of Delaware with full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct
its business as described in the General Disclosure Package and the Prospectus and to enter into this Agreement, the Trust Agreement,
the Warrant Agreement, the Founder’s Purchase Agreement, the Private Placement Agreement, the Registration and Shareholder
Rights Agreement, the Insider Letter and the Administrative Support Agreement and to carry out the transactions contemplated hereby
and thereby, and except where the failure to be so qualified or be in good standing would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect (as defined herein), is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction that requires such qualification.
(i)
There is no franchise, contract or other document of a character required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required; and the statements in the General
Disclosure Package and the Prospectus under the headings “Principal Stockholders,”
“Certain Relationships and Related Party Transactions,” and “Description
of Securities” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed
therein, are in all material respects accurate and fair summaries of such legal matters, agreements, documents or proceedings.
There are no business relationships or related party transactions involving the Company or any other person required by the Act
to be described in the Registration Statement or Prospectus that have not been described as required.
(j)
The Company’s authorized equity capitalization is as set forth in the Registration Statement, the General Disclosure
Package and the Prospectus.
(k)
All issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and none of such shares were issued in violation of the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by the Company. The offers and sales of the outstanding shares of
capital stock and Warrants were at all relevant times either registered under the Act, the applicable state securities and blue
sky laws or, based in part on the representations and warranties of the purchasers of such shares of capital stock and Warrants,
exempt from such registration requirements. The holders of the outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities arising by operation of law or under the Amended and Restated Certificate
of Incorporation of the Company (as amended from time to time, the “Amended and Restated
Certificate”), or otherwise; and, except as set forth in the Registration Statement, the General Disclosure Package
and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert
any obligations into or exchange any securities for shares or other ownership interests in the Company are outstanding.
(l)
The Securities have been duly authorized and when issued and delivered by the Company against payment for the Securities
by the Underwriters pursuant to this Agreement, will be validly issued.
(m)
The Shares included in the Units have been duly authorized and, when issued and delivered by the Company against payment
for the Securities by the Underwriters pursuant to this Agreement, will be validly issued, fully paid and non-assessable.
(n)
The Warrants included in the Units, when issued and delivered in the manner set forth in the Warrant Agreement against payment
for the Securities by the Underwriters pursuant to this Agreement, will be duly issued and delivered, and will constitute valid
and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time
in effect and by equitable principles of general applicability.
(o)
The Shares issuable upon exercise of the Warrants included in the Units and the Private Placement Warrants have been duly
authorized and reserved for issuance upon exercise thereof and, when issued and delivered by the Company against payment therefor
pursuant to the Warrants and the Private Placement Warrants, as applicable, and the Warrant Agreement, will be validly issued,
fully paid and non-assessable. The holders of such Shares will not be subject to personal liability by reason of being such holders;
such Shares are not and will not be subject to any preemptive or other similar contractual rights granted by the Company; and all
corporate action required to be taken for the authorization, issuance and sale of such Shares (other than such execution (if applicable),
countersignature (if applicable) and delivery at the time of issuance) have been duly and validly taken.
(p)
Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no holders of any
securities of the Company or any rights exercisable for or convertible or exchangeable into securities of the Company have the
right to require the Company to register any such securities of the Company under the Act or to include any such securities in
a registration statement to be filed by the Company.
(q)
No securities of the Company have been sold by the Company or by or on behalf of, or for the benefit of, any person or persons
controlling, controlled by, or under common control with the Company from its inception through and including the date hereof,
except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus.
(r)
Neither the Company nor any of its affiliates has, prior to the date hereof, made any offer or sale of any securities that
are required to be “integrated” pursuant to the Act with the offer and sale of the Underwritten Securities pursuant
to the Registration Statement.
(s)
The Founder Shares are duly authorized, validly issued, fully paid and non-assessable.
(t)
The Private Placement Warrants, when delivered upon the consummation of the Offering, will be duly issued, and will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time
in effect and by equitable principles of general applicability.
(u)
This Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy,
insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles
of general applicability.
(v)
The Trust Agreement has been duly authorized, executed and delivered by the Company, and is a valid and binding agreement
of the Company, enforceable against the Company, in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(w)
The Warrant Agreement has been duly authorized, executed and delivered by the Company and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms except as the enforceability thereof may be limited
by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time in effect and by equitable
principles of general applicability.
(x)
The Founder’s Purchase Agreement has been duly authorized, executed and delivered by the Company and the Sponsor,
and is a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance
with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability.
(y)
The Private Placement Agreement has been duly authorized, executed and delivered by the Company and the Sponsor, and is
a valid and binding agreement of the Company and the Sponsor, enforceable against the Company and the Sponsor in accordance with
its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’
rights generally from time to time in effect and by equitable principles of general applicability.
(z)
The Registration and Shareholder Rights Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, or similar laws affecting creditors’ rights generally from time to time
in effect and by equitable principles of general applicability.
(aa)
The Insider Letter executed by the Company, the Sponsor and each executive officer, director and director nominee of the
Company, has been duly authorized, executed and delivered by the Company, the Sponsor and, to the Company’s knowledge, each
such executive officer, director and director nominee, respectively, and is a valid and binding agreement of the Company, the Sponsor
and, to the Company’s knowledge, each such executive officer, director and director nominee, respectively, enforceable against
the Company, the Sponsor and, to the Company’s knowledge, each such executive officer, director and director nominee of the
Company, respectively, in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency,
or similar laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general
applicability.
(bb)
The Administrative Support Agreement has been duly authorized, executed and delivered by the Company and, assuming the due
authorization, execution, and delivery thereof by the Sponsor, is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, or similar
laws affecting creditors’ rights generally from time to time in effect and by equitable principles of general applicability.
(cc)
The Company is not and, after giving effect to the offering and sale of the Securities and the Private Placement Warrants
and the application of the proceeds thereof as described in the Registration Statement, the General Disclosure Package and the
Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.
(dd)
No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection
with the transactions contemplated herein or in the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement,
the Private Placement Agreement, the Registration and Shareholder Rights Agreement, the Insider Letter or the Administrative Support
Agreement, except for the registration under the Act and the Exchange Act of the Securities and such as may be required under state
securities or blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters
in the manner contemplated herein and in the General Disclosure Package and the Prospectus.
(ee)
The Company is not in violation or default of (i) any provision of the Amended and Restated Certificate, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any (x) statute, law, rule,
regulation, or (y) judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company; except in the case of clauses (ii) and (iii) above for any such conflict,
breach or violation that would not, individually or in the aggregate, be reasonably expected to have a material adverse effect
on the financial condition, prospects, earnings, business or properties of the Company, taken as a whole, whether or not arising
from transactions in the ordinary course of business (a “Material Adverse Effect”).
(ff)
Neither the issue and sale of the Securities nor the consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof or of the Trust Agreement, the Warrant Agreement, the Founder’s Purchase Agreement, the
Private Placement Agreement, the Registration and Shareholder Rights Agreement, the Insider Letter or the Administrative Support
Agreement will conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, (i) the Amended and Restated Certificate, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which
the Company is a party or bound or to which the Company’s property is subject, or (iii) any statute, law, rule, or regulation,
judgment, order or decree applicable to the Company of any court, regulatory body, administrative agency, governmental body, arbitrator
or other authority having jurisdiction over the Company or any of its respective properties.
(gg)
The historical financial statements, including the notes thereto and the supporting schedules, if any, of the Company included
in the General Disclosure Package, the Prospectus and the Registration Statement present fairly the financial condition, results
of operations and cash flows of the Company as of the dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as otherwise noted therein). The summary financial data set forth under
the caption “Summary Financial Data” in the General Disclosure Package,
Prospectus and Registration Statement fairly present, on the basis stated in the General Disclosure Package, Prospectus and Registration
Statement, the information included therein. The Company is not party to any off-balance sheet transactions, arrangements, obligations
(including contingent obligations), or other relationships with unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial condition, changes in financial condition, results of operations, liquidity,
capital expenditures, capital resources, or significant components of revenues or expenses. The statistical, industry-related and
market-related data included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived
from sources that the Company reasonably and in good faith believes are reliable and accurate, and such data agree with the sources
from which they are derived.
(hh)
No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or the Sponsor, or, to the Company’s knowledge, any of its executive officers, directors or director nominees,
or the property of the Company is pending or, to the knowledge of the Company, threatened that (i) could reasonably be expected
to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated
hereby by the Company or (ii) could reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated
in the General Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(ii)
The Company owns or leases all such properties as are necessary to the conduct of its operations as presently conducted.
(jj)
Marcum LLP (“Marcum”), who has certified certain financial statements
of the Company and delivered its report with respect to the audited financial statements and schedules included in the Registration
Statement, General Disclosure Package and the Prospectus, is a registered public accounting firm that is independent with respect
to the Company within the meaning of the Act and the Exchange Act and the applicable published rules and regulations thereunder.
(kk)
The Company maintains effective “disclosure controls and procedures” (as defined under Rule 13a-15(e) under
the Exchange Act) to the extent required by such rule.
(ll)
Solely to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated by the Commission
thereunder (the “Sarbanes-Oxley Act”) have been applicable to the Company,
there is and has been no failure on the part of the Company to comply in all material respects with the applicable provisions of
the Sarbanes-Oxley Act.
(mm)
There is and has been no failure on the part of the Company or, to the Company’s knowledge, any of the Company’s
officers or directors, in their capacities as such, to comply with (as and when applicable), and immediately following the Effective
Date the Company will be in compliance with, Nasdaq Marketplace Rule 5605. Further, there is and has been no failure on the part
of the Company or, to the Company’s knowledge, any of the Company’s officers or directors, in their capacities as such,
to comply with (as and when applicable), and immediately following the Effective Date the Company will be in compliance with, the
phase-in requirements and all other provisions of the Nasdaq Stock Market LLC corporate governance requirements set forth in the
Nasdaq Marketplace Rules.
(nn)
There are no transfer, stamp, issue, registration, documentary or other similar taxes, duties, fees or charges under U.S.
federal law or the laws of any state, or any political subdivision thereof, or under the laws of any non U.S. jurisdiction, required
to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of the Securities.
(oo)
The Company has filed all tax returns (including U.S. federal, state and non U.S.) that are required to be filed by it or
has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect)
through the date hereof and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently
being contested in good faith and for which adequate reserves required by generally accepted accounting principles have been created
with respect thereto or as would not have a Material Adverse Effect, except as set forth in or contemplated in the Registration
Statement, General Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(pp)
The Company possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state
or foreign regulatory authorities necessary to conduct its business, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such license, certificate, authorization or permit that, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as set forth in or contemplated
in the Registration Statement, the General Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(qq)
None of the Company, the Sponsor or to the Company’s knowledge, any director, director nominee, officer, agent, employee,
affiliate or other person associated with or acting on behalf of the Company: (i) has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to political activity: (ii) has made any direct or indirect
unlawful contribution or payment to any official of, or candidate for, or any employee of, any federal, state or foreign office
from corporate funds; (iii) has made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment;
or (iv) is aware of or has taken any action, directly or indirectly, that could result in a violation by the Company, the Sponsor
or such other persons of the OECD Convention on Bribery of Foreign Public Officials in International Business Transactions, the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”).
The Company, the Sponsor and, to the Company’s knowledge, its directors, director nominees, officers, agents, employees and
affiliates have each conducted the business of the Company and their own businesses on behalf of the Company in compliance with
the FCPA and any applicable similar anti-corruption and anti-bribery law or regulation and have instituted and maintain policies
and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(rr)
The operations of the Company are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of jurisdictions where the Company conducts
business, the applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(ss)
None of the Company, the Sponsor or, to the Company’s knowledge, any director, director nominee, officer, agent or
affiliate of the Company is currently subject to any sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”) or any similar sanctions imposed by any
other body, governmental or other, to which any of such persons is subject (collectively, “other
economic sanctions”); and the Company will not directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the
purpose of financing the activities of any person currently subject to any sanctions administered by OFAC or other economic sanctions.
(tt)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (i) does
not have any material lending or other relationship with any bank or lending affiliate of any of the Underwriters and (ii) does
not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate
of any of the Underwriters.
(uu)
All information contained in the questionnaires (the “Questionnaires”)
completed by the Sponsor and, to the knowledge of the Company, the Company’s officers, directors and director nominees and
provided to the Underwriters, is true and correct in all material respects and the Company has not become aware of any information
that would cause the information disclosed in the Questionnaires completed by the Sponsor or the Company’s officers, directors
and director nominees to become inaccurate and incorrect in any material respect that has not otherwise been disclosed to the Representative
by the Company.
(vv)
Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, prior to the date
hereof, the Company has not selected any specific initial Business Combination target and has not, nor, has anyone on its behalf,
initiated any substantive discussions, directly or indirectly, with any initial Business Combination target.
(ww)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, there are no claims,
payments, arrangements, contracts, agreements or understandings relating to the payment of a brokerage commission or finder’s,
consulting, origination or similar fee by the Company or the Sponsor with respect to the sale of the Securities hereunder or any
other arrangements, agreements or understandings of the Company, the Sponsor or any officer or director of the Company, or their
respective affiliates, that may affect the Underwriters’ compensation, as determined by the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
(xx)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not
made any direct or indirect payments (in cash or securities) that would qualify as “underwriting compensation” as defined
in Rule 5110(j)(22) of FINRA’s Conduct Rules ): (i) to any person, as a finder’s fee, consulting fee or otherwise,
in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital
to the Company; (ii) to any person that, to the Company’s knowledge, has been accepted by FINRA as a member of FINRA
(a “Member”); or (iii) to any person or entity that, to the Company’s
knowledge, has any direct or indirect affiliation or association with any Member, within the FINRA Review Period, as defined in
Rule 5110(j)(20) of FINRA’s Conduct Rules, other than payments to the Underwriters pursuant to this Agreement.
(yy)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, during the period
beginning 180 days prior to the initial filing of the Registration Statement and ending on the Effective Date, no Member and/or
any person associated or affiliated with a Member has provided any investment banking, financial advisory and/or consulting services
to the Company.
(zz)
Except as disclosed in the FINRA Questionnaires provided to the Representative, to the Company’s knowledge, no officer,
director, or beneficial owner of any class of the Company’s securities (whether debt or equity, registered or unregistered,
regardless of the time acquired or the source from which derived) (any such individual or entity, a “Company
Affiliate”) is a Member or a person associated or affiliated with a Member.
(aaa)
Except as disclosed in the FINRA Questionnaires provided to the Representative, to the Company’s knowledge, no Company
Affiliate is an owner of shares or other securities of any Member (other than securities purchased on the open market).
(bbb)
[Reserved]
(ccc)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, no proceeds from the
sale of the Underwritten Securities (excluding underwriting compensation as disclosed in the Registration Statement, General Disclosure
Package and the Prospectus) will be paid by the Company to any Member, or any persons associated or affiliated with a Member.
(ddd)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has not
issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a “participating
member,” as defined in Rule 5110(j)(15) of FINRA’s Conduct Rules, in the Offering within the FINRA Review Period, as
defined in Rule 5110(j)(20) of FINRA’s Conduct Rules.
(eee)
Except as described in the Registration Statement, the General Disclosure Package and the Prospectus, no person to whom
securities of the Company have been privately issued within the FINRA Review Period, as defined in Rule 5110(j)(20) of FINRA’s
Conduct Rules has, to the Company’s knowledge, any relationship or affiliation or association with any Member intending to
participate in the Offering.
(fff)
To the Company’s knowledge, no Member intending to participate in the Offering has a conflict of interest with the
Company. For this purpose, a “conflict of interest” means, if at the
time of the Member’s participation in the Offering, any of the following applies: (A) the securities are to be issued by
the Member; (B) the Company controls, is controlled by or is under common control with the Member or the Member’s associated
persons; (C) at least 5% of the net offering proceeds, not including underwriting compensation, are intended to be: (i) used to
reduce or retire the balance of a loan or credit facility extended by the Member, its affiliates and its associated persons, in
the aggregate; or (ii) otherwise directed to the Member, its affiliates and associated persons, in the aggregate; or (D) as a result
of the Offering and any transactions contemplated at the time of the Offering: (i) the Member will be an affiliate of the Company;
(ii) the Member will become publicly owned; or (iii) the Company will become a Member or form a broker-dealer subsidiary. As used
herein, the term “Member intending to participate in the Offering”
includes any associated person of a Member that is participating in the Offering, any members of such associated person’s
immediate family, and any affiliate of a Member that is participating in the Offering.
(ggg)
The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(hhh)
The Company does not own an interest in any corporation, partnership, limited liability company, joint venture, trust or
other entity.
(iii)
No relationship, direct or indirect, exists between or among any of the Company or any affiliate of the Company, on the
one hand, and any director, director nominee, officer, stockholder, special advisor, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the Act or the Exchange Act to be described in the Registration
Statement, General Disclosure Package or the Prospectus that is not described as required. There are no outstanding loans, advances
(except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company
to or for the benefit of any of the officers, directors or director nominees of the Company or any of their respective family members,
except as disclosed in the Registration Statement, General Disclosure Package and the Prospectus. The Company has not extended
or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to
or for any director or officer of the Company.
(jjj)
The Company has not offered, or caused the Underwriters to offer, the Underwritten Securities to any person or entity with
the intention of unlawfully influencing: (a) a customer or supplier of the Company or any affiliate of the Company to
alter the customer’s or supplier’s level or type of business with the Company or such affiliate or (b) a journalist
or publication to write or publish favorable information about the Company or any such affiliate.
(kkk)
Upon delivery and payment for the Units on the Closing Date, the Company will not be subject to Rule 419 under the Act and
none of the Company’s outstanding securities will be deemed to be a “penny stock” as defined in Rule 3a51-1 under
the Exchange Act.
(lll)
From the time of the initial confidential submission of the Registration Statement to the Commission through the Execution
Time, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Act (an “Emerging
Growth Company”).
(mmm)
As of the time of filing of the Registration Statement, the Company was a “smaller reporting company,” as defined
in Rule 12b-2 of the Exchange Act.
(nnn)
The Company (i) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications
with the consent of the Representative with entities that are qualified institutional buyers within the meaning of Rule 144A
under the Act or institutions that are accredited investors within the meaning of Rule 501 under the Act and (ii) has not authorized
anyone other than the Representative to engage in Testing-the-Waters Communications. The Company reconfirms that the Representative
has been authorized to act on its behalf in undertaking Testing-the-Waters Communications. The Company has not distributed any
Written Testing-the-Waters Communications other than those listed on Schedule III hereto or other Written Testing-the-Waters Communications
that contain substantially the same information, of which the Representative has been made aware. “Testing-the-Waters
Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d)
of the Act, and “Written Testing-the-Waters Communication” means any
Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Act.
Any certificate signed
by any officer of the Company and delivered to the Representative or counsel for the Underwriters in connection with the Offering
shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2.
Purchase and Sale.
(a)
Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at a
purchase price of $9.80 per Unit, the amount of the Underwritten Securities set forth opposite such Underwriter’s name in
Schedule I hereto.
(b) Subject
to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby
grants an option to the several Underwriters to purchase, severally and not jointly, up to 3,300,000 Option Securities at the
same purchase price per Unit as the Underwriters shall pay for the Underwritten Securities. Said option may be exercised only
to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in
whole or in part at any time on or before the 45th day after the date of the Prospectus upon written notice by the
Representative to the Company setting forth the number of Option Securities as to which the several Underwriters are
exercising the option and the Additional Closing Date. The number of Option Securities to be purchased by each Underwriter
shall be based upon the same percentage of the total number of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as the
Representative in its absolute discretion shall make to eliminate any fractional shares.
(c)
In addition to the discount from the public offering price represented by the purchase price set forth in the first sentence
of Section 2(a) of this Agreement, the Company hereby agrees to pay to the Underwriters a deferred discount of $0.35 per Unit (for
both Underwritten Securities and Option Securities) purchased hereunder (the “Deferred
Discount”). The Deferred Discount will be paid directly to the Representative, on behalf of the Underwriters,
by the trustee from amounts on deposit in the Trust Account by wire transfer payable in same-day funds if and when the Company
consummates its initial Business Combination. The Underwriters hereby agree that if no Business Combination is consummated within
the time period provided in the Trust Agreement and the funds held under the Trust Agreement are distributed to the holders of
the Shares included in the Securities sold pursuant to this Agreement (the “Public Stockholders”),
(i) the Underwriters will forfeit any rights or claims to the Deferred Discount and (ii) the trustee under the Trust Agreement
is authorized to distribute the Deferred Discount to the Public Stockholders on a pro rata basis.
3.
Delivery and Payment.
(a)
Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section
2 hereof shall have been exercised on or before the second Business Day prior to the Closing Date) shall be made at 10:00 a.m.,
New York City time, on [●], 2020, or at such time on such later date not more than two Business Days after the foregoing
date as the Representative shall designate, which date and time may be postponed by agreement between the Representative and the
Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the
“Closing Date”). Delivery of the Securities shall be made to the Representative
for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representative
of the purchase price thereof by wire transfer payable in same-day funds to an account specified by the Company and to the Trust
Account as described below in this Section 3. Delivery of the Underwritten Securities and the Option Securities shall be made
through the facilities of The Depository Trust Company (“DTC”) unless
the Representative shall otherwise instruct.
(b) Payment
for the Underwritten Securities shall be made as follows: $215,600,000 of the proceeds received by the Company for the
Underwritten Securities (including $7,700,000 of Deferred Discount) shall be deposited in the Trust Account pursuant to the
terms of the Trust Agreement along with such portion of the gross proceeds of the Private Placement Warrants (the
“Private Placement Portion”) in order for the Trust Account to
equal the product of (i) the number of Units sold and (ii) $10.20, upon delivery to the Representative of the
Underwritten Securities through the facilities of DTC or, if the Representative has otherwise instructed, upon delivery to
the Representative of certificates (in form and substance satisfactory to the Representative) representing the Underwritten
Securities, in each case for the account of the Underwriters. Underwritten Securities shall be registered in such name or
names and in such authorized denominations as the Representative may request in writing at least two Business Days prior to
the Closing Date. If delivery is not made through the facilities of DTC, the Company will permit the Representative to
examine and package the Underwritten Securities for delivery, at least one Business Day prior to the Closing Date. The
Company shall not be obligated to sell or deliver the Underwritten Securities except upon tender of payment by the
Representative for all the Underwritten Securities.
(c)
Payment for the Option Securities shall be made as follows: $9.80 per Option Security (including $0.35 per Option Security
of Deferred Discount) shall be deposited in the Trust Account pursuant to the terms of the Trust Agreement upon delivery to the
Representative of the Option Securities through the facilities of DTC or, if the Representative has otherwise instructed, upon
delivery to the Representative of certificates (in form and substance satisfactory to the Representative) representing the Option
Securities (or through the facilities of DTC) for the account of the Underwriters. The Option Securities shall be registered in
such name or names and in such authorized denominations as the Representative may request in writing at least two Business Days
prior to the Closing Date. If delivery is not made through the facilities of DTC, the Company will permit the Representative to
examine and package the Option Securities for delivery, at least one Business Day prior to the Closing Date. The Company shall
not be obligated to sell or deliver the Option Securities except upon tender of payment by the Representative for all the Option
Securities.
(d)
If the option provided for in Section 2 hereof is exercised after the second Business Day prior to the Closing Date, the
Company will deliver the Option Securities (at the expense of the Company) to the Representative, in the same manner as the delivery
of the Underwritten Securities, on the date specified by the Representative (which shall be at least two Business Days after exercise
of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the
Representative of the purchase price thereof to the Trust Account as described above in Section 3(b). If settlement for the Option
Securities occurs after the Closing Date, the Company will deliver to the Representative on the Additional Closing Date for the
Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4.
Offering by Underwriters. It is understood
that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus (the “Offering”).
5.
Agreements. The Company agrees with the
several Underwriters that:
(a)
Prior to the termination of the Offering, the Company will not file any amendment of the Registration Statement or supplement
to the Prospectus or any Rule 462(b) Registration Statement unless the Company has furnished the Representative a copy for
its review prior to filing and will not file any such proposed amendment, supplement or Rule 462(b) Registration Statement
to which the Representative reasonably objects. The Company will cause the Prospectus, properly completed, and any supplement thereto
to be filed in a form approved by the Representative with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory to the Representative of such timely filing. The Company
will promptly advise the Representative (i) when the Prospectus, and any supplement thereto, shall have been filed (if required)
with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the
Commission, (ii) when, prior to termination of the Offering, any amendment to the Registration Statement shall have been filed
or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, any Rule
462(b) Registration Statement or any Written Testing-the-Waters Communication or for any supplement to the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement or any order preventing or suspending the use of the Preliminary Prospectus, the Prospectus or any Written Testing-the-Waters
Communication, or of the institution of any proceedings for that purpose or pursuant to Section 8A of the Act and (v) of the
receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent
the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement
and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or
relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new
registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon
as practicable.
(b)
If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b), any event or development occurs as a
result of which the Preliminary Prospectus would include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein in the light of the circumstances under which they were made at such time
not misleading, the Company will (i) notify promptly the Representative so that any use of the Preliminary Prospectus may cease
until it is amended or supplemented; (ii) amend or supplement the Preliminary Prospectus to correct such statement or omission
in a form reasonably acceptable to the Representative; and (iii) supply any amendment or supplement to the Representative in such
quantities as it may reasonably request.
(c)
If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 172), any event or development occurs as a result of which the Prospectus
as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements therein in the light of the circumstances under which they were made at such time not misleading, or if
it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder,
the Company promptly will (i) notify the Representative of any such event; (ii) prepare and file with the Commission, subject to
the second sentence of paragraph (a) of this Section 5, an amendment or supplement that will correct such statement or omission
or effect such compliance; and (iii) supply any supplemented Prospectus to the Representative in such quantities as it may
reasonably request.
(d)
As soon as practicable, the Company will make generally available to its security holders and to the Representative an earnings
statement or statements of the Company and its subsidiaries that will satisfy the provisions of Section 11(a) of the Act and Rule
158.
(e)
The Company will not make any offer relating to the Units that constitutes or would constitute a Free Writing Prospectus
or a portion thereof required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the Act.
(f)
The Company will furnish to the Representative and counsel for the Underwriters, upon request and without charge, a copy
of the Registration Statement (with exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may
be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies
of each Preliminary Prospectus, the Prospectus and any supplement thereto as the Representative may reasonably request. The Company
will pay the expenses of printing or other production of all documents relating to the Offering.
(g)
The Company will arrange, if necessary, for the qualification of the Securities for sale under the laws of such jurisdictions
as the Representative may designate and will maintain such qualifications in effect so long as required for the distribution of
the Securities; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where
it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising
out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.
(h)
The Company will not, without the prior written consent of the Representative, (x) offer, sell, contract to sell, pledge
or otherwise dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate
of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange
Act with respect to, any other Units, shares of capital stock, Warrants or any securities convertible into, or exercisable, or
exchangeable for, shares of capital stock or publicly announce an intention to effect any such transaction during the period commencing
on the date hereof and ending 180 days after the date of this Agreement or (y) release the Sponsor or any officer, director
or director nominee of the Company from the 180-day lock-up contained in the Insider Letter; provided, however, that
the Company may (1) issue and sell the Private Placement Warrants, (2) issue and sell the Option Securities on exercise of
the option provided for in Section 2 hereof, (3) issue securities in connection with the initial Business Combination, (4) issue
up to 1,500,000 additional warrants with the terms identical to the Private Placement Warrants, at a price of $1.00 per warrant,
for the repayment of loans, which may be made by the Sponsor or an affiliate of the Sponsor or any of the officers or directors
of the Company, to finance transaction costs in connection with the initial Business Combination and (5) register with the Commission
pursuant to the Registration and Shareholder Rights Agreement, in accordance with the terms of the Registration and Shareholder
Rights Agreement, the resale of the securities covered thereby.
(i)
The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.
