As submitted confidentially with the
Securities and Exchange Commission on June 20, 2019
This draft registration statement has
not been publicly filed with the Securities and Exchange
Commission and all information herein
remains strictly confidential
Registration
No. 333-
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Silver
Spike Acquisition Corp.
(Exact name of registrant as specified in its charter)
Cayman Islands
(State or other jurisdiction of incorporation or organization) |
6770
(Primary Standard Industrial Classification Code Number) |
N/A
(I.R.S. Employer
Identification Number) |
1114 6th Ave, 41st Floor
New York, New York, 10036
United States of America
Telephone: (212) 905-4923
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Scott Gordon, Chief Executive Officer
Gregory Gentile, Chief Financial Officer
c/o Silver Spike Acquisition Corp.
1114 6th Ave, 41st Floor
New York, New York, 10036
United States of America
Telephone: (212) 905-4923
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Deanna L. Kirkpatrick
Derek J. Dostal
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000 |
Gregg A. Noel
Jonathan Ko
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Telephone: (213) 687-5000
|
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.
| Large accelerated filer ☐ |
Accelerated filer ☐ |
Non-accelerated filer ☒ |
Smaller reporting company ☒ |
| |
|
|
Emerging growth company ☒ |
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 to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Security
Being Registered |
Amount Being Registered |
Proposed Maximum Offering Price per Security(1) |
Proposed Maximum
Aggregate Offering
Price(1) |
Amount of
Registration Fee |
| Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant(2) |
28,750,000 Units |
$10.00 |
$287,500,000 |
$34,845 |
| Class A ordinary shares included as part of the units(3) |
28,750,000 Shares |
— |
— |
—(4) |
| Redeemable warrants included as part of the units(3) |
14,375,000 Warrants |
— |
— |
—(4) |
| Total |
|
|
$287,500,000 |
$34,845 |
| (1) | Estimated solely for the purpose of calculating the registration fee. |
| (2) | Includes 3,750,000 units, consisting of 3,750,000 Class A ordinary shares and 1,875,000 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, there are also being registered an indeterminable number of additional securities as may be issued to
prevent dilution resulting from share splits, share dividends or similar transactions. |
| (4) | No fee pursuant to Rule 457(g). |
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.
SUBJECT TO COMPLETION, DATED
JUNE 20, 2019
PRELIMINARY PROSPECTUS
$250,000,000
Silver Spike Acquisition Corp.
25,000,000 Units
Silver Spike Acquisition Corp. is a newly incorporated blank
check company incorporated as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, amalgamation,
share exchange, asset acquisition, share 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 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 a business combination target in any business, industry or geographical location, we intend
to focus our search for businesses in the cannabis industry that are compliant with all applicable laws and regulations within
the jurisdictions in which they are located or operate and, in particular, we will not invest in, or consummate a business combination
with, a target business that we determine has been operating, or whose business plan is to operate, in violation of U.S. federal
laws, including the U.S. Controlled Substances Act.
This is an initial public offering of our securities. Each unit
has an offering price of $10.00 and consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant
entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided
herein, and only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the completion
of our initial business combination and 12 months from the closing of this offering, and will expire five years after the completion
of our initial business combination or earlier upon redemption or liquidation, as described in this prospectus. We have also granted
the underwriters a 45-day option to purchase up to an additional 3,750,000 units to cover over-allotments, if any.
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary 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 described below as of two business days
prior to the completion of our initial business combination, including interest (which interest shall be net of taxes payable),
divided by the number of then issued and outstanding Class A ordinary shares that were sold as part of the units in this offering,
which we refer to collectively as our public shares, subject to the limitations described herein. If we are unable to complete
our initial business combination within 24 months from the closing of this offering, we will 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 (less
up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number
of then issued and outstanding public shares, subject to applicable law and as further described herein.
Our sponsor, Silver Spike Sponsor, LLC, a Delaware limited liability
company (which we refer to as our “sponsor” throughout this prospectus), has committed to purchase an aggregate of
7,000,000 warrants (or 7,750,000 warrants if the underwriters’ over-allotment option is exercised in full) at a price of
$1.00 per warrant ($7,000,000 in the aggregate or $7,750,000 in the aggregate if the underwriters’ over-allotment option
is exercised in full) in a private placement that will close simultaneously with the closing of this offering. We refer to these
warrants throughout this prospectus as the private placement warrants. Each private placement warrant entitles the holder thereof
to purchase one Class A ordinary share at $11.50 per share, subject to adjustment as provided herein.
Our initial shareholders currently hold 7,187,500 founder shares
(as defined below), up to 937,500 of which are subject to forfeiture by our sponsor depending on the extent to which the underwriters’
over-allotment option is exercised.
Prior to this offering, there has been no public market for our
units, ordinary shares or warrants. We intend to apply to list our units on the Nasdaq Capital Market, or Nasdaq, under the symbol
“ ” on or promptly after the date of this prospectus. We cannot guarantee that our securities will be approved for
listing on Nasdaq. The Class A ordinary shares and warrants constituting the units will begin separate trading on the 52nd day
following the date of this prospectus unless Credit Suisse Securities (USA) LLC informs us of its decision to allow earlier separate
trading, subject to our filing a Current Report on Form 8-K with the Securities and Exchange Commission, or the “SEC”,
containing an audited balance sheet of the Company reflecting our receipt of the gross proceeds of this offering and issuing a
press release announcing when such separate trading will begin. Once the securities constituting the units begin separate trading,
we expect that the Class A ordinary shares and warrants will be listed on Nasdaq under the symbols “ ” and “
,” 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 risks. See the section of this prospectus entitled “Risk Factors” beginning on page 29.
Investors will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings.
| | |
Per Unit | |
Total |
| Public offering price | |
$ | 10.00 | | |
$ | 250,000,000 | |
| Underwriting discounts and commissions(1) | |
$ | 0.55 | | |
$ | 13,750,000 | |
| Proceeds, before expenses, to us | |
$ | 9.45 | | |
$ | 236,250,000 | |
| (1) | Includes $0.35 per unit, or $8,750,000 (or up to $10,062,500 if the underwriters’ over-allotment option is exercised
in full) in the aggregate, payable to the underwriters for deferred underwriting commissions to be placed in a trust account located
in the United States as described herein. Does not include certain fees and expenses payable to the underwriters in connection
with this offering. See also “Underwriting” 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, $250,000,000 or $287,500,000 if the underwriters’ over-allotment
option is exercised in full ($10.00 per unit), will be deposited into a U.S.-based trust account with acting
as trustee. Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our
taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of:
(1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection
with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or
timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months
from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
business combination activity; and (3) the redemption of our public shares if we are unable to complete our initial business combination
within 24 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 shareholders.
The underwriters are offering the units for sale on a firm commitment
basis. Delivery of the units will be made on or about ,
2019.
Neither the SEC nor any state securities commission has approved
or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
No invitation, whether directly or indirectly, may be made to
the public in the Cayman Islands to subscribe for our securities.
Credit Suisse
The date of this prospectus is ,
2019
table
of contents
Page
We are responsible for the information contained in this prospectus.
We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus.
We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
Until ,
2019, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter
and with respect to unsold allotments or subscriptions.
TRADEMARKS
This prospectus contains references to trademarks and service
marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus may appear
without the ® or ™ symbols, but such references are not intended to indicate, in any way, that
the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names.
We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship
with, or endorsement or sponsorship of us by, any other companies.
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 “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:
| · | “we,” “us,” “our,” “company” or “our company” are to Silver
Spike Acquisition Corp., a Cayman Islands exempted company; |
| · | “amended and restated memorandum and articles of association” are to our memorandum and articles of association
to be in effect upon completion of this offering; |
| · | “Class A ordinary shares” are to our Class A ordinary shares, par value $0.0001 per share; |
| · | “Class B ordinary shares” are to our Class B ordinary shares, par value $0.0001 per share; |
| · | “Companies Law” are to the Companies Law (2018 Revision) of the Cayman Islands as the same may be amended from
time to time; |
| · | “directors” are to our current directors and director nominees; |
| · | “founder shares” are to our Class B ordinary shares initially purchased by our sponsor in a private placement
prior to this offering and the Class A ordinary shares that will be issued upon the automatic conversion of the Class B ordinary
shares at the time of our initial business combination (for the avoidance of doubt, such Class A ordinary shares will not be “public
shares”); |
| · | “initial shareholders” are to our sponsor and other holders of our founder shares prior to this offering (if
any); |
| · | “letter agreement” refers to the letter agreement entered into between us and our initial shareholders, directors
and officers, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part; |
| · | “management” or our “management team” are to our officers and directors and any other advisors described
in the “Management” section of this prospectus; |
| · | “ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares; |
| · | “private placement warrants” are to the warrants issued to our sponsor in a private placement simultaneously
with the closing of this offering; |
| · | “public shares” are to our Class A ordinary shares sold as part of the units in this offering (whether they
are purchased in this offering or thereafter in the open market); |
| · | “public shareholders” are to the holders of our public shares, including our sponsor, officers and directors
to the extent our sponsor, officers or directors purchase public shares, provided their status as a “public shareholder”
shall only exist with respect to such public shares; |
| · | “sponsor” are to Silver Spike Sponsor, LLC, a Delaware limited liability company; |
| · | “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) and the private placement warrants; and |
| · | “$,” “US$” and “U.S. dollar” each refer to the United States dollar. |
Any conversion of the Class B ordinary shares described in
this prospectus will take effect as a redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter
of Cayman Islands law. All references in this prospectus to shares of the Company being forfeited shall take effect as surrenders
for no consideration of such shares as a matter of Cayman Islands law. Any share dividends described in this prospectus will take
effect as a share capitalization as a matter of Cayman Islands law. Unless we tell you otherwise, the information in this prospectus
assumes that the underwriters will not exercise their over-allotment option and the forfeiture by our sponsor of 937,500 founder
shares.
General
We are a newly incorporated blank check company incorporated
as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus
as our initial business combination. To date, our efforts have been limited to organizational activities and activities related
to this offering. We have not selected any 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.
Our sponsor is an affiliate of Silver Spike Capital. Silver
Spike Capital is an asset management fund focused on the burgeoning cannabis and related health & wellness industries. Silver
Spike was formed in 2019 with an executive team consisting of seasoned investment professionals, many of whom have extensive experience
in emerging and frontier markets as well as cannabis industry investors and entrepreneurs with proven track records. With this
team, Silver Spike is positioning to become the leading institutional-quality asset manager in this nascent, fragmented sector.
While we may pursue a business combination target in any business,
industry or geographical location, we intend to focus our search for businesses in the cannabis industry that are compliant with
all applicable laws and regulations within the jurisdictions in which they are located or operate and, in particular, we will not
invest in, or consummate a business combination with, a target business that we determine has been operating, or whose business
plan is to operate, in violation of U.S. federal laws, including the U.S. Controlled Substances Act. The cannabis industry has
experienced significant growth over the last several years. With full federal legalization in Canada and 36 states in the United
States allowing for some type of legal use under state law, the cannabis industry is amongst the fastest growing industries in
the world. We believe that the normalization of cannabis and its many uses - both therapeutic and recreational - is creating a
rarely seen opportunity to invest in related businesses. At the same time, the cannabis industry is highly fragmented and subject
to a complex regulatory framework, creating significant barriers to entry. The cannabis-related investment space is currently dominated
by small funds which we believe lack both the capital and experience to see their investments through multiple rounds of funding.
We believe that there are several target businesses that could
benefit from our partnership and are compliant with all applicable laws and regulations within the jurisdictions in which they
are located or operate. In the United States, this would currently include non-plant touching businesses that support the functioning
of cannabis activity but are not directly related to cultivation, manufacturing, processing, branding, transportation, distribution,
storage or sale of cannabis and cannabis-based products. Another set of eligible targets in the U.S. would include hemp derived
cannabidiol (“CBD”) businesses that are compliant with the U.S. Agricultural Improvement Act of 2018 (the “Farm
Bill Act”), which would include targets engaged in cultivation, manufacturing, processing, branding, transportation, distribution,
storage or sale of hemp-derived CBD. We may also consider companies pursuing an FDA track for pharmaceutical applications and treatments
that entail compounds found in cannabis. There are also a number of qualifying cannabis-related licensed operators in industries
outside of the United States. This includes companies currently operating in jurisdictions where cannabis has been decriminalized
for recreational use, such as Canada, Colombia and Uruguay. Globally, 19 countries have legalized medical use and nearly 40
countries have decriminalized recreational use. Over the next 24 months, we believe that legislative activity in certain jurisdictions
will further broaden our opportunity set for eligible acquisitions.
The transition of the cannabis and derivative products industries
to a regulated and legal marketplace has been happening at a rapid pace over recent years. Many countries have or are contemplating
some form of legalized use, including Canada and the United States. For example, on June 28, 2018, the Marijuana Freedom and Opportunity
Act was introduced in the United States Senate, which would remove marijuana from the schedule of controlled substances under the
Controlled Substances Act and decriminalize its use. We believe that this momentum will continue to accelerate worldwide, generating
tremendous opportunity in the industry, with both broader legislative acceptance and an evolving regulatory environment. There
have already been hundreds of businesses launched across various sub-sectors of the cannabis industry, many of which are located
in Canada or the United States. These businesses have raised billions of dollars from investors in public and private markets;
including strategic investments from major multinational companies that are altering or broadening their core business focus. Many
of these businesses have valuations in excess of a billion dollars. However, the cannabis industry is still in its infancy. In
order to succeed under the new legislative and regulatory frameworks, we believe that businesses will need strong management teams
with deep operational expertise and financial acumen.
As this industry evolves from a nascent industry cycle, often
with high levels of return, we believe that investors will become more discerning and will focus on business models that can scale
profitably. Despite high profile recent investments, we believe the total quantum of invested capital in the space is scant relative
to other major industry sectors. As the industry evolves and legislative and regulatory hurdles are addressed, we anticipate an
institutionalization of capital investment, with reduced reliance on high net worth individuals, family offices and select hedge
funds. We believe that this will be manifested by new investors providing sources of liquidity that will resemble more mature markets,
including increased breadth of financial instruments across the capital structure.
We believe that the cannabis industry will continue to grow
at a rapid pace in the coming years – with the potential to reach several hundred billion dollars of sales within the next
ten years. Unlike other emerging industries, which have been driven by massive technological advances, cannabis has supported therapeutic
treatments for thousands of years across a variety of cultures. The evolution of public perception is being sustained by consumers
seeking cannabis-based treatments for a variety of health and wellness needs. We believe that there will be growth via the broader
adoption of cannabis for non-recreational use. Potential sources for additional growth include the disruption of a variety of health-related
market segments including pain management, sleep, skin care and cosmetics and anxiety, as well as many other applications that
are being explored.
Scott Gordon, our founder, is the founder and Chief Executive
Officer of Silver Spike Capital, a newly formed investment platform dedicated to the cannabis industry. Mr. Gordon began investing
in the cannabis industry in 2014 and in 2016 co-founded and became Chairman of Egg Rock Holdings, parent company of the Papa &
Barkley family of cannabis products with related subsidiary assets in manufacturing, processing, and logistics. Egg Rock Holdings
also is the parent company of Papa & Barkley Essentials, a hemp-derived CBD business based in Colorado. Mr. Gordon has spent
his career investing in emerging markets globally and has formed and managed a number of large global platforms. Prior to the formation
of Silver Spike Capital, Mr. Gordon was President of Fintech Advisory Inc., investment manager for a multibillion dollar family
office fund focused on long-term and opportunistic investments in emerging markets. Previously, Mr. Gordon held leadership positions
at several asset management firms including Marathon Asset Management, Caxton and Taconic Capital. Earlier in his career, Mr. Gordon
led the Global Special Situations Group at Bank of America, the Emerging Markets business at ING Capital and was a founding member
of the Emerging Markets business at JP Morgan.
Mr. Gordon is joined at Silver Spike by a number of investment
professionals who have experience spanning cannabis, consumer products, medical and scientific research and investment management.
See “Management” for additional information about our management team.
Business Strategy
Our business strategy is to identify and complete our initial
business combination with a target operating in the cannabis industry that is compliant with all applicable laws and regulations
within the jurisdictions in which it is located or operates. We believe that there is an opportunity to take advantage of a newly
emerging industry, with a variety of established operators seeking access to capital and managerial expertise. We intend to leverage
our team’s
collective operating, technical, regulatory and legal expertise
in cannabis to build a strong business with competitive advantages to emerge as a leading public company in the space.
As the industry continues to transition to a new legislative
and regulatory framework, we believe that many companies will need a partner that can assist in providing a level of operational
and financial expertise to support their growth. Our team includes a variety of investment, operational and healthcare professionals
that will provide operating, technical, regulatory and legal expertise in cannabis to assist a target business access the public
markets. Our team consists of professionals who have decades of experience in capital markets globally, have extensive scientific
and medical knowledge of the plant and its many compounds and includes entrepreneurs and founders of consumer facing businesses.