(j)
The Company agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary
Prospectus, the Prospectus and all amendments or supplements to any of them, as may, in each case, be reasonably requested for
use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery
of certificates, if any, for the Securities, including any stamp or transfer taxes in connection with the original issuance and
sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement and all other agreements or documents
printed (or reproduced) and delivered in connection with the Offering; (v) the registration of the Securities under the Exchange
Act and the listing of the Securities on The Nasdaq Capital Market; (vi) the printing and delivery of a preliminary blue sky memorandum,
any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states
and any filings required to be made with FINRA (including filing fees and the reasonable and documented FINRA-related fees and
expenses of counsel for the Underwriters not to exceed $15,000); (vii) all fees, expenses and disbursements relating to investigations
and background checks of the Company’s officers and directors (which fees and disbursements shall not exceed $3,500 per person);
(viii) the transportation and other expenses incurred by or on behalf of the Company (and not the Underwriters) in connection with
presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s accountants and the
fees and expenses of counsel (including local and special counsel) for the Company; and (x) all other costs and expenses incident
to the performance by the Company of its obligations hereunder.
(k)
For a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business
Combination or until such earlier time at which the Liquidation occurs, the Company will use its best efforts to maintain the registration
of the Units, the Shares and the Warrants under the provisions of the Exchange Act, except after giving effect to a going private
transaction or acquisition of the Company after the completion of a Business Combination. The Company will not deregister the Units,
the Shares or the Warrants under the Exchange Act (except in connection with a going private transaction or acquisition of the
Company after the completion of a Business Combination) without the prior written consent of the Representative.
(l)
The Company shall, on the date hereof, retain its independent registered public accounting firm to audit the balance sheet
of the Company as of the Closing Date (the “Audited Balance Sheet”)
reflecting the receipt by the Company of the proceeds of the Offering on the Closing Date. As soon as the Audited Balance Sheet
becomes available, the Company shall promptly, but not later than four Business Days after the Closing Date, file a Current Report
on Form 8-K with the Commission, which report shall contain the Audited Balance Sheet. Additionally, if not disclosed on such Current
Report on Form 8-K, upon the Company’s receipt of the proceeds from the exercise of all or any portion of the option provided
for in Section 2 hereof, the Company shall promptly, but not later than four Business Days after the receipt of such proceeds,
file a Current Report on Form 8-K with the Commission, which report shall disclose the Company’s sale of the Option Securities
and its receipt of the proceeds therefrom.
(m)
For a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business
Combination or until such earlier time at which the Liquidation occurs or the Shares and the Warrants cease to be publicly traded,
the Company, at its expense, shall cause its regularly engaged independent registered public accounting firm to review (but not
audit) the Company’s financial statements for each of the first three fiscal quarters prior to the announcement of quarterly
financial information, the filing of the Company’s Quarterly Report on Form 10-Q and the mailing, if any, of quarterly financial
information to stockholders.
(n)
For a period commencing on the Effective Date and ending five (5) years from the date of the consummation of the Business
Combination or until such earlier time at which the Liquidation occurs, the Company shall, to the extent such information or documents
are not otherwise publicly available, upon written request from the Representative, furnish to the Representative copies of such
financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of
any class of securities, and, to the extent such information or documents are not otherwise publicly available, upon written request
from the Representative, promptly furnish to the Representative: (i) a copy of such registration statements, financial statements
and periodic and special reports as the Company shall be required to file with the Commission and from time to time furnishes generally
to holders of any such class of its securities; and (ii) such additional documents and information with respect to the Company
and the affairs of any future subsidiaries of the Company as the Representative may from time to time reasonably request, all subject
to the execution of a satisfactory confidentiality agreement. Any registration statements, financial statements, periodic and special
reports or other additional documents referred to in the preceding sentence filed on the Commission’s EDGAR website will
be considered furnished for the purposes of this section.
(o)
For a period commencing on the Effective Date and ending at least five (5) years from the date of the consummation of the
Business Combination or until such earlier time at which the Liquidation occurs or the Shares and the Warrants cease to be publicly
traded, the Company shall retain a transfer and warrant agent.
(p)
In no event will the amounts payable by the Company to the Sponsor for office space, utilities and secretarial and administrative
support exceed $10,000 per month in the aggregate from the date hereof until the earlier of the date of the consummation of the
Business Combination or the Liquidation.
(q)
The Company will not consummate a Business Combination with any entity that is affiliated with the Sponsor or any of the
Company’s officers or directors unless the Company, or a committee of its independent directors, obtains an opinion from
an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such Business Combination
is fair to the Company from a financial point of view. The Company shall not pay the Sponsor or its affiliates or any of the Company’s
officers, directors or any of their respective affiliates any fees or compensation for services rendered to the Company prior to,
or in connection with, the consummation of a Business Combination; provided however, that such officers, directors and affiliates
(i) may receive reimbursement for out-of-pocket expenses incurred by them in connection with activities on the Company’s
behalf to the extent that such expenses do not exceed the amount of available proceeds not deposited in the Trust Account; (ii)
may be repaid loans as described in the Registration Statement, the General Disclosure Package and the Prospectus; and (iii) may
be paid $10,000 per month for office space, utilities, and secretarial and administrative support pursuant to the Administrative
Support Agreement between the Company and the Sponsor.
(r)
The Company will apply the net proceeds from the Offering and the sale of the Private Placement Warrants received by it
in a manner consistent in all material respects with the applications described under the caption “Use of Proceeds”
in the General Disclosure Package and the Prospectus.
(s)
For a period of 90 days following the Effective Date, in the event any person or entity (regardless of any FINRA affiliation
or association) is engaged to assist the Company in its search for a merger candidate or to provide any other merger and acquisition
services, or has provided or will provide any investment banking, financial, advisory and/or consulting services to the Company,
the Company agrees that it shall promptly provide to FINRA (via a FINRA submission), the Representative and its counsel a notification
prior to entering into the agreement or transaction relating to a potential Business Combination: (i) the identity of the person
or entity providing any such services; (ii) complete details of all such services and copies of all agreements governing such services
prior to entering into the agreement or transaction; and (iii) justification as to why the value received by any person or entity
for such services is not underwriting compensation for the Offering. The Company also agrees that proper disclosure of such arrangement
or potential arrangement will be made in the tender offer materials or proxy statement, as applicable, which the Company may file
in connection with the Business Combination for purposes of offering redemption of shares held by its stockholders or for soliciting
stockholder approval, as applicable.
(t)
The Company shall advise FINRA, the Representative and its counsel if it is aware that any 10% or greater stockholders of
the Company becomes an affiliate or associated person of a Member participating in the distribution of the Securities.
(u)
The Company shall cause the proceeds of the Offering and the sale of the Private Placement Warrants to be held in the Trust
Account to be invested only in United States government treasury bills with a maturity of 185 days or less or in money market funds
meeting certain conditions under Rule 2a-7 under the Investment Company Act as set forth in the Trust Agreement and disclosed in
the General Disclosure Package and the Prospectus. The Company will otherwise conduct its business in a manner so that it will
not become subject to registration under the Investment Company Act. Furthermore, once the Company consummates a Business Combination,
it will not be required to register as an investment company under the Investment Company Act.
(v)
During the period prior to the Company’s initial Business Combination or Liquidation, the Company may instruct the
trustee under the Trust Agreement to release: (i) interest from the Trust Account in the amounts necessary to pay taxes and
(ii) the per-share amount in the Trust Account (including any interest income earned on the amounts held in the Trust Account (which
interest shall be net of taxes payable)) to Public Stockholders who properly redeem their Public Shares in connection with a vote
to approve an amendment to the Amended and Restated Certificate to modify the substance or timing of the Company’s obligation
to redeem 100% of the Public Shares if the Company does not consummate an initial Business Combination within the time period prescribed
in the Amended and Restated Certificate. Otherwise, all funds held in the Trust Account (including any interest income earned on
the amounts held in the Trust Account (which interest shall be net of taxes payable)) will remain in the Trust Account until the
earlier of the consummation of the Company’s initial Business Combination or the Liquidation; provided, however,
that in the event of the Liquidation, up to $100,000 of interest income may be released to the Company if the proceeds of the Offering
held by the Company outside of the Trust Account are not sufficient to cover the costs and expenses associated with implementing
the Company’s plan of dissolution.
(w)
The Company agrees not amend, modify or otherwise change the Warrant Agreement, the Trust Agreement, the Private Placement
Agreement, the Registration and Shareholder Rights Agreement and the Insider Letter without the prior written consent of the Representative
which will not be unreasonably withheld. Furthermore, the Trust Agreement shall provide that the trustee is required to obtain
a joint written instruction signed by both the Company and the Representative with respect to the transfer of the funds held in
the Trust Account from the Trust Account, prior to commencing any liquidation of the assets of the Trust Account in connection
with the consummation of any Business Combination, and such provision of the Trust Agreement shall not be permitted to be amended
without the prior written consent of the Representative.
(x)
The Company will reserve and keep available that maximum number of its authorized but unissued securities that are issuable
upon exercise of any of the Warrants and Private Placement Warrants outstanding from time to time and the conversion of the Founder
Shares.
(y)
Prior to the earlier of the consummation of a Business Combination and the Liquidation, the Company shall not issue (other
than in replacement for lost, stolen or mutilated certificates) any Shares, Warrants or any options or other securities convertible
into Shares, or any preferred shares, in each case, that participate in any manner in the Trust Account or that vote as a class
with the Shares on a Business Combination.
(z)
The Company shall cause its audit committee to review on a quarterly basis all payments made to the Sponsor, any of the
Company’s officers or directors, or to the Company’s or any of such other persons’ respective affiliates.
(aa)
The Company agrees that it will use commercially reasonable efforts to prevent the Company from becoming subject to Rule
419 under the Act prior to the consummation of any Business Combination, including, but not limited to, using its best efforts
to prevent any of the Company’s outstanding securities from being deemed to be a “penny stock” as defined in
Rule 3a-51-1 under the Exchange Act during such period.
(bb)
To the extent required by Rule 13a-15(e) under the Exchange Act, the Company will maintain “disclosure controls and
procedures” (as defined under Rule 13a-15(e) under the Exchange Act) and a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization,
(ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and
to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(cc)
The Company will use commercially reasonable efforts to effect and, for a period commencing on the Effective Date and ending
at least five (5) years from the date of the consummation of the initial Business Combination or until such earlier time at which
the Liquidation occurs or the Shares and Warrants cease to be publicly traded, maintain the listing of the Units, the Shares and
the Warrants on The Nasdaq Capital Market (or another national securities exchange).
(dd)
As soon as legally required to do so, the Company and its directors and officers, in their capacities as such, shall take
all actions necessary to comply with any applicable provisions of the Sarbanes-Oxley Act, including Section 402 related to loans
and Sections 302 and 906 related to certifications, and to comply with The Nasdaq Marketplace Rules.
(ee)
The Company shall not take any action or omit to take any action that would cause the Company to be in breach or violation
of its Amended and Restated Certificate.
(ff)
The Company will seek to have all vendors, service providers (other than independent accountants), prospective target businesses,
lenders or other entities with which it does business enter into agreements waiving any right, title, interest or claim of any
kind in or to any monies held in the Trust Account for the benefit of the Public Stockholders. The Company may forego obtaining
such waivers only if the Company shall have received the approval of one of its Chief Executive Officers.
(gg)
The Company may consummate the initial Business Combination and conduct redemptions of Shares for cash upon consummation
of such Business Combination without a stockholder vote pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, including
the filing of tender offer documents with the Commission. Such tender offer documents will contain substantially the same financial
and other information about the initial Business Combination and the redemption rights as is required under the Commission’s
proxy rules and will provide each stockholder of the Company with the opportunity prior to the consummation of the initial Business
Combination to redeem the Shares held by such stockholder for an amount of cash equal to (A) the aggregate amount then on deposit
in the Trust Account as of two Business Days prior to the consummation of the initial Business Combination, representing (x) the
proceeds held in the Trust Account from the Offering and the sale of the Private Placement Warrants and (y) any interest income
earned on the funds held in the Trust Account (which interest shall be net of taxes payable), divided by (B) the total number of
Shares sold as part of the Units in the Offering (the “Public Shares”)
then outstanding. Alternatively, the Company will submit such Business Combination to the Company’s stockholders for their
approval (“Business Combination Vote”). With respect to the initial
Business Combination Vote, if any, the Sponsor and the Company’s officers and directors have agreed to vote all of their
Founder Shares and any other Shares purchased during or after the Offering in favor of the Company’s initial Business Combination.
If the Company seeks stockholder approval of the initial Business Combination, the Company will offer to each Public Stockholder
holding Shares the right to have its shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules of the
Commission at a per share redemption price (the “Redemption Price”)
equal to (I) the aggregate amount then on deposit in the Trust Account as of two Business Days prior to the consummation of the
initial Business Combination representing (1) the proceeds held in the Trust Account from the Offering and the sale of the Private
Placement Warrants and (2) any interest income earned on the funds held in the Trust Account (which interest shall be net of any
taxes payable), divided by (II) the total number of Public Shares then outstanding. If the Company seeks stockholder approval of
the initial Business Combination, the Company may proceed with such Business Combination only if a majority of the outstanding
Shares voted by the stockholders at a duly held stockholder meeting are voted to approve such Business Combination. If, after seeking
and receiving such stockholder approval, the Company elects to so proceed, it will redeem Public Shares, at the Redemption Price,
from those Public Stockholders who affirmatively requested such redemption. Only Public Stockholders holding Shares who properly
exercise their redemption rights, in accordance with the applicable tender offer or proxy materials related to such Business Combination
and the Amended and Restated Certificate, shall be entitled to receive distributions from the Trust Account in connection with
an initial Business Combination, and the Company shall pay no distributions with respect to any other holders of shares of capital
stock of the Company in connection therewith. In the event that the Company does not effect a Business Combination within the time
period prescribed in the Amended and Restated Certificate, the Company will (i) cease all operations except for the purpose of
winding up, (ii) as promptly as reasonably possible but not more than ten (10) 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
(which interest shall be net of taxes payable and less up to $100,000 of such net 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), and (iii) as promptly as reasonably
possible following such redemption, subject, in the case of clauses (ii) and (iii), to the approval of the Company’s remaining
stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations
under Delaware law to provide for claims of creditors and the requirements of other applicable law. Only Public Stockholders holding
Shares included in the Securities shall be entitled to receive such redemption amounts and the Company shall pay no such redemption
amounts or any distributions in liquidation with respect to any other shares of the Company. The Sponsor and the Company’s
officers and directors have agreed that they will not propose any amendment to its Amended and Restated Certificate that would
affect the substance or timing of the Company’s obligation to redeem 100% of the outstanding Public Shares if the Company
has not consummated a Business Combination within the time period prescribed in the Amended and Restated Certificate unless the
Company offers the right to redeem the Public Shares in connection with such amendment, as described in the Registration Statement,
General Disclosure Package and the Prospectus.
(hh)
In the event that the Company desires or is required by an applicable law or regulation to cause an announcement (“Business
Combination Announcement”) to be placed in The Wall Street Journal, The New York Times or any other
news or media publication or outlet or to be made via a public filing with the Commission announcing the consummation of the Business
Combination that indicates that the Underwriters were the underwriters in the Offering, the Company shall supply the Representative
with a draft of the Business Combination Announcement and provide the Representative with a reasonable advance opportunity to comment
thereon, subject to the agreement of the Underwriters to keep confidential such draft announcement in accordance with the Representative’s
standard policies regarding confidential information.
(ii)
Upon the consummation of the initial Business Combination, the Company and the Representative will jointly direct the trustee
under the Trust Agreement to pay the Representative, on behalf of the Underwriters, the Deferred Discount out of the proceeds of
the Offering held in the Trust Account. The Underwriters shall have no claim to payment of any interest earned on the portion of
the proceeds held in the Trust Account representing the Deferred Discount. If the Company fails to consummate its initial Business
Combination within the time period prescribed in the Amended and Restated Certificate, the Deferred Discount will not be paid to
the Representative and will, instead, be included in the Liquidation distribution of the proceeds held in the Trust Account made
to the Public Stockholders. In connection with any such Liquidation, the Underwriters forfeit any rights or claims to the Deferred
Discount.
(jj)
The Company will endeavor in good faith, in cooperation with the Representatives, to qualify the Securities for offering
and sale under the securities laws of such jurisdictions as the Representatives may reasonably designate and will maintain such
qualifications in effect so long as required for the distribution of the Securities, provided that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such jurisdiction. Until the earliest of (i) the date on which all Underwriters
shall have ceased to engage in market-making activities in respect of the Securities, (ii) the date on which the Securities are
listed on The Nasdaq Capital Market (or any successor thereto), (iii) a going private transaction after the completion of a Business
Combination, and (iv) the date of the liquidation of the Company, in each jurisdiction where such qualification shall be effected,
the Company will, unless the Representatives agree that such action is not at the time necessary or advisable, use all reasonable
efforts to file and make such statements or reports at such times as are or may be required to qualify the Securities for offering
and sale under the securities laws of such jurisdiction.
(kk)
If at any time following the distribution of any Written Testing-the-Waters Communication, there occurred or occurs an event
or development as a result of which such Written Testing-the-Waters Communication included or would include any untrue statement
of a material fact or omitted or would omit to state any material fact necessary in order to make the statements therein in light
of the circumstances under which they were made at such time, not misleading, the Company will promptly (i) notify the Representative
so that use of the Written Testing-the-Waters Communication may cease until it is amended or supplemented; (ii) amend or supplement,
at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission; and
(iii) supply any amendment or supplement to the Representative in such quantities as may be reasonably requested.
(ll)
The Company will promptly notify the Representative if the Company ceases to be an Emerging Growth Company at any time prior
to the later of (i) completion of the distribution of the Securities within the meaning of the Act and (ii) completion of the 180-day
restricted period referred to in Section 5(h) hereof.
(mm)
If the Representative, in its sole discretion, agrees to release or waive the transfer restrictions set forth in any Insider
Letter for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least
three Business Days before the effective date of the release or waiver, the Company agrees to announce the impending release or
waiver by a press release substantially in the form of Exhibit A hereto through a major news service at least two Business Days
before the effective date of the release or waiver.
(nn) Upon
the earlier to occur of the expiration or termination of the Underwriters’ over-allotment option, the Company shall
cancel or otherwise effect the forfeiture of Founder Shares from the Sponsor, in an aggregate amount equal to the number of
Founder Shares determined by multiplying (a) 825,000 by (b) a fraction, i) the numerator of which is 3,300,000 minus the
number of Shares purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of
which is 3,300,000. For the avoidance of doubt, if the Underwriters exercise their over-allotment option in full, the Company
shall not cancel or otherwise effect the forfeiture of the Founder Shares pursuant to this subsection.
6.
Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall
be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution
Time, the Closing Date and any Additional Closing Date pursuant to Section 3 hereof, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a)
The Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been
issued and no proceedings for that purpose shall have been instituted or threatened.
(b)
The Company shall have requested and caused Ellenoff Grossman & Schole LLP, counsel for the Company, to have furnished
to the Representative its opinions dated the Closing Date and addressed to the Representative, in a form reasonably acceptable
to the Representative.
(c)
The Representative shall have received from Kirkland & Ellis LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representative, with respect to the issuance and sale of the Securities, the Registration
Statement, the General Disclosure Package, the Prospectus (together with any supplement thereto) and other related matters as the
Representative may reasonably require, and the Company shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d)
The Company shall have furnished to the Representative a certificate of the Company, signed by the co-Chief Executive Officers
and the principal financial or accounting officer of the Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, each Preliminary Prospectus, the Prospectus and any amendment or
supplement thereto, and this Agreement and that:
(i)
the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(ii)
no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued
and no proceedings for that purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii)
since the date of the most recent financial statements included in the General Disclosure Package and the Prospectus (exclusive
of any supplement thereto), there has been no Material Adverse Effect, except as set forth in or contemplated in the General Disclosure
Package and the Prospectus (exclusive of any supplement thereto).
(e)
The Company shall have requested and caused Marcum to have furnished to the Representative, at the Execution Time and at
the Closing Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory
to the Representative, confirming that it is a registered public accounting firm that is independent with respect to the Company
within the meaning of the Act and the Exchange Act and the applicable rules and regulations adopted by the Commission thereunder
and that it has performed an audit of the financial statements of the Company for the period from August 21, 2020 (inception) through
August 28, 2020, provided that the cutoff date shall not be more than two Business Days prior to such Execution Time or
Closing Date, as applicable, and stating in effect that:
(i)
in their opinion the audited financial statements and financial statement schedules included in the Registration Statement,
the General Disclosure Package and the Prospectus and reported on by them comply as to form in all material respects with the applicable
accounting requirements of the Act and the related rules and regulations adopted by the Commission; and
(ii)
they have performed certain other specified procedures as a result of which they determined that certain information of
an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from
the general accounting records of the Company) set forth in the Registration Statement, the General Disclosure Package and the
Prospectus, including the information set forth under the captions “Dilution” and “Capitalization” in the
General Disclosure Package and the Prospectus, agrees with the accounting records of the Company, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph
(e) include any supplement thereto at the date of the letter.
(f)
Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof), the General Disclosure Package and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a prospective change in, or affecting the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company, whether or not arising
from transactions in the ordinary course of business, except as set forth in or contemplated in the General Disclosure Package
and the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof),
the General Disclosure Package and the Prospectus (exclusive of any supplement thereto).
(g)
Prior to the Closing Date, the Company shall have furnished to the Representative such further information, certificates
and documents as the Representative may reasonably request.
(h)
FINRA shall not have raised any objection with respect to the fairness or reasonableness of the underwriting or other arrangements
of the transactions contemplated hereby.
(i)
The Securities shall be duly listed subject to notice of issuance on The Nasdaq Capital Market, satisfactory evidence of
which shall have been provided to the Representative.
(j)
On the Effective Date, the Company shall have delivered to the Representative executed copies of the Trust Agreement, the
Warrant Agreement, the Founder’s Purchase Agreement, the Private Placement Agreement, the Insider Letter, the Registration
and Shareholder Rights Agreement and the Administrative Support Agreement.
(k)
At least one (1) Business Day prior to the Effective Date, the Sponsor shall have caused the applicable purchase price for
the Private Placement Warrants to be deposited into the Trust Account.
(l)
No order preventing or suspending the sale of the Units in any jurisdiction designated by the Representative pursuant to
Section 5(jj) hereof shall have been issued as of the Closing Date, and no proceedings for that purpose shall have been instituted
or shall have been threatened.
If any of the conditions
specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representative
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any
time prior to, the Closing Date by the Representative. Notice of such cancellation shall be given to the Company in writing or
by telephone or facsimile confirmed in writing.
The documents required
to be delivered by this Section 6 shall be delivered at the office of Kirkland & Ellis LLP, counsel for the Underwriters, at
601 Lexington Avenue, New York, New York 10022, Attention: Christian O. Nagler, Esq. and Aaron M. Schleicher, Esq., unless otherwise
indicated herein, on the Closing Date.
7.
Reimbursement of Underwriters’ Expenses.
If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters
set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof (other than clauses (ii)
or (iii) thereof) or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or
comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through the Representative on demand for all reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
8.
Indemnification and Contribution.
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter and any person who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the respective directors, officers, employees and agents
of each Underwriter from and against any loss, expense, liability, damage or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or controlling person may incur under the Act, the Exchange Act or otherwise,
insofar as such loss, expense, liability, damage or claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any amendment), the Preliminary Prospectus, any Issuer
Free Writing Prospectus that the Company has filed or was required to file with the Commission or is otherwise required to retain,
the Prospectus, any “road show” as defined in Section 433(h) of the Act or any Written Testing-the-Waters Communication
or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however,
that the Company will not be liable in any such case to the extent that any loss, expense, liability, damage or claim arises out
of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained
in and in conformity with information furnished in writing by the Underwriters through the Representative to the Company specifically
for inclusion therein. The indemnity agreement set forth in this Section 8(a) shall be in addition to any liability which the
Company may otherwise have.
If any action is brought
against an Underwriter or controlling person in respect of which indemnity may be sought against the Company pursuant to this Section
8(a), such Underwriter shall promptly notify the Company in writing of the institution of such action, and the Company shall assume
the defense of such action, including the employment of counsel and payment of expenses; provided, however, that
any failure or delay to so notify the Company will not relieve the Company of any obligation hereunder, except to the extent that
its ability to defend is actually impaired by such failure or delay. Such Underwriter or controlling person shall have the right
to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless the employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action, or the Company shall not have employed counsel to have charge of the defense of
such action within a reasonable time or such indemnified party or parties shall have reasonably concluded (based on the advice
of counsel) that there may be defenses available to it or them which are different from or additional to those available to the
Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party
or parties), in any of which events such fees and expenses shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one separate firm of attorneys for the Underwriters
or controlling persons in any one action or series of related actions in the same jurisdiction (other than local counsel in any
such jurisdiction) representing the indemnified parties who are parties to such action). Anything in this paragraph to the contrary
notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its consent.
(b)
Each Underwriter agrees, severally and not jointly, to indemnify, defend and hold harmless the Company, the Company’s
directors, the Company’s officers that signed the Registration Statement, and any person who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company
by or on behalf of such Underwriter through the Representative specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability that any Underwriter may otherwise have. The Company acknowledges
that the following statements set forth under the heading “Underwriting,” (x) the list of Underwriters and their respective
roles and participation in the sale of the Securities, (y) the sentence related to the Underwriter’s intention not to make
sales to discretionary accounts and (z) the paragraphs related to stabilization, covering transactions and bids, in the Preliminary
Prospectus, the General Disclosure Package and the Prospectus (to the extent such statements relate to the Underwriters), constitute
the only information furnished by or on behalf of any Underwriter through the Representative to the Company for purposes of this
Section 8.
If any action is brought
against the Company or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company or such person shall promptly notify the Representative in writing of the institution of such action and
the Representative, on behalf of the Underwriters, shall assume the defense of such action, including the employment of counsel
and payment of expenses. The Company or such person shall have the right to employ its own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of the Company or such person unless the employment of such counsel shall
have been authorized in writing by the Representative in connection with the defense of such action or the Representative shall
not have employed counsel to have charge of the defense of such action within a reasonable time or such indemnified party or parties
shall have reasonably concluded (based on the advice of counsel) that there may be defenses available to it or them which are different
from or additional to those available to the Underwriters (in which case the Representative shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall
be borne by such Underwriter and paid as incurred (it being understood, however, that the Underwriters shall not be liable for
the expenses of more than one separate firm of attorneys in any one action or series of related actions in the same jurisdiction
(other than local counsel in any such jurisdiction) representing the indemnified parties who are parties to such action). Anything
in this paragraph to the contrary notwithstanding, no Underwriter shall be liable for any settlement of any such claim or action
effected without the written consent of the Representative.
(c)
If the indemnification provided for in this Section 8 is unavailable or insufficient to hold harmless an indemnified party
under subsections (a) and (b) of this Section 8 in respect of any losses, expenses, liabilities, damages or claims referred
to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, expenses, liabilities, damages or claims (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and the Underwriters from the offering of the Securities
or (ii) if (but only if) the allocation provided by clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of
the Company and of the Underwriters in connection with the statements or omissions which resulted in such losses, expenses, liabilities,
damages or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company and the
Underwriters shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts
and commissions but before deducting expenses) received by the Company bear to the underwriting discounts and commissions received
by the Underwriters. The relative fault of the Company and of the Underwriters shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to
information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred
by such indemnified party in connection with investigating or defending any claim or action.
(d)
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section
8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in Section 8(c)(i) and, if applicable,
Section 8(c)(ii). Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section
8 are several in proportion to their respective underwriting commitments and not joint.
(e)
In any proceeding relating to the Registration Statement, the Preliminary Prospectus, the General Disclosure Package, any
Written Testing-the-Waters Communication, the Prospectus, or any supplement or amendment thereto, each party against whom contribution
may be sought under this Section 8 hereby consents to the exclusive jurisdiction of (i) the federal courts of the United States
of America located in the City and County of New York, Borough of Manhattan and (ii) the courts of the State of New York located
in the City and County of New York, Borough of Manhattan (collectively, the “Specified
Courts”), agrees that process issuing from such courts may be served upon it by any other contributing party and
consents to the service of such process and agrees that any other contributing party may join it as an additional defendant in
any such proceeding in which such other contributing party is a party.
(f)
Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution
under this Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities
or expenses are incurred. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties
of the Company set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation
made by or on behalf of any Underwriter, its directors or officers or any person controlling any Underwriter, the Company, its
directors or officers or any persons controlling the Company, (ii) acceptance of any Securities and payment therefor hereunder,
and (iii) any termination of this Agreement. A successor to any Underwriter, its directors or officers or any person controlling
any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.