Our acquisition plan is to leverage our management team’s
networks of potential transaction sources where we believe a combination of our management team’s industry relationships,
knowledge and experience could effect a positive transformation or augmentation of existing businesses or assets. Over the course
of their careers, the members of our management team have developed a broad network of contacts and corporate relationships that
we believe will serve as a useful source of acquisition opportunities. We plan to leverage relationships with management teams
of public and private companies, investment professionals at private equity firms and other financial sponsors, owners of private
businesses, investment bankers, restructuring advisers, consultants, attorneys and accountants, which we believe should provide
us with a number of business combination opportunities.
Following the completion of this offering, the members of our
management team plan to communicate with their networks of relationships to articulate the parameters for our search for a target
business and a potential business combination and begin the process of pursuing and reviewing potentially interesting leads.
Acquisition Criteria
Consistent with our business strategy, we have identified the
following general, non-exclusive criteria and guidelines that we believe are important in evaluating prospective targets for our
initial business combination. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide
to enter into our initial business combination with a target that does not meet one or more of these criteria and guidelines. We
expect to weigh potential upside from growth in the target business and an improved capital structure against any identified downside
risks. We intend to focus on target businesses that we believe:
| · | exhibit institutional-level operations and financial controls. We intend to seek a target in the cannabis space that
not only has a leading competitive position, but also has the underlying infrastructure and operations to build a public platform; |
| · | have durable competitive advantages that are differentiated in the sector. We intend to acquire an asset that not only
benefits from secular tailwinds in the industry, but also exhibit hard-to-replicate competitive advantages amongst its peers; |
| · | are fundamentally sound with consistent operational performance and free cash flow generation. We expect to target a
business that has historically exhibited profitability and strong cash flow generation. Our management team has a proven track
record accelerating growth of companies with strong past performance; |
| · | are at an inflection point, such as requiring additional capital to achieve a growth strategy. We intend to look for
targets that have clear opportunities for long-term sustainable growth, but which require our capital or expertise to achieve a
growth strategy; |
| · | have the potential to further improve their performance under our ownership. We intend to seek targets where we believe
we can improve company results by leveraging our transactional, financial, managerial and investment experience as well as our
extensive networks and insights. We believe our management team has the right skills and capabilities to enhance companies’
results and consolidate competitive positions in their sectors; |
| · | may benefit from capital markets access. We intend to seek a target that may benefit from being, or has the potential
to become, a public company with an increased public profile, enhanced corporate governance and increased access to a more diversified
pool of capital; and |
| · | exhibit unrecognized value and desirable returns on capital. We will look for targets that we believe have been undervalued
by the marketplace based on our analysis and due diligence review. |
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 criteria
and guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we
decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines,
we will disclose that the target business does not meet the above criteria and guidelines in our shareholder communications related
to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender
offer materials that we would file with the SEC.
Acquisition Process
We have not selected any 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.
Certain of our officers and directors presently have, 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 to such entity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business
combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however,
that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete
our initial business combination.
Initial Business Combination
The rules of Nasdaq require that our initial business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. We refer to this as the 80% fair market value test.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our
board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards
employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors
will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets.
The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide
public shareholders with our analysis of our satisfaction of the 80% fair market value test, as well as the basis for our determinations.
If our board is not able independently to determine the fair market value of the target business or businesses, 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. We do not currently intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination, although there is no restriction on our doing so.
We anticipate structuring our initial business combination so
that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the issued and outstanding
equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the issued
and outstanding voting securities of the target or otherwise
acquires a controlling interest in the target business 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 shareholders prior to our initial business combination may
collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in
our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number
of new shares in exchange for all of the issued and outstanding capital stock or shares 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 shareholders
immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are
owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what
will be valued for purposes of the 80% fair market value test. If our 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 target businesses. Notwithstanding
the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80%
fair market value test.
Prior to the effectiveness of the registration statement of
which this prospectus forms a part, we will file a Registration Statement on Form 8-A with the SEC to voluntarily register our
securities under Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, we will be subject
to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing a Form 15 to suspend our
reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial business combination.
Emerging Growth Company Status and
Other Corporate Information
We are an “emerging growth company,” as defined
in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups
Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to,
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there
may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we
have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal
year’s second fiscal quarter and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated
with it in the JOBS Act.
Exempted companies are Cayman Islands companies wishing to conduct
business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As
an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance
with Section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 30 years from
the date of the undertaking, no law which is enacted in the
Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and,
in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance
tax shall be payable (1) on or in respect of our shares, debentures or other obligations or (2) by way of the withholding in whole
or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal
or interest or other sums due under a debenture or other obligation of us.
We are a Cayman Islands exempted company incorporated in June
2019. Our executive offices are located at 1114 6th Ave, 41st Floor, New York, New York, 10036 and our telephone number is (212)
905-4923.
The Offering
In making your decision whether to invest in our securities,
you should take into account not only the backgrounds of the members of our management team, but also the special risks we face
as a blank check company and the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the
Securities Act. You will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. You should
carefully consider these and the other risks set forth in the section below entitled “Risk Factors” of this prospectus.
| Securities offered |
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25,000,000 units (or 28,750,000 units if the underwriters’ over-allotment option is exercised in full), at $10.00 per unit, each unit consisting of: |
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· one Class A ordinary share; and |
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· one-half of one redeemable warrant. |
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| Nasdaq symbols |
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Units: “ ” |
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Class A Ordinary Shares: “ ” |
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Warrants: “ ” |
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| Trading commencement and separation of Class A ordinary shares and warrants |
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The units will begin trading promptly after the date of this prospectus. The Class A ordinary shares and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse Securities (USA) LLC 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 Class A ordinary shares 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 Class A ordinary shares 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. |
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| Separate trading of the Class A ordinary shares and warrants is prohibited until we have filed a Current Report on Form 8-K |
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In no event will the Class A ordinary shares 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 of the Company 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. If the underwriters’ over-allotment option is exercised following the initial filing of such Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information to reflect the exercise of the underwriters’ over-allotment option. |
| Units: |
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| Number issued and outstanding before this offering |
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0 |
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| Number issued and outstanding after this offering |
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25,000,000(1) |
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| Ordinary shares: |
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| Number issued and outstanding before this offering |
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7,187,500(2) (3) |
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| Number issued and outstanding after this offering |
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31,250,000(1) (3) (4) |
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| Warrants: |
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| Number of private placement warrants to be sold in a private placement simultaneously with this offering |
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7,000,000 |
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| Number of warrants to be outstanding after this offering and the private placement |
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19,500,000(1) |
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| Exercisability |
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Each whole warrant offered in this offering is exercisable to purchase one Class A ordinary share, subject to adjustment as provided herein, and only whole warrants are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. |
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We structured each unit to contain one-half of one warrant, with each whole warrant exercisable for one Class A ordinary share, as compared to units issued by some other similar blank check companies which contain whole warrants exercisable for one share, in order to reduce the dilutive effect of the warrants upon completion of our initial business combination as compared to units that each contain a whole warrant to purchase one share, which we believe will make us a more attractive business combination partner for target businesses. |
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| Exercise price |
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$11.50 per share, subject to adjustment as described herein. |
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In addition, if (x) we issue additional ordinary shares or equity-linked securities for capital raising purposes in |
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(1) Assumes
no exercise of the underwriters’ over-allotment option and the forfeiture by our sponsor of 937,500 founder shares.
(2) Consists
solely of founder shares and includes up to 937,500 founder shares that are subject to forfeiture by our sponsor depending on the
extent to which the underwriters’ over-allotment option is exercised.
(3) Founder
shares are currently classified as Class B ordinary shares, which shares will automatically convert into Class A ordinary shares
on the first business day following our initial business combination on a one-for-one basis, subject to adjustment as described
below adjacent to the caption “Founder shares conversion and anti-dilution rights.”
(4) Includes
25,000,000 public shares and 6,250,000 founder shares.
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connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20 per ordinary share (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 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 completion of our initial business combination (net of redemptions), and (z) the volume weighted average trading price of our ordinary shares during the 20 trading day period starting on the trading day prior to the day on which we consummate our initial business combination (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 higher 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 higher of the Market Value and the Newly Issued Price. |
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| Exercise period |
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The warrants will become exercisable on the later of: |
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· 30 days after the completion of our initial business combination; and |
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· 12 months from the closing of this offering; |
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provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement). |
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We are not registering the Class A ordinary shares 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 reasonable best efforts to file with the SEC a registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants, and we will use our reasonable best efforts to cause the same to become effective within 60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary |
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shares until the warrants expire or are redeemed; provided that if our Class A ordinary shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement. |
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The warrants will expire at 5:00 p.m., New York City time, five years after the completion of our initial business combination or earlier upon redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to us and not placed in the trust account. |
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| Redemption of warrants |
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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; |
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· at a price of $0.01 per warrant; |
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· upon a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period; and |
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· if, and only if, the last reported sale price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders. |
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We will not redeem the warrants unless a registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. |
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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 |
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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 shareholders of issuing the maximum number of Class A ordinary shares 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 Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of the Class A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Please see the section entitled “Description of Securities—Warrants—Public Shareholders’ Redeemable Warrants” for additional information. |
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None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees. |
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| Founder shares |
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In June 2019, our sponsor subscribed for an aggregate of 7,187,500 founder shares, par value $0.0001 per share, for an aggregate purchase price of $25,000, or $0.004 per share (after giving effect to a forfeiture of one share by our sponsor for no value, a subsequent share capitalization and the forfeiture of 937,500 shares assuming the over-allotment option is not exercised). |
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Prior to the initial investment in the company of $25,000 by our sponsor, the company had no assets, tangible or intangible. The purchase price of these founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. Our initial shareholders will collectively own 20% of our issued and outstanding shares after this offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding ordinary shares upon the consummation of this offering. Up to 937,500 founder shares are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. |
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The founder shares are identical to the Class A ordinary shares included in the units being sold in this offering, except that: |
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· prior to our initial business combination, only holders of the founder shares have the right to vote on the election of directors and holders of a majority of our founder shares may remove a member of the board of directors for any reason; |
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· the founder shares are subject to certain transfer restrictions, as described in more detail below; |
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· our initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive: (1) their redemption rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial business combination (and not seek to sell its shares to us in any tender offer we undertake in connection with our initial business combination); (2) their redemption rights with respect to their founder shares and any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) their rights to liquidating distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame). If we submit our initial business combination to our public shareholders for a vote, our initial shareholders have agreed, pursuant to such letter agreement, to vote their founder shares and any public shares they hold in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all issued and outstanding shares are voted and the over-allotment option is not exercised), subject to any higher threshold as is required by Cayman Islands or other applicable law, in order to have such initial business combination approved. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to |
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public shares acquired by them, if any; |
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· the founder shares will automatically convert into our Class A ordinary shares on the first business day following the completion of our initial business combination on a one-for-one basis subject to adjustment pursuant to certain anti-dilution rights, as described below adjacent to the caption “Founder shares conversion and anti-dilution rights”; and |
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· the founder shares are entitled to registration rights. |
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| Transfer restrictions on founder shares |
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Our initial shareholders 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) the date on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction after our initial business combination that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property (except as described herein under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject to the same restrictions and other agreements of our initial shareholders with respect to any founder shares. We refer to such transfer restrictions throughout this prospectus as the lock-up. |
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Notwithstanding the foregoing, if the last reported sale price of our ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up. |
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| Founder shares conversion and anti-dilution rights |
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The founder shares are designated as Class B ordinary shares and will automatically convert into Class A ordinary shares on the first business day following the completion of our initial business combination on a one-for-one basis, subject to adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities convertible or exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts issued in this offering and related to the closing of our initial business combination, the ratio at which founder shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares then in issue) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion of this offering plus the number of Class A ordinary shares and equity- |
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linked securities issued or deemed issued in connection with our initial business combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our initial business combination and any private placement warrants issued to our sponsor, an affiliate of our sponsor or any of our officers or directors. Any conversion of Class B ordinary shares described herein will take effect as a redemption of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for our Class A ordinary shares issued in a financing transaction in connection with our initial business combination, including but not limited to a private placement of equity or debt. |
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| Election of directors; voting rights |
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Prior to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors. Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to our initial business combination, holders of a majority of our founder shares may remove a member of the board of directors for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by at least 90% of our ordinary shares voting in a general meeting. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law, holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote. |
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| Private placement warrants |
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Our sponsor has committed, pursuant to a written agreement, to purchase an aggregate of 7,000,000 private placement warrants (or 7,750,000 if the underwriters’ over-allotment option is exercised in full) at a price of $1.00 per warrant ($7,000,000 in the aggregate or $7,750,000 in the aggregate if the underwriters’ 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 is exercisable to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein. Private placement warrants may be exercised only for a whole number of shares. The purchase price of the private placement warrants will be added to the proceeds from this offering to be held in the trust account. If we do not complete our initial business combination within 24 months from the closing of this offering, the proceeds of the sale of the private placement warrants 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 not be redeemable by us so long as they are held by our sponsor or |
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its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering. Our sponsor, as well as its permitted transferees, have the option to exercise the private placement warrants on a cashless basis. |
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| Transfer restrictions on private placement warrants |
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The private placement warrants (including the Class A ordinary shares 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 herein under “Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants.” |
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| Proceeds to be held in trust account |
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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 $257,000,000 in proceeds we will receive from this offering and the sale of the private placement warrants described in this prospectus, or $295,250,000 if the underwriters’ over-allotment option is exercised in full, $250,000,000 ($10.00 per unit), or $287,500,000 ($10.00 per unit) if the underwriters’ over-allotment option is exercised in full, (including $8,750,000 (or up to $10,062,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions), will be deposited into a U.S.-based trust account with acting as trustee, and $2,000,000 will be used to pay expenses in connection with the closing of this offering and for working capital following this offering. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries. |
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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 taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we are unable to complete our initial business combination within 24 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 |
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our creditors, if any, which could have priority over the claims of our public shareholders. |
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| Anticipated expenses and funding sources |
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Unless and until we complete our initial business combination, no proceeds held in the trust account will be available for our use, except the withdrawal of interest to pay taxes or to redeem our public shares in connection with an amendment to our amended and restated memorandum and articles of association, as described above. Based upon current interest rates, we expect the trust account to generate approximately $3,500,000 of interest annually (assuming an interest rate of 1.40% per year). Unless and until we complete our initial business combination, we may pay our expenses only from: |
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· the net proceeds of this offering and the sale of the private placement warrants not held in the trust account, which will be approximately $1,000,000 in working capital after the payment of approximately $1,000,000 in expenses relating to this offering; and |
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· any loans or additional investments from our sponsor, members of our management team or any of their affiliates or other third parties, although they are under no obligation to loan 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 our initial business combination. |
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| Conditions to completing our initial business combination |
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There is no limitation on our ability to raise funds privately or through loans in connection with our initial business combination. The rules of Nasdaq require that our initial business combination occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. We refer to this as the 80% fair market value test. The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets. The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide public shareholders with our analysis of our satisfaction of |
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the 80% fair market value test, as well as the basis for our determinations. If our board is not able independently to determine the fair market value of the target business or businesses, 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. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no restriction on our doing so. |
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We will complete our initial business combination only if the post-transaction company in which our public shareholders own shares will own or acquire 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business 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 shareholders prior to our initial business combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial business combination transaction. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% fair market value test; provided that in the event that our 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 target businesses. |
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| Permitted purchases of public shares and public warrants by our affiliates |
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If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial shareholders, directors, officers, advisors or any of their affiliates may purchase public 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 or duty to do so. Please see “Proposed Business—Permitted purchases of our securities” for a description of how such persons will determine from which shareholders to seek to acquire securities. There is no limit on the number of shares or warrants such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. In the event |
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our initial shareholders, directors, officers, advisors or any of their affiliates determine to make any such purchases at the time of a shareholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None of the funds in the trust account will be used to purchase public shares or public warrants in such transactions. If they engage in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Subsequent to the consummation of this offering, we will adopt an insider trading policy which will require insiders to (1) refrain from purchasing securities during certain blackout periods and when they are in possession of any material non-public information and (2) to clear certain trades prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary. |
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We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Our sponsor, directors, officers, advisors or any of their affiliates will be restricted from making any purchases if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act. |
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| Redemption rights for public shareholders upon completion of our initial business combination |
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We will provide our public shareholders 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 completion of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitations described herein. |
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The amount in the trust account is initially anticipated to be $10.00 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. There will be no redemption rights upon the completion of our initial business combination with respect to our warrants. Our initial |
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shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial business combination. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. |
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| Manner of conducting redemptions |
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We will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection with a shareholder meeting called to approve the business combination or (2) by means of a tender offer. The decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive, amalgamations pursuant to a scheme of arrangement and any transactions where we issue more than 20% of our issued and outstanding ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder approval. We intend to conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC unless shareholder approval is required by applicable law or stock exchange listing requirement or we choose to seek shareholder approval for business or other reasons. |
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If a shareholder vote is not required and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of association: |
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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. |
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Upon the public announcement of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any |
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plan established in accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under the Exchange Act. |