9.
Default by an Underwriter. If any one
or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement,
the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions that the amount
of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities set forth opposite
the names of all the remaining Underwriters) the Securities that the defaulting Underwriter or Underwriters agreed but failed
to purchase; provided, however, that in the event that the aggregate amount of Securities that the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the Underwritten Securities, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of the Securities. If within one Business Day after such
default relating to more than 10% of the Underwritten Securities the remaining Underwriters do not arrange for the purchase of
such Underwritten Securities, then the Company shall be entitled to a further period of one Business Day within which to procure
another party or parties reasonably satisfactory to the Representative to purchase said Underwritten Securities. In the event
that neither the remaining Underwriters nor the Company purchase or arrange for the purchase of all of the Underwritten Securities
to which a default relates as provided in this Section 9, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall
be postponed for such period, not exceeding five Business Days, as the Representative shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained
in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter
for damages occasioned by its default hereunder.
10.
Termination. This Agreement shall be subject
to termination in the absolute discretion of the Representative, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s Units, Shares or Warrants
shall have been suspended by the Commission, or trading in securities generally on the New York Stock Exchange or The Nasdaq Capital
Market shall have been suspended or limited or minimum prices shall have been established on such exchange or trading market,
(ii) a banking moratorium shall have been declared either by Federal or New York State authorities, (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other national
or international calamity or crisis (including, without limitation, an act of terrorism) or change in economic or political conditions
the effect of which on financial markets is such as to make it, in the sole judgment of the Representative, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by the General Disclosure Package or the Prospectus
(exclusive of any supplement thereto) or (iv) since the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package and the Prospectus, any material adverse change or any development involving a prospective
material adverse change in or affecting the earnings, business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company, whether or not arising in the ordinary course of business.
11.
Representations and Indemnities to Survive.
The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12.
Recognition of the U.S. Special Resolution Regimes.
(a)
In the event that any Underwriter that is a Covered Entity (as defined below) becomes subject to a proceeding under a U.S.
Special Resolution Regime (as defined below), the transfer from such Underwriter of this Agreement, and any interest and obligation
in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution
Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the
United States.
(b)
In the event that any Underwriter that is a Covered Entity (as defined below) or a BHC Act Affiliate (as defined below)
of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights (as defined below) under
this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default
Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States
or a state of the United States.
For purposes of this
Section 12, the following terms shall have the following meaning: (2) “BHC Act Affiliate” has the meaning assigned
to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k); (x) “Covered
Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance
with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 382.2(b); (y) “Default Right” has the meaning assigned to that term in, and shall be interpreted in
accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and (z) “U.S. Special Resolution Regime”
means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
13.
Notices. All communications hereunder
will be in writing and effective only on receipt, and, if sent to the Representative, will be mailed, delivered or e-mailed to:
B. Riley Securities, Inc., 299 Park Avenue, New York, NY 10171, Attention: Syndicate Department, with a copy to the Representative’s
counsel at Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022, Attention: Christian O. Nagler, Esq. and Aaron
M. Schleicher, Esq., or, if sent to the Company, will be mailed, delivered or e-mailed to Roman DBDR Tech Acquisition Corp., 345
Lorton Avenue, Suite 400, Burlingame, CA 94010, Attention: Dr. Donald G. Basile and Dixon Doll, Jr., with a copy to the Company’s
counsel at Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, New York 10105, Attention: Douglas S. Ellenoff,
Esq. and Joshua N. Englard, Esq.
14.
Successors. This Agreement will inure
to the benefit of and be binding upon the parties hereto and their respective successors and the affiliates, officers, directors,
employees, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation
hereunder. No party to this Agreement may assign, in whole or in part, this Agreement or any of its rights or obligations hereunder
without the prior written consent of the other parties hereto.
15.
No Fiduciary Duty. The Company hereby
acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction
between the Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on the other, (b)
the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement
of the Underwriters in connection with the Offering and the process leading up to the Offering is as independent contractors and
not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection
with the Offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related
or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature
or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading
thereto.
16.
Integration. This Agreement supersedes
all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with
respect to the subject matter hereof.
17.
Applicable Law. This Agreement will be
governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed
within the State of New York, without regards to the conflicts of laws principles that would apply to the laws of another jurisdiction.
Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby shall
be instituted in the Specified Courts, and the Company and each Underwriter irrevocably submit to the exclusive jurisdiction (except
for proceedings instituted in regard to the enforcement of a judgment of any such court, as to which such jurisdiction is non-exclusive)
of such courts in any such suit, action or proceeding. The Company and each Underwriter irrevocably and unconditionally waives
any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court
has been brought in an inconvenient forum.
18. WAIVER
OF JURY TRIAL. THE COMPANY HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19.
Counterparts. This Agreement may be signed
in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the
same agreement. This Agreement may be executed by facsimile, PDF or other electronic means, which signatures will be accepted
as if they were original execution signatures.
20.
Headings. The section headings used herein
are for convenience only and shall not affect the construction hereof.
21.
Definitions. The terms that follow, when
used in this Agreement, shall have the meanings indicated.
“Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Applicable
Time” shall mean [5:00] p.m. (New York time) on the date of this Agreement.
“Business
Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions
or trust companies are authorized or obligated by law to close in New York City.
“Commission”
shall mean the U.S. Securities and Exchange Commission.
“Effective
Date” shall mean each date and time that the Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or becomes effective.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
“Execution
Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
“FINRA
Questionnaires” shall mean the written questionnaires sent on behalf of the Representative to the officers, directors,
and holders of 5% or more of any class of the Company’s capital stock prior to the Closing Date.
“Free
Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“General
Disclosure Package” shall mean (i) the Preliminary Prospectus dated [●], 2020, relating to the Securities
and (ii) the Time of Delivery Information, if any, set forth on Schedule II hereto.
“Liquidation”
shall mean the distributions of the Trust Account to the Public Stockholders in connection with the redemption of Shares held by
the Public Stockholders pursuant to the terms of the Amended and Restated Certificate if the Company fails to consummate a Business
Combination.
“Preliminary
Prospectus” shall mean any preliminary prospectus referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits Rule 430A Information.
“Prospectus”
shall mean the prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the Execution Time.
“Registration
Statement” shall mean the registration statement referred to in paragraph 1(a) above, including exhibits
and financial statements and any prospectus and prospectus supplement relating to the Securities that is filed with the Commission
pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution
Time and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior
to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the
case may be.
“Rule
158”, “Rule 172”, “Rule
405”, “Rule 419”, “Rule
424”, “Rule 430A”, “Rule 433”
and “Rule 462” refer to such rules under the Act.
“Rule
430A Information” shall mean information with respect to the Securities and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A.
“Rule
462(b) Registration Statement” shall mean a registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the Offering covered by the registration statement referred to in Section 1(a) hereof.
22.
CONSTRUCTION.
Unless the context
otherwise requires:
(a)
the words “hereof,” “hereto,” “herein” and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(b)
words defined in the singular shall have a comparable meaning when used in the plural, and vice versa;
(c)
wherever the word “include,” “includes” or “including” is used in this Agreement, it
shall be deemed to be followed by the words “without limitation”;
(d)
references herein to any law shall be deemed to refer to such law as amended, reenacted, supplemented or superseded in whole
or in part and in effect from time to time and also to all rules and regulations promulgated thereunder;
(e)
if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is
a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended
to the next succeeding Business Day;
(f)
with regard to each and every term and condition of this Agreement and all other agreements and instruments subject to the
terms hereof, the parties understand and agree that such documents have been mutually negotiated, prepared and drafted, and if
at any time the parties desire or are required to interpret or construe any such term or condition, no consideration will be given
to the issue of which party actually prepared, drafted or requested any such term or condition; and
(g) a
reference to “knowledge” of the Company or of which the Company is “aware” means to the actual knowledge
of any of the directors or officers of the Company, each after due and reasonable inquiry.
[Remainder of page intentionally left
blank.]
If the foregoing is
in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon it
will become a binding agreement among the Company and the several Underwriters in accordance with its terms.
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Very truly yours, |
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: |
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Title: |
| The foregoing Underwriting
Agreement is hereby |
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| confirmed and accepted as of the date first
above written. |
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| B. RILEY SECURITIES, INC. |
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| By: |
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| Name: |
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| Title: |
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[Signature
Page to Underwriting Agreement]
SCHEDULE
I
| Underwriters |
|
Number of Underwritten Securities to be Purchased |
| B. Riley Securities, Inc. |
|
[●] |
| [●] |
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[●] |
| Total |
|
22,000,000 |
SCHEDULE
II
TIME OF
DELIVERY INFORMATION
Roman DBDR Tech
Acquisition Corp. priced 22,000,000 units at $10.00 per unit plus an additional 3,300,000 units if the underwriters exercise
their over-allotment option in full.
The underwriting discounts
and commissions shall be $0.55 per Unit, including $0.35 per Unit in the aggregate payable to the Underwriters for deferred underwriting
commissions to be placed into the Trust Account and released to the Underwriters upon completion of the initial Business Combination
in accordance with the Trust Agreement.
The amounts in the
Trust Account may be invested only in U.S. government treasury bills with a maturity of 185 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.
The units will be issued
pursuant to an effective registration statement that has been previously filed with the U.S. Securities and Exchange Commission.
This communication
shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of the securities in
any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification
under the securities law of any such state or jurisdiction.
Copies of the prospectus
related to this offering may be obtained from B. Riley Securities, Inc., 299 Park Avenue, New York, NY 10171, Attention: Syndicate
Department.
SCHEDULE
III
SCHEDULE
OF WRITTEN TESTING-THE-WATERS COMMUNICATIONS
1. Investor
presentation dated [●] 2020.
EXHIBIT A
Form of
Press Release
Roman DBDR Tech Acquisition Corp.
[Date]
Roman DBDR Tech Acquisition
Corp. (the “Company”) announced today that B. Riley Securities, the
sole book-running manager and underwriter in the Company’s recent public sale of Units, is [waiving] [releasing] a lock-up
restriction with respect to shares of the Company’s [Class A common stock] [Warrants] [Units] held by [certain officers or
directors] [an officer or director] of the Company. The [waiver] [release] will take effect on [Date], and the securities may be
sold on or after such date.
This press release
is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and
such securities may not be offered or sold in the United States absent registration or an exemption from registration under the
Securities Act of 1933, as amended.
Exhibit 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ROMAN DBDR TECH ACQUISITION CORP.
[●], 2020
Roman DBDR Tech Acquisition
Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”),
DOES HEREBY CERTIFY AS FOLLOWS:
1. The name
of the Corporation is “Roman DBDR Tech Acquisition Corp.”. The original certificate of incorporation
of the Corporation was filed with the Secretary of State of the State of Delaware on August 21, 2020 (the “Original
Certificate”).
2. This
Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), which both
restates and amends the provisions of the Original Certificate, was duly adopted in accordance with Sections 228, 242 and 245 of
the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).
3. This
Amended and Restated Certificate shall become effective on the date of filing with Secretary of State of Delaware.
4. The text
of the Original Certificate is hereby restated and amended in its entirety to read as follows:
ARTICLE I
NAME
The name of the corporation
is Roman DBDR Tech Acquisition Corp. (the “Corporation”).
ARTICLE II
PURPOSE
The purpose of the
Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. In addition
to the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess
and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of the
business or purposes of the Corporation, including, but not limited to, effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination, involving the Corporation and one or more businesses (a “Business
Combination”).
ARTICLE III
REGISTERED AGENT
The address of the
Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, in the City of Wilmington, County of
New Castle, State of Delaware, 19808, and the name of the Corporation’s registered agent at such address is Corporation Service
Company.
ARTICLE IV
CAPITALIZATION
Section 4.1 Authorized
Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share,
which the Corporation is authorized to issue is 221,000,000 shares, consisting of (a) 200,000,000 shares of common stock (the
“Common Stock”), including (i) 200,000,000 shares of Class A Common Stock (the “Class A
Common Stock”), and (ii) 20,000,000 shares of Class B Common Stock (the “Class B
Common Stock”), and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”).
Section 4.2 Preferred Stock. Subject
to Article IX of this Amended and Restated Certificate, the Board of Directors of the Corporation (the “Board”)
is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred
Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights,
if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such
series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted
by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock
Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full
extent provided by law, now or hereafter, to adopt any such resolution or resolutions.
Section 4.3 Common Stock.
(a) Voting.
(i) Except as
otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of
the Common Stock shall exclusively possess all voting power with respect to the Corporation.
(ii) Except as
otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of
shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders
of the Corporation on which the holders of the Common Stock are entitled to vote.
(iii) Except as
otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), at any annual or
special meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class B
Common Stock, voting together as a single class, shall have the exclusive right to vote for the election of directors and
on all other matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required
by law or this Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of any series of
Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate (including any amendment to
any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock or other
series of Common Stock if the holders of such affected series of Preferred Stock or Common Stock, as applicable, are entitled exclusively,
either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated
Certificate (including any Preferred Stock Designation) or the DGCL.
(b) Class B
Common Stock.
(i) Shares of
Class B Common Stock shall be convertible into shares of Class A Common Stock on a one-for-one basis (the “Initial
Conversion Ratio”) automatically on the closing of the Business Combination.
(ii) Notwithstanding
the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock, or Equity-linked Securities (as
defined below), are issued or deemed issued in excess of the amounts sold in the Corporation’s initial public offering of
securities (the “Offering”) and related to the closing of the initial Business Combination, all issued
and outstanding shares of Class B Common Stock shall automatically convert into shares of Class A Common Stock at the
time of the closing of the initial Business Combination at a ratio for which:
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the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) by the Corporation, related to or in connection with the consummation of the initial Business Combination (excluding any securities issued or issuable to any seller in the initial Business Combination, any private placement warrants issued to Roman DBDR Tech Sponsor LLC (the “Sponsor”) or its affiliates upon conversion of loans to the Corporation plus (B) the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination; and |
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the denominator shall be the number of shares of Class B Common Stock issued and outstanding prior to the closing of the initial Business Combination. |
As used herein, the term “Equity-linked
Securities” means any securities of the Corporation which are convertible into or exchangeable or exercisable for
Common Stock
Notwithstanding anything
to the contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular
issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent
or agreement of holders of a majority of the shares of Class B Common Stock then outstanding consenting or agreeing separately
as a single class in the manner provided in Section 4.3(b)(iii), and (ii) in no event shall the Class B
Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one.
The foregoing conversion
ratio shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification,
recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise)
or similar reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser
number of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding
subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class B Common Stock.
Each share of Class B
Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.3(b). The pro
rata share for each holder of Class B Common Stock will be determined as follows: Each share of Class B Common
Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one (1) multiplied
by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued
and outstanding shares of Class B Common Stock shall be converted pursuant to this Section 4.3(b) and
the denominator of which shall be the total number of issued and outstanding shares of Class B Common Stock at the time of
conversion.
(iii) Voting. Except
as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), for so long
as any shares of Class B Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written
consent of the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately as a single
class, amend, alter or repeal (1) any provision of this Amended and Restated Certificate,
whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences
or relative, participating, optional or other or special rights of the Class B Common Stock or (2) without limiting the
generality of the foregoing, any provision of Article IV or V of this Amended and Restated Certificate or Section 9.15
of the Amended and Restated Bylaws. Any action required or permitted to be taken at any meeting of the holders of Class B
Common Stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of the outstanding Class B Common Stock having not less than the
minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B
Common Stock were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes
of proceedings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or
by certified or registered mail, return receipt requested. Prompt written notice of the taking of corporate action without
a meeting by less than unanimous written consent of the holders of Class B Common Stock shall, to the extent required by law,
be given to those holders of Class B Common Stock who have not consented in writing and who, if the action had been taken
at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date
that written consents signed by a sufficient number of holders of Class B Common Stock to take the action were delivered to
the Corporation.
(c) Dividends. Subject
to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX hereof,
the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property
or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds
of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.
(d) Liquidation,
Dissolution or Winding Up of the Corporation. Subject to applicable law, the rights, if any, of the holders of any outstanding
series of the Preferred Stock and the provisions of Article IX hereof, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities
of the Corporation, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Corporation
available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Common Stock (on
an as converted basis with respect to the Class B Common Stock) held by them.
Section 4.4 Rights
and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders
thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and
options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the exercise price,
duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration
to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.
ARTICLE V
BOARD OF DIRECTORS
Section 5.1 Board
Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In
addition to the powers and authority expressly conferred upon the Board by statute, this Amended and Restated Certificate or the
Bylaws of the Corporation (“Bylaws”), the Board is hereby empowered to exercise all such powers and do
all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL,
this Amended and Restated Certificate, and any Bylaws adopted by the stockholders of the Corporation; provided, however, that no
Bylaws hereafter adopted by the stockholders of the Corporation shall invalidate any prior act of the Board that would have been
valid if such Bylaws had not been adopted.
Section 5.2 Number,
Election and Term.
(a) The number
of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred Stock
voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted
by three-quarters (3/4) of the Board.
(b) The Board
shall be divided into three classes, as nearly equal in number as possible and designated Class I, Class II and Class III. The
Board is authorized to assign members of the Board already in office to Class I, Class II or Class III; provided
that the Chairman of the Board shall be a Class III Director. The term of the initial Class I Directors shall expire
at the first annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate,
the term of the initial Class II Directors shall expire at the second annual meeting of the stockholders of the Corporation
following the effectiveness of this Amended and Restated Certificate and the term of the initial Class III Directors shall
expire at the third annual meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated
Certificate. At each succeeding annual meeting of the stockholders of the Corporation, beginning with the first annual meeting
of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate, each of the successors
elected to replace the class of directors whose term expires at that annual meeting shall be elected for a three-year term or until
the election and qualification of their respective successors in office, subject to their earlier death, resignation or removal. If
the number of directors that constitute the Board is changed, any increase or decrease shall be apportioned by the Board among
the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease
in the number of directors constituting the Board shorten the term of any incumbent director. Subject to the rights of the holders
of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one
or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders
present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is hereby expressly authorized,
by resolution or resolutions thereof, to assign members of the Board already in office to the aforesaid classes at the time this
Amended and Restated Certificate (and therefore such classification) becomes effective in accordance with the DGCL.
(c) A director
shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has been
elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
(d) Unless and
except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot. The holders of
shares of Common Stock shall not have cumulative voting rights with regard to election of directors.
Section 5.3 Newly
Created Directorships and Vacancies. Newly created directorships resulting from an increase in the number of directors and
any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled
solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining
director (and not by stockholders), and any director so chosen shall hold office for the remainder of the full term of the class
of directors to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected
and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.
Section 5.4 Removal.
Any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders
of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally
in the election of directors, voting together as a single class; provided, however, for so long as any shares of
Class B Common Stock shall remain outstanding, a director may not be removed for cause without the affirmative vote or written
consent of the holders of a majority of the shares of Class B Common Stock then outstanding, voting separately as a single
class. For purposes of this Section 5.4, “cause” shall mean (i) a director’s conviction of a felony
under United States federal law which the Board reasonably believes had or will have a detrimental effect on the Company’s
reputation or business or otherwise would materially interfere with such director’s ability to fulfill his or her material
duties as a director of the Company or (ii) continued nonperformance of such director’s material duties for a period
of thirty (30) days after there has been delivered to such director a written demand for performance from the Company which describes
the basis for the Company’s belief that such director has not substantially performed his or her duties and fails to correct
such nonperformance within thirty (30) days of delivery of such written demand.
ARTICLE VI
BYLAWS
In furtherance and not in limitation of
the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or repeal
the Bylaws. The affirmative vote of three-quarters (3/4) of the Board shall be required to adopt, amend, alter or repeal the Bylaws;
provided, however, for so long as any shares of Class B Common Stock shall remain outstanding, the Board shall
not, without the prior vote or written consent of the holders of a majority of the shares of Class B Common Stock then outstanding,
voting separately as a single class, amend, alter or repeal any provision of Article VI or VIII of this Amended and Restated
Certificate or Section 9.15 of the Amended and Restated Bylaws. The Bylaws also may be adopted, amended, altered or repealed
by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of
the Corporation required by law or by this Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative
vote of the holders of at least a majority of the voting power of all then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders
to adopt, amend, alter or repeal the Bylaws; and provided further, however, that no Bylaws hereafter adopted by the stockholders
shall invalidate any prior act of the Board.
ARTICLE VII
SPECIAL MEETINGS OF STOCKHOLDERS; ACTION
BY WRITTEN CONSENT
Section 7.1 Special
Meetings. Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements
of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board or the Board
pursuant to a resolution adopted by three-quarters of the Board, and the ability of the stockholders of the Corporation to call
a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders
of the Corporation may not be called by another person or persons.
Section 7.2 Advance
Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders
before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.
Section 7.3 Action
by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate
(including any Preferred Stock Designation) relating to the rights of the holders of any outstanding series of Preferred Stock,
subsequent to the consummation of the Offering, any action required or permitted to be taken by the stockholders of the Corporation
must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of
the stockholders other than with respect to our Class B Common Stock with respect to which action may be taken by written
consent.
ARTICLE VIII
LIMITED LIABILITY; INDEMNIFICATION
Section 8.1 Limitation
of Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation
thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless they violated their duty of loyalty
to the Corporation or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments
of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from their actions as directors. Any
amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of
the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.
Section 8.2 Indemnification
and Advancement of Expenses.
(a) To the fullest
extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless
each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”)
by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the
Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee
benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or
agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines,
ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such
proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’
fees) incurred by an indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition;
provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition
of the proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so
advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Section 8.2
or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 8.2(a),
except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance
expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding
(or part thereof) was authorized by the Board.
(b) The rights
to indemnification and advancement of expenses conferred on any indemnitee by this Section 8.2 shall not
be exclusive of any other rights that any indemnitee may have or hereafter acquire under law, this Amended and Restated Certificate,
the Bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.
(c) Any repeal
or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption of any
other provision of this Amended and Restated Certificate inconsistent with this Section 8.2, shall, unless otherwise
required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader
indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect
any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect
of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to,
any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
(d) This Section 8.2 shall
not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance
expenses to persons other than indemnitees.
ARTICLE IX
BUSINESS COMBINATION REQUIREMENTS; EXISTENCE
Section 9.1 General.
(a) The provisions
of this Article IX shall apply during the period commencing upon the effectiveness of this Amended and Restated
Certificate and terminating upon the consummation of the Corporation’s initial Business Combination and no amendment to this Article IX shall
be effective prior to the consummation of the initial Business Combination unless approved by the affirmative vote of the holders
of at least sixty-five percent (65%) of all then outstanding shares of the Common Stock.
(b) Immediately
after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including the proceeds
of any exercise of the underwriters’ over-allotment option) and certain other amounts specified in the Corporation’s
registration statement on Form S-1, as initially filed with the U.S. Securities and Exchange Commission (the “SEC”)
on August 21, 2020, as amended (the “Registration Statement”), shall be deposited in a trust account
(the “Trust Account”), established for the benefit of the Public Stockholders (as defined below) pursuant
to a trust agreement described in the Registration Statement. Except for the withdrawal of interest to pay taxes (less up
to $100,000 interest to pay dissolution expenses), none of the funds held in the Trust Account (including the interest earned on
the funds held in the Trust Account) will be released from the Trust Account until the earliest to occur of (i) the completion
of the initial Business Combination, (ii) the redemption of 100% of the Offering Shares (as defined below) if the Corporation
is unable to complete its initial Business Combination within 18 months from the closing of the Offering (or, if the Office
of the Delaware Division of Corporations shall not be open for business (including filing of corporate documents) on such date
the next date upon which the Office of the Delaware Division of Corporations shall be open (the “Deadline Date”) and
(iii) the redemption of shares in connection with a vote seeking to amend any provisions of this Amended and Restated Certificate
relating to stockholders’ rights or pre-initial Business Combination activity (as described in Section 9.7).
Holders of shares of Common Stock included as part of the units sold in the Offering (the “Offering Shares”)
(whether such Offering Shares were purchased in the Offering or in the secondary market following the Offering and whether or not
such holders are the Sponsor or officers or directors of the Corporation, or affiliates of any of the foregoing) are referred
to herein as “Public Stockholders.”
Section 9.2 Redemption
Rights.
(a) Prior to
the consummation of the initial Business Combination, the Corporation shall provide all holders of Offering Shares with the opportunity
to have their Offering Shares redeemed upon the consummation of the initial Business Combination pursuant to, and subject to the
limitations of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering Shares redeemed
pursuant to such Sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption
price per share determined in accordance with Section 9.2(b) hereof (the “Redemption Price”);
provided, however, that the Corporation will only redeem Offering Shares so long as (after such redemption), the
Corporation’s net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) (or any successor rule)), or of any entity that succeeds
the Corporation as a public company, will be at least $5,000,001 either immediately prior to or upon consummation of the initial
Business Combination or any greater net tangible asset or cash requirement which may be contained in the agreement relating to
the initial Business Combination (such limitation hereinafter called the “Redemption Limitation”). Notwithstanding
anything to the contrary contained in this Amended and Restated Certificate, there shall be no Redemption Rights or liquidating
distributions with respect to any warrant issued pursuant to the Offering. Such obligation to redeem Offering Shares is subject
to the completion of the proposed initial Business Combination to which it relates.
(b) If the Corporation
offers to redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business Combination with
a proxy solicitation pursuant to Regulation 14A of the Exchange Act (or any successor rules or regulations) and filing
proxy materials with the SEC, the Corporation shall offer to redeem the Offering Shares upon the consummation of the initial Business
Combination, subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof
pursuant to a tender offer in accordance with Rule 13e-4 and Regulation 14E of the Exchange Act (or any successor rule or
regulation) (such rules and regulations hereinafter called the “Tender Offer Rules”) which it shall
commence prior to the consummation of the initial Business Combination and shall file tender offer documents with the SEC prior
to the consummation of the initial Business Combination that 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 (or any successor
rule or regulation) (such rules and regulations hereinafter called the “Proxy Solicitation Rules”),
even if such information is not required under the Tender Offer Rules; provided, however, that if a stockholder vote is required
by law to approve the proposed initial Business Combination, or the Corporation decides to submit the proposed initial Business
Combination to the stockholders for their approval for business or other legal reasons, the Corporation shall offer to redeem the
Offering Shares, subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof
in conjunction with a proxy solicitation pursuant to the Proxy Solicitation Rules (and not the Tender Offer Rules) at a price
per share equal to the Redemption Price calculated in accordance with the following provisions of this Section 9.2(b).
In the event that the Corporation offers to redeem the Offering Shares pursuant to a tender offer in accordance with the Tender
Offer Rules, the Redemption Price per share of the Common Stock payable to holders of the Offering Shares tendering their Offering
Shares pursuant to such tender offer shall be equal to the quotient obtained by dividing: (i) the aggregate amount on deposit
in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest
not previously released to the Corporation to pay its taxes, by (ii) the total number of then outstanding Offering Shares. If
the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on the proposed initial Business Combination
pursuant to a proxy solicitation, the Redemption Price per share of the Common Stock payable to holders of the Offering Shares
exercising their Redemption Rights shall be equal to the quotient obtained by dividing (a) the aggregate amount on deposit
in the Trust Account as of two business days prior to the consummation of the initial Business Combination, including interest
not previously released to the Corporation to pay its taxes, by (b) the total number of then outstanding Offering Shares.
(c) If the Corporation
offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination pursuant to a proxy
solicitation, 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(d)(3) of the Exchange Act),
shall be restricted from seeking Redemption Rights with respect to more than an aggregate of 15% of the Offering Shares without
the prior written consent of the Corporation.
(d) In the event
that the Corporation has not consummated an initial Business Combination by the Deadline Date, the Corporation shall (i) cease
all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter subject to lawfully available funds therefor, redeem 100% of the Offering Shares in consideration of a per-share
price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account,
including interest not previously released to the Corporation to pay its taxes (less up to $100,000 of such net interest to pay
dissolution expenses), by (B) the total number of then outstanding Offering Shares, which redemption will completely extinguish
rights of the Public Stockholders (including the right to receive further liquidating distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders
and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Corporation’s obligations
under the DGCL to provide for claims of creditors and other requirements of applicable law.