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In the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares, which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commission, to be less than $5,000,001 upon completion of our initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public shareholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination. |
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If, however, shareholder approval of the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other reasons, we will: |
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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. |
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We expect that a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural requirements of Regulation 14A in connection with any shareholder vote even if we are not able to maintain our Nasdaq listing or Exchange Act registration. |
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If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. In such case, pursuant to the terms of a letter agreement entered into with |
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us, our initial shareholders have agreed (and their permitted transferees will agree) to vote their founder shares and any public shares held by them in favor of our initial business combination. We expect that at the time of any shareholder vote relating to our initial business combination, our initial shareholders and their permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote thereon. Our directors and officers also have agreed to vote in favor of our initial business combination with respect to public shares acquired by them, if any. These voting thresholds, and the voting agreements of our initial shareholders, may make it more likely that we will consummate our initial business combination. Each public shareholder may elect to redeem their public shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination. |
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Our amended and restated memorandum and articles of association will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination. For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2) cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete such business combination or redeem any shares in connection therewith, and all public shares submitted for redemption will be returned to the holders thereof. |
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| Tendering share certificates in connection with a tender offer or redemption rights |
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We may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve our 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 (Deposit/Withdrawal At Custodian) System, at the holder’s option, rather than simply voting against the initial business combination. The |
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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 shareholders to satisfy such delivery requirements. |
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| Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold shareholder vote |
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Notwithstanding the foregoing redemption rights, if we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from 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 shareholders 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 sponsor or its affiliates to purchase their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder holding more than an aggregate of 15% of the shares sold in this offering could threaten to exercise its redemption rights against a business combination if such holder’s shares are not purchased by us or our sponsor or its affiliates at a premium to the then-current market price or on other undesirable terms. By limiting our shareholders’ 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 shareholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount of cash. |
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However, we would not be restricting our shareholders’ ability to vote all of their shares (including all shares held by those shareholders that hold more than 15% of the shares sold in this offering) for or against our initial business combination. |
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| Redemption Rights in connection with proposed amendments to our amended and restated memorandum and articles of association |
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Some other blank check companies have a provision in their constitutional documents which prohibits the amendment of certain constitutional provisions. Our amended and restated memorandum and articles of association will provide that any of its provisions (other than amendments relating to the appointment or removal of directors prior to our initial business combination, which require the approval of at least 90% of our ordinary shares voting in a general meeting), including those related to pre-business combination activity (including the requirement to deposit proceeds of this |
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offering and the private placement warrants into the trust account and not release such amounts except in specified circumstances), may be amended if approved by holders of at least two-thirds of our ordinary shares who attend and vote in a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares. Our initial shareholders, who will beneficially own 20% of our ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), may participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose. 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 memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares 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 issued and outstanding public shares. Our initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial business combination. Our directors and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. |
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| Release of funds in trust account on closing of our initial business combination |
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On the completion of our initial business combination, all amounts held in the trust account will be released to us. We will use these funds to pay amounts due to any public shareholders who properly exercise their redemption rights as described above under “Redemption rights for public shareholders 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. If our initial business combination is paid for using equity or debt, 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 the redemption of our public shares, we may apply the balance of the cash released |
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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. |
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| Redemption of public shares and distribution and liquidation if no initial business combination |
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Our sponsor, officers and directors have agreed that we will have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete our initial business combination within such 24-month period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands 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 24-month time period. |
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Our initial shareholders 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 their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering. However, if our initial shareholders acquire public shares, they will be entitled to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time frame. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event we do not complete our initial business combination within the allotted time frame and, in such event, such amounts will be included with the funds held in the trust account that will be available to fund the redemption of our public shares. |
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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 memorandum and articles of association (A) to modify the substance or timing |
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of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their public shares 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 issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination (so that we do not then become subject to the SEC’s “penny stock” rules). |
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| Limited payments to insiders |
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There will be no finder’s fees, reimbursements or cash payments made by us to our sponsor, officers or directors, or our or any of their affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination, other than the following payments, none of which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account prior to the completion of our initial business combination: |
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· repayment of an aggregate of up to $250,000 in loans that may be made to us by our sponsor to cover offering-related and organizational expenses (as of June 11, 2019, we had borrowed $12,500 from our sponsor); |
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· reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination; and |
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· repayment of 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, the terms of which have not been determined nor have any written agreements been executed with respect thereto. 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. |
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These payments may be funded using the net proceeds of this offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith. |
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| Audit committee |
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Prior to the effectiveness of this registration statement, we will have established and will maintain an audit committee to, among other things, monitor compliance with the terms described above and the other terms relating to this offering. Our audit committee will also review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or any of their affiliates. If any noncompliance is identified, then the audit committee will be charged with the responsibility to immediately take all action necessary to rectify such noncompliance or otherwise to cause compliance with the terms of this offering. For more information, see the section entitled “Management—Committees of the Board of Directors—Audit Committee.” |
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| Conflicts of interest |
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Certain of our officers and directors presently have, 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 to such entity. Accordingly, if any of our officers or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our initial business combination. |
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| Indemnity |
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Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any liability |
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for such third-party claims. We have not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve for such obligations. |
Risks
We are a newly incorporated company that has conducted no operations
and has generated no revenues. Until we complete our initial business combination, we will have no operations and will generate
no operating revenues. In making your decision whether to invest in our securities, you should take into account not only the background
of our management team, but also the special risks we face as a blank check company. This offering is not being conducted in compliance
with Rule 419 promulgated under the Securities Act. Accordingly, you will not be entitled to protections normally afforded to investors
in Rule 419 blank check offerings. For additional information concerning how Rule 419 blank check offerings differ from this offering,
please see “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
You should carefully consider these and the other risks set forth in the section of this prospectus entitled “Risk Factors.”
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.
| Balance Sheet Data: | |
As of June 11, 2019 |
| Working capital (deficiency) | |
$ | (12,500 | ) |
| Total assets | |
| 32,500 | |
| Total liabilities | |
| 12,500 | |
| Shareholder’s equity | |
| 20,000 | |
If our initial business combination is not completed within
24 months from the closing of this offering, the proceeds then on deposit in the trust account, including interest (less up to
$100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), will be used to fund the redemption
of our public shares. Our initial shareholders 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 their founder shares if we fail to complete
our initial business combination within such 24-month time period.
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.
Risks Relating to the Offering
We are a newly incorporated company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company incorporated under the laws
of the Cayman Islands with no operating results, and we will not commence operations until obtaining funding through this offering.
Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of
completing our initial business combination with one or more target businesses. We have no plans, arrangements or understandings
with any prospective target business concerning a business combination and may be unable to complete our 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 June 11, 2019, we had no cash and a working capital deficiency
of $12,500. 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 shareholders may not be afforded an opportunity
to vote on our proposed business combination, which means we may complete our initial business combination even though a majority
of our public shareholders do not support such a combination.
We will either (1) seek shareholder approval of our initial
business combination at a meeting called for such purpose at which public shareholders may elect to redeem their public shares
without voting, and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide
our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial
business combination by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount
payable in cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the completion
of our initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of
then issued and outstanding public shares, subject to the limitations described herein. Accordingly, it is possible that we will
consummate our initial business combination even if holders of a majority of our public shares do not approve of the business combination
we consummate. The decision as to whether we will seek shareholder approval of a proposed business combination or will allow shareholders
to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.
For instance, Nasdaq rules currently allow us to engage in a tender offer in lieu of a shareholder meeting but would still require
us to obtain shareholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration
in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of
our outstanding shares, we would seek shareholder approval of such business combination instead of conducting a tender offer.
If we seek shareholder approval of our initial business
combination, our initial shareholders, officers and directors have agreed to vote in favor of such initial business combination,
regardless of how our public shareholders vote.
Unlike many other blank check companies in which the initial
shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in
connection with an initial business combination, our initial shareholders have agreed (and their permitted transferees will agree),
pursuant to the terms of a letter agreement entered into with us, to vote their founder shares and any public shares held by them
in favor of our initial business combination. As a result, in addition to our initial shareholders’ founder shares, we would
need 9,375,001, or 37.5%, of the 25,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming
all issued and outstanding shares are voted and the over-allotment option is not exercised), subject to any higher threshold as
is required by Cayman Islands or other applicable law, in order to have such initial business combination approved. Our directors
and officers have also entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired
by them, if any. We expect that our initial shareholders and their permitted transferees will own at least 20% of our issued and
outstanding ordinary shares at the time of any such shareholder vote. Accordingly, if we seek shareholder approval of our initial
business combination, it is more likely that the necessary shareholder approval will be received than would be the case if such
persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public shareholders.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek shareholder approval of such business combination.
At the time of your investment in us, you will not be provided
with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since our board of directors
may complete a business combination without seeking shareholder approval, public shareholders may not have the right or opportunity
to vote on the business combination, unless we seek such shareholder approval. Accordingly, if we do not seek shareholder approval,
your only opportunity to affect the investment decision regarding a potential business combination may be limited to exercising
your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents
mailed to our public shareholders in which we describe our initial business combination.
The ability of our public shareholders to redeem
their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it
difficult for us to enter into a business combination with a target.
We may seek to enter into a business combination transaction
agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of
cash. If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and,
as a result, would not be able to proceed with the business combination. The amount of the deferred underwriting commissions payable
to the underwriters will not be adjusted for any shares that are redeemed in connection with a business combination and such amount
of deferred underwriting discount is not available for us to use as consideration in an initial business combination. Furthermore,
in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment of the deferred
underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination (so that we do not then
become subject to the SEC’s “penny stock” rules), or any greater net tangible asset or cash requirement that
may be contained in the agreement relating to our initial business combination. Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than
$5,000,001 upon completion of our initial business combination or less than such greater amount necessary to satisfy a closing
condition as described above, we would not proceed with such redemption of our public shares and the related business combination,
and we instead may search for an alternate business combination. Prospective targets will be aware of these risks and, thus, may
be reluctant to enter into a business combination transaction with us. If we are able to consummate an initial business combination,
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 shareholders to exercise
redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into an agreement for our initial business
combination, we will not know how many shareholders may exercise their redemption rights and, therefore, we will need to structure
the transaction based on our expectations as to the number of shares that will be submitted for redemption. If our initial business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to
have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account to meet such requirements,
or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption than we initially expected,
we may need to restructure the transaction to reserve a greater portion of the cash in the trust account or arrange for third-party
financing.
Raising additional third-party financing may involve dilutive
equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit our ability
to complete the most desirable business combination available to us or optimize our capital structure.
The ability of our public shareholders to exercise
redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
If our initial business combination agreement requires us to
use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount of cash at closing,
the probability that our initial business combination would be unsuccessful increases. If our initial business combination is unsuccessful,
you would not receive your pro rata portion of the trust account until we liquidate the trust account. If you are in need of immediate
liquidity, you could attempt to sell your shares in the open market; however, at such time our shares may trade at a discount to
the pro rata amount per share in the trust account. In either situation, you may suffer a material loss on your investment or lose
the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open
market.
The requirement that we complete our initial business
combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we
approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that
would produce value for our shareholders.
Any potential target business with which we enter into negotiations
concerning a business combination will be aware that we must complete our initial business combination within 24 months from the
closing of this offering. Consequently, such target business may obtain leverage over us in negotiating a business combination,
knowing that if we do not complete our initial business combination with that particular target business, we may be unable to complete
our initial business combination with any target business. This risk will increase as we get closer to the end of the 24-month
period. In addition, we may have limited time to conduct due diligence and may enter into our initial business combination on terms
that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business
combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up
and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.00 per share, or
less than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers and directors have agreed that we must
complete our initial business combination within 24 months from the closing of this offering. We may not be able to find a suitable
target business and complete our initial business combination within such time period. Our ability to complete our initial business
combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and the other risks
described herein.
If we are unable to complete our initial business combination
within such 24-month period, we will: (1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably
possible but not more than 10 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000 of interest to pay dissolution
expenses and which interest shall be net of taxes payable),
divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’
rights as shareholders (including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve
and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements
of other applicable law. In such case, our public shareholders may receive only $10.00 per share, or less than $10.00 per share,
on the redemption of their shares, and our warrants will expire worthless. See “—If third parties bring claims against
us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be
less than $10.00 per share” and other risk factors herein.
If we seek shareholder approval of our initial business
combination, our sponsor, directors, officers, advisors or any of their affiliates may elect to purchase shares or warrants from
public shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of
our securities.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our initial
shareholders, directors, officers, advisors or any of their affiliates may purchase public 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 or duty to do so. Please see “Proposed Business—Permitted purchases
of our securities” for a description of how such persons will determine from which shareholders to seek to acquire securities.
Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of our shares,
is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor,
directors, officers, advisors or any of their affiliates purchase shares in privately negotiated transactions from public shareholders
who have already elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination,
such selling shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against
our initial business combination. The price per share paid in any such transaction may be different than the amount per share a
public shareholder would receive if it elected to redeem its shares in connection with our initial business combination. The purpose
of such purchases could be to vote such shares in favor of our initial business combination and thereby increase the likelihood
of obtaining shareholder approval of our initial business combination or to satisfy a closing condition in an agreement with a
target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination,
where it appears that such requirement would otherwise not be met. 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 warrant holders for
approval in connection with our initial business combination. This may result in the completion of our initial business combination
that may not otherwise have been possible.
In addition, if such purchases are made, the public “float”
of our Class A ordinary shares or public warrants and the number of beneficial holders of our securities may be reduced, possibly
making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
If a shareholder fails to receive notice of our
offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for
tendering its shares, such shares may not be redeemed.
We will comply with the tender offer rules or proxy rules, as
applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance with these
rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware
of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable, that we will
furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares. In the event that a shareholder fails to comply
with these procedures, its shares may not be redeemed. See “Proposed Business—Effecting Our Initial Business Combination—Tendering
share 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 shareholders will be entitled to receive funds from
the trust account only upon the earliest to occur of: (1) the completion of our initial business combination, and then only in
connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described
herein, (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and
restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect
to any other provision relating to shareholders’ rights or pre-initial business combination activity and (3) the redemption
of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering,
subject to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest
of any kind in the trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect
to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially
at a loss.
Nasdaq may delist our securities from 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 that our Class A ordinary
shares and warrants are eligible to trade separately, we anticipate that our Class A ordinary shares and warrants will be listed
separately on Nasdaq. Although, after giving effect to this offering, we expect to meet on a pro forma basis Nasdaq’s minimum
initial listing standards, which generally only require that we meet certain requirements relating to shareholders’ equity,
market capitalization, aggregate market value of publicly held shares and distribution requirements, 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 share 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, it is likely that Nasdaq will require us to file a new initial listing application and meet its initial listing
requirements as well as certain qualitative requirements, as opposed to its more lenient continued listing requirements. We cannot
assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of our securities from trading on its
exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| · | a limited availability of market quotations for our securities; |
| · | reduced liquidity with respect to such securities; |
| · | a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our
Class A ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary
trading market for our securities; |
| · | a limited amount of news and analyst coverage for our company; and |
| · | a decreased ability to issue additional securities or obtain additional financing in the future. |
The National Securities Markets Improvement Act of 1996, which
is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as
“covered securities.” Because we expect that our units and eventually our Class A ordinary shares and warrants will
be listed on Nasdaq, our units, Class A ordinary shares and warrants will qualify as covered securities under such statute. Although
the states are preempted from regulating the sale of covered 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 qualify as covered securities under such statute and we would be subject to
regulation in each state in which we offer our securities.
You will not be entitled to protections normally
afforded to investors of many other blank check companies.
Since the net proceeds of this offering and the sale of the
private placement warrants are intended to be used to complete an initial business combination with a target business that has
not been identified, we may be deemed to be a “blank check” company under the U.S. 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 of the Company 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 “Proposed Business—Comparison of This Offering to Those of Blank Check Companies Subject to Rule 419.”
If we seek shareholder approval of our initial business
combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders
are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess
of 15% of our Class A ordinary shares.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such
shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section
13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares
sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would not be
restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business
combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial business
combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business
combination. And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares,
would be required to sell your shares in open market transactions, potentially at a loss.
Because of our limited resources and the significant
competition for business combination opportunities, it may be more difficult for us to complete our initial business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per
share, or less in certain circumstances, on our redemption of their shares, and our warrants will expire worthless.
We expect to encounter intense competition from other entities
having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to
acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will
be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses
we could potentially acquire with the net proceeds of 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, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for
our Class A ordinary
shares, it will potentially reduce the resources available to
us for our initial business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating
a business combination. If we are unable to complete our initial business combination, our public shareholders may receive only
approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced
and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
If the funds not being held in the trust account
are insufficient to allow us to operate for at least the 24 months following the closing of this offering, we may be unable to
complete our initial business combination.
The funds available to us outside of the trust account may not
be sufficient to allow us to operate for at least the 24 months following the closing of this offering, assuming that our initial
business combination is not completed during that time. We expect to incur significant costs in pursuit of our acquisition plans.
Management’s plans to address this need for capital through this offering and potential loans from certain of our affiliates
are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be
able to raise additional financing from unaffiliated parties necessary to fund our expenses. Any such event in the future may negatively
impact the analysis regarding our ability to continue as a going concern at such time.
We believe that, upon the closing of this offering, the funds
available to us outside of the trust account, will be sufficient to allow us to operate for at least the 24 months following the
closing of this offering; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could use
a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business. We could
also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters of intent
designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms
more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any
current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target
business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have
sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete
our initial business combination, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account and our warrants will expire worthless. See “—If third parties bring claims
against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders
may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of 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 may depend on loans from
our sponsor or management team to fund our search, to pay our taxes and to complete our initial business combination. Our sponsor
is not obligated to fund such loans.