(e) If the Corporation
offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation
shall consummate the proposed initial Business Combination only if (i) such initial Business Combination is approved by the
affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder meeting held to
consider such initial Business Combination and (ii) the Redemption Limitation is not exceeded.
(f) If the Corporation
conducts a tender offer pursuant to Section 9.2(b), the Corporation shall consummate the proposed initial Business Combination
only if the Redemption Limitation is not exceeded.
Section 9.3 Distributions
from the Trust Account.
(a) A Public Stockholder
shall be entitled to receive funds from the Trust Account only as provided in Sections 9.2(a), 9.2(b), 9.2(d) or 9.7 hereof. In
no other circumstances shall a Public Stockholder have any right or interest of any kind in or to distributions from the Trust
Account, and no stockholder other than a Public Stockholder shall have any interest in or to the Trust Account.
(b) Each Public
Stockholder that does not exercise its Redemption Rights shall retain its interest in the Corporation and shall be deemed to have
given its consent to the release of the remaining funds in the Trust Account to the Corporation, and following payment to any Public
Stockholders exercising their Redemption Rights, the remaining funds in the Trust Account shall be released to the Corporation.
(c) The exercise
by a Public Stockholder of the Redemption Rights shall be conditioned on such Public Stockholder following the specific procedures
for redemptions set forth by the Corporation in any applicable tender offer or proxy materials sent to the Public Stockholders
relating to the proposed initial Business Combination, including the requirement that any Public Stockholder that holds Offering
Shares beneficially must identify itself to the Corporation in connection with any redemption election in order to validly redeem
such Offering Shares. Public Stockholders seeking to exercise their redemption rights will be required to either tender their certificates
(if any) to the Company’s transfer agent or to deliver their shares to the transfer agent electronically using The Depository
Trust Company's DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, in each case up to two business days
prior to the vote on the proposal to approve a Business Combination. Payment of the amounts necessary to satisfy the Redemption
Rights properly exercised shall be made as promptly as practical after the consummation of the initial Business Combination.
Section 9.4 Share
Issuances. Prior to the consummation of the Corporation’s initial Business Combination, the Corporation shall not
issue any additional shares of capital stock of the Corporation that would entitle the holders thereof to receive funds from the
Trust Account or vote on any initial Business Combination, on any pre-Business Combination activity or on any amendment to this Article IX.
Section 9.5 Transactions
with Affiliates. In the event the Corporation enters into an initial Business Combination with a target business that
is affiliated with the Sponsor, or the directors or officers of the Corporation, the Corporation, or a committee of the independent
directors of the Corporation, shall obtain an opinion from an independent investment banking firm or another independent entity
that commonly renders valuation opinions that such Business Combination is fair to the Corporation from a financial point of view.
Section 9.6 No
Transactions with Other Blank Check Companies. The Corporation shall not enter into an initial Business Combination solely
with another blank check company or a similar company with nominal operations.
Section 9.7 Additional
Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) to
modify the substance or timing of the ability of Public Stockholders to seek redemption in connection with an initial Business
Combination or the Corporation’s obligation to redeem 100% of the Offering Shares if the Corporation has not consummated
an initial Business Combination by the Deadline Date, the Public Stockholders shall be provided with the opportunity to redeem
their Offering Shares upon the 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 not previously released to the Corporation to pay its taxes, divided by
the number of then outstanding Offering Shares; provided, however, that any such amendment will be voided, and this Article IX will
remain unchanged, if any stockholders who wish to redeem are unable to redeem due to the Redemption Limitation.
Section 9.8 Minimum
Value of Target. So long as the Corporation is listed on a national securities exchange, the Corporation’s initial Business
Combination must occur with one or more target businesses that together have a fair market value of at least 80% of the assets
held in the Trust Account (excluding the deferred underwriting discount held in, and taxes payable on the income earned on, the
Trust Account) at the time of the agreement for the initial Business Combination.
ARTICLE X
CORPORATE OPPORTUNITY
To the extent allowed
by law, the doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation
or any of its officers or directors, or any of their respective affiliates, in circumstances where the application of any
such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Amended
and Restated Certificate or in the future, and the Corporation renounces any expectancy that any of the directors or officers
of the Corporation will offer any such corporate opportunity of which he or she may become aware to the Corporation, except, the
doctrine of corporate opportunity shall apply with respect to any of the directors or officers of the Corporation with respect
to a corporate opportunity that was offered to such person solely in his or her capacity as a director or officer of the Corporation
and (i) such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be
reasonable for the Corporation to pursue and (ii) the director or officer is permitted to refer that opportunity to the Corporation
without violating any legal obligation.
ARTICLE XI
AMENDMENT OF AMENDED AND RESTATED CERTIFICATE
OF INCORPORATION
The Corporation reserves
the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated
Certificate (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at
the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate
and the DGCL; and, except as set forth in Article VIII, all rights, preferences and privileges of whatever nature
herein conferred upon stockholders, directors or any other persons by and pursuant to this Amended and Restated Certificate in
its present form or as hereafter amended are granted subject to the right reserved in this Article XI; provided, however,
that Article IX of this Amended and Restated Certificate may be amended only as provided therein.
ARTICLE XII
EXCLUSIVE FORUM FOR CERTAIN LAWSUITS;
CONSENT TO JURISDICTION
Section 12.1 (a) Forum. Subject
to clause (b) immediately below, and unless the Corporation consents in writing to the selection of an alternative forum,
to the fullest extent permitted by the applicable law, the Court of Chancery of the State of Delaware shall be the sole and exclusive
forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf
of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other
employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim
against the Corporation, its directors, officers or employees arising pursuant to any provision of the DGCL or this Amended and
Restated Certificate or the Bylaws, or (iv) any action asserting a claim against the Corporation, its directors, officers
or employees governed by the internal affairs doctrine and, if brought outside of Delaware, the stockholder bringing the suit will
be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the
Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the
Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten
days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court
of Chancery, or (C) for which the Court of Chancery does not have subject matter jurisdiction. (b) Notwithstanding the
foregoing, (i) the provisions of this Section 12.1 will not apply to suits brought to enforce any liability or
duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction and (ii) unless
the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States
of America shall, to the fullest extent permitted by law, be the exclusive forum for the resolution of any complaint asserting
a cause of action arising under the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder.
Section 12.2 Consent
to Jurisdiction. If any action the subject matter of which is within the scope of Section 12.1(a) immediately
above is filed in a court other than a court located within the State of Delaware (a “Foreign Action”)
in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the
state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce
Section 12.1(a) immediately above (an “FSC Enforcement Action”) and (ii) having
service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel
in the Foreign Action as agent for such stockholder. If any action the subject matter of which is within the scope of Section 12.1(b) above
is filed in a court other than a federal district court of the United States of America (a “Foreign Securities Act
Action”) in the name of any stockholder (current, former or future), such stockholder shall be deemed to have consented
to: (x) the personal jurisdiction of the federal district courts of the United States of America in connection with any action
brought in any such court to enforce Section 12.1(b) above (a “Foreign Securities Act Enforcement Action”),
and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder’s
counsel in the Foreign Securities Act Enforcement Action as agent for such stockholder.
Section 12.3 Severability.
If any provision or provisions of this Article XII shall be held to be invalid, illegal or unenforceable
as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the
validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article XII (including,
without limitation, each portion of any sentence of this Article XII containing any such provision held to
be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such
provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
Section 12.4 Deemed
Notice. Any person or entity purchasing or otherwise acquiring or holding any interest in any security of the Corporation shall
be deemed to have notice of and consented to this Article XII.
[Signature Page Follows]
IN WITNESS WHEREOF,
Roman DBDR Tech Acquisition Corp. has caused this Amended and Restated Certificate to be duly executed and acknowledged in its
name and on its behalf by an authorized officer as of the date first set forth above.
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: Dr. Donald G. Basile |
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Title: Chairman of the Board |
Exhibit 4.4
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (this “Agreement”),
dated as of ,
2020, is by and between Roman DBDR Tech Acquisition Corp., a Delaware corporation (the “Company”), and
Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agent”,
also referred to herein as the “Transfer Agent”).
WHEREAS, the Company is engaged in an
initial public offering (the “Offering”) of units of the Company’s equity securities, each
such unit comprised of one share of Class A common stock of the Company, par value $0.0001 per share (“Common
Stock”) and one-half of one redeemable Public Warrant (as defined below) (the
“Units”) and, in connection therewith, has determined to issue and deliver up to 11,000,000
warrants (or up to 12,650,000 warrants if the Over-allotment Option is exercised in full) to public investors in the Offering
(the “Public Warrants”); and
WHEREAS, on
,
2020, the Company entered into that certain Private Placement Warrants Purchase Agreement with Roman DBDR Tech Sponsor LLC, a
Delaware limited liability company (the “Sponsor”), pursuant to which the Sponsor agreed to
purchase an aggregate of 10,375,000 warrants (or 11,695,000 in the event that the Over-allotment Option (as defined below) in
connection with the Company’s Offering is exercised in full) simultaneously with the closing of the Offering
bearing the legend set forth in Exhibit B hereto (the
“Private Placement Warrants”) at a purchase price of $1.00
per Private Placement Warrant; and
WHEREAS, in order to finance the Company’s
transaction costs in connection with an intended initial Business Combination (as defined below), the Sponsor or an affiliate of
the Sponsor or certain of the Company’s executive officers and directors may, but are not obligated to, loan to the Company
funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into up to an additional 1,500,000
warrants at a price of $1.00 per warrant (the “Working Capital Warrants”); and
WHEREAS, following consummation of the Offering,
the Company may issue additional warrants (“Post IPO Warrants”; together with the Private Placement Warrants,
the Working Capital Warrants and the Public Warrants, the “Warrants”) in connection with, or following
the consummation by the Company of, a Business Combination (defined below); and
WHEREAS, the Company has filed with the
Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1, File No.
333-249330 (the “Registration Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities Act”), of the
Units, the Public Warrants and the Common Stock included in the Units; and
WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration,
transfer, exchange, redemption and exercise of the Warrants; and
WHEREAS, the Company desires to provide
for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and
WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf
of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution
and delivery of this Agreement.
NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts
such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.
2. Warrants.
2.1 Form of Warrant. Each
Warrant shall be issued in registered form only, and, if a physical certificate is issued, shall be in substantially the form of Exhibit
A hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of,
the Chairman of the Board, President, any Chief Executive Officer, Chief Financial Officer, Secretary or other principal officer
of the Company. In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in
the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if
he or she had not ceased to be such at the date of issuance.
2.2 Effect of Countersignature.
If a physical certificate is issued, unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant
certificate shall be invalid and of no effect and may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant Register. The
Warrant Agent shall maintain books (the “Warrant Register”) for the registration of
original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent
shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance
with instructions delivered to the Warrant Agent by the Company. All of the Public Warrants shall initially be represented by one
or more book-entry certificates (each, a “Book-Entry Warrant Certificate”) deposited with The Depository
Trust Company (the “Depositary”) and registered in the name of Cede & Co., a nominee of the Depositary.
Ownership of beneficial interests in the Public Warrants shall be shown on, and the transfer of such ownership shall be effected
through, records maintained by (i) the Depositary or its nominee for each Book-Entry Warrant Certificate, or (ii) institutions
that have accounts with the Depositary (each such institution, with respect to a Warrant in its account, a “Participant”).
If the Depositary subsequently ceases
to make its book-entry settlement system available for the Public Warrants, the Company may instruct the Warrant Agent regarding
making other arrangements for book-entry settlement. In the event that the Public Warrants are not eligible for, or it is no longer
necessary to have the Public Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the
Depositary to deliver to the Warrant Agent for cancellation each Book-Entry Warrant Certificate, and the Company shall instruct
the Warrant Agent to deliver to the Depositary definitive certificates in physical form evidencing such Warrants (“Definitive
Warrant Certificate”). Such Definitive Warrant Certificate shall be in the form annexed hereto as Exhibit
A, with appropriate insertions, modifications and omissions, as provided above.
2.3.2 Registered Holder. Prior
to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person
in whose name such Warrant is registered in the Warrant Register (the “Registered Holder”)
as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other
writing on a Definitive Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
2.4 Detachability of Warrants.
The Common Stock and Public Warrants comprising the Units shall begin separate trading on the 52nd day following the date of the
Prospectus or, if such 52nd day is not on a day, other than a Saturday, Sunday or federal holiday, on which banks in New York City
are generally open for normal business (a “Business Day”), then on the immediately
succeeding Business Day following such date, or earlier (the “Detachment Date”) with
the consent of B. Riley FBR, Inc. , as representative of the several underwriters (the “Representative”),
but in no event shall the Common Stock and the Public Warrants comprising the Units be separately traded until (A) the Company
has filed a current report on Form 8-K with the Commission containing an audited balance sheet reflecting the receipt by the Company
of the gross proceeds of the Offering, including the proceeds received by the Company from the exercise by the underwriters of
their right to purchase additional Units in the Offering (the “Over-Allotment Option”),
if the Over-Allotment Option is exercised prior to the filing of the Form 8-K, and (B) the Company issues a press release and files
with the Commission a current report on Form 8-K announcing when such separate trading shall begin.
2.5 No Fractional Warrants
Other Than as Part of Units. The Company shall not issue fractional Warrants other than as part of the Units, each of
which is comprised of one share of Common Stock and one-half of one Public Warrant. If, upon the detachment of Public Warrants
from Units or otherwise, a holder of Warrants would be entitled to receive a fractional Warrant, the Company shall round down to
the nearest whole number the number of Warrants to be issued to such holder.
2.6 Private Placement Warrants
and Working Capital Warrants. The Private Placement Warrants and the Working Capital Warrants shall be identical to the Public
Warrants, except that so long as they are held by the Sponsor or any Permitted Transferees (as defined below), as applicable, the
Private Placement Warrants and the Working Capital Warrants: (i) may be exercised for cash or on a cashless basis, pursuant to subsection
3.3.1(c) hereof, (ii) may not be transferred, assigned or sold until thirty (30) days after the completion by the Company
of an initial Business Combination (as defined below), and (iii) shall not be redeemable by the Company; provided, however,
that in the case of (ii) the Private Placement Warrants and the Working Capital Warrants and any shares of Common Stock held by
the Sponsor or any Permitted Transferees, as applicable, and issued upon exercise of the Private Placement Warrants and the Working
Capital Warrants may be transferred by the holders thereof:
(a) to the Company’s officers or
directors, any affiliate or family member of any of the Company’s officers or directors, any affiliate of the Sponsor or
to any member(s) of the Sponsor or any of their affiliates, officers, directors and direct and indirect equityholders;
(b) in the case of an individual, by gift
to a member such individual’s immediate family or to a trust, the beneficiary of which is a member of such individual’s
immediate family, an affiliate of such individual or to a charitable organization;
(c) in the case of an individual, by virtue
of the laws of descent and distribution upon death of such person;
(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 an initial Business Combination at prices no greater than the price at which the Warrants
were originally purchased;
(f) in the event of the Company’s
liquidation prior to consummation of the Company’s Business Combination; or
(g) by virtue of the laws of the State
of Delaware or the Sponsor’s limited liability company agreement upon dissolution of the Sponsor;
provided, however, that, in the case of clauses
(a) through (e), these transferees (the “Permitted Transferees”) enter into a written
agreement with the Company agreeing to be bound by the transfer restrictions in this Agreement.
2.7 Working
Capital Warrants. The Working Capital Warrants shall be identical to the Private Placement Warrants.
2.8
Post-IPO Warrants. The Post-IPO Warrants, when and if issued, shall have the same terms and be in the same form as the Public
Warrants except as may be agreed upon by the Company.
3. Terms and Exercise of Warrants.
3.1 Warrant Price. Each whole
Warrant shall entitle the Registered Holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase
from the Company the number of shares of Common Stock stated therein, at the price of $11.50 per share, subject to the adjustments
provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant
Price” as used in this Agreement shall mean the price per share at which shares of Common Stock may be purchased at the time
a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date
(as defined below) for a period of not less than twenty (20) Business Days; provided, that the Company shall provide at least five
(5) days’ prior written notice of such reduction to Registered Holders of the Warrants; and provided further, that any such
reduction shall be identical among all of the Warrants.
3.2 Duration of Warrants.
A Warrant may be exercised only during the period (the “Exercise Period”) commencing
on the later of: (i) the date that is thirty (30) days after the first date on which the Company completes a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more
businesses (a “Business Combination”), or (ii) the date that is twelve (12) months
from the date of the closing of the Offering, and terminating at 5:00 p.m., New York City time on the earlier to occur of: (x)
the date that is five (5) years after the date on which the Company completes its initial Business Combination, (y) the liquidation
of the Company, or (z) other than with respect to the Private Placement Warrants and the Working Capital Warrants to the extent
then held by the original purchasers thereof or their Permitted Transferees, the Redemption Date (as defined below) as provided
in Section 6.2 hereof (the Expiration Date”); provided, however,
that the exercise of any Warrant shall be subject to the satisfaction of any applicable conditions, as set forth in subsection
3.3.2 below with respect to an effective registration statement. Except with respect to the right to receive the Redemption
Price (as defined below) (other than with respect to a Private Placement Warrant or a Working Capital Warrant) to the extent then
held by the original purchasers thereof or their Permitted Transferees in the event of a redemption (as set forth in Section
6 hereof), each outstanding Warrant (other than a Private Placement Warrant or a Working Capital Warrant to the extent
then held by the original purchasers thereof or their Permitted Transferees in the event of a redemption) not exercised on or before
the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease
at 5:00 p.m. New York City time on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants
by delaying the Expiration Date; provided, that the Company shall provide at least twenty (20) days prior written notice
of any such extension to Registered Holders of the Warrants and, provided further that any such extension shall be identical in
duration among all the Warrants.
3.3 Exercise of Warrants.
3.3.1 Payment. Subject to
the provisions of the Warrant and this Agreement, a Warrant may be exercised by the Registered Holder thereof by delivering to
the Warrant Agent at its corporate trust department (i) the Definitive Warrant Certificate evidencing the Warrants to be exercised,
or, in the case of a Book-Entry Warrant Certificate, the Warrants to be exercised (the “Book-Entry Warrants”)
on the records of the Depositary to an account of the Warrant Agent at the Depositary designated for such purposes in writing by
the Warrant Agent to the Depositary from time to time, (ii) an election to purchase (“Election to Purchase”)
shares of Common Stock pursuant to the exercise of a Warrant, properly completed and executed by the Registered Holder on the reverse
of the Definitive Warrant Certificate or, in the case of a Book-Entry Warrant Certificate, properly delivered by the Participant
in accordance with the Depositary’s procedures, and (iii) payment in full of the Warrant Price for each full share of Common
Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant,
the exchange of the Warrant for the shares of Common Stock and the issuance of such shares of Common Stock, as follows:
(a) by certified check payable to the
order of the Warrant Agent or by wire transfer;
(b) in the event of a redemption pursuant
to Section 6 hereof in which the Company’s board of directors (the “Board”) has
elected to require all holders of the Warrants to exercise such Warrants on a “cashless basis,” by surrendering the
Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of
shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the “Fair Market
Value”, as defined in this subsection 3.3.1(b) by (y) the Fair Market Value. Solely for purposes of this subsection
3.3.1(b) and Section 6.3, the “Fair Market Value” shall mean the average last sale price of the
Common Stock for the ten (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 the Warrants, pursuant to Section 6 hereof;
(c) with respect to any Private Placement
Warrant or Working Capital Warrant, so long as such Private Placement Warrant or Working Capital Warrant is held by the Sponsor
or a Permitted Transferee, as applicable, by surrendering the Warrants for that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference
between the Warrant Price and the “Fair Market Value”, as defined in this subsection 3.3.1(c), by (y) the
Fair Market Value. Solely for purposes of this subsection 3.3.1(c), the “Fair Market Value” shall mean
the average reported last sale price of the Common Stock for the ten (10) trading days ending on the third trading day prior to
the date on which notice of exercise of the Warrant is sent to the Warrant Agent; or
(d) as provided in Section 7.4 hereof.
3.3.2 Issuance of Shares of Common
Stock on Exercise. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the
Warrant Price (if payment is pursuant to subsection 3.3.1(a)), the Company shall issue to the Registered Holder of
such Warrant a book-entry position or certificate, as applicable, for the number of full shares of Common Stock to which he, she
or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been
exercised in full, a new book-entry position or countersigned Warrant, as applicable, for the number of shares of Common Stock
as to which such Warrant shall not have been exercised. If fewer than all the Warrants evidenced by a Book-Entry Warrant Certificate
are exercised, a notation shall be made to the records maintained by the Depositary, its nominee for each Book-Entry Warrant Certificate,
or a Participant, as appropriate, evidencing the balance of the Warrants remaining after such exercise. Notwithstanding the foregoing,
the Company shall not be obligated to deliver any shares of Common Stock pursuant to the exercise of a Warrant and shall have no
obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the shares
of Common Stock underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company’s
satisfying its obligations under Section 7.4. No Warrant shall be exercisable and the Company shall not be obligated
to issue shares of Common Stock upon exercise of a Warrant unless the Common Stock issuable upon such Warrant exercise has been
registered, qualified or deemed to be exempt from registration or qualification under the securities laws of the state of residence
of the Registered Holder of the Warrants, except pursuant to Section 7.4. 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 shall not be entitled to exercise such
Warrant and such Warrant may have no value and expire worthless, in which case the purchaser of a Unit containing such Public Warrants
shall have paid the full purchase price for the Unit solely for the shares of Common Stock underlying such Unit. In no event will
the Company be required to net cash settle the Warrant exercise. The Company may require holders of Public Warrants to settle the
Warrant on a “cashless basis” pursuant to subsection 3.3.1(b) and Section 7.4. If, by reason of
any exercise of Warrants on a “cashless basis”, the holder of any Warrant would be entitled, upon the exercise of such
Warrant, to receive a fractional interest in a share of Common Stock, the Company shall round down to the nearest whole number,
the number of shares of Common Stock to be issued to such holder.
3.3.3 Valid Issuance. All
shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued,
fully paid and non-assessable.
3.3.4 Date of Issuance. Each
person in whose name any book-entry position or certificate, as applicable, for shares of Common Stock is issued shall for all
purposes be deemed to have become the holder of record of such shares of Common Stock on the date on which the Warrant, or book-entry
position representing such Warrant, was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery
of such certificate in the case of a certificated Warrant, except that, if the date of such surrender and payment is a date when
the share transfer books of the Company or book-entry system of the Warrant Agent are closed, such person shall be deemed to have
become the holder of such shares of Common Stock at the close of business on the next succeeding date on which the share transfer
books or book-entry system are open.
3.3.5 Maximum Percentage.
A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this subsection
3.3.5; however, no holder of a Warrant shall be subject to this subsection 3.3.5 unless he, she
or it makes such election. If the election is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s
Warrant, and such holder shall 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 4.9% or 9.8% (or such other amount as a holder may specify)(the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence,
the aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being
made, but shall exclude shares of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of
the Warrant beneficially owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such person and its affiliates (including, without limitation,
any convertible notes or convertible preferred stock or warrants) subject to a limitation on conversion or exercise analogous to
the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
For purposes of the Warrant, in determining the number of outstanding shares of Common Stock, the holder may rely on the number
of outstanding shares of Common Stock as reflected in (1) the Company’s most recent annual report on Form 10-K, quarterly
report on Form 10-Q, current report on Form 8-K or other public filing with the Commission as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by the Company or the Transfer Agent setting forth the number of shares
of Common Stock outstanding. For any reason at any time, upon the written request of the holder of the Warrant, the Company shall,
within two (2) Business Days, confirm orally and in writing to such holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of equity securities of the Company by the holder and its affiliates since the date as of which such number of outstanding shares
of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from time to time increase or decrease
the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided, however,
that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock Dividends.
4.1.1 Split-Ups. If after
the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock or other similar
event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable
on exercise of each Warrant shall be increased in proportion to such increase in the outstanding shares of Common Stock. A rights
offering to holders of the Common Stock entitling holders to purchase shares of Common Stock at a price less than the “Fair
Market Value” (as defined below) shall be deemed a stock dividend of a number of shares of Common Stock equal to the product
of (i) the number of shares of 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 the Common Stock) and (ii) one (1) minus the quotient
of (x) the price per share of Common Stock paid in such rights offering divided by (y) the Fair Market Value. For purposes of this subsection
4.1.1, (i) if the rights offering is for securities convertible into or exercisable for Common Stock, in determining the price
payable for Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional
amount payable upon exercise or conversion and (ii) “Fair Market Value” means the volume weighted average price of
the 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 Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive
such rights.
4.1.2 Extraordinary Dividends.
If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash,
securities or other assets to the holders of the Common Stock on account of such shares of Common Stock (or other shares of the
Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1.1 above,
(b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the Common Stock in connection
with a proposed initial Business Combination, (d) as a result of the repurchase of shares of Common Stock by the Company if a proposed
Business Combination is presented to the stockholders of the Company for approval, (e) to satisfy the redemption rights of the
holders of Common Stock in connection with a stockholder vote to amend the Company’s amended and restated certificate of
incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares of Common
Stock if the Company does not complete the Business Combination within the period set forth in the Company’s amended and
restated certificate of incorporation or (f) in connection with the redemption of public shares of Common Stock upon the failure
of the Company to complete its initial Business Combination and any subsequent distribution of its assets upon its liquidation
(any such non-excluded event being referred to herein as an “Extraordinary Dividend”),
then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the
amount of cash and/or the fair market value (as determined by the Board, in good faith) of any securities or other assets paid
on each share of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2, “Ordinary Cash Dividends”
means any cash dividend or cash distribution which, when combined on a per share basis, with the per share amounts of all other
cash dividends and cash distributions paid on the Common Stock during the 365-day period ending on the date of declaration of such
dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section
4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number
of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price of the Units
in the Offering).
4.2 Aggregation of Shares.
If after the date hereof, and subject to the provisions of Section 4.6 hereof, the number of outstanding shares
of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of 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 Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.
4.3 Adjustments in Exercise Price.
4.3.1 Whenever the number of shares of
Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or Section
4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior
to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the
exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of
Common Stock so purchasable immediately thereafter.
4.3.2 If (i) the Company issues additional
shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock for capital raising
purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less
than $9.20 per share of Common Stock, with such issue price or effective issue price to be determined in good faith by the Board
(and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any founder shares held by
such holder or affiliates, as applicable, prior to such issuance) (the “New Issuance Price”), (ii) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of the initial Business Combination on the date of the consummation thereof (net of redemptions) and (iii) the
volume weighted average trading price of the Common Stock during the 20 trading day period starting on the trading day prior to
the day on which the Company consummates the initial Business Combination (such price, the “Market Value”)
is below $9.20 per share, then the Warrant Price shall be adjusted (to the nearest cent) to be equal to 115% of the greater of
the Market Value and the New Issuance Price and the Redemption Trigger Price (as defined below) shall be adjusted (to the nearest
cent) to be equal to 180% of the greater of the Market Value and the Newly Issued Price.
4.4 Replacement of Securities
upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other
than a change under subsections 4.1.1 or 4.1.2 or Section 4.2 hereof or that solely
affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into
another entity or conversion of the Company as another entity (other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock),
or in the case of any sale or conveyance to another entity of the assets or other property of the Company as an entirety or substantially
as an entirety in connection with which the Company is dissolved, the holders of the Warrants shall 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 Common
Stock of the Company 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 his, her or its Warrant(s) immediately prior to such event (the “Alternative Issuance”); provided, however,
that in connection with the closing of any such consolidation, merger, sale or conveyance, the successor or purchasing entity shall
execute an amendment hereto with the Warrant Agent providing for delivery of such Alternative Issuance; provided, further,
that (i) if the holders of the Common Stock 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
constituting the Alternative Issuance for which each Warrant shall become exercisable shall be deemed to be the weighted average
of the kind and amount received per share by the holders of the Common Stock in such consolidation or merger that affirmatively
make such election, and (ii) if a tender, exchange or redemption offer shall have been made to and accepted by the holders of the
Common Stock (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 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 (or any successor rule)) 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 (or any successor rule)) 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 (or any successor rule)) more than 50% of the outstanding shares of Common
Stock, the holder of a Warrant shall be entitled to receive as the Alternative Issuance, 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 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 this Section 4; provided, further,
that if less than 70% of the consideration receivable by the holders of the Common Stock in the applicable event 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 properly exercises the Warrant within thirty (30) days following the public disclosure of the consummation of such applicable
event by the Company pursuant to a Current Report on Form 8-K filed with the Commission, the Warrant Price shall be reduced by
an amount (in dollars) (but in no event less than zero) equal to the difference of (i) the Warrant Price in effect prior to such
reduction minus (ii) (A) the Per Share Consideration (as defined below) minus (B) the Black-Scholes Warrant Value (as defined below).
The “Black-Scholes Warrant Value” means the value of a Warrant
immediately prior to the consummation of the applicable event based on the Black-Scholes Warrant Model for a Capped American Call
on Bloomberg Financial Markets (“Bloomberg”). For purposes of calculating such amount, (1) Section
6 of this Agreement shall be taken into account, (2) the price of each share of Common Stock shall be the volume weighted
average price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective
date of the applicable event, (3) the assumed volatility shall be the 90 day volatility obtained from the HVT function on Bloomberg
determined as of the trading day immediately prior to the day of the announcement of the applicable event, and (4) the assumed
risk-free interest rate shall correspond to the U.S. Treasury rate for a period equal to the remaining term of the Warrant. “Per Share Consideration”
means (i) if the consideration paid to holders of the Common Stock consists exclusively of cash, the amount of such cash per share
of Common Stock, and (ii) in all other cases, the amount of cash per share of Common Stock, if any, plus the volume weighted average
price of the Common Stock as reported during the ten (10) trading day period ending on the trading day prior to the effective date
of the applicable event. If any reclassification or reorganization also results in a change in shares of Common Stock covered by subsection
4.1.1, then such adjustment shall be made pursuant to subsection 4.1.1 or Sections 4.2, 4.3 and
this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers. In no event will the Warrant Price be reduced to less than
the par value per share issuable upon exercise of the Warrant.
4.5 Notices of Changes in Warrant.
Upon every adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company
shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment
and the increase or decrease, if any, in the number of shares of Common Stock purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon
the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, the
Company shall give written notice of the occurrence of such event to each holder of a Warrant, at the last address set forth for
such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such event.
4.6 No Fractional Shares.
Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares of Common
Stock upon the exercise of Warrants. If, by reason of any adjustment made pursuant to this Section 4, the holder of
any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall,
upon such exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to such holder.
4.7 Form of Warrant. The form
of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such
adjustment may state the same Warrant Price and the same number of shares of Common Stock as is stated in the Warrants initially
issued pursuant to this Agreement; provided, however, that the Company may at any time in its sole discretion
make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and
any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may
be in the form as so changed.
4.8 Other Events. In case
any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section
4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to (i) avoid an
adverse impact on the Warrants and (ii) effectuate the intent and purpose of this Section 4, then, in each such case,
the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national
standing, which shall give its opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary
to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary,
the terms of such adjustment, provided, however, that under no circumstances shall the Warrants be adjusted pursuant to this Section
4.8 as a result of any issuance of securities in connection with the Business Combination. The Company shall adjust the terms
of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.
4.9 No Adjustment. For the
avoidance of doubt, no adjustment shall be made to the terms of the Warrants solely as a result of an adjustment to the conversion
ratio of the Company’s Class B common stock (the “Class B Common Stock”) into shares of Common
Stock or the conversion of the shares of Class B Common Stock into shares of Common Stock, in each case, pursuant to the Company’s
Charter, as amended from time to time.
5. Transfer and Exchange of Warrants.
5.1 Registration of Transfer.
The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender
of such Warrant for transfer, in the case of certificated Warrants, properly endorsed with signatures properly guaranteed and accompanied
by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants
shall be issued and the old Warrant shall be cancelled by the Warrant Agent. In the case of certificated Warrants, the Warrants
so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.
5.2 Procedure for Surrender of
Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon
the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants
so surrendered, representing an equal aggregate number of Warrants; provided, however, that except as otherwise
provided herein or in any Book-Entry Warrant Certificate or Definitive Warrant Certificate, each Book-Entry Warrant Certificate
and Definitive Warrant Certificate may be transferred only in whole and only to the Depositary, to another nominee of the Depositary,
to a successor depository, or to a nominee of a successor depository; provided further, however,
that in the event that a Warrant surrendered for transfer bears a restrictive legend (as in the case of the Private Placement Warrants
and the Working Capital Warrants), the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange thereof until
the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend.
5.3 Fractional Warrants. The
Warrant Agent shall not be required to effect any registration of transfer or exchange which shall result in the issuance of a
warrant certificate or book-entry position for a fraction of a warrant.
5.4 Service Charges. No service
charge shall be made for any exchange or registration of transfer of Warrants.
5.5 Warrant Execution and Countersignature.
The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants
required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant
Agent, shall supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
5.6 Transfer of Warrants.
Prior to the Detachment Date, the Public Warrants may be transferred or exchanged only together with the Unit in which such Warrant
is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, each
transfer of a Unit on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. Notwithstanding
the foregoing, the provisions of this Section 5.6 shall have no effect on any transfer of Warrants on and after
the Detachment Date.
6. Redemption.
6.1 Redemption. Subject to Section
6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time while
they are exercisable and prior to their expiration, at the office of the Warrant Agent, upon notice to the Registered Holders of
the Warrants, as described in Section 6.2 below, at the price of $0.01 per Warrant (the “Redemption Price”),
provided that the last sales price of the Common Stock reported has been at least $18.00 per share (the “Redemption
Trigger Price”; subject to adjustment in compliance with Section 4 hereof), on each of twenty (20)
trading days within the thirty (30) trading-day period ending on the third trading day prior to the date on which notice of the
redemption is given and provided that there is an effective registration statement covering the shares of Common Stock issuable
upon exercise of the Warrants, and a current prospectus relating thereto, available throughout the 30-day Redemption Period (as
defined in Section 6.2 below) or the Company has elected to require the exercise of the Warrants on a “cashless
basis” pursuant to subsection 3.3.1; provided, however, that if and when the Public Warrants become
redeemable by the Company, the Company may not exercise such redemption right if the issuance of shares of Common Stock upon exercise
of the Public Warrants is not exempt from registration or qualification under applicable state blue sky laws or the Company is
unable to effect such registration or qualification.
6.2 Date Fixed for, and Notice
of, Redemption. In the event that the Company elects to redeem all of the Warrants, the Company shall fix a date for the redemption
(the “Redemption Date”). Notice of redemption shall be mailed by first class mail,
postage prepaid, by the Company not less than thirty (30) days prior to the Redemption Date (the “30-day Redemption Period”)
to the Registered Holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books.
Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the Registered
Holder received such notice.
6.3 Exercise After Notice of Redemption.
The Warrants may be exercised, for cash (or on a “cashless basis” in accordance with subsection 3.3.1(b) of
this Agreement) at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof
and prior to the Redemption Date. In the event that the Company determines to require all holders of Warrants to exercise their
Warrants on a “cashless basis” pursuant to subsection 3.3.1, the notice of redemption shall contain the
information necessary to calculate the number of shares of Common Stock to be received upon exercise of the Warrants, including
the “Fair Market Value” (as such term is defined in subsection 3.3.1(b) hereof) in such case. On and
after the Redemption Date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of
the Warrants, the Redemption Price.
6.4 Exclusion of Private Placement
Warrants and Working Capital Warrants. The Company agrees that the redemption rights provided in this Section 6 shall
not apply to the Private Placement Warrants or the Working Capital Warrants if at the time of the redemption such Private Placement
Warrants or the Working Capital Warrants continue to be held by the Sponsor or any Permitted Transferees, as applicable. However,
once such Private Placement Warrants or Working Capital Warrants are transferred (other than to Permitted Transferees under Section 2.6),
the Company may redeem the Private Placement Warrants and the Working Capital Warrants, provided that the criteria for redemption
are met, including the opportunity of the holder of such Private Placement Warrants or the Working Capital Warrants to exercise
the Private Placement Warrant and the Working Capital Warrants prior to redemption pursuant to Section 6.3. Private
Placement Warrants and Working Capital Warrants that are transferred to persons other than Permitted Transferees shall upon such
transfer cease to be Private Placement Warrants or Working Capital Warrants and shall become Public Warrants under this Agreement.
7. Other Provisions Relating to
Rights of Holders of Warrants.
7.1 No Rights as Stockholder.
A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without
limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to
receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other
matter.
7.2 Lost, Stolen, Mutilated, or
Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such
terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or
destroyed. Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation of Common Stock.
The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that shall
be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration of Common Stock;
Cashless Exercise at Company’s Option.
7.4.1 Registration of the Common
Stock. The Company agrees that as soon as practicable, but in no event later than fifteen (15) Business Days after the closing
of its initial Business Combination, it shall use its best efforts to file with the Commission a registration statement for the
registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the Warrants. The Company shall
use its 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 this Agreement.
If any such registration statement has not been declared effective by the 60th Business Day following the closing of the Business
Combination, holders of the Warrants shall have the right, during the period beginning on the 61st Business Day after the closing
of the Business Combination and ending upon such registration statement being declared effective by the Commission, and during
any other period when the Company shall fail to have maintained an effective registration statement covering the shares of Common
Stock issuable upon exercise of the Warrants, to exercise such Warrants on a “cashless basis,” by exchanging the Warrants
(in accordance with Section 3(a)(9) of the Securities Act (or any successor rule) or another exemption) for that number of shares
of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the
Warrants, multiplied by the difference between the Warrant Price and the “Fair Market Value” (as defined below) by
(y) the Fair Market Value. Solely for purposes of this subsection 7.4.1, “Fair Market Value” shall mean
the volume weighted average price of the Common Stock as reported during the ten (10) trading day period ending on the trading
day prior to the date that notice of exercise is received by the Warrant Agent from the holder of such Warrants or its securities
broker or intermediary. The date that notice of cashless exercise is received by the Warrant Agent shall be conclusively determined
by the Warrant Agent. In connection with the “cashless exercise” of a Public Warrant, the Company shall, upon request,
provide the Warrant Agent with an opinion of counsel for the Company (which shall be an outside law firm with securities law experience)
stating that (i) the exercise of the Warrants on a cashless basis in accordance with this subsection 7.4.1 is
not required to be registered under the Securities Act and (ii) the shares of Common Stock issued upon such exercise shall be freely
tradable under United States federal securities laws by anyone who is not an affiliate (as such term is defined in Rule 144 under
the Securities Act (or any successor statute)) of the Company and, accordingly, shall not be required to bear a restrictive legend.
Except as provided in subsection 7.4.2, for the avoidance of any doubt, unless and until all of the Warrants have been
exercised or have expired, the Company shall continue to be obligated to comply with its registration obligations under the first
three sentences of this subsection 7.4.1.
7.4.2 Cashless Exercise at Company’s
Option. If the 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 (or any successor
statute), the Company may, at its option, (i) require holders of Public Warrants who exercise Public Warrants to exercise
such Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act (or any successor
statute) as described in subsection 7.4.1 and (ii) in the event the Company so elects, the Company shall not be required
to file or maintain in effect a registration statement for the registration, under the Securities Act, of the Common Stock issuable
upon exercise of the Warrants, notwithstanding anything in this Agreement to the contrary. If the Company does not elect at the
time of exercise to require a holder of Public Warrants who exercises Public Warrants to exercise such Public Warrants on a “cashless
basis,” it agrees to use its best efforts to register or qualify for sale the Common Stock issuable upon exercise of the
Public Warrant under the blue sky laws of the state of residence of the exercising Public Warrant holder to the extent an exemption
is not available.
8. Concerning the Warrant Agent
and Other Matters.
8.1 Payment of Taxes. The
Company shall from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in
respect of the issuance or delivery of shares of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated
to pay any transfer taxes in respect of the Warrants or such shares of Common Stock.
8.2 Resignation, Consolidation,
or Merger of Warrant Agent.
8.2.1 Appointment of Successor
Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from
all further duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office
of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor
Warrant Agent in place of the Warrant Agent. If the Company shall fail to make such appointment within a period of thirty (30)
days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of a Warrant
(who shall, with such notice, submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the
Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s
cost. Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing
under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and
State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination
by federal or state authority. After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights,
immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder,
without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall
execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall
make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming
to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.
8.2.2 Notice of Successor Warrant
Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor
Warrant Agent and the Transfer Agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 Merger or Consolidation
of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under
this Agreement without any further act.
8.3 Fees and Expenses of Warrant
Agent.
8.3.1 Remuneration. The Company
agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and shall, pursuant to
its obligations under this Agreement, reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably
incur in the execution of its duties hereunder.
8.3.2 Further Assurances.
The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered
all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying
out or performing of the provisions of this Agreement.
8.4 Liability of Warrant Agent.
8.4.1 Reliance on Company Statement.
Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by
a statement signed by any Co-Chief Executive Officer, the Chief Financial Officer, President, Executive Vice President, Vice President,
Secretary or Chairman of the Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement
for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity. The Warrant
Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify
the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees,
for anything done or omitted by the Warrant Agent in the execution of this Agreement, except as a result of the Warrant Agent’s
gross negligence, willful misconduct or bad faith.
8.4.3 Exclusions. The Warrant
Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof). The Warrant Agent shall not be responsible for any breach by the Company
of any covenant or condition contained in this Agreement or in any Warrant. The Warrant Agent shall not be responsible to make
any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method, or amount
of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any
act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock shall, when issued, be valid
and fully paid and non-assessable.
8.5 Acceptance of Agency.
The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently
account for, and pay to the Company, all monies received by the Warrant Agent for the purchase of shares of Common Stock through
the exercise of the Warrants.
8.6 Waiver. The Warrant Agent
has no right of set-off or any other right, title, interest or claim of any kind (“Claim”) in, or to
any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date
hereof, by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement,
payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. The Warrant Agent hereby waives any
and all Claims against the Trust Account and any and all rights to seek access to the Trust Account.
9. Miscellaneous Provisions.
9.1 Successors. All the covenants
and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit
of their respective successors and assigns.
9.2 Notices. Any notice, statement
or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company
shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier
service within five (5) days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing
by the Company with the Warrant Agent), as follows:
Roman DBDR Tech Acquisition Corp.
345 Lorton Avenue, Suite 400
Burlingame, California 94010
Attention: Dr. Donald G Basile and Dixon Doll, Jr.
Any notice, statement or demand authorized by this Agreement
to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when
so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company),
as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attention: Compliance Department
9.3 Applicable Law. The validity,
interpretation, and performance of this Agreement and of the Warrants shall be governed in all respects by the laws of the State
of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws
of another jurisdiction. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in
any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court
for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The
Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Notwithstanding
the foregoing, the provisions of this paragraph will not apply to suits brought to enforce any liability or duty created by the
Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum.
Any person or entity purchasing or otherwise
acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in this
Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a court
other than a court located within the State of New York or the United States District Court for the Southern District of New York
(a “foreign action”) in the name of any warrant holder, such warrant holder shall be deemed to have consented
to: (x) the personal jurisdiction of the state and federal courts located within the State of New York or the United States District
Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions
(an “enforcement action”), and (y) having service of process made upon such warrant holder in any such
enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
9.4 Persons Having Rights under
this Agreement. Nothing in this Agreement shall be construed to confer upon, or give to, any person or corporation other than
the parties hereto and the Registered Holders of the Warrants and, for purposes of Sections 7.4, 9.4 and 9.8,
the Representative, any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation,
promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall
be for the sole and exclusive benefit of the parties hereto and, for purposes of Sections 7.4, 9.4 and 9.8,
the Representative, and their successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination of the Warrant
Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough
of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may require
any such holder to submit such holder’s Warrant for inspection by the Warrant Agent.
9.6 Counterparts. This Agreement
may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one and the same instrument.
9.7 Effect of Headings. The
section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.
9.8 Amendments. This Agreement
may be amended by the parties hereto without the consent of any Registered Holder (i) for the purpose of curing any ambiguity,
or correcting any mistake, including to conform the provisions of this Agreement to the description of the terms of the Warrants
and this Agreement in the Registration Statement or curing, correcting or supplementing any defective provision contained herein
or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may
deem necessary or desirable and that the parties deem shall not adversely affect the interest of the Registered Holders, and (ii)
to provide for the delivery of Alternative Issuance pursuant to Section 4.4. All other modifications or amendments, including
any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the vote or written consent of the Registered
Holders of a majority of the then outstanding Public Warrants. Any amendment solely to the Private Placement Warrants or the Working
Capital Warrants shall require the vote or written consent of a majority of the holders of the then outstanding Private Placement
Warrants or the Working Capital Warrants, as applicable. Notwithstanding the foregoing, the Company may lower the Warrant Price
or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without
the consent of the Registered Holders.
9.9 Severability. This Agreement
shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable
term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms
to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first above written.
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: |
Dr. Donald G. Basile |
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Title: |
Chairman and Co-Chief Executive Officer |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent |
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By: |
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Name: |
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Title: |
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[Signature Page to Warrant Agreement]
EXHIBIT A
[Form of Warrant Certificate]
[FACE]
Number
Warrants
THIS WARRANT SHALL BE VOID IF NOT EXERCISED
PRIOR TO
THE EXPIRATION OF THE EXERCISE PERIOD
PROVIDED FOR
IN THE WARRANT AGREEMENT DESCRIBED BELOW
ROMAN DBDR TECH ACQUISITION CORP.
Incorporated Under the Laws of the State of Delaware
CUSIP 77584N 119
Warrant Certificate
This Warrant Certificate certifies that
, or registered assigns, is the registered holder of warrant(s)
evidenced hereby (the “Warrants” and each, a “Warrant”) to purchase shares of Class A common
stock, $0.0001 par value per share (“Common Stock”), of Roman DBDR Tech Acquisition
Corp., a Delaware corporation (the “Company”). Each Warrant entitles the holder, upon exercise during
the period set forth in the Warrant Agreement referred to below, to receive from the Company that number of fully paid and non-assessable
shares of Common Stock as set forth below, at the exercise price (the “Exercise Price”)
as determined pursuant to the Warrant Agreement, payable in lawful money (or through “cashless exercise”
as provided for in the Warrant Agreement) of the United States of America upon surrender of this Warrant Certificate and payment
of the Exercise Price at the office or agency of the Warrant Agent referred to below, subject to the conditions set forth herein
and in the Warrant Agreement. Defined terms used in this Warrant Certificate but not defined herein shall have the meanings given
to them in the Warrant Agreement.
Each whole Warrant is initially exercisable
for one fully paid and non-assessable share of Common Stock. No fractional shares will be issued upon exercise of any Warrant.
If, upon the exercise of Warrants, a holder would be entitled to receive a fractional interest in a share of Common Stock, the
Company will, upon exercise, round down to the nearest whole number the number of shares of Common Stock to be issued to the Warrant
holder. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.
The initial Exercise Price per share of
Common Stock for any Warrant is equal to $11.50 per whole share. The Exercise Price is subject to adjustment upon the occurrence
of certain events set forth in the Warrant Agreement.
Subject to the conditions set forth in
the Warrant Agreement, the Warrants may be exercised only during the Exercise Period and to the extent not exercised by the end
of such Exercise Period, such Warrants shall become void.
Reference is hereby made to the further
provisions of this Warrant Certificate set forth on the reverse hereof and such further provisions shall for all purposes have
the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid
unless countersigned by the Warrant Agent, as such term is used in the Warrant Agreement.
This Warrant Certificate shall be governed
by and construed in accordance with the internal laws of the State of New York, without regard to conflicts of laws principles
thereof.
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: |
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Title: |
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent |
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By: |
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Name: |
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Title: |
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[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant
Certificate are part of a duly authorized issue of Warrants entitling the holder on exercise to receive shares of Common Stock
and are issued or to be issued pursuant to a Warrant Agreement dated as of _____, 2020 (the “Warrant Agreement”),
duly executed and delivered by the Company to Continental Stock Transfer & Trust Company, a New York corporation, as warrant
agent (the “Warrant Agent”), which Warrant Agreement is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to for a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Warrant Agent, the Company and the holders (the words “holders”
or “holder” meaning the Registered Holders or Registered Holder, respectively) of the Warrants. A copy
of the Warrant Agreement may be obtained by the holder hereof upon written request to the Company. Defined terms used in this Warrant
Certificate but not defined herein shall have the meanings given to them in the Warrant Agreement.
Warrants may be exercised at any time during
the Exercise Period set forth in the Warrant Agreement. The holder of Warrants evidenced by this Warrant Certificate may exercise
them by surrendering this Warrant Certificate, with the form of election to purchase set forth hereon properly completed and executed,
together with payment of the Exercise Price as specified in the Warrant Agreement (or through “cashless exercise” as
provided for in the Warrant Agreement) at the principal corporate trust office of the Warrant Agent. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised shall be less than the total number of Warrants evidenced
hereby, there shall be issued to the holder hereof or his, her or its assignee, a new Warrant Certificate evidencing the number
of Warrants not exercised.
Notwithstanding anything else in this Warrant
Certificate or the Warrant Agreement, no Warrant may be exercised unless at the time of exercise (i) a registration statement covering
the shares of Common Stock to be issued upon exercise is effective under the Securities Act and (ii) a prospectus thereunder relating
to the shares of Common Stock is current, except through “cashless exercise” as provided for in the Warrant Agreement.
The Warrant Agreement provides that upon
the occurrence of certain events the number of shares of Common Stock issuable upon exercise of the Warrants set forth on the face
hereof may, subject to certain conditions, be adjusted. If, upon exercise of a Warrant, the holder thereof would be entitled to
receive a fractional interest in a share of Common Stock, the Company shall, upon exercise, round down to the nearest whole number
of shares of Common Stock to be issued to the holder of the Warrant.
Warrant Certificates, when surrendered
at the principal corporate trust office of the Warrant Agent by the Registered Holder thereof in person or by legal representative
or attorney duly authorized in writing, may be exchanged, in the manner and subject to the limitations provided in the Warrant
Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor evidencing
in the aggregate a like number of Warrants.
Upon due presentation for registration
of transfer of this Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate or Warrant Certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company and the Warrant Agent may deem
and treat the Registered Holder(s) hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
Neither the Warrants nor this Warrant Certificate entitles any holder hereof to any rights of a stockholder of the Company.
Election to Purchase
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby irrevocably elects
to exercise the right, represented by this Warrant Certificate, to receive
shares of Common Stock and herewith tenders payment for such shares of Common Stock to the order of Roman DBDR Tech Acquisition
Corp. (the “Company”) in the amount of $ in accordance with the terms
hereof. The undersigned requests that a certificate for such shares of Common Stock be registered in the name of
, whose address is and that
such shares of Common Stock be delivered to
whose address is . If said
number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder, the undersigned requests
that a new Warrant Certificate representing the remaining balance of such shares of Common Stock be registered in the name of
, whose address is
and that such Warrant Certificate be delivered to
, whose address is .
In the event that the Warrant has been
called for redemption by the Company pursuant to Section 6 of the Warrant Agreement and the Company has required
cashless exercise pursuant to Section 6.3 of the Warrant Agreement, the number of shares of Common Stock that
this Warrant is exercisable for shall be determined in accordance with subsection 3.3.1(b) and Section
6.3 of the Warrant Agreement.
In the event that the Warrant is a Private
Placement Warrant or a Working Capital Warrant that is to be exercised on a “cashless” basis pursuant to subsection
3.3.1(c) of the Warrant Agreement, the number of shares of Common Stock that this Warrant is exercisable for shall be
determined in accordance with subsection 3.3.1(c) of the Warrant Agreement.
In the event that the Warrant is to be
exercised on a “cashless” basis pursuant to Section 7.4 of the Warrant Agreement, the number of shares
of Common Stock that this Warrant is exercisable for shall be determined in accordance with Section 7.4 of the
Warrant Agreement.
In the event that the Warrant may be exercised,
to the extent allowed by the Warrant Agreement, through cashless exercise (i) the number of shares of Common Stock that this Warrant
is exercisable for would be determined in accordance with the relevant section of the Warrant Agreement which allows for such
cashless exercise and (ii) the holder hereof shall complete the following: The undersigned hereby irrevocably elects to exercise
the right, represented by this Warrant Certificate, through the cashless exercise provisions of the Warrant Agreement, to receive
shares of Common Stock. If said number of shares of Common Stock is less than all of the shares of Common Stock purchasable hereunder
(after giving effect to the cashless exercise), the undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares of Common Stock be registered in the name of
, whose address is and that such Warrant
Certificate be delivered to , whose address is
.
[Signature Page Follows]
| Date: , 20 |
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(Signature) |
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(Address) |
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(Tax Identification Number) |
| Signature Guaranteed: |
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THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15 (OR ANY SUCCESSOR RULE)).
EXHIBIT B
LEGEND
“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, SUBJECT TO ANY ADDITIONAL LIMITATIONS ON TRANSFER
DESCRIBED IN THE LETTER AGREEMENT BY AND AMONG ROMAN DBDR TECH ACQUISITION CORP. (THE “COMPANY”), ROMAN DBDR TECH SPONSOR
LLC AND THE OTHER PARTIES THERETO, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE
THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH THE COMPANY COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN SECTION
3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT)
WHO AGREES IN WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.
SECURITIES EVIDENCED BY THIS CERTIFICATE
AND SHARES OF CLASS A COMMON STOCK OF THE COMPANY ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS
UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.”
Exhibit 5.1
ELLENOFF GROSSMAN
& SCHOLE LLP
1345 Avenue
of the Americas
New York, New
York 10105
Telephone: (212)
370-1300
Facsimile: (212)
370-7889
www.egsllp.com
November 4, 2020
Roman DBDR Tech Acquisition Corp.
345 Lorton Avenue, Suite 400
Burlingame, California 94010
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Re: |
Registration Statement of Roman DBDR Tech Acquisition Corp. |
Ladies and Gentlemen:
We have acted as counsel to Roman DBDR
Tech Acquisition Corp., a Delaware corporation (the “Company”), in connection with the registration by the
Company with the U.S. Securities and Exchange Commission of up to 25,300,000 units of the Company, including the
underwriters’ over-allotment option (collectively the “Units”), with each Unit consisting of one
share of Class A common stock of the Company, par value $0.0001 per share (the “Common Stock”) and
one-half of one redeemable warrant of the Company, each whole warrant entitling the holder thereof to purchase one share of
Common Stock (the “Warrants”), pursuant to a Registration Statement on Form S-1, File No.
333-249330, initially filed by the Company with the Commission on October 5, 2020 (as amended, the “Registration
Statement”).
We have examined such documents and considered
such legal matters as we have deemed necessary and relevant as the basis for the opinion set forth below. With respect to such
examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as reproduced or certified copies, and the authenticity of
the originals of those latter documents. As to questions of fact material to this opinion, we have, to the extent deemed appropriate,
relied upon certain representations of certain officers and employees of the Company.
Based upon the foregoing,
we are of the opinion that:
1. Units. When
the Registration Statement becomes effective under the Securities Act of 1933, as amended (the “Act”), and when
the offering is completed as contemplated by the Registration Statement, such Units will be legally binding obligations of the
Company, enforceable in accordance with their terms except: (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law); (b) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; (c) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought; (d) we express no opinion as to whether a state court outside of the State of New York or a
federal court of the United States would give effect to the choice of New York law provided for in the Warrant Agreement; and (e)
with respect to the Common Stock, we express no opinion to the extent that, notwithstanding its current reservation of shares of
Common Stock, future issuances of securities, including the Common Stock, of the Company and/or adjustments to outstanding securities,
including the Warrants underlying the Units, of the Company may cause the number of shares of Common Stock underlying the Units,
including the Common Stock issuable upon exercise of the Warrants underlying the Units, to exceed the number that remain authorized
but unissued.
2. Common Stock.
When the Registration Statement becomes effective under the Act and when the offering is completed as contemplated by the Registration
Statement, the shares of Common Stock will be validly issued, fully paid and non-assessable.