Of the net proceeds of this offering and the sale of the private
placement warrants, only approximately $1,000,000 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 $1,000,000, 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 $1,000,000, 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. Neither our sponsor, members of our management team nor any of their affiliates is under any obligation to loan funds
to, or invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from
funds released to us upon completion of our initial business combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
In such case, our public shareholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will
expire worthless. See “—If third parties bring claims against us, the proceeds held in the trust account could be reduced
and the per-share redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
Subsequent to our completion of our initial business
combination, we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that
could have a significant negative effect on our financial condition, results of operations and the price of our securities, which
could cause you to lose some or all of your investment.
Even if we conduct extensive due diligence on a target business
with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular
target business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that
factors outside of the target business and outside of our control will not later arise. As a result of these factors, we may be
forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result
in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously
known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may be non-cash
items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative
market perceptions about us or our securities. In addition, charges of this nature may cause us to violate net worth or other covenants
to which we may be subject as a result of assuming pre-existing debt held by a target business or by virtue of our obtaining post-combination
debt financing. Accordingly, any shareholder or warrant holder who chooses to remain a shareholder or warrant holder following
our initial business combination could suffer a reduction in the value of their securities. Such shareholders and warrant holders
are unlikely to have a remedy for such reduction in value.
If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00
per share.
Our placing of funds in the trust account may not protect those
funds from third-party claims against us. Although we will seek to have all vendors, service providers (other than our independent
auditors), prospective target businesses or other entities with which we do business execute agreements with us waiving any right,
title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders,
such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to
a claim against our assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving
such claims to the monies held in the trust account, our management will perform an analysis of the alternatives available to it
and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third
party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party
that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed
by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where
we are unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will
agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we are unable
to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection
with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived that
may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by public
shareholders could be less than the $10.00 per share initially held in the trust account, due to claims of such creditors.
Our sponsor has agreed that it will be liable to us if and to
the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the
trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the
date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek
access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have
not independently verified whether our sponsor has
sufficient funds to satisfy its indemnity obligations and believe
that our sponsor’s only assets are securities of our company. Our sponsor may not have sufficient funds available to satisfy
those obligations. We have not asked our sponsor to reserve for such obligations, and therefore, no funds are currently set aside
to cover any such obligations. As a result, if any such claims were successfully made against the trust account, the funds available
for our initial business combination and redemptions could be reduced to less than $10.00 per public share. In such event, we may
not be able to complete our initial business combination, and you would receive such lesser amount per share in connection with
any redemption of your public shares. None of our officers or directors will indemnify us for claims by third parties including,
without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to enforce the indemnification
obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to
our public shareholders.
In the event that the proceeds in the trust account are reduced
below the lesser of (1) $10.00 per public share or (2) such lesser amount per share held in the trust account as of the date of
the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which
may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification
obligations related to a particular claim, our independent directors would determine whether to take legal action against our sponsor
to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on
our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent directors
in exercising their business judgment may choose not to do so in any particular instance. If our independent directors choose not
to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to our public
shareholders may be reduced below $10.00 per share.
If, after we distribute the proceeds in the trust
account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition
is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of
directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of
directors and us to claims of punitive damages.
If, after we distribute the proceeds in the trust account to
our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed
against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or
insolvency laws as a voidable performance. As a result, a liquidator could seek to recover some or all amounts received by our
shareholders. In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having
acted in bad faith by paying public shareholders from the trust account prior to addressing the claims of creditors, thereby exposing
itself and us to claims of punitive damages.
If, before distributing the proceeds in the trust
account to our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition
is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our
shareholders and the per-share amount that would otherwise be received by our shareholders in connection with our liquidation may
be reduced.
If, before distributing the proceeds in the trust account to
our public shareholders, we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is filed
against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and may
be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any liquidation claims deplete the trust account, the per-share amount that would otherwise be received by our shareholders
in connection with our liquidation would be reduced.
If we are deemed to be an investment company under
the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an investment company under the Investment
Company Act, our activities may be restricted, including:
| · | restrictions on the nature of our investments; and |
| · | restrictions on the issuance of securities; |
each of which may make it difficult for us to complete our initial
business combination.
In addition, we may have imposed upon us burdensome requirements,
including:
| · | registration as an investment company with the SEC; |
| · | adoption of a specific form of corporate structure; and |
| · | reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently
not subject to. |
We do not believe that our anticipated principal activities
will subject us to the Investment Company Act. The proceeds held in the trust account may be invested by the trustee only in U.S.
government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries and
meeting certain conditions under Rule 2a-7 under the Investment Company Act. Because the investment of the proceeds will be restricted
to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1 promulgated under the Investment
Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens
would require additional expenses for which we have not allotted funds and may hinder our ability to complete a business combination.
If we are unable to complete our initial business combination, our public shareholders may receive only approximately $10.00 per
share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
Changes in laws or regulations, or a failure to
comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination, and results of operations.
We are subject to laws and regulations enacted by national,
regional and local governments. In particular, we 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. See “—Risks Relating to the Cannabis Industry” for
additional risks we may face in connection with our initial business combination.
If we are unable to consummate our initial business
combination within 24 months of the closing of this offering, our public shareholders may be forced to wait beyond such 24 months
before redemption from our trust account.
If we are unable to consummate our initial business combination
within 24 months from the closing of this offering, we will distribute the aggregate amount then on deposit in the trust account,
including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable),
pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our
affairs, as further described herein. Any redemption of public shareholders from the trust account shall be effected automatically
by function of our amended and restated memorandum and articles of association prior to any voluntary winding up. If we are required
to windup, liquidate the trust account and distribute such amount therein, pro rata, to our public shareholders, as part of any
liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies
Law. In that case, investors may be forced to wait beyond the initial 24 months before the redemption proceeds of our trust account
become available to them and they receive the return of their pro rata portion of the proceeds from our trust account. We have
no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate
our initial business combination or amend certain provisions of our amended and restated memorandum and articles of association
and then only in cases where investors have properly sought to redeem their Class A ordinary shares. Only upon our redemption or
any liquidation will public shareholders be entitled to distributions if we are unable to complete our initial business combination
and do not amend certain provisions of our amended and restated memorandum and articles of association prior thereto.
Our shareholders may be held liable for claims by
third parties against us to the extent of distributions received by them upon redemption of their shares.
If we are forced to enter into an insolvent liquidation, any
distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date
on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business. As a result,
a liquidator could seek to recover some or all amounts received by our shareholders. Furthermore, our directors may be viewed as
having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves
and our company to claims, by paying public shareholders from the trust account prior to addressing the claims of creditors. We
cannot assure you that claims will not be brought against us for these reasons. We and our directors and officers who knowingly
and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay
our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable to a fine of up to
$18,292.68 and to imprisonment for five years in the Cayman Islands.
We may not hold an annual general meeting of shareholders
until after the completion of our initial business combination. Our public shareholders will not have the right to elect directors
prior to the consummation of our Business Combination.
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. There
is no requirement under the Companies Law for us to hold annual or general meetings to elect directors. Until we hold an annual
general meeting of shareholders, public shareholders may not be afforded the opportunity to discuss company affairs with management.
As holders of our Class A ordinary shares, our public shareholders also will not have the right to vote on the election of directors
prior to completion of our initial business combination. In addition, holders of a majority of our founder shares may remove a
member of the board of directors for any reason.
We are not registering the Class A ordinary shares
issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time, and such registration
may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its
warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We are not registering the Class A ordinary shares issuable
upon exercise of the warrants under the Securities Act or any state securities laws at this time. However, under the terms of the
warrant agreement, we have agreed, as soon as practicable, but in no event later than 15 business days after the closing of our
initial business combination, to use our reasonable best efforts to file a registration statement under the Securities Act covering
the issuance of such shares, to use our reasonable best efforts to cause the same to become effective within 60 business days after
the closing of our initial business combination and to maintain the effectiveness of such registration statement and a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed. 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,
complete or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under
the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will
be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise
their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the
state of the exercising holder, or an exemption from registration is available. Notwithstanding the above, if our Class A ordinary
shares are, at the time of any exercise of a warrant, not listed on a national securities exchange such that they do not satisfy
the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require
holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9)
of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement,
but we will use our reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in
exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable
state securities laws and no exemption is available. If the issuance of the shares upon exercise of the warrants is not so registered
or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant
and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a
purchase of units will have paid the full unit purchase price
solely for the Class A ordinary shares included in the units. If and when the warrants become redeemable by us, we may exercise
our redemption right even if we are unable to register or qualify the underlying Class A ordinary shares for sale under all applicable
state securities laws.
The grant of registration rights to our initial
shareholders and their permitted transferees may make it more difficult to complete our initial business combination, and the future
exercise of such rights may adversely affect the market price of our Class A ordinary shares.
The holders of the founder shares, private placement
warrants and any warrants that may be issued on conversion of working capital loans (and any ordinary shares issuable upon
the exercise of the private placement warrants or warrants issued upon conversion of the 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 this offering requiring us to register such securities for resale. 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 ordinary shares. In addition, the
existence of the registration rights may make our initial business combination more costly or difficult to conclude. This
is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask
for more cash consideration to offset the negative impact on the market price of our Class A ordinary shares that is
expected when the Class A ordinary shares owned by our initial shareholders or their permitted transferees, our private
placement warrants or warrants issued in connection with working capital loans are registered for resale.
Because we are not limited to a particular industry
or any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain the merits
or risks of any particular target business’s operations.
We
may consummate a business combination with a company in any industry we choose and are not limited to any particular industry or
type of business, although we intend to focus our search for businesses in the cannabis industry that are compliant with all applicable
laws and regulations within the jurisdictions in which they are located or operate and, in particular, we will not invest in, or
consummate a business combination with, a target business that we determine has been operating, or whose business plan is to operate,
in violation of U.S. federal laws, including the U.S. Controlled Substances Act. Accordingly, there is no current basis for you
to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which
we may ultimately acquire. To the extent we complete a business combination with a financially unstable company or an entity in
its early stages of development or growth, we may be affected by numerous risks inherent in the business operations of those entities.
If we complete a business combination with an entity in an industry characterized by a high level of risk, including the cannabis
industry, we may be affected by the currently unascertainable risks of that industry. Although our management will endeavor to
evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly 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 a target business.
See “—Risks Relating to the Cannabis Industry” for additional risks we may face in connection with our initial
business combination.
Past performance by our management team and their
affiliates may not be indicative of future performance of an investment in the Company.
Information regarding performance by our management team and
their affiliates is presented for informational purposes only. Past performance by our management team and their affiliates is
not a guarantee either (1) that we will be able to identify a suitable candidate for our initial business combination or (2) of
success with respect to any business combination we may consummate. You should not rely on the historical record of our management
team and their affiliates as indicative of our future performance of an investment in the company or the returns the company will,
or is likely to, generate going forward.
Although we have identified general criteria and
guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our
initial business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria and guidelines
for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial business
combination will not have all of these positive attributes. If we complete our initial business combination with a target that
does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business
that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination with
a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if shareholder approval of the transaction is required by applicable law or
stock exchange listing requirement, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult
for us to attain shareholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We may seek acquisition opportunities with an early
stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
To the extent we complete our initial business combination with
an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may
be affected by numerous risks inherent in the operations of the business with which we combine. These risks include investing in
a business without a proven business model and with limited historical financial data, volatile revenues or earnings, intense competition
and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate the risks
inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors
and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and
leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an
independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from an
independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business combination with an
affiliated entity, we are not required to obtain an opinion from an independent investment banking firm, or from an independent
accounting firm, that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained,
our shareholders will be relying on the judgment of our board of directors, who will determine fair market value based on standards
generally accepted by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation
materials, as applicable, related to our initial business combination.
We may issue additional Class A ordinary shares
or preferred shares to complete our initial business combination or under an employee incentive plan after completion of our initial
business combination. We may also issue Class A ordinary shares upon the conversion of the founder shares 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 memorandum and articles of association. Any such issuances would substantially dilute the interest of our shareholders
and likely present other risks.
Our amended and restated memorandum and articles of association
will authorize the issuance of ordinary shares, including 200,000,000 Class A ordinary shares, par value $0.0001 per share, and
20,000,000 Class B ordinary shares, par value $0.0001 per share, as well as 1,000,000 preferred shares, par value $0.0001. Immediately
after this offering, there will be 155,500,000 and 13,750,000 (assuming that the underwriters have not exercised their over-allotment
option) authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which
amount takes into account shares reserved for issuance upon exercise of outstanding warrants, and 1,000,000 authorized but unissued
preferred shares available for issuance.
We may issue a substantial number of additional Class A ordinary
shares, and may issue preferred shares, in order to complete our initial business combination or under an employee incentive plan
after completion of our initial business combination. We may also issue Class A ordinary shares upon conversion of the Class B
ordinary shares at a ratio greater than one-to-one at the time of our initial business combination as a result of the anti-dilution
provisions as set forth herein. However, our amended and restated memorandum and articles of association will provide, among other
things, that prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof
to (1) receive funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination
or (b) to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have
to consummate a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions.
The issuance of additional ordinary shares or preferred shares:
| · | may significantly dilute the equity interest of investors in this offering; |
| · | may subordinate the rights of holders of Class A ordinary shares if preferred shares are issued with rights senior to those
afforded our Class A ordinary shares; |
| · | could cause a change in control if a substantial number of Class A ordinary shares are issued, which may affect, among other
things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our
present officers and directors; and |
| · | may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants. |
Unlike certain other blank check companies, our
initial shareholder will receive additional Class A ordinary shares if we issue shares to consummate an initial business combination.
The founder shares will automatically convert into Class A ordinary
shares on the first business day following the completion of our initial business combination on a one-for-one basis, subject to
adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities convertible or
exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts issued in this offering and related
to the closing of our initial business combination, the ratio at which founder shares will convert into Class A ordinary shares
will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares then in issue) so that the number of
Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted
basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion of this offering plus the number of Class
A ordinary shares and equity-linked securities issued or deemed issued in connection with our initial business combination (net
of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller in our
initial business combination and any private placement warrants issued to our sponsor, an affiliate of our sponsor or any of our
officers or directors. This is different than certain other blank check companies in which the initial shareholder will only be
issued an aggregate of 20% of the total number of shares to be outstanding prior to our initial business combination.
We may be a passive foreign investment company,
or “PFIC,” which could result in adverse United States federal income tax consequences to U.S. investors.
If we are a PFIC for any taxable year (or portion thereof) that
is included in the holding period of a U.S. Holder (as defined in the section of this prospectus captioned “Income Tax Considerations
— United States Federal Income Taxation — General”) of our Class A ordinary shares or warrants, the U.S. Holder
may be subject to adverse U.S. federal income tax consequences and may be subject to additional reporting requirements. Our PFIC
status for our current and subsequent taxable years may depend on whether we qualify for the PFIC start-up exception (see the section
of this prospectus captioned “Income Tax Considerations—United States Federal Income Taxation—U.S. Holders—Passive
Foreign Investment Company Rules”). Depending on the particular circumstances, the application of the start-up exception
may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception. Accordingly,
there can be no assurances with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. Our
actual PFIC status for any taxable year, moreover, will not be determinable until after the end of such taxable year. If we determine
we are a PFIC for any taxable year (of which there can be no assurance), we will endeavor to provide to a U.S. Holder such information
as the Internal Revenue Service (“IRS”) may require, including a PFIC annual information statement, in order to enable
the U.S. Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will
timely provide
such required information, and such election would be unavailable
with respect to our warrants in all cases. We urge U.S. investors to consult their own tax advisors regarding the possible application
of the PFIC rules. For a more detailed discussion of the tax consequences of PFIC classification to U.S. Holders, see the section
of this prospectus captioned “Income Tax Considerations — United States Federal Income Taxation — U.S. Holders
— Passive Foreign Investment Company Rules.”
We may reincorporate in another jurisdiction in
connection with our initial business combination and such reincorporation may result in taxes imposed on shareholders.
We may, in connection with our initial business combination
and subject to requisite shareholder approval under the Companies Law, reincorporate in the jurisdiction in which the target company
or business is located or in another jurisdiction. The transaction may require a shareholder to recognize taxable income in the
jurisdiction in which the shareholder is a tax resident or in which its members are resident if it is a tax transparent entity.
We do not intend to make any cash distributions to shareholders to pay such taxes. Shareholders may be subject to withholding taxes
or other taxes with respect to their ownership of us after the reincorporation.
Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public shareholders may receive only approximately
$10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
We anticipate that the investigation of each specific target
business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require
substantial management time and attention and substantial costs for accountants, attorneys and others. If we decide not to complete
a specific initial business combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial business combination
for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred
which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If we are unable
to complete our initial business combination, our public shareholders may receive only approximately $10.00 per share, or less
in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
We are dependent upon our officers and directors
and their departure could adversely affect our ability to operate.