3. Warrants.
When the Registration Statement becomes effective under the Act and when the Warrants underlying the Units are issued, delivered
and paid for as part of the Units, as contemplated by the Registration Statement, such Warrants will be legally binding obligations
of the Company enforceable in accordance with their terms except: (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally and by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law); (b) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws; (c) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought; (d) we express no opinion as to whether a state court outside of the State of New York or
a federal court of the United States would give effect to the choice of New York law provided for in the Warrant Agreement; (e)
with respect to the Common Stock, we express no opinion to the extent that, notwithstanding its current reservation of shares
of Common Stock, future issuances of securities, including the Common Stock, of the Company and/or adjustments to outstanding
securities, including the Warrants, of the Company may cause the Warrants to be exercisable for more shares of Common Stock than
the number that remain authorized but unissued and (f) we have assumed the Exercise Price (as defined in the Warrant Agreement)
will not be adjusted to an amount below the par value per share of the Common Stock.
Our opinion herein is expressed solely with
respect to the Delaware General Corporation Law of the State of Delaware and, as to the Units and the Warrants constituting legally
binding obligations of the Company, solely with respect to the laws of the State of New York. Our opinion is based on these laws
as in effect on the date hereof and as of the effective date of the Registration Statement, and we assume no obligation to revise
or supplement this opinion after the effective date of the Registration Statement should the law be changed by legislative action,
judicial decision or otherwise. Where our opinions expressed herein refer to events to occur at a future date, we have assumed
that there will have been no changes in the relevant law or facts between the date hereof and such future date. Our opinions expressed
herein are limited to the matters expressly stated herein and no opinion is implied or may be inferred beyond the matters expressly
stated. Not in limitation of the foregoing, we are not rendering any opinion as to the compliance with any other federal or state
law, rule or regulation relating to securities, or to the sale or issuance thereof.
We hereby consent to the use of this opinion
as an exhibit to the Registration Statement, to the use of our name as your counsel and to all references made to us in the Registration
Statement and in the prospectus forming a part thereof. In giving this consent, we do not hereby admit that we are in the category
of persons whose consent is required under Section 7 of the Act, or the rules and regulations promulgated thereunder.
Very truly yours,
| /s/
Ellenoff Grossman & Schole LLP |
|
| Ellenoff Grossman &
Schole LLP |
|
Exhibit 10.1
,
2020
Roman DBDR Tech Acquisition Corp.
345 Lorton Avenue, Suite 400
Burlingame, California 94010
| Re: |
Initial Public Offering |
Ladies and Gentlemen:
This letter (this
“Letter Agreement”) is being delivered to you in accordance with the
Underwriting Agreement (the “Underwriting Agreement”) entered into by and between Roman DBDR
Tech Acquisition Corp., a Delaware corporation (the “Company”), and B. Riley FBR, Inc., as
representative (the “Representative”) of the several underwriters (each, an
“Underwriter” and collectively, the “Underwriters”), relating to an
underwritten initial public offering (the “Public Offering”), of up to
25,300,000 of the Company’s units (including up to 3,300,000 units that may be purchased to cover over-allotments, if
any) (the “Units”), each comprised of one share of the Company’s Class A common stock, par
value $0.0001 per share (the “Common Stock”), and one-half of one redeemable
warrant. Each whole warrant (each, a “Warrant”) entitles the holder thereof to purchase one share
of Common Stock at a price of $11.50 per share, subject to adjustment. The Units will be sold in the Public Offering pursuant
to a registration statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with
the U.S. Securities and Exchange Commission (the “Commission”) and the Company has applied to have
the Units listed on The Nasdaq Capital Market. Certain capitalized terms used herein are defined in paragraph 11 hereof.
In order to induce the Company and the
Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each of Roman DBDR Tech Sponsor LLC (the “Sponsor”)
and the undersigned individuals, each of whom is a member of the Company’s board of directors and/or management team (each,
an “Insider” and collectively, the “Insiders”), hereby agrees with the Company
as follows:
1. The
Sponsor and each Insider agrees that if the Company seeks stockholder approval of a proposed Business Combination, then in connection
with such proposed Business Combination, it, he or she shall (i) vote any shares of Capital Stock owned by it, him or her in favor
of any proposed Business Combination and (ii) not redeem any shares of Common Stock owned by it, him or her in connection with
such stockholder approval. If the Company engages in a tender offer in connection with any proposed Business Combination,
the Sponsor and each Insider agrees that it, he or she will not seek to sell its, his or her shares of Capital Stock to the Company
in connection with such tender offer.
2. The
Sponsor and each Insider hereby agrees that in the event that the Company fails to consummate a Business Combination within
18 months from the closing of the Public Offering, or such later period approved by the Company’s stockholders in
accordance with the Company’s amended and restated certificate of incorporation (the
“Charter”), the Sponsor and each Insider shall take all reasonable steps to cause the Company to
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10
business days thereafter, subject to lawfully available funds therefor, redeem 100% of the Common Stock sold as part of the
Units in the Public Offering (the “Offering Shares”), at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account (as defined below), including interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Offering Shares, which
redemption will completely extinguish all Public Stockholders’ rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of
directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for
claims of creditors and other requirements of applicable law. The Sponsor and each Insider agrees not to propose any
amendment to the Charter to modify the substance or timing of the ability of holders of Offering Shares to seek redemption in
connection with a Business Combination or the Company’s obligation to redeem 100% of the Offering Shares if the Company
does not complete a Business Combination within such time set forth in the Charter, unless the Company provides its 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 earned on the
funds held in the Trust Account and not previously released to the Company to pay its taxes, divided by the number of then
outstanding Offering Shares.
The Sponsor and each Insider acknowledges
that it, he or she has no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other
asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares held by it, him or her.
The Sponsor and each Insider hereby further waives, with respect to any shares of Common Stock held by it, him or her, if any,
any redemption rights it, he or she may have in connection with the consummation of a Business Combination, including, without
limitation, any such rights available in the context of a stockholder vote to approve such Business Combination or a stockholder
vote to approve an amendment to the Charter to modify the substance or timing of the Company’s obligation to redeem 100%
of the Offering Shares if the Company has not consummated a Business Combination within the time period set forth in the Charter
or in the context of a tender offer made by the Company to purchase shares of Common Stock (although the Sponsor, the Insiders
and their respective affiliates shall be entitled to redemption and liquidation rights with respect to any Offering Shares it
or they hold if the Company fails to consummate a Business Combination within the time period set forth in the Charter).
3. During
the period commencing on the date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and each Insider
shall not, without the prior written consent of the Representative, (i) sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase
a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission
promulgated thereunder, with respect to any Units, shares of Capital Stock, Warrants or any securities convertible into, or exercisable,
or exchangeable for, shares of Capital Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Capital Stock, Warrants
or any securities convertible into, or exercisable, or exchangeable for, shares of Capital Stock owned by it, him or her, whether
any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention
to effect any transaction specified in clause (i) or (ii). Each of the Insiders and the Sponsor acknowledges and agrees that,
prior to the effective date of any release or waiver, of the restrictions set forth in this paragraph 3 or paragraph 7 below,
the Company shall announce the impending release or waiver by press release through a major news service at least two business
days before the effective date of the release or waiver. Any release or waiver granted shall only be effective two business days
after the publication date of such press release. The provisions of this paragraph will not apply if the release or waiver is
effected solely to permit a transfer not for consideration and the transferee has agreed in writing to be bound by the same terms
described in this Letter Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer.
4. In
the event of the liquidation of the Trust Account upon the failure of the Company to consummate its initial Business Combination
within the time period set forth in the Charter, the Sponsor (the “Indemnitor”) agrees to indemnify and
hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited
to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether
pending or threatened) to which the Company may become subject as a result of any claim by (i) any third party for services rendered
or products sold to the Company or (ii) any prospective target business with which the Company has entered into a written
letter of intent, confidentiality or other similar agreement or Business Combination agreement (a “Target”); provided, however,
that such indemnification of the Company by the Indemnitor shall (x) apply only to the extent necessary to ensure that such claims
by a third party or a Target do not reduce the amount of funds in the Trust Account to below the lesser of (i) $10.20 per
Offering Share and (ii) the actual amount per Offering Share held in the Trust Account as of the date of the liquidation of the
Trust Account, if less than $10.20 per Offering Share is then held in the Trust Account due to reductions in the value of the trust
assets, less interest earned on the Trust Account which may be withdrawn to pay taxes, (y) not apply to any claims by a third party
or a Target which executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is
enforceable) and (z) not apply to any claims under the Company’s indemnity of the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended. The Indemnitor shall have the right to defend against any such
claim with counsel of its choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice
of the claim to the Indemnitor, the Indemnitor notifies the Company in writing that it shall undertake such defense.
5. To
the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 3,300,000 Units
in full within 45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to
forfeit, at no cost, a number of Founder Shares in the aggregate equal to 825,000 multiplied by a fraction, (i) the numerator
of which is 3,300,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment
option, and (ii) the denominator of which is 3,300,000. The Sponsor will be required to forfeit only that number of Founder
Shares as is necessary so that the Initial Stockholders will own an aggregate of 20.0% of the Company’s issued and
outstanding shares of Capital Stock after the Public Offering.
6. (a)
The Underwriters acknowledge that each Insider may become an officer or director of another special purpose acquisition company
with a class of securities intended to be registered under the Exchange Act, even before the Company has entered into a definitive
agreement regarding an initial Business Combination.
(b) The Sponsor and each Insider hereby
agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in the event of a breach by such
Sponsor or an Insider of its, his or her obligations under paragraphs 1, 2, 3, 4, 5, 7(a), 7(b), and 9, as applicable, of this
Letter Agreement (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be
entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such
breach.
7. (a)
The Sponsor and each Insider agrees that it, he or she shall not Transfer any Founder Shares (or shares of Common Stock
issuable upon conversion thereof) until the earlier of (A) the date that is one year after the completion of the
Company’s initial Business Combination or (B) subsequent to the Business Combination, (x) if the last sale price of the
Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after
the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger,
capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders
having the right to exchange their shares of Common Stock for cash, securities or other property (the
“Founder Shares Lock-up Period”).
(b) The Sponsor and each Insider agrees
that it, he or she shall not Transfer any Private Placement Warrants (or shares of Common Stock issued or issuable upon the exercise
of the Private Placement Warrants), until 30 days after the completion of a Business Combination (the “Private Placement Warrants Lock-up Period”,
together with the Founder Shares Lock-up Period, the “Lock-up Periods”).
(c) Notwithstanding the provisions set forth
in paragraphs 7(a) and (b), Transfers of the Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable
upon the exercise or conversion of the Private Placement Warrants or the Founder Shares and that are held by the Sponsor, any Insider
or any of their permitted transferees (that have complied with this paragraph 7(c)), are permitted (a) to the Company’s officers
or directors, any affiliate or family member of any of the Company’s officers or directors or any affiliate of the Sponsor
or to any member(s) of the Sponsor or any of their affiliates; (b) in the case of an individual, by gift to a member of such individual’s
immediate family or to a trust, the beneficiary of which is a member of such individual’s immediate family, an affiliate
of such individual or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution
upon death of such 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 an initial Business Combination at prices no greater than the price
at which the shares or warrants were originally purchased; (f) in the event of the Company’s liquidation prior to the completion
of an initial Business Combination; or (g) by virtue of the laws of the State of Delaware or the Sponsor’s limited liability
company agreement upon dissolution of the Sponsor; provided, however, that in the case of clauses (a) through
(e), these permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions
herein.
8. The
Sponsor and each Insider represents and warrants that it, he or she has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended
or revoked. Each Insider’s biographical information furnished to the Company (including any such information included in
the Prospectus) is true and accurate in all respects and does not omit any material information with respect to the Insider’s
background. Each Insider’s questionnaire furnished to the Company is true and accurate in all respects. Each Insider represents
and warrants that: it, he or she is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order
or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
it, he or she has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial
transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and it, he or she is
not currently a defendant in any such criminal proceeding.
9. Except
as disclosed in the Prospectus, neither the Sponsor nor any officer, nor any affiliate of the Sponsor or any officer, nor any
director of the Company, shall receive from the Company any finder’s fee, reimbursement, consulting fee, monies in respect
of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate,
the consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is) .
10. The
Sponsor and each Insider has full right and power, without violating any agreement to which it is bound (including, without limitation,
any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and,
as applicable, to serve as an officer and/or director on the board of directors of the Company and hereby consents to being named
in the Prospectus as an officer and/or director of the Company.
11. As
used herein, (i) “Business Combination” shall mean a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or
more businesses; (ii) “Capital Stock” shall mean, collectively, the Common Stock and the
Founder Shares; (iii) “Founder Shares” shall mean (a) the 6,325,000 shares of
the Company’s Class B common stock, par value $0.0001 per share, issued to the Sponsor (up to 825,000 Shares of which
are subject to complete or partial forfeiture by the Sponsor if the over-allotment option is not exercised by the
Underwriters) for an aggregate purchase price of $25,000, or $0.004 per share, prior to the consummation of the Public
Offering; (iv) “Initial Stockholders” shall mean the Sponsor and any Insider
that holds Founder Shares; (v) “Private Placement Warrants”
shall mean the Warrants to purchase up to 10,375,000 shares of Common Stock of the Company (up to 11,695,000 if the
over-allotment option is exercised in full) that the Sponsor has agreed to purchase for an aggregate purchase price of
$10,375,000 in the aggregate (up to $11,695,000 if the over-allotment option is exercised in full), or $1.00 per Warrant, in
a private placement that shall occur simultaneously with the consummation of the Public Offering; (vi)
“Public Stockholders” shall mean the holders of securities issued in the Public
Offering; (vii) “Trust Account” shall mean the trust fund into which a portion
of the net proceeds of the Public Offering shall be deposited; and (viii) “Transfer” shall mean the
(a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise
dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or
liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act,
and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap
or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any
security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or
(c) public announcement of any intention to effect any transaction specified in clause (a) or (b).
12. The
Company will maintain an insurance policy or policies providing directors’ and officers’ liability insurance, and
each officer and director shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent
of the coverage available for any of the Company’s directors or officers.
13. This
Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof
and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the
extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may
not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except
by a written instrument executed by all parties hereto.
14. No
party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior
written consent of the other parties. Any purported assignment in violation of this paragraph shall be void and ineffectual and
shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding
on the Sponsor and each Insider and their respective successors, heirs and assigns and permitted transferees.
15. Nothing
in this Letter Agreement shall be construed to confer upon, or give to, any person or corporation other than the parties hereto
any right, remedy or claim under or by reason of this Letter Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and agreements contained in this Letter Agreement shall be
for the sole and exclusive benefit of the parties hereto and their successors, heirs, personal representatives and assigns and
permitted transferees.
16. This
Letter Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.
17. This
Letter Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Letter Agreement or of any other term or provision hereof. Furthermore, in lieu of any
such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Letter
Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
18. This
Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
The parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this
Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submit
to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waive any objection to such exclusive
jurisdiction and venue or that such courts represent an inconvenient forum.
19. Any
notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in
writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by
hand delivery or facsimile transmission.
20. This
Letter Agreement shall terminate on the earlier of (i) the expiration of the Lock-up Periods or (ii) the liquidation of the Company;
provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated
and closed by December 31, 2020; provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.
21. The
Company, the Sponsor and each Insider hereby acknowledges and agrees that the Representative on behalf of the Underwriters is a
third party beneficiary of this Letter Agreement.
[Signature Pages Follow]
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Roman DBDR Tech Sponsor LLC |
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By: |
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Name: Dr. Donald G. Basile |
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Title: Managing Member |
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By: |
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Name: Dr. Donald G. Basile |
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By: |
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Name: Dixon Doll, Jr. |
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By: |
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Name: Alan Clingman |
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By: |
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Name: Paul Misir |
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By: |
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Name: Arun Abraham |
[Signature Page
to Letter Agreement]
| Acknowledged and Agreed: |
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| ROMAN DBDR TECH ACQUISITION CORP. |
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| By: |
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Name: Dr. Donald G. Basile |
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Title: Chairman and Co-Chief Executive Officer |
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[Signature Page
to Letter Agreement]
Exhibit 10.3
INVESTMENT MANAGEMENT TRUST AGREEMENT
This Investment Management Trust Agreement
(this “Agreement”) is made effective as of ,
2020, by and between Roman DBDR Tech Acquisition Corp., a Delaware corporation (the “Company”), and Continental
Stock Transfer & Trust Company, a New York corporation (the “Trustee”).
WHEREAS, the Company’s registration
statement on Form S-1, File No. 333-249330 (the “Registration Statement”) and prospectus
(the “Prospectus”) for the initial public offering of the Company’s units (the “Units”),
each of which consists of one share of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), and one-half of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one
share of Common Stock (such initial public offering hereinafter referred to as the “Offering”), has been declared effective
as of the date hereof by the U.S. Securities and Exchange Commission; and
WHEREAS, the Company has entered into an
Underwriting Agreement (the “Underwriting Agreement”) with B. Riley FBR, Inc. as representative
(the “Representative”) of the several underwriters (the “Underwriters”) named
therein; and
WHEREAS, as described in the
Prospectus, $224,400,000 of the gross proceeds of the Offering and sale of the Private Placement Warrants (as defined in the
Underwriting Agreement) (or $258,600,000, if the Underwriters’ over-allotment option is exercised in full) will be
delivered to the Trustee to be deposited and held in a segregated trust account located at all times in the United States
(the “Trust Account”) for the benefit of the Company and the holders of the
Common Stock included in the Units issued in the Offering as hereinafter provided (the amount to be delivered to the Trustee
(and any interest subsequently earned thereon) is referred to herein as the “Property,” the
stockholders for whose benefit the Trustee shall hold the Property will be referred to as the
“Public Stockholders,” and the Public Stockholders and the Company will be
referred to together as the “Beneficiaries”);
WHEREAS, pursuant to the Underwriting
Agreement, a portion of the Property equal to $7,700,000, or $8,855,000 if the Underwriters’ over-allotment option is
exercised in full, is attributable to deferred underwriting discounts and commissions that will be payable by the Company to
the Underwriters upon and concurrently with the consummation of the Business Combination (as defined below) (the
“Deferred Discount”); and
WHEREAS, the Company and the Trustee desire
to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall hold the Property.
NOW THEREFORE, IT IS AGREED:
1. Agreements and Covenants of Trustee.
The Trustee hereby agrees and covenants to:
(a) Hold the Property in trust for the
Beneficiaries in accordance with the terms of this Agreement in the Trust Account established by the Trustee in the United States
at J.P. Morgan Chase Bank, N.A. and at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;
(b) Manage, supervise and administer the
Trust Account subject to the terms and conditions set forth herein;
(c) In a timely manner, upon the written
instruction of the Company, invest and reinvest the Property solely in United States government securities within the meaning of
Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or less, or in money market funds
meeting the conditions of Rule 2a-7(d) promulgated under the Investment Company Act of 1940, as amended (or any successor rule),
which invest only in direct U.S. government treasury obligations, as determined by the Company; it being understood that the Trust
Account will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder and the Trustee
may earn bank credits or other consideration;
(d) Collect and receive, when due, all
interest or other income arising from the Property, which shall become part of the “Property,” as such
term is used herein;
(e) Promptly notify the Company and the
Representative of all communications received by the Trustee with respect to any Property requiring action by the Company;
(f) Supply any necessary information or
documents as may be requested by the Company (or its authorized agents) in connection with the Company’s preparation of the
tax returns relating to assets held in the Trust Account;
(g) Participate in any plan or proceeding
for protecting or enforcing any right or interest arising from the Property if, as and when instructed by the Company to do so;
(h) Render to the Company monthly written
statements of the activities of, and amounts in, the Trust Account reflecting all receipts and disbursements of the Trust Account;
(i) Commence liquidation of the Trust
Account only after and promptly after (x) receipt of, and only in accordance with, the terms of a letter from the Company (“Termination Letter”)
in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, as applicable, signed on
behalf of the Company by any Chief Executive Officer, Chief Financial Officer, President, Executive Vice President, Vice President,
Secretary or Chairman of the board of directors of the Company (the “Board”) or other authorized officer
of the Company, and, in the case of a Termination Letter in a form substantially similar to the attached hereto as Exhibit A, acknowledged
and agreed to by the Representative, and complete the liquidation of the Trust Account and distribute the Property in the Trust
Account, including interest not previously released to the Company to pay its taxes (less up to $100,000 of interest that may be
released to the Company to pay dissolution expenses), only as directed in the Termination Letter and the other documents referred
to therein, or (y) the date which is the later of (1) 18 months after the closing of the Offering and (2) such later date
as may be approved by the Company’s stockholders in accordance with the Company’s amended and restated certificate
of incorporation if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account
shall be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the
Property in the Trust Account, including interest not previously released to the Company to pay its taxes (less up to $100,000
of interest that may be released to the Company to pay dissolution expenses) shall be distributed to the Public Stockholders of
record as of such date; and provided, however, that in the event the Trustee receives a Termination Letter in a form
substantially similar to Exhibit B hereto, or if the Trustee begins to liquidate the Property because it has received no
such Termination Letter by the date specified in clause (y) of this Section 1(i), the Trustee shall keep the Trust Account open
until twelve (12) months following the date the Property has been distributed to the Public Stockholders.
(j) Upon written request from the Company,
which may be given from time to time in a form substantially similar to that attached hereto as Exhibit C, withdraw from
the Trust Account and distribute to the Company the amount of interest earned on the Property requested by the Company to cover
any tax obligation owed by the Company as a result of assets of the Company or interest or other income earned on the Property,
which amount shall be delivered directly to the Company by electronic funds transfer or other method of prompt payment, and the
Company shall forward such payment to the relevant taxing authority; provided, however, that to the extent there
is not sufficient cash in the Trust Account to pay such tax obligation, the Trustee shall liquidate such assets held in the Trust
Account as shall be designated by the Company in writing to make such distribution, so long as there is no reduction in the principal
amount initially deposited in the Trust Account; provided, further, that if the tax to be paid is a franchise tax,
the written request by the Company to make such distribution shall be accompanied by a copy of the franchise tax bill from the
State of Delaware for the Company (it being acknowledged and agreed that any such amount in excess of interest income earned on
the Property shall not be payable from the Trust Account). The written request of the Company referenced above shall constitute
presumptive evidence that the Company is entitled to said funds, and the Trustee shall have no responsibility to look beyond said
request;
(k) Upon written request from the Company,
which may be given from time to time in a form substantially similar to that attached hereto as Exhibit D, the Trustee shall
distribute on behalf of the Company the amount requested by the Company to be used to redeem shares of Common Stock from Public
Stockholders properly submitted in connection with a stockholder vote to approve an amendment to the Company’s amended and
restated certificate of incorporation to modify the substance or timing of the ability of Public Stockholders to seek redemption
in connection with an initial Business Combination or the Company’s obligation to redeem 100% of its public shares of Common
Stock if the Company has not consummated an initial Business Combination within such time as is described in clause (y) of Section
1(i) of the Agreement. The written request of the Company referenced above shall constitute presumptive evidence that the Company
is entitled to distribute said funds, and the Trustee shall have no responsibility to look beyond said request; and
(l) Not make any withdrawals or distributions
from the Trust Account other than pursuant to Section 1(i), (j) or (k) above.
2. Agreements and Covenants of the Company.
The Company hereby agrees and covenants to:
(a) Give all instructions to the Trustee
hereunder in writing, signed by the Company’s Chairman of the Board, any Chief Executive Officer, Chief Financial Officer,
President, Executive Vice President, Vice President or Secretary. In addition, except with respect to its duties under Sections
1(i), 1(j) and 1(k) hereof, the Trustee shall be entitled to rely on, and shall be protected in relying on, any
verbal or telephonic advice or instruction which it, in good faith and with reasonable care, believes to be given by any one of
the persons authorized above to give written instructions, provided that the Company shall promptly confirm such instructions in
writing;
(b) Subject to Section 4 hereof,
hold the Trustee harmless and indemnify the Trustee from and against any and all expenses, including reasonable counsel fees and
disbursements, or losses suffered by the Trustee in connection with any action taken by it hereunder and in connection with any
action, suit or other proceeding brought against the Trustee involving any claim, or in connection with any claim or demand, which
in any way arises out of or relates to this Agreement, the services of the Trustee hereunder, or the Property or any interest earned
on the Property, except for expenses and losses resulting from the Trustee’s gross negligence, fraud or willful misconduct.
Promptly after the receipt by the Trustee of notice of demand or claim or the commencement of any action, suit or proceeding, pursuant
to which the Trustee intends to seek indemnification under this Section 2(b), it shall notify the Company in writing of
such claim (hereinafter referred to as the “Indemnified Claim”). The Trustee shall
have the right to conduct and manage the defense against such Indemnified Claim; provided that the Trustee shall obtain
the consent of the Company with respect to the selection of counsel, which consent shall not be unreasonably withheld. The Trustee
may not agree to settle any Indemnified Claim without the prior written consent of the Company, which such consent shall not be
unreasonably withheld. The Company may participate in such action with its own counsel;
(c) Pay the Trustee the fees set forth
on Schedule A hereto, including an initial acceptance fee, annual administration fee, and transaction processing fee which
fees shall be subject to modification by the parties from time to time. It is expressly understood that the Property shall not
be used to pay such fees unless and until the closing of the Business Combination (defined below). The Company shall pay the Trustee
the initial acceptance fee and the first annual administration fee at the consummation of the Offering. The Trustee shall refund
to the Company the annual administration fee (on a pro rata basis) with respect to any period after the liquidation of the Trust
Account. The Company shall not be responsible for any other fees or charges of the Trustee except as set forth in this Section
2(c), Schedule A and as may be provided in Section 2(b) hereof;
(d) In connection with any vote of the
Company’s stockholders regarding a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination involving the Company and one or more businesses (the “Business Combination”),
provide to the Trustee an affidavit or certificate of the inspector of elections for the stockholder meeting verifying the vote
of such stockholders regarding such Business Combination;
(e) Provide the Representative with a
copy of any Termination Letter(s) and/or any other correspondence that is sent to the Trustee with respect to any proposed withdrawal
from the Trust Account promptly after it issues the same;
(f) Unless otherwise agreed between the
Company and the Representative, ensure that any Instruction Letter (as defined in Exhibit A) delivered in connection with
a Termination Letter in the form of Exhibit A expressly provides that the Deferred Discount is paid directly to the account or
accounts directed by the Representative on behalf of the Underwriters prior to any transfer of the funds held in the Trust Account
to the Company or any other person;
(g) Instruct the Trustee to make only
those distributions that are permitted under this Agreement, and refrain from instructing the Trustee to make any distributions
that are not permitted under this Agreement; and
(h) Within four (4) business days after
the Underwriters exercise the over-allotment option (or any unexercised portion thereof) or such over-allotment expires, provide
the Trustee with a notice in writing of the total amount of the Deferred Discount, which shall in no event be less than $7,700,000.
3. Limitations of Liability. The
Trustee shall have no responsibility or liability to:
(a) Imply obligations, perform duties,
inquire or otherwise be subject to the provisions of any agreement or document other than this Agreement and that which is expressly
set forth herein;
(b) Take any action with respect to the
Property, other than as directed in Section 1 hereof, and the Trustee shall have no liability to any third party except
for liability arising out of the Trustee’s gross negligence, fraud or willful misconduct;
(c) Institute any proceeding for the collection
of any principal and income arising from, or institute, appear in or defend any proceeding of any kind with respect to, any of
the Property unless and until it shall have received instructions from the Company given as provided herein to do so and the Company
shall have advanced or guaranteed to it funds sufficient to pay any expenses incident thereto;
(d) Refund any depreciation in principal
of any Property;
(e) Assume that the authority of any person
designated by the Company to give instructions hereunder shall not be continuing unless provided otherwise in such designation,
or unless the Company shall have delivered a written revocation of such authority to the Trustee;
(f) The other parties hereto or to anyone
else for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith and in the Trustee’s
best judgment, except for the Trustee’s gross negligence, fraud or willful misconduct. The Trustee may rely conclusively
and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen
by the Trustee, which counsel may be the Company’s counsel), statement, instrument, report or other paper or document (not
only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of
any information therein contained) which the Trustee believes, in good faith and with reasonable care, to be genuine and to be
signed or presented by the proper person or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification,
termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a written instrument delivered to the
Trustee, signed by the proper party or parties and, if the duties or rights of the Trustee are affected, unless it shall give its
prior written consent thereto;
(g) Verify the accuracy of the information
contained in the Registration Statement;
(h) Provide any assurance that any Business
Combination entered into by the Company or any other action taken by the Company is as contemplated by the Registration Statement;
(i) File information returns with respect
to the Trust Account with any local, state or federal taxing authority or provide periodic written statements to the Company documenting
the taxes payable by the Company, if any, relating to any interest income earned on the Property;
(j) Prepare, execute and file tax reports,
income or other tax returns and pay any taxes with respect to any income generated by, and activities relating to, the Trust Account,
regardless of whether such tax is payable by the Trust Account or the Company, including, but not limited to, franchise and income
tax obligations, except pursuant to Section 1(j) hereof; or
(k) Verify calculations, qualify or otherwise
approve the Company’s written requests for distributions pursuant to Sections 1(i), 1(j) or 1(k) hereof.