Our operations are dependent upon a relatively small group of
individuals – in particular, Scott Gordon, our Chief Executive Officer and Chairman of our board of directors, William Healy,
our President and a member of our board of directors, and Greg Gentile, our Chief Financial Officer, and Mohammed Grimeh, our Chief
Operating Officer. We believe that our success depends on the continued service of our officers and directors, at least until we
have completed our initial business combination. In addition, our officers and directors are not required to commit any specified
amount of time to our affairs and, accordingly, will have conflicts of interest in allocating their time among various business
activities, including identifying potential business combinations and monitoring the related due diligence. Moreover, certain of
our officers and directors have time and attention requirements for investment funds of which affiliates of our sponsor are the
investment managers. We do not have an employment agreement with, or key-man insurance on the life of, any of our directors or
officers. The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
Our ability to successfully effect our initial business
combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following
our initial business combination. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our ability to successfully effect our initial business combination
is dependent upon the efforts of our key personnel. The role of our key personnel in the target business, however, cannot presently
be ascertained. Although some of our key personnel may remain with the target business in senior management or advisory positions
following our initial business combination, it is likely that some or all of the management of the target business will remain
in place. While we intend to closely scrutinize any individuals we engage after our initial business combination, we cannot
assure you that our assessment of these individuals will prove
to be correct. These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could
cause us to have to expend time and resources helping them become familiar with such requirements.
In addition, the officers and directors of an acquisition candidate
may resign upon completion of our initial business combination. The departure of a business combination target’s key personnel
could negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate
that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not
wish to remain in place. The loss of key personnel could negatively impact the operations and profitability of our post-combination
business.
Our key personnel may negotiate employment or consulting
agreements with a target business in connection with a particular business combination. These agreements may provide for them to
receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest in
determining whether a particular business combination is the most advantageous.
Our key personnel may be able to remain with the company after
the completion of our initial business combination only if they are able to negotiate employment or consulting agreements in connection
with the business combination. Such negotiations would take place simultaneously with the negotiation of the business combination
and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services
they would render to us after the completion of our initial business combination. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business, subject to their fiduciary duties under
Cayman Islands law. However, we believe the ability of such individuals to remain with us after the completion of our initial business
combination will not be the determining factor in our decision as to whether or not we will proceed with any potential business
combination. There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial
business combination. We cannot assure you that any of our key personnel will remain in senior management or advisory positions
with us. The determination as to whether any of our key personnel will remain with us will be made at the time of our initial business
combination.
We may have limited ability to assess the management
of a prospective target business and, as a result, may effect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting our initial business
combination with a prospective target business, our ability to assess the target business’s management may be limited due
to a lack of time, resources or information. Our assessment of the capabilities of the target’s management, therefore, may
prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, shareholders or warrant holders who choose to remain
shareholders or warrant holders following our initial business combination could suffer a reduction in the value of their securities.
Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition candidate may resign
upon completion of our initial business combination. The departure of a business combination target’s key personnel could
negatively impact the operations and profitability of our post-combination business. The role of an acquisition candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate
that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial business combination, it is possible that members of the management of an acquisition candidate will not
wish to remain in place.
Our officers and directors will allocate their time
to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors are not required to, and will not,
commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations
and our search for a business combination and their other businesses. We do not intend to have any full-time employees prior to
the completion of our initial business combination. Each of our officers is engaged in several other business endeavors for which
he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours per
week to our affairs. Our independent directors may also serve as officers and board members for other entities. If our officers’
and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their
current commitment levels, it could limit their ability to devote time to our affairs, which may have a negative impact on our
ability to complete our initial business combination. For a complete discussion of our officers’ and directors’ other
business affairs, please see “Management—Directors, Director Nominees and Executive 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 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, or may in the future become, affiliated with entities that are engaged in a similar
business, and they are not prohibited from sponsoring, or otherwise becoming involved with, other blank check companies prior to
us completing our initial business combination. Moreover, certain of our officers and directors have time and attention requirements
for investment funds of which affiliates of our sponsor are the investment managers.
Our officers and directors also may become aware of business
opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual
duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should
be presented. These conflicts may not be resolved in our favor and a potential target business may be presented to other entities
prior to its presentation to us, subject to their fiduciary duties under Cayman Islands law.
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 “Management—Directors,
Director Nominees and Executive 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
a business combination with a target business that is affiliated with our sponsor, directors or officers, although we do not intend
to do so. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities
of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
In particular, affiliates of our sponsor have invested in industries
as diverse as cannabis, consumer products, medical and scientific research and investment management. As a result, there may be
substantial overlap between companies that would be a suitable business combination for us and companies that would make an attractive
target for such other affiliates.
We may engage in a business combination with one
or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers or directors
which may raise potential conflicts of interest.
In light of the involvement of our sponsor, officers and directors
with other entities, we may decide to acquire one or more businesses affiliated with our sponsor, officers and directors. Our officers
and directors also serve as officers
and board members for other entities, including, without limitation,
those described under “Management—Conflicts of Interest.” Such entities may compete with us for business combination
opportunities. Our sponsor, officers and directors are not currently aware of any specific opportunities for us to complete our
initial business combination with any entities with which they are affiliated, and there have been no preliminary discussions concerning
a business combination with any such entity or entities. Although we will not be specifically focusing on, or targeting, any transaction
with any affiliated entities, we would pursue such a transaction if we determined that such affiliated entity met our criteria
for a business combination as set forth in “Proposed Business—Effecting Our Initial Business Combination—Selection
of a target business and structuring of our initial business combination” and such transaction was approved by a majority
of our independent and disinterested directors.
Since our initial shareholders will lose their entire
investment in us if our initial business combination is not completed (other than with respect to any public shares they may acquire),
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
On June 11, 2019, our sponsor subscribed for an aggregate
of 7,187,500 founder shares for an aggregate purchase price of $25,000, or $0.004
per share (assuming the over-allotment option is not exercised and the forfeiture by our sponsor of 937,500 founder shares). As such, our initial shareholders will collectively own 20% of our issued and outstanding shares after this
offering (assuming they do not purchase any units in this offering). If we increase or decrease the size of this offering, we
will effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to
our founder shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder
shares at 20% of our issued and outstanding ordinary shares upon the consummation of 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 7,000,000 (or 7,750,000 if the underwriters’ over-allotment option is exercised in full) private
placement warrants, each exercisable to purchase one Class A ordinary share, for a purchase price of $7,000,000 in the
aggregate (or $7,750,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), or $1.00
per warrant, that will also be worthless if we do not complete a business combination. Each private placement warrant may be
exercised for one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein.
The founder shares are identical to the ordinary shares included
in the units being sold in this offering except that: (1) prior to our initial business combination, only holders of the founder
shares have the right to vote on the election of directors and holders of a majority of our founder shares may remove a member
of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions; (3) our initial
shareholders have entered into a letter agreement with us, pursuant to which they have agreed to waive: (x) their redemption
rights with respect to their founder shares and any public shares held by them in connection with the completion of our initial
business combination (and not seek to sell its shares to us in any tender offer we undertake in connection with our initial business
combination); (y) their redemption rights with respect to their founder shares and any public shares held by them in connection
with a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) to modify
the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination
within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights
or pre-initial business combination activity; and (z) their rights to liquidating distributions from the trust account with
respect to any founder shares they hold if we fail to complete our initial business combination within 24 months from the closing
of this offering (although they will be entitled to liquidating distributions from the trust account with respect to any public
shares they hold if we fail to complete our initial business combination within the prescribed time frame); (4) the founder
shares will automatically convert into our Class A ordinary shares on the first business day following the completion of our initial
business combination on a one-for-one basis subject to adjustment pursuant to certain anti-dilution rights and (5) the founder
shares are entitled to registration rights. Our directors and officers have also entered into the letter agreement with respect
to public shares acquired by them, if any.
The personal and financial interests of our sponsor, officers
and directors may influence their motivation in identifying and selecting a target business combination, completing an initial
business combination and influencing the operation of the business following the initial business combination. This risk may become
more acute as the 24-month deadline following the closing of this offering nears, which is the deadline for the completion of our
initial business combination.
We may issue notes or other debt securities, or
otherwise incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition
and thus negatively impact the value of our shareholders’ investment in us.
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; |
| · | our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand; |
| · | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such
financing while the debt security is outstanding; |
| · | our inability to pay dividends on our Class A ordinary shares; |
| · | 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 Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate
purposes; |
| · | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| · | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in
government regulation; and |
| · | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
We may be able to complete only one business combination
with the proceeds of this offering and the sale of the private placement warrants, which will cause us to be solely dependent on
a single business which may have a limited number of products or services. This lack of diversification may negatively impact our
operations and profitability.
The net proceeds from this offering and the sale of the private
placement warrants will provide us with $250,000,000 (or $287,500,000 if the underwriters’ over-allotment option is exercised
in full) that we may use to complete our initial business combination (which includes $8,750,000, or up to $10,062,500 if the underwriters’
over-allotment option is exercised in full, of deferred underwriting commissions being held in the trust account).
We may effectuate our initial business combination with a single
target business or multiple target businesses simultaneously or within a short period of time. However, we may not be able to effectuate
our initial business combination with more than one target business because of various factors, including the existence of complex
accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating
results and the financial condition of several target businesses as if they had been operated on a combined basis. By completing
our initial business combination with only a single entity our lack of diversification may subject us to numerous economic, competitive
and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading of risks
or offsetting of losses, unlike other entities which may
have the resources to complete several business combinations
in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
| · | 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. With multiple business combinations, we could also face additional risks, including
additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple
sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the
acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact
our profitability and results of operations.
We may attempt to complete our initial business
combination with a private company about which little information is available, which may result in a business combination with
a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we may seek to effectuate
our initial business combination with a privately held company. Very little public information generally exists about private companies,
and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited
information, which may result in a business combination with a company that is not as profitable as we suspected, if at all.
We expect to need to comply with the rules of Nasdaq
that require our initial business combination to occur with one or more target businesses having an aggregate fair market value
equal to at least 80% of the assets held in the trust account at the time of the agreement to enter into the initial business combination.
The rules of Nasdaq require that our initial business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. This restriction may limit the type and number of
companies that we may complete a business combination with. If we are unable to locate a target business or businesses that satisfy
this fair market value test, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances,
on the liquidation of our trust account, and our warrants will expire worthless. If we are not then listed on Nasdaq for whatever
reason, we would not be required to satisfy the foregoing 80% fair market value test and could complete a business combination
with a target business having a fair market value substantially below 80% of the balance in the trust account.
Our management may not be able to maintain control
of a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target
business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination so that the
post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets
of a target business, but we will complete such business combination only if the post-transaction company owns or acquires 50%
or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target
business sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not
consider any transaction that does not meet such criteria. Even if the post-transaction company
owns 50% or more of the voting securities of the target, our
shareholders prior to our initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in our initial business combination transaction. For example, we
could pursue a transaction in which we issue a substantial number of new Class A ordinary shares in exchange for all of the issued
and outstanding capital stock or shares 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 Class A ordinary shares, our shareholders immediately prior to such transaction
could own less than a majority of our issued and outstanding Class A ordinary shares subsequent to such transaction. In addition,
other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share
of the company’s shares than we initially acquired. Accordingly, this may make it more likely that our management will not
be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial
majority of our shareholders do not agree.
Our amended and restated memorandum and articles of association
will not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount
that would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon
completion of our initial business combination (such that we do not then become subject to the SEC’s “penny stock”
rules), or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business
combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our
public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our
initial business combination and do not conduct redemptions in connection with our initial business combination pursuant to the
tender offer rules, have entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors,
advisors or any of their affiliates. In the event the aggregate cash consideration we would be required to pay for all Class A
ordinary shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms
of the proposed business combination exceed the aggregate amount of cash available to us, we will not complete the business combination
or redeem any shares, all Class A ordinary shares submitted for redemption will be returned to the holders thereof, and we instead
may search for an alternate business combination.
The exercise price for the public warrants is higher
than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.
The exercise price of the public warrants is higher than is
typical in many similar blank check companies in the past. Historically, the exercise price of a warrant was generally a fraction
of the purchase price of the units in the initial public offering. The exercise price for our public warrants is $11.50 per share,
subject to adjustment as provided herein. As a result, the warrants are more likely to expire worthless.
In order to effectuate an initial business combination,
blank check companies have, in the past, amended various provisions of their charters and modified governing instruments. We cannot
assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments,
in a manner that will make it easier for us to complete our initial business combination that some of our shareholders may not
support.
In order to effectuate an initial business combination, blank
check companies have, in the recent past, amended various provisions of their charters and modified governing instruments. For
example, blank check companies have amended the definition of business combination, increased redemption thresholds and extended
the time to consummate an initial business combination. Amending our amended and restated certificate of incorporation will require
at least a special resolution of our shareholders as a matter of Cayman Islands law. We cannot assure you that we will not seek
to amend our amended and restated memorandum and articles of association 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 memorandum
and articles of association that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account) may be amended with the approval of holders of at least two-thirds of our
ordinary
shares who attend and vote at a general meeting,
which is a lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend
our amended and restated memorandum and articles of association and the trust agreement to facilitate the completion of an initial
business combination that some of our shareholders may not support.
Some other blank check companies have a provision in their charter
which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-business combination
activity, without approval by holders of a certain percentage of the company’s shares. In those companies, amendment of these
provisions typically requires approval by holders holding between 90% and 100% of the company’s public shares. Our amended
and restated memorandum and articles of association will provide that any of its provisions, including those 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), may be amended if approved by holders of at
least two-thirds of our ordinary shares who attend and vote in a general meeting, and corresponding provisions of the trust agreement
governing the release of funds from our trust account may be amended if approved by holders of 65% of our ordinary shares (other
than amendments relating to the appointment or removal of directors prior to our initial business combination, which require the
approval of at least 90% of our ordinary shares voting in a general meeting). Our initial shareholders, who will collectively beneficially
own 20% of our ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), may
participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will
have the discretion to vote in any manner they choose. As a result, we may be able to amend the provisions of our amended and restated
memorandum and articles of association which govern our pre-business combination behavior more easily than some other blank check
companies, and this may increase our ability to complete our initial business combination with which you do not agree. However,
our amended and restated memorandum and articles of association prohibits any amendment of its provisions (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 24
months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
business combination activity, unless we provide public shareholders with the opportunity to redeem their public shares. Furthermore,
our sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose such an amendment
unless we provide our public shareholders with the opportunity to redeem their public shares. In certain circumstances, our shareholders
may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
We may amend the terms of the warrants in a manner
that may be adverse to holders of public warrants with the approval by the holders of at least a majority of the then outstanding
public warrants.
Our warrants will be issued in registered form under a warrant
agreement between ,
as warrant agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any
holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority
of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders of public
warrants. Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least a majority
of the then outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants
with the consent of at least a majority of the then outstanding public warrants is unlimited, examples of such amendments could
be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the
number of Class A ordinary shares purchasable upon exercise of a warrant.
Certain agreements related to this offering may
be amended without shareholder approval.
Each of the agreements related to this offering to which we
are a party, other than the warrant agreement and the investment management trust agreement, may be amended without shareholder
approval. These agreements contain various provisions that our public shareholders might deem to be material. For example, our
letter agreement and the underwriting agreement contain certain lock-up provisions with respect to the founder shares, private
placement warrants and other securities held by our initial shareholders, officers and directors. Amendments to such agreements
would require the consent of the applicable parties thereto and would need to be approved by our board of directors, which may
do so for a variety of reasons, including to facilitate our initial business combination. While we do not expect our board of directors
to approve any amendment to any of these agreements prior to our initial business combination, it may be possible that our board
of directors, in exercising its business judgment and subject
to its fiduciary duties, chooses to approve one or more amendments
to any such agreement. Any material amendment entered into in connection with the completion of our initial business combination
will be disclosed in our proxy solicitation or tender offer materials, as applicable, related to such initial business combination,
and any other material amendment to any of our material agreements will be disclosed in a filing with the SEC. Any such amendments
would not require approval from our shareholders, may result in the completion of our initial business combination that may not
otherwise have been possible, and may have an adverse effect on the value of an investment in our securities. For example, amendments
to the lock-up provision discussed above may result in our initial shareholders selling their securities earlier than they would
otherwise be permitted, which may have an adverse effect on the price of our securities.
We may be unable to obtain additional financing to complete
our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
Although we believe that the net proceeds of this offering and
the sale of the private placement warrants will be sufficient to allow us to complete our initial business combination, because
we have not yet selected any target business we cannot ascertain the capital requirements for any particular transaction. If the
net proceeds of this offering and the sale of the private placement warrants prove to be insufficient, either because of the size
of our initial business combination, the depletion of the available net proceeds in search of a target business, the obligation
to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial business
combination or the terms of negotiated transactions to purchase shares in connection with our initial business combination, we
may be required to seek additional financing or to abandon the proposed business combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. To the extent that additional financing proves to be unavailable when needed
to complete our initial business combination, we would be compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business candidate. In addition, even if we do not need additional financing
to complete our initial business combination, we may require such financing to fund the operations or growth of the target business.
The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target
business. None of our officers, directors or shareholders is required to provide any financing to us in connection with or after
our initial business combination. If we are unable to complete our initial business combination, our public shareholders may receive
only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants
will expire worthless.
Our initial shareholders will control the election
of our board of directors until completion of our initial business combination and will hold a substantial interest in us. As a
result, they will elect all of our directors prior to our initial business combination and may exert a substantial influence on
actions requiring shareholder vote, potentially in a manner that you do not support.
Upon the closing of this offering, our initial shareholders
will own 20% of our issued and outstanding ordinary shares (assuming they do not purchase any units in this offering). In addition,
prior to our initial business combination, only the founder shares, all of which are held by our initial shareholders, will have
the right to vote on the election of directors, and holders of a majority of our founder shares may remove a member of the board
of directors for any reason.
Neither our initial shareholders nor, to our knowledge, any
of our officers or directors, have any current intention to purchase additional securities, other than as disclosed in this prospectus.
Factors that would be considered in making such additional purchases would include consideration of the current trading price of
our Class A ordinary shares. In addition, as a result of their substantial ownership in our company, our initial shareholders may
exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including
amendments to our amended and restated memorandum and articles of association and approval of major corporate transactions. If
our initial shareholders purchase any Class A ordinary shares in this offering or in the aftermarket or in privately negotiated
transactions, this would increase their influence over these actions. Accordingly, our initial shareholders will exert significant
influence over actions requiring a shareholder vote at least until the completion of our initial business combination.
Our sponsor paid an aggregate of $25,000, or
$0.004 per founder share (assuming the over-allotment option is not exercised and the forfeiture by our sponsor of 937,500 founder shares), and, accordingly, you will experience immediate and substantial dilution upon the purchase of our
Class A ordinary shares.
The difference between the public offering price per share (allocating
all of the unit purchase price to the Class A ordinary shares and none to the warrant included in the unit) and the pro forma net
tangible book value per Class A ordinary share 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 shareholders
will incur an immediate and substantial dilution of approximately 93.4% (or $9.34 per share, assuming no exercise of the underwriters’
over-allotment option), the difference between the pro forma net tangible book value per share of $0.66 and the initial offering
price of $10.00 per unit. This dilution would increase to the extent that the anti-dilution provisions of the founder shares result
in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the founder shares at the time
of our initial business combination. In addition, because of the anti-dilution protection in the founder shares, any equity or equity-linked
securities issued in connection with our initial business combination would be disproportionately dilutive to our Class A ordinary
shares.
A provision of our warrant agreement may make it
more difficult for us to consummate an initial business combination.
Unlike most blank check companies, if
| (i) | we issue additional Class A ordinary shares 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 Class A ordinary 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 completion 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 higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial business combination with a target business.
We may redeem your unexpired warrants prior to their
exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem outstanding warrants at any time
after they become exercisable and prior to their expiration, at a price of $0.01 per warrant; provided that the last reported sales
price of our Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period
ending on the third trading day prior to the date we send the notice of redemption to the warrant holders. If and when the warrants
become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities
for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to: (1) exercise your
warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so; (2) sell your warrants
at the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price
which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value
of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by our sponsor or its
permitted transferees.
Our warrants and founder shares may have an adverse
effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial business combination.
We will be issuing warrants to purchase 12,500,000 Class A ordinary
shares (or up to 14,375,000 Class A ordinary shares if the underwriters’ over-allotment option is exercised in full), at
a price of $11.50 per whole share (subject to adjustment as provided herein), as part of the units offered by this prospectus and,
simultaneously with the closing of this offering, we will be issuing in a private placement an aggregate of 7,000,000 (or 7,750,000
if the underwriters’ over-allotment option is exercised in full) private placement warrants, each exercisable to purchase
one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein. Our initial shareholders currently
hold 7,187,500 founder shares (up to 937,500 of which are subject to forfeiture by our sponsor depending on the extent to which
the underwriters’ over-allotment option is exercised). In addition, if our sponsor, an affiliate of our sponsor or certain
of our officers and directors make any working capital loans, up to $1,500,000 of such loans may be converted into warrants, at
the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants.
To the extent we issue ordinary shares to effectuate a business transaction, the potential for the issuance of a substantial number
of additional Class A ordinary shares upon exercise of these warrants or conversion rights could make us a less attractive acquisition
vehicle to a target business. Any such issuance will increase the number of issued and outstanding Class A ordinary shares and
reduce the value of the Class A ordinary shares issued to complete the business transaction. Therefore, our warrants and founder
shares may make it more difficult to effectuate a business combination or increase the cost of acquiring the target business.
The private placement warrants are identical to the warrants
sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees: (1)
they will not be redeemable by us; (2) they (including the ordinary shares issuable upon exercise of these warrants) may not, subject
to certain limited exceptions, be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial
business combination; (3) they may be exercised by the holders on a cashless basis; and (4) they (including the ordinary shares
issuable upon exercise of these warrants) are entitled to registration rights.
Because each unit contains one-half of one warrant
and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half of one warrant. Pursuant to the
warrant agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. This is
different from other offerings similar to ours whose units include one ordinary share and one whole warrant to purchase one 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 a business combination since the warrants will be exercisable in the aggregate for a half of the number of shares compared to
units that each contain a whole warrant to purchase one share, which we believe will make us a more attractive business combination
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.
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 ordinary shares and warrants underlying the units, include:
| · | the history and prospects of companies whose principal business is the acquisition of other companies; |
| · | prior offerings of those companies; |
| · | our prospects for acquiring an operating business at attractive values; |
| · | a review of debt to equity ratios in leveraged transactions; |
| · | 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. Shareholders
therefore have no access to information about prior market history on which to base their investment decision. Following this offering,
the price of our securities may vary significantly due to one or more potential business combinations and general market or economic
conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained.
You may be unable to sell your securities unless a market can be established and sustained.
Because we must furnish our shareholders with target
business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with
some prospective target businesses.
The federal proxy rules require that a proxy statement with
respect to a vote on a business combination meeting certain financial significance tests include historical and/or pro forma financial
statement disclosure in periodic reports. We will include the same financial statement disclosure in connection with our tender
offer documents, whether or not they are required under the tender offer rules. These financial statements may be required to be
prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or
U.S. GAAP, or international financing 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 financial statements in accordance with federal proxy rules and complete our initial business combination within
the prescribed time frame.
We are an emerging growth company and a smaller
reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors
and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning
of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding
executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a
result, our shareholders may not have access to certain information they may deem important. We could be an emerging growth company
for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary
shares held by non-affiliates exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would
no longer be an emerging growth company as of the end of such fiscal year. We cannot predict whether investors will find our securities
less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of
our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be
a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging
growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that
a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period which
means that when a standard is issued or revised and it has different application dates for public or private companies, we, as
an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of our financial statements with another public company which is neither an emerging growth company nor
an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in 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 ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such
completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of
that year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make
comparison of our financial statements with other public companies difficult or impossible.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management
resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act requires that we evaluate
and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year ending December 31, 2020.
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. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley
Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete
our initial business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its
internal controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act
may increase the time and costs necessary to complete any such acquisition.
Because we are incorporated under the laws of the
Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Federal courts may be limited.
We are an exempted company incorporated under the laws of the
Cayman Islands. As a result, it may be difficult for investors to effect service of process within the United States upon our directors
or officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs will be governed by our amended and restated
memorandum and articles of association, the Companies Law and the common law of the Cayman Islands. The rights of shareholders
to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us
under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the
decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be
under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different
body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and
judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders
derivative action in a Federal court of the United States.
We have been advised by our Cayman Islands legal counsel that
the courts of the Cayman Islands are unlikely (1) to recognize or enforce against us judgments of courts of the United States predicated
upon the civil liability provisions of the federal securities laws of the United States or any state; and (2) in original actions
brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities
laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances,
although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the
Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial
on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation
to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in
the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or
a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud
or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman
Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay
enforcement proceedings if concurrent proceedings are being brought elsewhere.
As a result of all of the above, public shareholders may have
more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
Provisions in our amended and restated memorandum
and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the
future for our Class A ordinary shares and could entrench management.
Our amended and restated memorandum and articles of association
will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
These provisions include two-year director terms and the ability of the board of directors to designate the terms of and issue
new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise
could involve payment of a premium over prevailing market prices for our securities.
After our initial business combination, it is possible
that a majority of our directors and officers will live outside the United States and all or substantially all of our assets will
be located outside the United States; therefore investors may not be able to enforce federal securities laws or their other legal
rights.
It is possible that after our initial business combination,
a majority of our directors and officers will reside outside of the United States and all or substantially all of our assets will
be located outside of the United States. As a result, it may be difficult, or in some cases not possible, for investors in the
United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments
of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States
laws.
If we effect a business combination with a company
located outside of the United States, the laws applicable to such company will likely govern all of our material agreements and
we may not be able to enforce our legal rights.
If we effect a business combination with a company located outside
of the United States, the laws of the country in which such company operates will likely govern almost all of the material agreements
relating to its operations. We cannot assure you that the target business will be able to enforce any of its material agreements
or that remedies will be available in this new jurisdiction. The system of laws and the enforcement of existing laws in such jurisdiction
may not be as certain in implementation and interpretation as in the United States. The inability to enforce or obtain a remedy
under any of our future agreements could result in a significant loss of business, business opportunities or capital.
If our management following our initial business
combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such laws,
which could lead to various regulatory issues.
Following our initial business combination, any or all of our
management could resign from their positions as officers of the Company, and the management of the target business at the time
of the business combination could
remain in place. Management of the target business may not be familiar with U.S. securities laws.
If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such
laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
After our initial business combination, substantially
all of our assets may be located in a foreign country and substantially all of our revenue may be derived from our operations in
such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political,
social and government policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government
policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically
and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s
economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries.
A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive
target business with which to consummate our initial business combination and if we effect our initial business combination, the
ability of that target business to become profitable.
We will be subject to changing law and regulations
regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance.
We will be subject to rules and regulations of various governing
bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new
and changing laws and regulations are likely to continue to result in increased general and administrative expenses and a diversion
of management time and attention from our search for a business combination target to compliance activities.
Moreover, because these laws, regulations and standards are
subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This
evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions
to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes,
we may be subject to penalty and our business may be harmed.
We may be delayed in processing mail received at
our registered office.
Mail addressed to the Company and received at its registered
office will be forwarded unopened to the forwarding address supplied by Company to be dealt with. None of the Company, its directors,
officers, advisors or service providers (including the organisation which provides registered office services in the Cayman Islands)
will bear any responsibility for any delay howsoever caused in mail reaching the forwarding address.
Risks Relating to the Cannabis Industry
Business combinations with companies operating in the cannabis
industry entail special considerations and risks. If we complete a business combination with a target business in the cannabis
industry, we will be subject to, and possibly adversely affected by, the risks set forth below. However, our efforts in identifying
prospective target businesses may not be limited to the cannabis industry. Accordingly, if we acquire a target business in another
industry, these risks will likely not affect us and we will be subject to other risks attendant with the specific industry of the
target business which we acquire, none of which can be presently ascertained.
There are risks related to the cannabis industry
to which we may become subject.
If we are successful in completing a business combination with
a target business with operations in the cannabis industry, we will be subject to, and possibly adversely affected by, the following
risks:
| · | The cannabis industry is extremely speculative and its legality is uncertain, making it subject to inherent risk; |
| · | Use of cannabis that is not in compliance with the U.S. Controlled Substances Act is illegal under U.S. federal law, and therefore,
strict enforcement of U.S. federal laws regarding the use, cultivation, |
manufacturing, processing, transportation,
distribution, storage and/or sale of cannabis would likely result in our inability to execute a business plan in the cannabis industry;
| · | Changes in the current policies of the Trump Administration and the U.S. Department of Justice resulting in heightened enforcement
of U.S. federal cannabis laws may negatively impact our ability to pursue our prospective business operations and/or generate revenues; |
| · | U.S. federal courts may refuse to recognize the enforceability of contracts pertaining to any business operations that are
deemed illegal under U.S. federal law and, as a result, cannabis-related contracts could prove unenforceable in such courts; |
| · | Consumer complaints and negative publicity regarding cannabis related products and services could lead to political pressure
on states to implement new laws and regulations that are adverse to the cannabis industry, to not modify existing, restrictive
laws and regulations or to reverse current favorable laws and regulations relating to cannabis; |
| · | Assets leased to cannabis businesses may be forfeited to the U.S. federal government in connection with government enforcement
actions under U.S. federal law; |
| · | U.S. Food and Drug Administration regulation of cannabis and the possible registration of facilities where cannabis is grown
could negatively affect the cannabis industry, which could directly affect our financial condition; |
| · | Due to our proposed involvement in the regulated cannabis industry, we may have a difficult time obtaining the various insurance
policies that are needed to operate our business, which may expose us to additional risks and financial liabilities; |
| · | The cannabis industry may face significant opposition from other industries that perceive cannabis products and services as
competitive with their own, including but not limited to the pharmaceutical industry, adult beverage industry and tobacco industry,
all of which are have powerful lobbying and financial resources; |
| · | Many national and regional banks have been resistant to doing business with cannabis companies because of the uncertainties
presented by federal law and, as a result, we may have difficulty accessing the service of banks, which may inhibit our ability
to open bank accounts or otherwise utilize traditional banking services; |
| · | Due to our proposed involvement in the regulated cannabis industry, we may have a difficult time obtaining financing in connection
with our initial business combination or thereafter; |
| · | Laws and regulations affecting the regulated cannabis industry are varied, broad in scope and subject to evolving interpretations,
and may restrict the use of the properties we acquire or require certain additional regulatory approvals, which could materially
adversely affect our operations; |
| · | National securities exchanges may not list companies engaged in the cannabis industry; |
| · | Section 280E of the Internal Revenue Code of 1986, as amended, which disallows a tax deduction for any amount paid or incurred
in carrying on any trade or business that consists of trafficking in controlled substances prohibited by federal or state law,
may prevent us from deducting certain business expenditures, which would increase our net taxable income; and |
| · | Risks similar to those discussed above based on regulations of other jurisdictions in which a prospective target may operate
or be organized in. |
Any of the foregoing could have an adverse impact on our operations
following a business combination.
Cannabis is currently illegal under U.S. federal
law and in other jurisdictions
If we complete a business combination with a target in the cannabis
industry, our ability to achieve our business objectives will be contingent, in part, upon the legality of the cannabis industry,
our compliance with regulatory requirements enacted by various governmental authorities, and our obtaining all regulatory approvals,
where necessary. The laws and regulations governing cannabis are still developing, including in ways that we may not foresee.
Although the Agriculture Improvement Act of 2018 has taken hemp and hemp derived cannabinoids out of the most restrictive class
of controlled substances under U.S. federal law, marijuana is a schedule-1 controlled substance in the United States
and is currently illegal under U.S. federal law. Even in those U.S. states in which the recreational use of marijuana has
been legalized, its use remains a violation of U.S. federal law. Additionally, in 2018, a series of memoranda and guidance from
2009 to 2014 that generally directed U.S. Attorneys not to enforce federal marijuana laws against actors who were in compliance
with state guidance were formally rescinded. Since U.S. federal laws criminalizing the use of marijuana preempt state
laws that legalize its use, continuation of U.S. federal law in its current state regarding marijuana could limit our
ability to do business in the United States. Similar issues of illegality apply in other countries. Any amendment to or replacement
of existing laws to make them more onerous, or delays in amending or replacing existing laws to liberalize the legal possession
and use of cannabis, or delays in obtaining, or the failure to obtain, any necessary regulatory approvals may significantly
delay or impact negatively our ability to consummate an initial business combination, the markets in which we operate, products
and sales initiatives and could have a material adverse effect on our business, liquidity, financial condition and/or results of
operations.
Any potential growth in the cannabis industry continues
to be subject to new and changing state and local laws and regulations.
Continued development of the cannabis industry is dependent
upon continued legislative legalization of cannabis at the state level, and a number of factors could slow or halt progress in
this area, even where there is public support for legislative action. Any delay or halt in the passing or implementation of legislation
legalizing cannabis use, or its cultivation, manufacturing, processing, transportation, distribution, storage and/or sale, or the
re-criminalization or restriction of cannabis at the state level could negatively impact our business. Additionally, changes in
applicable state and local laws or regulations, including zoning restrictions, permitting requirements and fees, could restrict
the products and services we may offer or impose additional compliance costs on us or our customers. Violations of applicable laws,
or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. We cannot
predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be
enacted in the future that will be materially adverse to our business.
Change in the laws, regulations
and guidelines that impact our business may cause adverse effects on our operations.
A cannabis products business
will be subject to a variety of laws, regulations and guidelines relating to the marketing, acquisition, manufacture, management,
transportation, storage, sale, labeling and disposal of cannabis as well as laws and regulations relating to health and safety,
the conduct of operations and the protection of the environment. Changes to such laws, regulations and guidelines may cause adverse
effects on our operations.
We may operate a highly
regulated business and any failure or significant delay in obtaining regulatory approvals could adversely affect our ability to
conduct our business.