4. Trust Account Waiver. The Trustee
has no right of set-off or any right, title, interest or claim of any kind (“Claim”) to, or to any monies
in, the Trust Account, and hereby irrevocably waives any Claim to, or to any monies in, the Trust Account that it may have now
or in the future. In the event the Trustee has any Claim against the Company under this Agreement, including, without limitation,
under Section 2(b) or Section 2(c) hereof, the Trustee shall pursue such Claim solely against the Company and its
assets outside the Trust Account and not against the Property or any monies in the Trust Account.
5. Termination. This Agreement shall
terminate as follows:
(a) If the Trustee gives written notice
to the Company that it desires to resign under this Agreement, the Company shall use its reasonable efforts to locate a successor
trustee, pending which the Trustee shall continue to act in accordance with this Agreement. At such time that the Company notifies
the Trustee that a successor trustee has been appointed and has agreed to become subject to the terms of this Agreement, the Trustee
shall transfer the management of the Trust Account to the successor trustee, including but not limited to the transfer of copies
of the reports and statements relating to the Trust Account, whereupon this Agreement shall terminate; provided, however,
that in the event that the Company does not locate a successor trustee within ninety (90) days of receipt of the resignation notice
from the Trustee, the Trustee may submit an application to have the Property deposited with any court in the State of New York
or with the United States District Court for the Southern District of New York and upon such deposit, the Trustee shall be immune
from any liability whatsoever; or
(b) At such time that the Trustee has
completed the liquidation of the Trust Account and its obligations in accordance with the provisions of Section 1(i) hereof
(which section may not be amended under any circumstances) and distributed the Property in accordance with the provisions of the
Termination Letter, this Agreement shall terminate except with respect to Section 2(b).
6. Miscellaneous.
(a) The Company and the Trustee each acknowledge
that the Trustee will follow the security procedures set forth below with respect to funds transferred from the Trust Account.
The Company and the Trustee will each restrict access to confidential information relating to such security procedures to authorized
persons. Each party must notify the other party immediately if it has reason to believe unauthorized persons may have obtained
access to such confidential information, or of any change in its authorized personnel. In executing funds transfers, the Trustee
shall rely upon all information supplied to it by the Company, including, account names, account numbers, and all other identifying
information relating to a Beneficiary, Beneficiary’s bank or intermediary bank. Except for any liability arising out of the
Trustee’s gross negligence, fraud or willful misconduct, the Trustee shall not be liable for any loss, liability or expense
resulting from any error in the information or transmission of the funds.
(b) This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles
that would result in the application of the substantive laws of another jurisdiction. This Agreement may be executed in several
original or facsimile counterparts, each one of which shall constitute an original, and together shall constitute but one instrument.
(c) This Agreement contains the entire
agreement and understanding of the parties hereto with respect to the subject matter hereof. This Agreement or any provision hereof
may only be changed, amended or modified (other than to correct a typographical error) by a writing signed by each of the parties
hereto; provided, however, that no such change, amendment or modification to Section 1(i), 2(f) or
Exhibit A may be made without the prior written consent of the Representative.
(d) This Agreement or any provision hereof
may only be changed, amended or modified pursuant to Section 6(c) hereof with the Consent of the Stockholders. For purposes
of this Section 6(d), the “Consent of the Stockholders”
means receipt by the Trustee of a certificate from the inspector of elections of the stockholder meeting certifying that the Company’s
stockholders of record as of a record date established in accordance with Section 213(a) of the Delaware General Corporation Law,
as amended (“DGCL”) (or any successor rule), who hold sixty-five percent (65%) or more of all then outstanding
shares of the Common Stock and Class B common stock, par value $0.0001 per share, of the Company voting together as a single class,
have voted in favor of such change, amendment or modification. No such amendment will affect any Public Stockholder who has otherwise
indicated his election to redeem his shares of Common Stock in connection with a stockholder vote sought to amend this Agreement
to modify the substance or timing of the Company’s obligation to redeem 100% of the Common Stock if the Company does not
complete its initial Business Combination within the time frame specified in the Company’s amended and restated certificate
of incorporation. Except for any liability arising out of the Trustee’s gross negligence, fraud or willful misconduct, the
Trustee may rely conclusively on the certification from the inspector or elections referenced above and shall be relieved of all
liability to any party for executing the proposed amendment in reliance thereon.
(e) The parties hereto consent to the
jurisdiction and venue of any state or federal court located in the City of New York, State of New York, for purposes of resolving
any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY WAIVES THE
RIGHT TO TRIAL BY JURY.
(f) Any notice, consent or request to
be given in connection with any of the terms or provisions of this Agreement shall be in writing and shall be sent by express mail
or similar private courier service, by certified mail (return receipt requested), by hand delivery or by electronic mail:
if to the Trustee, to:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attn: Francis Wolf and Celeste Gonzalez
Email: fwolf@continentalstock.com
cgonzalez@continentalstock.com
if to the Company, to:
Roman DBDR Tech Acquisition Corp.
Dr. Donald G. Basile
Dixon Doll, Jr.
Co-Chief Executive Officers
345 Lorton Avenue, Suite 400
Burlingame, California 94010
in each case, with copies to:
Ellenoff Grossman & Schole LLP
1345 Avenue of the Americas
New York, NY 10105
Attn: Stuart Neuhauser, Esq.
Email: sneuhauser@egsllp.com
and
B. Riley FBR, Inc.
299 Park Avenue
New York, New York 10171
Attn: General Counsel
and
Christian O. Nagler, Esq.
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
(g) Each of the Company and the Trustee
hereby represents that it has the full right and power and has been duly authorized to enter into this Agreement and to perform
its respective obligations as contemplated hereunder. The Trustee acknowledges and agrees that it shall not make any claims or
proceed against the Trust Account, including by way of set-off, and shall not be entitled to any funds in the Trust Account under
any circumstance.
(h) This Agreement is the joint product
of the Trustee and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement
of such parties and shall not be construed for or against any party hereto.
(i) This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute
valid and sufficient delivery thereof.
(j) Each of the Company and the Trustee
hereby acknowledges and agrees that B. Riley Securities, Inc. on behalf of the Underwriters is a third party beneficiary of this
Agreement.
(k) Except as specified herein, no party
to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity.
[Signature Page Follows]
IN WITNESS WHEREOF,
the parties have duly executed this Investment Management Trust Agreement as of the date first written above.
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Trustee |
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By: |
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Name: Francis Wolf |
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Title: Vice President |
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: Dr. Donald G. Basile |
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Title: Co-Chief Executive Officer |
[Signature Page
to Investment Management Trust Agreement]
SCHEDULE A
| Fee Item | |
Time and method of payment | |
Amount | |
| Initial set-up fee. | |
Initial closing of Offering by wire transfer. | |
$ | 3,500 | |
| Trustee administration fee | |
Payable annually. First year fee payable, at initial closing of Offering by wire transfer, thereafter by wire transfer or check. | |
$ | 10,000 | |
| Transaction processing fee for disbursements to Company under Sections 1(i) and (j) | |
Billed to the Company following disbursement made to Company under Section 1 | |
$ | 250 | |
Paying
Agent services as required pursuant to Section 1(i) and 1(k) | |
Billed to Company upon delivery of service pursuant to Section 1(i) and 1(k) | |
| Prevailing rates | |
Schedule A
EXHIBIT A
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
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Re: |
Trust Account No. Termination Letter |
Ladies and Gentlemen:
Pursuant to Section 1(i) of the Investment
Management Trust Agreement between Roman DBDR Tech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of ____, 2020 (the “Trust Agreement”),
this is to advise you that the Company has entered into an agreement with (the
“Target Business”) to consummate a business combination with Target Business (the “Business Combination”)
on or about [insert date]. The Company shall notify you at least seventy-two (72) hours in advance of the actual date of the consummation
of the Business Combination (the “Consummation Date”). Capitalized terms used but
not defined herein shall have the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to commence to liquidate all of the assets of the Trust Account, and to transfer the proceeds
to a segregated account held by you on behalf of the Beneficiaries to the effect that, on the Consummation Date, all of the funds
held in the Trust Account will be immediately available for transfer to the account or accounts that the Company shall direct on
the Consummation Date (including as directed to it by the Representative on behalf of the Underwriters (with respect to the Deferred
Discount)). It is acknowledged and agreed that while the funds are on deposit in the trust operating account at J.P. Morgan Chase
Bank, N.A. awaiting distribution, the Company will not earn any interest or dividends.
On the Consummation Date (i) counsel for
the Company shall deliver to you written notification that the Business Combination has been consummated, or will be consummated
concurrently with your transfer of funds to the accounts as directed by the Company (the “Notification”)
and (ii) the Company shall deliver to you (a) a certificate of any Chief Executive Officer, which verifies that the Business Combination
has been approved by a vote of the Company’s stockholders, if a vote is held and (b) a joint written instruction signed by
the Company and the Representative with respect to the transfer of the funds held in the Trust Account, including payment of amounts
owed to public stockholders who have properly exercised their redemption rights and payment of the Deferred Discount to the Representative
from the Trust Account (the “Instruction Letter”). You are hereby directed and authorized
to transfer the funds held in the Trust Account immediately upon your receipt of the Notification and the Instruction Letter, in
accordance with the terms of the Instruction Letter. In the event that certain deposits held in the Trust Account may not be liquidated
by the Consummation Date without penalty, you will notify the Company in writing of the same and the Company shall direct you as
to whether such funds should remain in the Trust Account and be distributed after the Consummation Date to the Company. Upon the
distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust
Account, your obligations under the Trust Agreement shall be terminated.
In the event that the Business Combination
is not consummated on the Consummation Date described in the notice thereof and we have not notified you on or before the original
Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions from the Company, the funds
held in the Trust Account shall be reinvested as provided in Section 1(c) of the Trust Agreement on the business day immediately
following the Consummation Date as set forth in such notice as soon thereafter as possible.
Exhibit A
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Very truly yours, |
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Roman DBDR Tech Acquisition Corp. |
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By: |
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Name: |
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Title: |
| B. Riley FBR, Inc. |
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| By: |
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Name: |
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Title: |
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Exhibit A
EXHIBIT B
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
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Re: |
Trust Account No. Termination Letter |
Ladies and Gentlemen:
Pursuant to Section 1(i) of the Investment
Management Trust Agreement between Roman DBDR Tech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of ____, 2020 (the “Trust Agreement”),
this is to advise you that the Company has been unable to effect a business combination with a Target Business (the “Business Combination”)
within the time frame specified in Section 1(i) of the Trust Agreement. Capitalized terms used but not defined herein shall have
the meanings set forth in the Trust Agreement.
In accordance with the terms of the Trust
Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account and to transfer the total proceeds into
a segregated account held by you on behalf of the Beneficiaries to await distribution to the Public Stockholders. The Company has
selected (1) as the effective date for the purpose of determining when
the Public Stockholders will be entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent of
record and, in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Stockholders
in accordance with the terms of the Trust Agreement and the Amended and Restated Certificate of Incorporation of the Company. Upon
the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the
Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent otherwise provided in Section
1(j) of the Trust Agreement.
| (1) |
18 months from the closing of the Offering, or
at a later date, if extended. |
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Very truly yours, |
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Roman DBDR Tech Acquisition Corp. |
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By: |
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Name: |
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Title: |
Exhibit B
EXHIBIT C
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
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Re: |
Trust Account No. Withdrawal Instruction |
Ladies and Gentlemen:
Pursuant to Section 1(j) of the Investment
Management Trust Agreement between Roman DBDR Tech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of _____, 2020 (the “Trust Agreement”),
the Company hereby requests that you deliver to the Company $ of the interest income earned on
the Property as of the date hereof. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust
Agreement.
The Company needs such funds to pay for
the tax obligations as set forth on the attached tax return or tax statement. In accordance with the terms of the Trust Agreement,
you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to
the Company’s operating account at:
[WIRE INSTRUCTION INFORMATION]
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Very truly yours, |
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Roman DBDR Tech Acquisition Corp. |
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By: |
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Name: |
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Title: |
Exhibit C
EXHIBIT D
[Letterhead of Company]
[Insert date]
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Francis Wolf and Celeste Gonzalez
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Re: |
Trust Account No. Shareholder Redemption Withdrawal Instruction |
Gentlemen:
Pursuant to Section 1(k) of the Investment
Management Trust Agreement between Roman DBDR Tech Acquisition Corp. (the “Company”) and Continental
Stock Transfer & Trust Company (the “Trustee”), dated as of _____, 2020 (the “Trust Agreement”),
the Company hereby requests that you deliver to the redeeming Public Stockholders of the Company $
of the principal and interest income earned on the Property as of the date hereof to a segregated account held by you on behalf
of the Beneficiaries. Capitalized terms used but not defined herein shall have the meanings set forth in the Trust Agreement.
The Company needs such funds to pay its
Public Stockholders who have properly elected to have their shares of Common Stock redeemed by the Company in connection with a
stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the
substance or timing of the Company’s obligation to redeem 100% of public shares of Common Stock if the Company has not consummated
an initial Business Combination within such time as is described in Section 1(i) of the Trust Agreement. As such, you are hereby
directed and authorized to transfer (via wire transfer) such funds promptly upon your receipt of this letter to a segregated account
held by you on behalf of the Beneficiaries.
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Very truly yours, |
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Roman DBDR Tech Acquisition Corp. |
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By: |
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Name: |
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Title: |
Exhibit D
Exhibit 10.4
REGISTRATION AND SHAREHOLDER RIGHTS AGREEMENT
THIS REGISTRATION AND
SHAREHOLDER RIGHTS AGREEMENT (this “Agreement”), dated as of ,
2020, is made and entered into by and among Roman DBDR Tech Acquisition Corp., a Delaware corporation (the “Company”),
Roman DBDR Tech Sponsor LLC, a Delaware limited liability company (the “Sponsor”, together with any person
or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 of this Agreement, a “Holder”
and collectively the “Holders”).
RECITALS
WHEREAS, on
August 26, 2020, pursuant to a Securities Subscription Agreement, the Sponsor purchased an aggregate of 7,906,250 shares
(the “Founder Shares”) of the Company’s Class B common stock, par
value $0.0001 per share, of which 1,581,250 were canceled pursuant to a Cancellation Agreement on October 26, 2020, and up to
825,000 of which will be forfeited to the Company for no consideration depending on the extent to which the underwriters of
the Company’s initial public offering exercise their over-allotment option;
WHEREAS, the
Founder Shares are convertible into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”),
on the terms and conditions provided in the Company’s amended and restated certificate of incorporation;
WHEREAS, on
,
2020, the Company and the Sponsor entered into that certain Private Placement Warrant Purchase Agreement, pursuant to which
the Sponsor agreed to purchase 10,375,000 warrants (or up to 11,695,000 if the over-allotment option in connection with the
Company’s initial public offering is exercised) (the
“Private Placement Warrants”), in a private placement
transaction occurring simultaneously with the closing of the Company’s initial public offering; and
WHEREAS, in
order to finance the Company’s transaction costs in connection with an intended initial Business Combination (as defined
below) the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may loan to the Company
funds as the Company may require, of which up to $1,500,000 of such loans may be convertible into warrants (“Working
Capital Warrants”) at a price of $1.00 per warrant; and
WHEREAS, the
Company and the Holders desire to enter into this Agreement, pursuant to which the Company shall grant the Holders certain registration
rights with respect to certain securities of the Company, as well as the right to nominate certain directors to the Company’s
Board (as defined below), as set forth in this Agreement.
NOW, THEREFORE,
in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
The terms defined in this Article I shall, for all purposes of this Agreement, have the respective
meanings set forth below:
“Adverse Disclosure”
shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief
Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (i) would
be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus
not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained
therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were
made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed,
and (iii) the Company has a bona fide business purpose for not making such information public.
“Agreement”
shall have the meaning given in the Preamble.
“Board”
shall mean the Board of Directors of the Company.
“Business Combination”
shall mean any merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination
with one or more businesses, involving the Company.
“Commission”
shall mean the Securities and Exchange Commission.
“Common Stock”
shall have the meaning given in the Recitals hereto.
“Company”
shall have the meaning given in the Preamble.
“Demand Registration”
shall have the meaning given in subsection 2.1.1.
“Demanding Holder”
shall have the meaning given in subsection 2.1.1.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Form S-1”
shall have the meaning given in subsection 2.1.1.
“Form S-3”
shall have the meaning given in subsection 2.3.
“Founder
Shares” shall have the meaning given in the Recitals hereto and shall be deemed to include the shares of Common Stock
issuable upon conversion thereof.
“Founder Shares Lock-up Period”
shall mean, with respect to the Founder Shares, the period ending on the earlier of (A) one year after the completion of the
Company’s initial Business Combination or (B) subsequent to the Business Combination, (x) if the last sale price
of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial
Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization
or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares
of Common Stock for cash, securities or other property.
“Holders”
shall have the meaning given in the Preamble.
“Insider Letter”
shall mean that certain letter agreement, dated as of ,
2020, by and among the Company, the Sponsor and each of the Company’s officers, directors and director nominees.
“Maximum Number of Securities”
shall have the meaning given in subsection 2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration
Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus (in the light of the circumstances
under which they were made) not misleading.
“Nominee”
is defined in Section 5.1.
“Permitted Transferees”
shall mean any person or entity to whom a Holder of Registrable Securities is permitted to transfer such Registrable Securities
prior to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the case may be, under the
Insider Letter, this Agreement and any other applicable agreement between such Holder and the Company, and to any transferee thereafter.
“Piggyback Registration”
shall have the meaning given in subsection 2.2.1.
“Private Placement Lock-up Period”
shall mean, with respect to Private Placement Warrants that are held by the initial purchasers of such Private Placement Warrants
or their Permitted Transferees, and any of the Common Stock issued or issuable upon the exercise or conversion of the Private Placement
Warrants and that are held by the initial purchasers of the Private Placement Warrants or their Permitted Transferees, the period
ending 30 days after the completion of the Company’s initial Business Combination.
“Private Placement Warrants”
shall have the meaning given in the Recitals hereto.
“Pro Rata”
shall have the meaning given in subsection 2.1.4.
“Prospectus”
shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as
amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“Registrable Security”
shall mean (a) the Founder Shares and the shares of Common Stock issued or issuable upon the conversion of any Founder Shares,
(b) the Private Placement Warrants (including any shares of the Common Stock issued or issuable upon the exercise of any such
Private Placement Warrants), (c) any outstanding share of the Common Stock or any other equity security (including the shares
of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by a Holder as of the date
of this Agreement, (d) any shares of the Common Stock issued or issuable upon the exercise of the Working Capital Warrants,
and (e) any other equity security of the Company issued or issuable with respect to any such share of the Common Stock by
way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or
reorganization; provided, however, that, as to any particular Registrable Security, such securities shall
cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance
with such Registration Statement; (B) such securities shall have been otherwise transferred, new certificates for such securities
not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of
such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding;
(D) such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any
successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or limitations); or (E) such
securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration”
shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration
statement becoming effective.
“Registration Expenses”
shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
(A) all registration
and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.)
and any securities exchange on which the Common Stock is then listed;
(B) fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in
connection with blue sky qualifications of Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable
fees and disbursements of counsel for the Company;
(E) reasonable
fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with
such Registration; and
(F) reasonable
fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand
Registration to be registered for offer and sale in the applicable Registration.
“Registration Statement”
shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including
the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such
registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Requesting Holder”
shall have the meaning given in subsection 2.1.1.
“Securities Act”
shall mean the Securities Act of 1933, as amended from time to time.
“Sponsor”
shall have the meaning given in the Recitals hereto.
“Underwriter”
shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part
of such dealer’s market-making activities.
“Underwritten Registration”
or “Underwritten Offering” shall mean a Registration in which securities of the Company
are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Working
Capital Warrants” shall have the meaning given in the Recitals hereto.
ARTICLE II
REGISTRATIONS
2.1 Demand
Registration.
2.1.1 Request
for Registration. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, at any time and
from time to time on or after the date the Company consummates the Business Combination, the Holders of at least a majority in
interest of the then-outstanding number of Registrable Securities (the “Demanding Holders”)
may make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe
the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such
written demand a “Demand Registration”). The Company shall, within ten (10) days
of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such
demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable
Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s
Registrable Securities in such Registration, a “Requesting Holder”) shall so notify
the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon receipt
by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall
be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall
effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt
of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders
pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than an aggregate of
three (3) Registrations pursuant to a Demand Registration under this subsection 2.1.1 with respect to any or all
Registrable Securities; provided, however, that a Registration shall not be counted for such purposes unless a Form S-1
or any similar long-form registration statement that may be available at such time (“Form S-1”)
has become effective and all of the Registrable Securities requested by the Requesting Holders to be registered on behalf of the
Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1 of this
Agreement.
2.1.2 Effective
Registration. Notwithstanding the provisions of subsection 2.1.1 above or any other part of this Agreement,
a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement
filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission
and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further,
that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration
pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or
state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to
have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated,
and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect
to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days,
of such election; and provided, further, that the Company shall not be obligated or required to file another
Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant
to a Demand Registration becomes effective or is subsequently terminated.
2.1.3 Underwritten
Offering. Subject to the provisions of subsection 2.1.4 and Section 2.4 hereof, if a
majority-in-interest of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the
Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of
such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned
upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities
in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities
through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary
form with the Underwriter(s) selected for such Underwritten Offering by the majority-in-interest of the Demanding Holders
initiating the Demand Registration.
2.1.4 Reduction
of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Registration pursuant to a Demand
Registration, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the
dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell,
taken together with all other Common Stock or other equity securities that the Company desires to sell and the Common Stock, if
any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held
by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can
be sold in the Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method,
or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable,
the “Maximum Number of Securities”), then the
Company shall include in such Underwritten Offering, as follows: (i) first, the Registrable Securities of the Demanding Holders
and the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Demanding Holder
and Requesting Holder (if any) has requested be included in such Underwritten Registration and the aggregate number of Registrable
Securities that the Demanding Holders and Requesting Holders have requested be included in such Underwritten Registration (such
proportion is referred to herein as “Pro Rata”)) that can be sold without exceeding
the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under
the foregoing clause (i), the Registrable Securities of Holders (Pro Rata, based on the respective number of Registrable Securities
that each Holder has so requested) exercising their rights to register their Registrable Securities pursuant to subsection
2.2.1 hereof, without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum
Number of Securities has not been reached under the foregoing clauses (i) and (ii), the Common Stock or other equity securities
that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to
the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (i), (ii) and (iii), the
Common Stock or other equity securities of other persons or entities that the Company is obligated to register in a Registration
pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number
of Securities.
2.1.5 Demand
Registration Withdrawal. A majority-in-interest of the Demanding Holders initiating a Demand Registration or a majority-in-interest
of the Requesting Holders (if any), pursuant to a Registration under subsection 2.1.1 shall have the right to
withdraw from a Registration pursuant to such Demand Registration for any or no reason whatsoever upon written notification to
the Company and the Underwriter or Underwriters (if any) of their intention to withdraw from such Registration prior to the effectiveness
of the Registration Statement filed with the Commission with respect to the Registration of their Registrable Securities pursuant
to such Demand Registration. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the
Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration prior to its withdrawal under
this subsection 2.1.5.
2.2 Piggyback
Registration.
2.2.1 Piggyback
Rights. If, at any time on or after the date the Company consummates a Business Combination, the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders
of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1 hereof),
other than a Registration Statement (i) filed in connection with any employee stock option or other benefit plan, (ii) for
an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of
debt that is convertible into equity securities of the Company or (iv) for a dividend reinvestment plan, then the Company
shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not
less than ten (10) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe
the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of
the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable
Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing
within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”).
The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use
its best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable
Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on
the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or
other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such
Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall
enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by
the Company.
2.2.2 Reduction
of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Registration that is to be a Piggyback
Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration
in writing that the dollar amount or number of the Common Stock that the Company desires to sell, taken together with (i) the
Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons
or entities other than the Holders of Registrable Securities hereunder (ii) the Registrable Securities as to which registration
has been requested pursuant to Section 2.2 hereof, and (iii) the Common Stock, if any, as to which Registration
has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company,
exceeds the Maximum Number of Securities, then:
(a) If the Registration
is undertaken for the Company’s account, the Company shall include in any such Registration (A) first, the Common Stock
or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities;
(B) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable
Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof,
Pro Rata, which can be sold without exceeding the Maximum Number of Securities; and (C) third, to the extent that the Maximum
Number of Securities has not been reached under the foregoing clauses (A) and (B), the Common Stock, if any, as to which Registration
has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can
be sold without exceeding the Maximum Number of Securities;
(b) If the Registration
is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include
in any such Registration (A) first, the Common Stock or other equity securities, if any, of such requesting persons or entities,
other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (B) second,
to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (A), the Registrable Securities
of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1, pro rata
based on the number of Registrable Securities that each Holder has requested be included in such Underwritten Registration and
the aggregate number of Registrable Securities that the Holders have requested to be included in such Underwritten Registration,
which can be sold without exceeding the Maximum Number of Securities; (C) third, to the extent that the Maximum Number of
Securities has not been reached under the foregoing clauses (A) and (B), the Common Stock or other equity securities that
the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (D) fourth, to the
extent that the Maximum Number of Securities has not been reached under the foregoing clauses (A), (B) and (C), the Common
Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant
to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number
of Securities.
2.2.3 Piggyback
Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw from a Piggyback Registration
for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her
or its intention to withdraw from such Piggyback Registration prior to the effectiveness of the Registration Statement filed with
the Commission with respect to such Piggyback Registration. The Company (whether on its own good faith determination or as the
result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration
Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such
Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration
Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.
2.2.4 Unlimited
Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 hereof
shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 hereof.
2.3 Registrations
on Form S-3. Any Holder of Registrable Securities may at any time, and from time to time, request in writing that the
Company, pursuant to Rule 415 under the Securities Act (or any successor rule promulgated thereafter by the Commission),
register the resale of any or all of their Registrable Securities on Form S-3 or any similar short form registration statement
that may be available at such time (“Form S-3”); provided, however, that
the Company shall not be obligated to effect such request through an Underwritten Offering. Within five (5) days of the Company’s
receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company
shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities,
and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable
Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten (10) days after the receipt
by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than twelve (12) days after the Company’s
initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of
such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable
Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder
or Holders; provided, however, that the Company shall not be obligated to effect any such Registration
pursuant to Section 2.3 hereof if (i) a Form S-3 is not available for such offering; or (ii) the
Holders of Registrable Securities, together with the Holders of any other equity securities of the Company entitled to inclusion
in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price
to the public of less than $10,000,000.
2.4 Restrictions
on Registration Rights. If (A) during the period starting with the date sixty (60) days prior to the Company’s good
faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of,
a Company initiated Registration and provided that the Company has delivered written notice to the Holders prior to receipt of
a Demand Registration pursuant to subsection 2.1.1 and it continues to actively employ, in good faith, all reasonable
efforts to cause the applicable Registration Statement to become effective; (B) the Holders have requested an Underwritten
Registration and the Company and the Holders are unable to obtain the commitment of underwriters to firmly underwrite the offer;
or (C) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company and the Board
concludes as a result that it is essential to defer the filing of such Registration Statement at such time, then in each case the
Company shall furnish to such Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment
of the Board it would be seriously detrimental to the Company for such Registration Statement to be filed in the near future and
that it is therefore essential to defer the filing of such Registration Statement. In such event, the Company shall have the right
to defer such filing for a period of not more than thirty (30) days; provided, however, that the Company
shall not defer its obligation in this manner more than once in any 12-month period.