In the event we acquire a business
involved in the production, distribution and sale of cannabis products, achievement of our business objectives will be contingent,
in part, upon compliance with the regulatory requirements enacted by applicable government authorities and obtaining all regulatory
approvals, where necessary, for the sale of our products. We cannot predict the time required to secure all appropriate regulatory
approvals for our products, or the extent of testing and documentation that may be required by government authorities. Any delays
in obtaining, or failure to obtain regulatory approvals would significantly delay the development of markets and products and
could have a material adverse effect on our business, results of operation and financial condition.
U.S. regulations relating
to hemp-derived CBD products are unclear and rapidly evolving.
We may acquire a business involved
in the production, distribution or sale of hemp-derived CBD products. Participation in the market for hemp-derived CBD products
in the United States and elsewhere may require us to employ novel approaches to existing regulatory pathways. Although the passage
of the Farm Bill in December 2018 legalized the cultivation of hemp in the United States to produce products containing CBD and
other non-THC cannabinoids, it is unclear how the U.S. Food and Drug Administration (“FDA”) will respond to the approach
taken by a target business we acquire, or whether the FDA will propose or implement new or additional regulations. In addition,
such products may be subject to regulation at the state or local levels. Unforeseen regulatory obstacles may hinder our ability
to successfully compete in the market for such products.
We may become involved
in regulatory or agency proceedings, investigations and audits.
Businesses in the cannabis industry,
and the business of the suppliers from which we may acquire the products we may sell, require compliance with many laws and regulations.
Failure to comply with these laws and regulations could subject us or such suppliers to regulatory or agency proceedings or investigations
and could also lead to damage awards, fines and penalties. We or such suppliers may become involved in a number of government
or agency proceedings, investigations and audits. The outcome of any regulatory or agency proceedings, investigations, audits,
and other contingencies could harm our reputation or the reputations of the brands that we may sell, require us to take, or refrain
from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition.
There can be no assurance that any pending or future regulatory or agency proceedings, investigations and audits will not result
in substantial costs or a diversion of management’s attention and resources or have a material adverse impact on our business,
financial condition and results of operations.
Research in Canada, the
United States and internationally regarding the medical benefits, viability, safety, efficacy and dosing of cannabis or isolated
cannabinoids (such as CBD and THC) remains in relatively early stages. There have been few clinical trials on the benefits of
cannabis or isolated cannabinoids conducted by us or by others.
In the event we acquire a target
business involving medical cannabis, future research and clinical trials may draw different or negative conclusions regarding
the medical benefits, viability, safety, efficacy, dosing or other facts and perceptions related to medical cannabis, which could
adversely affect social acceptance of cannabis and the demand for our products. We may be subject to liability for risks against
which we cannot insure or against which we may elect not to insure due to the high cost of insurance premiums or other factors.
The payment of any such liabilities would reduce the funds available for our normal business activities. Payment of liabilities
for which we do not carry insurance may have a material adverse effect on our financial position and operations.
With respect to target
businesses operating in the medical and adult-use cannabis markets, the illicit supply of cannabis and cannabis-based products
may reduce our sales and impede our ability to succeed in such markets.
In the event we acquire a target
business operating in the medical and adult-use cannabis markets, we may face competition from unlicensed and unregulated market
participants, including illegal dispensaries and black market suppliers selling cannabis and cannabis-based products.
Even with the legalization of
medical and adult-use cannabis in certain jurisdictions, black market operations remain abundant and are a substantial competitor
to cannabis-related businesses. In addition, illegal dispensaries and black market participants may be able to (i) offer products
with higher concentrations of active ingredients that are either expressly prohibited or impracticable to produce under applicable
regulations, (ii) use delivery methods, including edibles, concentrates and extract vaporizers, that we may be prohibited from
offering to individuals in such jurisdictions, (iii) brand products more explicitly, and (iv) describe/discuss intended effects
of products. As these illicit market participants do not comply with the regulations governing the medical and adult-use cannabis
industry in such jurisdictions, their operations may also have significantly lower costs.
As a result of the competition
presented by the black market for cannabis, any unwillingness by consumers currently utilizing these unlicensed distribution channels
to begin purchasing from legal producers for any reason or any inability or unwillingness of law enforcement authorities to enforce
laws prohibiting the unlicensed cultivation and sale of cannabis and cannabis-based products could (i) result in the perpetuation
of the black market for cannabis, (ii) adversely affect our market share and (iii) adversely impact the public perception of cannabis
use and licensed cannabis producers and dealers, all of which would have a materially adverse effect on our business, operations
and financial condition.
The cannabis industry faces significant opposition,
and any negative trends may adversely affect our business operations.
If we complete a business combination with a target in the cannabis
industry, we will be substantially dependent on the continued market acceptance, and the proliferation of consumers, of cannabis.
We believe that with further legalization, cannabis will become more accepted, resulting in growth in consumer demand. However,
we cannot predict the future growth rate or future market potential, and any negative outlook on the cannabis industry may adversely
affect our business operations.
Large, well-funded industries that perceive cannabis products
and services as competitive with their own, including but not limited to the pharmaceutical industry, adult beverage industry and
tobacco industry, all of which are have powerful lobbying and financial resources, may have strong economic reasons to oppose the
development of the cannabis industry. For example, should cannabis displace other drugs or products, the medical cannabis industry
could face a material threat from the pharmaceutical industry, which is well-funded and possesses a strong and experienced lobby.
Any inroads the pharmaceutical, or any other potentially displaced, industry or sector could make in halting or impeding the cannabis
industry could have a detrimental impact on our business.
The cannabis industry is highly competitive and
evolving.
The market for businesses in the cannabis industry is highly
competitive and evolving. There may be no material aspect of our business that is protected by patents, copyrights, trademarks
or trade names, and we may face strong competition from larger companies, including in our search for an initial business combination
and those that may offer similar products and services to ours following our initial business combination. Our potential competitors
may
have longer operating histories, significantly greater financial,
marketing or other resources and larger client bases than we will, and there can be no assurance that we will be able to successfully
compete against these or other competitors.
Given the rapid changes affecting the global, national, and
regional economies generally and the cannabis industry, in particular, we may not be able to create and maintain a competitive
advantage in the marketplace. Our success will depend on our ability to keep pace with any changes in our markets, particularly,
legal and regulatory changes. Our success will also depend on our ability to respond to, among other things, changes in the economy,
market conditions, and competitive pressures. Any failure by us to anticipate or respond adequately to such changes could have
a material adverse effect on our financial condition and results of operations.
We and our customers may have difficulty accessing
the service of banks, which may make it difficult to sell products and services.
Financial transactions involving proceeds generated by cannabis-related
conduct can form the basis for prosecution under the federal money laundering statutes, unlicensed money transmitter statute and
the U.S. Bank Secrecy Act. Guidance issued by the Financial Crimes Enforcement Network (“FinCen”), a division of the
U.S. Department of the Treasury (the “FinCen Memo”), clarifies how financial institutions can provide services to cannabis-related
businesses consistent with their obligations under the Bank Secrecy Act. Despite the rescission of memoranda that had de-prioritized
the enforcement of federal law against marijuana users and businesses that comply with state marijuana laws, FinCen has not rescinded
the FinCen Memo. While this memo appears to be a standalone document and is presumptively still in effect, FinCen could elect to
rescind the FinCen Memo at any time. Banks remain hesitant to offer banking services to cannabis-related businesses. Consequently,
those businesses involved in the cannabis industry continue to encounter difficulty establishing banking relationships.
Our inability to maintain bank accounts would make it difficult for us to operate our business, increase our operating costs, and
pose additional operational, logistical and security challenges and could result in our inability to implement our business plan.
The development and operation of businesses in the
cannabis industry may require additional financing, which may not be available on favorable terms, if at all.
Due to the growth in the cannabis industry, the continued development
and operation of businesses in the cannabis industry may require additional financing. The failure to raise such capital could
result in the delay or indefinite postponement of current business objectives or the cessation of business. There can be no assurance
that additional capital or other types of financing will be available if needed or that, if available,
the terms of such financing will be favorable.
We may be subject to product
liability claims.
If we acquire a target business
operating as a manufacturer and distributor of products utilizing cannabis for human consumption, we will face an inherent risk
of exposure to product liability claims, regulatory action and litigation if our products are alleged to have caused significant
loss or injury. In addition, the manufacture and sale of cannabis products involve the risk of injury to consumers due to tampering
by unauthorized third parties or product contamination. Previously unknown adverse reactions resulting from human consumption
of cannabis products alone or in combination with other medications or substances could occur. We may be subject to various product
liability claims, including, among others, that the products we produced caused injury or illness, include inadequate instructions
for use or include inadequate warnings concerning possible side effects or interactions with other substances.
A product liability claim or
regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers
generally, and could have a material adverse effect on our results of operations and financial condition. There can be no assurances
that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential
liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability
to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims
could prevent or inhibit the commercialization of products.
We may not be able to obtain
adequate insurance coverage in respect of the risks our business faces, the premiums for such insurance may not continue to be
commercially justifiable or there may be coverage limitations and other exclusions which may result in such insurance not being
sufficient to cover potential liabilities that we face.
Although we expect to have insurance
coverage with respect to the assets and operations of our target business, such insurance coverage will be subject to coverage
limits and exclusions and may not be available for the risks and hazards to which we are exposed. In addition, no assurance can
be given that such insurance will be adequate to cover our liabilities, including potential product liability claims, or will
be generally available in the future or, if available, that premiums will be commercially justifiable. If we were to incur substantial
liability and such damages were not covered by insurance or were in excess of policy limits, we may be exposed to material uninsured
liabilities that could impede our liquidity, profitability or solvency.
We, or the cannabis industry
more generally, may receive unfavorable publicity or become subject to negative consumer or investor perception.
We believe that the cannabis
industry is highly dependent upon positive consumer and investor perception regarding the benefits, safety, efficacy and quality
of the cannabis distributed to consumers. The perception of the cannabis industry and cannabis products, currently and in the
future, may be significantly influenced by scientific research or findings, regulatory investigations, litigation, political statements,
media attention and other publicity (whether or not accurate or with merit) both in the United States and in other countries,
including Canada, relating to the consumption of cannabis products, including unexpected safety or efficacy concerns arising with
respect to cannabis products or the activities of industry participants. There can be no assurance that future scientific research,
findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the
cannabis market or any particular cannabis product or will be consistent with earlier publicity. Adverse future scientific research
reports, findings and regulatory proceedings that are, or litigation, media
attention or other publicity
that is, perceived as less favorable than, or that questions, earlier research reports, findings or publicity (whether or not
accurate or with merit) could result in a significant reduction in the demand for the cannabis products of a target business we
acquire. Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis, or
the products of a target business we acquire specifically, or associating the consumption of cannabis with illness or other negative
effects or events, could adversely affect us. This adverse publicity could arise even if the adverse effects associated with cannabis
products resulted from consumers’ failure to use such products legally, appropriately or as directed.
Third parties with whom
we do business may perceive themselves as being exposed to reputational risk by virtue of their relationship with us and may ultimately
elect not to do business with us.
If we acquire a target business
in the cannabis industry, the parties with which we do business may perceive that they are exposed to reputational risk as a result
of our cannabis business activities. Failure to establish or maintain business relationships could have a material adverse effect
on us.
Our reputation and ability to do business may be
negatively impacted by the improper conduct by our business partners, employees or agents.
We cannot provide assurance that our internal controls and compliance
systems will always protect us from acts committed by our employees, agents or business partners in violation of applicable laws
and regulations in the jurisdictions in which we conduct operations, including those applicable to businesses in the cannabis industry.
Any improper acts or allegations could damage our reputation and subject us to civil or criminal investigations and related shareholder
lawsuits, could lead to substantial civil and criminal monetary and non-monetary penalties, and could cause us to incur significant
legal and investigatory fees.
Certain events or developments in the cannabis industry
more generally may impact our reputation.
Damage to our reputation can result from the actual or perceived
occurrence of any number of events, including any negative publicity, whether true or not. If we acquire a target business in the
cannabis industry, because cannabis has been commonly associated with various other narcotics, violence and criminal activities,
there is a risk that our business might attract negative publicity. There is also a risk that the actions of other companies and
service providers in the cannabis industry may negatively affect the reputation of the industry as a whole and thereby negatively
impact our reputation. The increased usage of social media and other web-based tools used to generate, publish and discuss user-generated
content and to connect with other users has made it increasingly easier for individuals and groups to communicate and share negative
opinions and views in regards to our activities and the cannabis industry in general, whether true or not.
We do not ultimately have direct control over how we or the
cannabis industry is perceived by others. Reputational issues may result in decreased investor confidence, increased challenges
in developing and maintaining community relations and present an impediment to our overall ability to advance our business strategy
and realize on our growth prospects.
The cannabis industry is subject to the risks inherent
in an agricultural business, including the risk of crop failure.
The growing of cannabis is an agricultural process. As such,
a target business with operations in the cannabis industry is subject to the risks inherent in the agricultural business, including
risks of crop failure presented by weather, insects, plant diseases and similar agricultural risks. Although some cannabis production
is conducted indoors under climate controlled conditions, cannabis continues to be grown outdoors and there can be no assurance
that natural elements, such as insects and plant diseases, will not entirely interrupt production activities or have an adverse
effect on the production of cannabis and, accordingly, the operations of a potential target business.
Many cannabis businesses are dependent on key personnel
with sufficient experience in the cannabis industry.
The success of businesses in the cannabis industry is largely
dependent on the performance of their respective management teams and key employees and their continuing ability to attract, develop,
motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and significant costs may
be incurred to attract and retain them. The loss of the services of any key personnel, or an inability to attract other suitably
qualified persons when needed, could prevent a business from executing on its business plan and strategy, and the business may
be unable to find adequate replacements on a timely basis, or at all.
The price of production of cannabis will vary based
on a number of factors outside of our control.
Revenues of businesses in the cannabis industry are in a large
part derived from the production, sale and distribution of cannabis. The price of production, sale and distribution of cannabis
is dependent number of key inputs and their related costs, including raw materials and supplies related to cannabis growing operations,
as well as electricity, water and other utilities. Cannabis growing operations consume considerable energy, making such operations
vulnerable to rising energy costs. Any significant interruption or negative change in the availability or economics of the supply
chain for key inputs could materially impact financial condition and operating results of businesses operating in the cannabis
industry. Any inability to secure required supplies and services or to do so on appropriate terms could have a materially adverse
impact on the business, financial condition, results of operations and prospects of such businesses.
In addition, the price of production, sale and distribution
of cannabis will fluctuate widely due to, among other factors, how young the cannabis industry is and the impact of numerous factors
beyond the control of such businesses, including international, economic and political trends, expectations of inflation, currency
exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production
due to new production and distribution developments and improved production and distribution methods.
Cautionary
Note Regarding Forward-Looking Statements
Some statements contained in this prospectus are forward-looking
in nature. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections,
forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking
statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predict,” “project,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements in this prospectus may include, for example, statements about:
| · | our ability to select an appropriate target business or businesses; |
| · | our ability to complete our initial business combination; |
| · | our expectations around the performance of a 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; |
| · | our potential ability to obtain additional financing to complete our initial business combination; |
| · | our pool of prospective target businesses; |
| · | operating a business in the cannabis industry; |
| · | the ability of our officers and directors to generate a number of potential business combination opportunities; |
| · | our public securities’ potential liquidity and trading; |
| · | the lack of a market for our securities; |
| · | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
| · | 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 heading “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 25,000,000 units at an offering price of $10.00
per unit. We estimate that the net proceeds of this offering together with the funds we will receive from the sale of the private
placement warrants will be used as set forth in the following table.
| | |
Without Over-Allotment Option | |
Over-Allotment Option Exercised |
| Gross proceeds | |
| | | |
| | |
| Gross proceeds from units offered to public(1) | |
$ | 250,000,000 | | |
$ | 287,500,000 | |
| Gross proceeds from private placement warrants offered in the private placement | |
| 7,000,000 | | |
| 7,750,000 | |
| Total gross proceeds | |
$ | 257,000,000 | | |
$ | 295,250,000 | |
| Estimated offering expenses(2) | |
| | | |
| | |
| Underwriting commissions (2.0% of gross proceeds from units offered to public, excluding deferred portion)(3) | |
$ | 5,000,000 | | |
$ | 5,750,000 | |
| Legal fees and expenses | |
| | | |
| | |
| Accounting fees and expenses | |
| | | |
| | |
| Printing and engraving expenses | |
| | | |
| | |
| SEC expenses | |
| 34,845 | | |
| 34,845 | |
| FINRA expenses | |
| 43,625 | | |
| 43,625 | |
| Travel and road show | |
| | | |
| | |
| Directors and officers insurance premiums | |
| | | |
| | |
| Nasdaq listing and filing fees | |
| 75,000 | | |
| 75,000 | |
| Miscellaneous expenses(4) | |
| | | |
| | |
| Total estimated offering expenses (other than underwriting commissions) | |
$ | 1,000,000 | | |
$ | 1,000,000 | |
| Proceeds after estimated offering expenses | |
$ | 251,000,000 | | |
$ | 288,500,000 | |
| Held in trust account(3) | |
$ | 250,000,000 | | |
$ | 287,500,000 | |
| % of public offering size | |
| 100 | % | |
| 100 | % |
| Not held in trust account(2) | |
$ | 1,000,000 | | |
$ | 1,000,000 | |
The following table shows the use of the approximately $1,000,000
of net proceeds not held in the trust account(5).