ARTICLE III
COMPANY PROCEDURES
3.1 General
Procedures. If at any time on or after the date the Company consummates a Business Combination the Company is required to effect
the Registration of Registrable Securities, the Company shall use its best efforts to effect such Registration to permit the sale
of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall,
as expeditiously as possible:
3.1.1 prepare and
file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities
covered by such Registration Statement have been sold;
3.1.2 prepare and
file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the
Prospectus, as may be requested by any Holder or any Underwriter of Registrable Securities or as may be required by the rules,
regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement
to the Prospectus;
3.1.3 prior to filing
a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if
any, and each Holder of Registrable Securities included in such Registration, and each such Holder’s legal counsel, copies
of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case
including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement
(including each preliminary Prospectus), and such other documents as the Underwriters and each Holder of Registrable Securities
included in such Registration or the legal counsel for any such Holders may request in order to facilitate the disposition of the
Registrable Securities owned by such Holders;
3.1.4 prior to any
public offering of Registrable Securities, use its best efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as
any Holder of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution)
may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement
to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations
of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable
Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions;
provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process
or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such
Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued
by the Company are then listed;
3.1.6 provide a transfer
agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such
Registration Statement;
3.1.7 advise each
seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any
proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued;
3.1.8 at least five
(5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration
Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus,
furnish a copy thereof to each seller of such Registrable Securities and its counsel, including, without limitation, providing
copies promptly upon receipt of any comment letters received with respect to any such Registration Statement or Prospectus;
3.1.9 notify the Holders
at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of
the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes
a Misstatement, and then to correct such Misstatement as set forth in Section 3.4 hereof;
3.1.10 permit a representative
of the Holders (such representative to be selected by a majority of the participating Holders), the Underwriters, if any, and any
attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the
preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however,
that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory
to the Company, prior to the release or disclosure of any such information; and provided further, the Company
may not include the name of any Holder or Underwriter or any information regarding any Holder or Underwriter in any Registration
Statement or Prospectus, any amendment or supplement to such Registration Statement or Prospectus, any document that is to be incorporated
by reference into such Registration Statement or Prospectus, or any response to any comment letter, without the prior written consent
of such Holder or Underwriter and providing each such Holder or Underwriter a reasonable amount of time to review and comment on
such applicable document, which comments the Company shall include unless contrary to applicable law;
3.1.11 obtain a “cold
comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Registration
which the participating Holders may rely on, in customary form and covering such matters of the type customarily covered by “cold
comfort” letters as the managing Underwriter may reasonably request, and reasonably satisfactory to a majority-in-interest
of the participating Holders;
3.1.12 on the date
the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel
representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if
any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion
is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included
in such opinions and negative assurance letters, and reasonably satisfactory to a majority in interest of the participating Holders;
3.1.13 in the event
of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form,
with the managing Underwriter of such offering;
3.1.14 make available
to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months
beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement
which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any
successor rule promulgated thereafter by the Commission);
3.1.15 if the Registration
involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its reasonable efforts
to make available senior executives of the Company to participate in customary “road show” presentations that may be
reasonably requested by the Underwriter in any Underwritten Offering; and
3.1.16 otherwise,
in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection
with such Registration.
3.2 Registration
Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that
the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’
commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration
Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Requirements
for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of
the Company pursuant to a Registration initiated by the Company hereunder unless such person (i) agrees to sell such person’s
securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes
all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary
documents as may be reasonably required under the terms of such underwriting arrangements.
3.4 Suspension
of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains
a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies
of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare
and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing
by the Company that the use of the Prospectus may be resumed. If the filing, initial effectiveness or continued use of a Registration
Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the
inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s
control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness
of, or suspend use of, such Registration Statement for the shortest period of time, but in no event more than thirty (30) days,
determined in good faith by the Company to be necessary for such purpose. In the event the Company exercises its rights under the
preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of
the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall
immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Reporting
Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting
company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of
the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings. The Company further covenants
that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable
such Holder to sell shares of the Common Stock held by such Holder without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter
by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder
a written certification of a duly authorized officer as to whether it has complied with such requirements.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company
agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each
person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and
expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as
the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein.
The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within
the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In connection
with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration
Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents
and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact
contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or
any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only
to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by such
Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several,
not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities
shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant
to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors
and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the
foregoing with respect to indemnification of the Company.
4.1.3 Any person entitled
to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which
it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification
hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect
to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel
(plus local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified
parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry
of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is
so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such
claim or litigation.
4.1.4 The indemnification
provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of
securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions
as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s
indemnification is unavailable for any reason.
4.1.5 If the indemnification
provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying
party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as
a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action
in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material
fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s
and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action;
provided, however, that the liability of any Holder under this subsection 4.1.5 shall be limited
to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable
by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations
set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges
or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that
it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata
allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection
4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of
such fraudulent misrepresentation.
ARTICLE 5
SHAREHOLDER RIGHTS
5.1 Subject
to the terms and conditions of this Agreement, at any time and from time to time on or after the date that the Company consummates
a Business Combination and for so long as the Sponsor holds any Registrable Securities:
5.1.1 The
Sponsor shall have the right, but not the obligation, to designate three individuals to be appointed or nominated, as the case
may be, for election to the Board (including any successor, each, a “Nominee”) by giving written notice
to the Company on or before the time such information is reasonably requested by the Board or the Nominating Committee of the Board,
as applicable, for inclusion in a proxy statement for a meeting of stockholders provided to the Sponsor.
5.1.2 The
Company will, as promptly as practicable, use its best efforts to take all necessary and desirable actions (including, without
limitation, calling special meetings of the Board and the stockholders and recommending, supporting and soliciting proxies) so
that there are three Sponsor Nominees serving on the Board at all times.
5.1.3 The
Company shall, to the fullest extent permitted by applicable law, use its best efforts to take all actions necessary to ensure
that: (i) each Sponsor Nominee is included in the Board’s slate of nominees to the stockholders of the Company for each
election of Directors; and (ii) each Sponsor Nominee is included in the proxy statement prepared by management of the Company
in connection with soliciting proxies for every meeting of the stockholders of the Company called with respect to the election
of members of the Board, and at every adjournment or postponement thereof, and on every action or approval by written consent of
the stockholders of the Company or the Board with respect to the election of members of the Board.
5.1.4 If
a vacancy occurs because of the death, disability, disqualification, resignation, or removal of a Sponsor Nominee or for any other
reason, the Sponsor shall be entitled to designate such person’s successor, and the Company will, as promptly as practicable
following such designation, use its best efforts to take all necessary and desirable actions, to the fullest extent permitted by
law, within its control such that such vacancy shall be filled with such successor Nominee.
5.1.5 If
a Nominee is not elected because of such Nominee’s death, disability, disqualification, withdrawal as a nominee or for any
other reason, the Sponsor shall be entitled to designate promptly another Nominee and the Company will take all necessary and desirable
actions within its control such that the director position for which such Nominee was nominated shall not be filled pending such
designation or the size of the Board shall be increased by one and such vacancy shall be filled with such successor Nominee as
promptly as practicable following such designation.
5.1.6 As
promptly as reasonably practicable following the request of any Sponsor Nominee, the Company shall enter into an indemnification
agreement with such Sponsor Nominee, in the form entered into with the other members of the Board. The Company shall pay the reasonable,
documented out-of-pocket expenses incurred by the Sponsor Nominee in connection with his or her services provided to or on behalf
of the Company, including attending meetings or events attended explicitly on behalf of the Company at the Company’s request.
5.1.7 The
Company shall (i) purchase directors’ and officers’ liability insurance in an amount determined by the Board
to be reasonable and customary and (ii) for so long as a Sponsor Nominee serves as a Director of the Company, maintain such
coverage with respect to such Sponsor Nominee; provided that upon removal or resignation of such Sponsor Nominee
for any reason, the Company shall take all actions reasonably necessary to extend such directors’ and officers’ liability
insurance coverage for a period of not less than six years from any such event in respect of any act or omission occurring at
or prior to such event.
5.1.8 For
so long as a Sponsor Nominee serves as a Director of the Company, the Company shall not amend, alter or repeal any right to indemnification
or exculpation covering or benefiting any Director nominated pursuant to this Agreement as and to the extent consistent with applicable
law, whether such right is contained in the Company’s amended and restated certificate of incorporation or its bylaws, or
another document (except to the extent such amendment or alteration permits the Company to provide broader indemnification or exculpation
rights on a retroactive basis than permitted prior thereto).
5.1.9 Each
Sponsor Nominee may, but does not need to qualify as “independent” pursuant to listing standards of Nasdaq (or such
other national securities exchange upon which the Company’s securities are then listed).
5.1.10 Any
Sponsor Nominee will be subject to the Company’s customary due diligence process, including its review of a completed questionnaire
and a background check. Based on the foregoing, the Company may object to any Sponsor Nominee provided (a) it does so in good
faith, and (b) such objection is based upon any of the following: (i) such Sponsor Nominee was convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses), (ii) such
Sponsor Nominee was the subject of any order, judgment, or decree not subsequently reversed, suspended or vacated of any court
of competent jurisdiction, permanently or temporarily enjoining such proposed director from, or otherwise limiting, the following
activities: (A) engaging in any type of business practice, or (B) engaging in any activity in connection with the purchase
or sale of any security or in connection with any violation of federal or state securities laws, (iii) such Sponsor Nominee
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in
clause (ii)(B), or to be associated with persons engaged in such activity, (iv) such proposed Sponsor Nominee was found by
a court of competent jurisdiction in a civil action or by the Commission to have violated any federal or state securities law,
and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended or vacated, or
(v) such proposed Sponsor Nominee was the subject of, or a party to any federal or state judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to a violation of any federal or state
securities laws or regulations. In the event the Board reasonably finds the Sponsor Nominee to be unsuitable based upon one or
more of the foregoing clauses (i) through (v) and reasonably objects to the identified Sponsor Nominee, Sponsor shall
be entitled to propose a different Sponsor Nominee to the Board within 30 calendar days of the Company’s notice to Sponsor
of its objection to the Sponsor Nominee and such replacement Sponsor Nominee shall be subject to the review process outlined above.
5.1.11 The
Company shall take all necessary action to cause a Sponsor Nominee chosen by the Sponsor, at the request of such Sponsor Nominee
to be elected to the board of directors (or similar governing body) of each material operating subsidiary of the Company. The Sponsor
Nominee, as applicable, shall have the right to attend (in person or remotely) any meetings of the board of directors (or similar
governing body or committee thereof) of each subsidiary of the Company.
ARTICLE VI
MISCELLANEOUS
6.1 Notices.
Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed
to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person
or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, or facsimile. Each notice or
communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served,
sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the
case of notices delivered by courier service, hand delivery, or facsimile, at such time as it is delivered to the addressee (with
the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation.
Any notice or communication under this Agreement must be addressed, if to the Company, to: 345 Lorton Avenue, Suite 400, Burlingame,
California 94010, and, if to any Holder, at such Holder’s address or contact information as set forth in the Company’s
books and records. Any party may change its address for notice at any time and from time to time by written notice to the other
parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in
this Section 6.1.
6.2 Assignment;
No Third Party Beneficiaries.
6.2.1 This Agreement
and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in
part.
6.2.2 Prior to the
expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Holder may assign
or delegate such Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with
a transfer of Registrable Securities by such Holder to a Permitted Transferee but only if such Permitted Transferee agrees to become
bound by the transfer restrictions set forth in this Agreement.
6.2.3 This Agreement
and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the
permitted assigns of the Holders, which shall include Permitted Transferees.
5.2.4 This Agreement
shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement
and Section 6.2 hereof.
6.2.5 No assignment
by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company
unless and until the Company shall have received (i) written notice of such assignment as provided in Section 6.1 hereof
and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms
and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer
or assignment made other than as provided in this Section 6.2 shall be null and void.
6.3 Counterparts.
This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed
an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
6.4 Governing
Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY
AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS
AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS
OF SUCH JURISDICTION AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL
COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
6.5 Amendments
and Modifications. Upon the written consent of the Company and the Holders of at least a majority in interest of the Registrable
Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement
may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however,
that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity
as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in
such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and
any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under
this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise
of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights
or remedies hereunder or thereunder by such party.
6.6 Other Registration
Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to
require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration
filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company
represents and warrants that this Agreement supersedes any other registration rights agreement, shareholder agreement or agreement
with similar terms and conditions and in the event of a conflict between any such agreement or agreements and this Agreement, the
terms of this Agreement shall prevail.
6.7 Term.
This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the
date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event
prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or
any successor rule promulgated thereafter by the Commission)) or (B) the Holders of all Registrable Securities are permitted
to sell the Registrable Securities under Rule 144 (or any similar provision) under the Securities Act without limitation on
the amount of securities sold or the manner of sale. The provisions of Section 3.5 and Article IV
shall survive any termination.
[Signature Page Follows]
IN WITNESS WHEREOF,
the undersigned have caused this Agreement to be executed as of the date first written above.
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COMPANY: |
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ROMAN DBDR TECH ACQUISITION CORP.,
a Delaware corporation |
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By: |
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Name: Dr. Donald G. Basile |
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Title: Chairman and Co-Chief Executive Officer |
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HOLDER: |
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ROMAN DBDR TECH SPONSOR LLC,
a Delaware limited liability company |
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By: |
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Name: Dixon Doll, Jr. |
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Title: Managing Member |
[Signature
Page to Registration and Shareholder Rights Agreement]
Exhibit 10.6
PRIVATE PLACEMENT WARRANT PURCHASE AGREEMENT
THIS PRIVATE PLACEMENT WARRANTS PURCHASE AGREEMENT,
dated as of ,
2020 (as it may from time to time be amended, this “Agreement”), is entered into by and between Roman DBDR Tech
Acquisition Corp., a Delaware corporation (the “Company”), and Roman DBDR Tech Sponsor LLC, a Delaware limited
liability company (the “Purchaser”).
WHEREAS:
The Company intends to consummate an initial
public offering of the Company’s units (the “Public Offering”), each unit consisting of one share of Class A
common stock of the Company, par value $0.0001 per share (each, a “Share”), and one-half of one redeemable warrant;
Each whole warrant entitles the holder to
purchase one Share at an exercise price of $11.50 per Share; and
The Purchaser has
agreed to purchase an aggregate of 10,375,000 warrants (or up to 11,695,000 warrants to the extent the underwriters’
over-allotment option is exercised) (the “Private Placement Warrants”), each Private Placement Warrant
entitling the holder to purchase one Share at an exercise price of $11.50 per Share.
NOW THEREFORE, in consideration of the mutual
promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby, intending legally to be bound, agree as follows:
AGREEMENT
Section 1. Authorization, Purchase and Sale; Terms
of the Private Placement Warrants.
A. Authorization
of the Private Placement Warrants. The Company has duly authorized the issuance and sale of the Private Placement Warrants
to the Purchaser.
B. Purchase and
Sale of the Private Placement Warrants.
(i)
Simultaneously with the consummation of the Public Offering or on such earlier time and date as may be mutually agreed by the
Purchaser and the Company (the “Initial Closing Date”), the Company shall issue and sell to the Purchaser,
and the Purchaser shall purchase from the Company, an aggregate of 10,375,000 Private Placement Warrants at a price of $1.00
per warrant for an aggregate purchase price of $10,375,000 (the “Purchase Price”). Purchaser shall pay the
Purchase Price by wire transfer of immediately available funds to the trust account (the “Trust Account”)
maintained by Continental Stock Transfer & Trust Company, acting as trustee (”Continental”), at
least one (1) business day prior to the date of effectiveness (the “Effective Date”) of the
registration statement relating to the Public Offering (the “Registration Statement”). On the
Initial Closing Date, upon the payment by the Purchaser of the Purchase Price, the Company, at its option, shall deliver a
certificate evidencing the Private Placement Warrants purchased on such date duly registered in the Purchaser’s name to
the Purchaser or effect such delivery in book-entry form.
(ii) In the event that the underwriters’
over-allotment option is exercised in full or in part, the Purchaser shall purchase up to an additional 1,320,000 Private Placement
Warrants (the “Additional Private Placement Warrants”), in the same proportion as the amount of the option that
is so exercised, and simultaneously with such purchase of Additional Private Placement Warrants, as payment in full for the Additional
Private Placement Warrants being purchased hereunder, and at least one (1) business day prior to the closing of such portion
of the underwriters’ over-allotment option, Purchaser shall pay $1.00 per Additional Private Placement Warrant, up to an
aggregate amount of $1,320,000, by wire transfer of immediately available funds or by such other method as may be reasonably acceptable
to the Company, to the Trust Account. The closing of the purchase and sale of the Additional Private Placement Warrants, if applicable,
shall take place simultaneously with the closing of all or any portion of the underwriters’ over-allotment option (such closing
date, together with the Initial Closing Date, the “Closing Dates” and each, a “Closing Date”).
The closing of the purchase and sale of the Additional Private Placement Warrants, if applicable, shall take place at the offices
of Ellenoff Grossman & Schole LLP, counsel for the Company, or such other place as may be agreed upon by the parties hereto.
C. Terms of the
Private Placement Warrants.
(i) Each Private Placement Warrant
shall have the terms set forth in a Warrant Agreement to be entered into by the Company and Continental in connection with the
Public Offering (the “Warrant Agreement”). Such terms include the fact that the Private Placement Warrants shall
not be transferable, assignable or salable until 30 days after the completion of an initial business combination, subject to certain
exceptions set forth in the Warrant Agreement.
(ii) On or prior to the Effective
Date, the Company and the Purchaser shall enter into a registration and shareholder rights agreement (the “Registration
and Shareholder Rights Agreement”) pursuant to which the Company will grant certain registration rights to the Purchaser
relating to the Private Placement Warrants and the Shares underlying the Private Placement Warrants.
Section 2. Representations and Warranties of the
Company. As a material inducement to the Purchaser to enter into this Agreement and purchase the Private Placement Warrants,
the Company hereby represents and warrants to the Purchaser (which representations and warranties shall survive the applicable
Closing Date) that:
A. Incorporation
and Corporate Power. The Company is a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and is qualified to do business in every jurisdiction in which the failure to so qualify would reasonably
be expected to have a material adverse effect on the financial condition, operating results or assets of the Company. The
Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement
and the Warrant Agreement.
B. Authorization;
No Breach.
(i) The execution, delivery and performance
of this Agreement and the Private Placement Warrants have been duly authorized by the Company as of the applicable Closing Date.
This Agreement constitutes the valid and binding obligation of the Company, enforceable in accordance with its terms. Upon
issuance in accordance with, and payment pursuant to, the terms of the Warrant Agreement and this Agreement, the Private Placement
Warrants will constitute valid and binding obligations of the Company, enforceable in accordance with their terms.
(ii) The execution and delivery by
the Company of this Agreement and the Private Placement Warrants, the issuance and sale of the Private Placement Warrants, the
issuance of the Shares upon exercise of the Private Placement Warrants and the fulfillment, of and compliance with, the respective
terms hereof and thereof by the Company, do not and will not as of the applicable Closing Date (a) conflict with or result
in a breach of the terms, conditions or provisions of, (b) constitute a default under, (c) result in the creation of
any lien, security interest, charge or encumbrance upon the Company’s share capital or assets under, (d) result in a
violation of, or (e) require any authorization, consent, approval, exemption or other action by or notice or declaration to,
or filing with, any court or administrative or governmental body or agency pursuant to the amended and restated certificate of
incorporation of the Company (in effect on the date hereof or as may be amended prior to completion of the contemplated Public
Offering), or any material law, statute, rule or regulation to which the Company is subject, or any agreement, order, judgment
or decree to which the Company is subject, except for any filings required after the date hereof under federal or state securities
laws.
C. Title to Securities.
Upon issuance in accordance with, and payment pursuant to, the terms hereof, the Warrant Agreement, the Shares issuable upon exercise
of the Private Placement Warrants will be duly and validly issued as fully paid and nonassessable. On the date of issuance of the
Private Placement Warrants, the Shares issuable upon exercise of the Private Placement Warrants shall have been reserved for issuance.
Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, the Purchaser will have
good title to the Private Placement Warrants and the Shares issuable upon exercise of such Private Placement Warrants, free and
clear of all liens, claims and encumbrances of any kind, other than (i) transfer restrictions hereunder and under the other
agreements contemplated hereby, (ii) transfer restrictions under federal and state securities laws, and (iii) liens,
claims or encumbrances imposed due to the actions of the Purchaser.
D. Valid
Issuance. The total number of shares of all classes of capital stock which the Company has authority to issue is
221,000,000 shares of common stock (which consist of 200,000,000 shares of the Company’s Class A Common Stock and
20,000,000 shares of the Company’s Class B common stock, par value $0.0001 per share (the “Class B
Common Stock”)) and 1,000,000 shares of the Company’s preferred stock, par value $0.0001, per share (the
“Preferred Stock”). As of the date hereof, the Company has issued and outstanding no shares of Class A
Common Stock, 6,325,000 shares of Class B Common Stock (of which up to 825,000 shares are subject to forfeiture as
described in the Registration Statement) and no shares of Preferred Stock. All of the issued shares of capital stock of the
Company have been duly authorized, validly issued, and are fully paid and non-assessable
E. Governmental
Consents. No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by
the Company of any other transactions contemplated hereby.
Section 3. Representations and Warranties of the
Purchaser. As a material inducement to the Company to enter into this Agreement and issue and sell the Private Placement
Warrants to the Purchaser, the Purchaser hereby represents and warrants to the Company (which representations and warranties shall
survive the applicable Closing Date) that:
A. Organization
and Requisite Authority. The Purchaser possesses all requisite power and authority necessary to carry out the transactions
contemplated by this Agreement.
B. Authorization;
No Breach.
(i) This Agreement constitutes a valid
and binding obligation of the Purchaser, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights
and to general equitable principles (whether considered in a proceeding in equity or law).
(ii) The execution and delivery by
the Purchaser of this Agreement and the fulfillment of and compliance with the terms hereof by the Purchaser does not and shall
not as of the applicable Closing Date conflict with or result in a breach by the Purchaser of the terms, conditions or provisions
of any agreement, instrument, order, judgment or decree to which the Purchaser is subject.
C. Investment Representations.
(i) The Purchaser is acquiring the
Private Placement Warrants and, upon exercise of the Private Placement Warrants, the Shares issuable upon such exercise (collectively,
the “Securities”), for the Purchaser’s own account, for investment purposes only and not with a view towards,
or for resale in connection with, any public sale or distribution thereof.
(ii) The Purchaser is an “accredited
investor” as such term is defined in Rule 501(a)(3) of Regulation D under the Securities Act of 1933, as amended
(the “Securities Act”).
(iii) The Purchaser understands that
the Securities are being offered and will be sold to it in reliance on specific exemptions from the registration requirements of
the United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s
compliance with, the representations and warranties of the Purchaser set forth herein in order to determine the availability of
such exemptions and the eligibility of the Purchaser to acquire such Securities.
(iv) The Purchaser did not enter into
this Agreement as a result of any general solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act.
(v) The Purchaser has been furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale
of the Securities which have been requested by the Purchaser. The Purchaser has been afforded the opportunity to ask questions
of the executive officers and directors of the Company. The Purchaser understands that its investment in the Securities involves
a high degree of risk and it has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to the acquisition of the Securities.
(vi) The Purchaser understands that
no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the investment in the Securities by the Purchaser nor have such
authorities passed upon or endorsed the merits of the offering of the Securities.
(vii) The Purchaser understands that:
(a) the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (1) subsequently registered thereunder or (2) sold in reliance
on an exemption therefrom; and (b) except as specifically set forth in the Registration Rights Agreement, neither the Company
nor any other person is under any obligation to register the Securities under the Securities Act or any state securities laws or
to comply with the terms and conditions of any exemption thereunder. The Private Placement Warrants will bear a legend and
appropriate “stop transfer” instructions (or an appropriate notation if the warrants are issued in book entry form)
relating to the foregoing. The Purchaser further understands that the Securities and Exchange Commission (the “SEC”)
has taken the position that promoters or affiliates of a blank check company and their transferees, both before and after an initial
business combination, are deemed to be “underwriters” under the Securities Act when reselling the securities of a blank
check company. Based on that position, Rule 144 adopted pursuant to the Securities Act would not be available for resale
transactions of the Securities until the one-year anniversary following consummation of an initial business combination despite
technical compliance with the requirements of such Rule.
(viii) The Purchaser has such knowledge
and experience in financial and business matters, knows of the high degree of risk associated with investments in the securities
of companies in the development stage such as the Company, is capable of evaluating the merits and risks of an investment in the
Securities and is able to bear the economic risk of an investment in the Securities in the amount contemplated hereunder for an
indefinite period of time. The Purchaser has adequate means of providing for its current financial needs and contingencies
and will have no current or anticipated future needs for liquidity which would be jeopardized by the investment in the Securities.
The Purchaser can afford a complete loss of its investment in the Securities.
Section 4. Conditions of the Purchaser’s
Obligations. The obligations of the Purchaser to purchase and pay for the Private Placement Warrants are subject to the
fulfillment, on or before the applicable Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct
at and as of the applicable Closing Date as though then made.
B. Performance.
The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the applicable Closing Date.
C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
D. Warrant Agreement.
The Company shall have entered into the Warrant Agreement.
Section 5. Conditions of the Company’s Obligations.
The obligations of the Company to the Purchaser under this Agreement are subject to the fulfillment, on or before the applicable
Closing Date, of each of the following conditions:
A. Representations
and Warranties. The representations and warranties of the Purchaser contained in Section 3 shall be true and correct
at and as of the applicable Closing Date as though then made.
B. Performance.
The Purchaser shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by the Purchaser on or before the applicable Closing Date.
C. No Injunction.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby, which prohibits the consummation of any of the transactions contemplated by this Agreement
or the Warrant Agreement.
D. Warrant Agreement.
The Company shall have entered into the Warrant Agreement.
Section 6. Termination. This Agreement
may be terminated at any time after March 31, 2021 upon the election by either the Company or the Purchaser solely as to itself
upon written notice to the other party if the initial closing of the Public Offering does not occur prior to such date.
Section 7. Survival of Representations and Warranties.
All of the representations and warranties contained herein shall survive the applicable Closing Date.
Section 8. Definitions. Terms used but
not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Registration Statement.
Section 9. Miscellaneous.
A. Successors and
Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors of the parties hereto whether
so expressed or not. Notwithstanding the foregoing or anything to the contrary herein, the parties may not assign this Agreement
without the prior written consent of the other party hereto, other than assignments by the Purchaser to affiliates thereof.
B. Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
C. Counterparts.
This Agreement may be executed simultaneously in two or more counterparts, none of which need contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and the same agreement.
D. Descriptive
Headings; Interpretation. The descriptive headings of this Agreement are inserted for convenience only and do not constitute
a substantive part of this Agreement. The use of the word “including” in this Agreement shall be by way
of example rather than by limitation.
E. Governing Law.
This Agreement shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed
in accordance with the internal laws of the State of New York, without regard to the conflicts of laws principles thereof.
F. Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
all parties hereto.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement to be effective as of the date first set forth above.
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COMPANY: |
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ROMAN DBDR TECH ACQUISITION CORP. |
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By: |
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Name: |
Dr. Donald G. Basile |
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Title: |
Chairman and Chief Executive Officer |
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PURCHASER: |
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ROMAN DBDR TECH SPONSOR LLC |
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By: |
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Name: |
Dixon Doll, Jr. |
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Title: |
Managing Member |
[Signature
page to Private Placement Warrants Purchase Agreement]
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the inclusion in this
Registration Statement of Roman DBDR Tech Acquisition Corp. (the “Company”) on Amendment No. 3 to Form S-1, File
No. 333-249330, of our report dated September 4, 2020, except the first paragraph of Note 5 and the second paragraph of Note
8 as to which the date is November 3, 2020, which includes an explanatory paragraph as to the Company’s ability to
continue as going concern, with respect to our audit of the financial statements of Roman DBDR Tech Acquisition Corp. as of
August 28, 2020 and for the period from August 21, 2020 (inception) through August 28, 2020, which report appears in the
Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading
“Experts” in such Prospectus.
/s/ Marcum llp
Marcum llp
New York, NY
November 3, 2020