| | |
Amount | |
% of Total |
| Legal, accounting, due diligence, travel and other expenses in connection with any business combination(6) | |
$ | | | |
| | % |
| Legal and accounting fees related to regulatory reporting obligations | |
| | | |
| | % |
| Payment for director compensation | |
| | | |
| | % |
| Reserve for liquidation expenses | |
| | | |
| | % |
| Nasdaq continued listing fees | |
| 75,000 | | |
| 7.5 | % |
| Other miscellaneous expenses | |
| | | |
| | % |
| Total | |
$ | 1,000,000 | | |
| 100.0 | % |
| (1) | Includes amounts payable to public shareholders who properly redeem their shares in connection with our successful completion
of our initial business combination. |
| (2) | A portion of the offering expenses have been paid from the proceeds of loans from our sponsor of up to $250,000 as described
in this prospectus. As of June 11, 2019, we had borrowed $12,500 under the promissory note with our sponsor to be used for a portion
of the expenses of this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering
proceeds that has been allocated for the payment of offering expenses (other than underwriting commissions) not held in the trust
account. These expenses are estimates only. 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. |
| (3) | 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, $8,750,000 (or up to $10,062,500 if the underwriters’ 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 used 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. |
| (4) | Includes organizational and administrative expenses and may include amounts related to above-listed expenses in the event actual
amounts exceed estimates. |
| (5) | These expenses are estimates only. Our actual expenditures for some or all of these items may differ from the estimates set
forth herein. For example, we may incur greater legal and accounting expenses than our current estimates in connection with negotiating
and structuring a business combination based upon the level of complexity of such business combination. In the event we identify
an acquisition target in a specific industry subject to specific regulations, we may incur additional expenses associated with
legal due diligence and the engagement of special legal counsel. In addition, our staffing needs may vary and as a result, we may
engage a number of consultants to assist with legal and financial due diligence. We do not anticipate any change in our intended
use of proceeds, other than fluctuations among the current categories of allocated expenses, which fluctuations, to the extent
they exceed current estimates for any specific category of expenses, would not be available for our expenses. The amount in the
table above does not include interest available to us from the trust account. Based on current interest rates, we would expect
approximately $3,500,000 to be available to us from interest earned on the funds held in the trust account over the 12 months following
the closing of this offering; however, we can provide no assurances regarding this amount. This estimate assumes an interest rate
of 1.40% per annum based upon current yields of securities in which the trust account may be invested. 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. Any such loans may 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 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 issued to our sponsor. The terms of such loans, 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. |
| (6) | Includes estimated amounts that may also be used in connection with our initial business combination to fund a “no shop”
provision and commitment fees for financing. |
The rules of Nasdaq require that our initial business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. Of the net proceeds of this offering and the sale
of the private placement warrants, $250,000,000 (or $287,500,000 if the underwriters’ over-allotment option is exercised
in full), including $8,750,000 (or up to $10,062,500 if the underwriters’ over-allotment option is exercised in full) of
deferred underwriting commissions, will, upon the consummation of this offering, be placed in a U.S.-based trust account with
acting as trustee. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 180
days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under
the Investment Company Act. Based on current interest rates, we estimate that the interest earned on the trust account will be
approximately $3,500,000 per year, assuming an interest rate of 1.40% per year. We will not be permitted to withdraw any of the
principal or interest held in the trust account except for the withdrawal of interest to pay taxes, if any, the funds held in the
trust account will not be released from the trust account until the earliest to occur of: (1) the completion of our initial business
combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended
and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our
public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B)
with respect to any other provision relating to shareholders’ rights or pre-initial
business combination activity; and (3) the redemption of our
public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering,
subject to applicable law. Based on current interest rates, we expect that interest earned on the trust account will be sufficient
to pay taxes.
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, 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 the redemption of our public shares, 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 believe that amounts not held in trust will be sufficient
to pay the costs and expenses to which such proceeds are allocated. This belief is based on the fact that while we may begin preliminary
due diligence of a target business in connection with an indication of interest, we intend to undertake in-depth due diligence,
depending on the circumstances of the relevant prospective acquisition, only after we have negotiated and signed a letter of intent
or other preliminary agreement that addresses the terms of a business combination. However, if our estimate of the costs of undertaking
in-depth due diligence and negotiating a business combination is less than the actual amount necessary to do so, we may be required
to raise additional capital, the amount, availability and cost of which is currently unascertainable. If we are required to seek
additional capital, we could seek such additional capital through loans or additional investments from our sponsor, members of
our management team or any of their affiliates, but such persons are not under any obligation to loan funds to, or invest in, us.
Prior to the closing of this offering, our sponsor has agreed
to loan us up to $250,000 under an unsecured promissory note to be used for a portion of the expenses of this offering. As of June
11, 2019, we had borrowed $12,500 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 January 31, 2020 or the closing of this offering.
These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has been allocated
for the payment of offering expenses (other than underwriting commissions) 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. Any such loans may 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 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 issued to our sponsor. The terms of such loans, 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 shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our sponsor,
directors, officers, advisors or any of their affiliates may also purchase shares in privately negotiated transactions or in the
open market either prior to or following the completion of our initial business combination. Please see “Proposed Business—Permitted
purchases of our securities” for a description of how such persons will determine from which shareholders to seek to acquire
shares. The price per share paid in any such transaction may be different than the amount per share a public shareholder would
receive if it elected to redeem its shares in connection with our initial business combination. However, such persons 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 be restricted from making any such purchases when they are in possession of any
material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange
Act. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules
under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the
purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply
with such rules.
We may not redeem our public shares in an amount that would
cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion
of our initial business combination (so that we do not then become 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 shareholders 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 such redemption of our public shares and the
related business combination, and we instead may search for an alternate business combination.
A public shareholder will be entitled to receive funds from
the trust account only upon the earliest to occur of: (1) the completion of our initial business combination; (2) the redemption
of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and
articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we
do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any
other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of
our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering,
subject to applicable law. In no other circumstances will a shareholder have any right or interest of any kind to or in the trust
account.
Our initial shareholders have entered into a letter agreement
with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public
shares held by them in connection with the completion of our initial business combination. Our directors and officers have also
entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any.
In addition, our initial shareholders have agreed to waive their rights to liquidating distributions from the trust account with
respect to their founder shares if we fail to complete our initial business combination within 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 ordinary shares to
date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends
in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent
to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination
will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating
and does not anticipate declaring any share dividends in the foreseeable future, except if we increase the size of this offering,
in which case we will effect a capitalization or other appropriate mechanism immediately prior to the consummation of this offering
in such amount as to maintain the number of founder shares at 20% of our issued and outstanding ordinary shares 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 Class A
ordinary share, 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 Class A ordinary share 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 shareholders 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 ordinary shares which may
be redeemed for cash), by the number of issued and outstanding Class A ordinary shares.
At June 11, 2019, our net tangible book value was a deficiency
of $12,500, or approximately $(0.00) per ordinary share. After giving effect to the sale of 25,000,000 Class A ordinary shares
included in the units we are offering by this prospectus, 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 June 11, 2019 would have been $5,000,010
or $0.66 per share, representing an immediate increase in net tangible book value (as decreased by the value of 23,726,999 Class
A ordinary shares that may be redeemed for cash and assuming no exercise of the underwriters’ over-allotment option) of 0.66
per share to our initial shareholders as of the date of this prospectus and an immediate dilution of $9.34 per share or 93.40%
to our public shareholders not exercising their redemption rights. The dilution to new investors if the underwriters exercise the
over-allotment option in full would be an immediate dilution of $9.42 per share or 94.20%.
The following table illustrates the dilution to the public shareholders
on a per-share basis, assuming no value is attributed to the warrants included in the units or the private placement warrants:
| | |
Without Over-allotment | |
With Over-allotment |
| Public offering price | |
$ | 10.00 | | |
$ | 10.00 | |
| Net tangible book deficit before this offering | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| Increase attributable to public shareholders | |
| 0.66 | | |
| 0.58 | |
| Pro forma net tangible book value after this offering and the sale of the private placement warrants | |
| 0.66 | | |
| 0.58 | |
| Dilution to public shareholders | |
$ | 9.34 | | |
$ | 9.42 | |
| Percentage of dilution to new investors | |
| 93.40 | % | |
| 94.20 | % |
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 $237,269,990
because holders of up to approximately 94.9% 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 shareholders meeting, including interest (which interest shall be net of taxes payable), divided by the
number of Class A ordinary shares sold in this offering).
The following table sets forth information with respect to our
initial shareholders and the public shareholders:
| | |
Shares Purchased | |
Total Consideration | |
Average Price per Share |
| | |
Number | |
Percentage | |
Amount | |
Percentage | |
|
| Initial Shareholders(1) | |
| 6,250,000 | | |
| 20.00 | % | |
$ | 25,000 | | |
| 0.01 | % | |
$ | 0.004 | |
| Public Shareholders | |
| 25,000,000 | | |
| 80.00 | % | |
| 250,000,000 | | |
| 99.99 | % | |
| 10.00 | |
| | |
| 31,250,000 | | |
| 100.00 | % | |
$ | 250,025,000 | | |
| 100.00 | % | |
| | |
| (1) | Assumes the full forfeiture of 937,500 founder shares that are subject to forfeiture by our sponsor depending on the extent
to which the underwriters’ over-allotment option is exercised. |
The pro forma net tangible book value per share after this offering
is calculated as follows:
| | |
Without Over-allotment | |
With Over-allotment |
| Numerator: | |
| | | |
| | |
| Net tangible book deficit before this offering | |
$ | (12,500 | ) | |
$ | (12,500 | ) |
| Net proceeds from this offering and sale of the private placement warrants | |
| 251,000,000 | | |
| 288,500,000 | |
| Plus: Offering costs paid in advance, excluded from tangible book value | |
| 32,500 | | |
| 32,500 | |
| Less: Deferred underwriting commissions | |
| (8,750,000 | ) | |
| (10,062,500 | ) |
| Less: Proceeds held in trust subject to redemption | |
| (237,269,990 | ) | |
| (273,457,490 | ) |
| | |
$ | 5,000,010 | | |
$ | 5,000,010 | |
| Denominator | |
| | | |
| | |
| Class B ordinary shares outstanding prior to this offering | |
| 7,187,500 | | |
| 7,187,500 | |
| Class B ordinary shares forfeited if over-allotment is not exercised | |
| (937,500 | ) | |
| — | |
| Class A ordinary shares included in the units offered | |
| 25,000,000 | | |
| 28,750,000 | |
| Less: Ordinary shares subject to redemption/tender | |
| (23,726,999 | ) | |
| (27,345,749 | ) |
| | |
| 7,523,001 | | |
| 8,591,751 | |
Capitalization
The following table sets forth our capitalization at June 11,
2019, and as adjusted to give effect to the sale of our 25,000,000 units in this offering for $250,000,000 (or $10.00 per unit)
and the sale of 7,000,000 private placement warrants for $7,000,000 (or $1.00 per warrant) and the application of the estimated
net proceeds derived from the sale of such securities:
| | |
June 11, 2019 |
| | |
Actual | |
As Adjusted(2) |
| Note payable to related party(1) | |
$ | 12,500 | | |
$ | — | |
| Deferred underwriting commissions | |
| — | | |
| 8,750,000 | |
| Class A ordinary shares, subject to redemption; -0- shares actual and 23,726,999 shares as adjusted(3) | |
| — | | |
| 237,269,990 | |
| Shareholders’ equity: | |
| | | |
| | |
| Preferred shares, $0.0001 par value, 1,000,000 shares authorized; none issued and outstanding, actual and as adjusted | |
| — | | |
| — | |
| Class A ordinary shares, $0.0001 par value, 200,000,000 shares authorized; no shares issued and outstanding, actual; 1,273,001 shares issued and outstanding (excluding 23,726,999 shares subject to possible redemption), as adjusted | |
| — | | |
| 127 | |
| Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 and 6,250,000 shares issued and outstanding, actual and as adjusted, respectively(4) | |
| 719 | | |
| 625 | |
| Additional paid-in capital(5) | |
| 24,281 | | |
| 5,004,258 | |
| Accumulated deficit | |
| (5,000 | ) | |
| (5,000 | ) |
| Total shareholders’ equity | |
$ | 20,000 | | |
$ | 5,000,010 | |
| Total capitalization | |
$ | 32,500 | | |
$ | 251,020,000 | |
| (1) | Our sponsor has agreed to loan us up to $250,000 under an unsecured promissory note to be used for a portion of the expenses
of this offering. As of June 11, 2019, we had borrowed $12,500 under the promissory note with our sponsor to be used for a portion
of the expenses of this offering. |
| (2) | Assumes the full forfeiture of 937,500 shares that are subject to forfeiture by our sponsor depending on the extent to which
the underwriters’ over-allotment option is exercised. The proceeds of the sale of such shares will not be deposited into
the trust account, the shares will not be eligible for redemption from the trust account nor will they be eligible to vote upon
the initial business combination. |
| (3) | Upon the completion of our initial business combination, we will provide our public shareholders 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 (which interest shall be net of
taxes payable), subject to the limitations described herein whereby our net tangible assets, after payment of the deferred underwriting
commission, will be maintained at a minimum of $5,000,001 upon our initial business combination and any limitations (including,
but not limited to, cash requirements) created by the terms of the proposed business combination. The “as adjusted”
amount of Class A ordinary shares, subject to redemption equals the “as adjusted” total assets of $251,020,000, less
the “as adjusted” total liabilities of $8,750,000, less the “as adjusted” total shareholder’s equity.
The value of Class A ordinary shares that may be redeemed is equal to $10.00 per share (which is the assumed redemption price)
multiplied by 23,726,999 Class A ordinary shares, which is the maximum number of Class A ordinary shares that may be redeemed for
a $10.00 purchase price per share and still maintain at least $5,000,001 of net tangible assets. |
| (4) | Actual share amount is prior to any forfeiture of founder shares by our sponsor and as adjusted share amount assumes no exercise
of the underwriters’ over-allotment option. |
| (5) | The “as adjusted” additional paid-in capital calculation is equal to the “as adjusted” total shareholder’s
equity of $5,000,010, minus Class A and Class B ordinary shares (par value) of $752, minus the accumulated deficit of $(5,000). |
Management’s
Discussion and Analysis of Financial Condition
and Results of Operations
Overview
We are a blank check company incorporated as a Cayman Islands
exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more businesses. We have not selected any 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 sale of the private placement warrants, our shares, debt or a combination of cash, shares and debt.
The issuance of additional shares in a business combination:
| · | may significantly dilute the equity interest of investors in this offering, which dilution would increase if the anti-dilution
provisions of the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis
upon conversion of the Class B ordinary shares; |
| · | may subordinate the rights of holders of Class A ordinary shares if preferred shares are issued with rights senior to those
afforded our Class A ordinary shares; |
| · | could cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things,
our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present
officers and directors; |
| · | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of
a person seeking to obtain control of us; and |
| · | may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. |
Similarly, if we issue debt securities or otherwise incur significant
indebtedness, 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 is payable on demand; |
| · | our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such
financing while the debt is outstanding; |
| · | our inability to pay dividends on our Class A ordinary shares; |
| · | 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 Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate
purposes; |
| · | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
| · | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in
government regulation; and |
| · | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements,
execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
As indicated in the accompanying financial statements, at June
11, 2019, we had deferred offering costs of approximately $32,500. Further, we expect to continue to incur significant costs in
the pursuit of our acquisition plans.
We cannot assure you that our plans to raise capital or to complete
our initial business combination will be successful.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any
revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for this
offering. Following this offering, we will not generate any operating revenues until after completion of our initial business combination.
We will generate non-operating income in the form of interest income on cash and cash equivalents after this offering. There has
been no significant change in our financial or trading position and no material adverse change has occurred since the date of our
audited financial statements. After this offering, we expect to incur increased expenses as a result of being a public company
(for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses
to increase substantially after the closing of this offering.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion
of this offering from the availability of up to $250,000 in loans from our sponsor under an unsecured promissory note. As of June
11, 2019, we have borrowed $12,500 under the promissory note. 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 uncertainty through this offering are discussed above. 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.
We estimate that the net proceeds from (1) the sale of the units
in this offering, after deducting offering expenses of approximately $1,000,000 and underwriting commissions of $5,000,000 ($5,750,000
if the underwriters’ over-allotment option is exercised in full) (excluding deferred underwriting commissions of $8,750,000
(or up to $10,062,500 if the underwriters’ over-allotment option is exercised in full)), and (2) the sale of the private
placement warrants for a purchase price of $7,000,000 (or $7,750,000 if the underwriters’ over-allotment option is exercised
in full), will be $251,000,000 (or $288,500,000 if the underwriters’ over-allotment option is exercised in full). Of this
amount, $250,000,000 or $287,500,000 if the underwriters’ over-allotment option is exercised in full, including $8,750,000
(or up to $10,062,500 if the underwriters’ over-allotment option is exercised in full) in deferred underwriting commissions
will be deposited into the trust account. The funds in the trust account will be invested only in U.S. government treasury bills
with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $1,000,000 will
not be held in the trust account. In the event that our offering expenses exceed our estimate of $1,000,000 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 $1,000,000,
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 (which interest shall be net of taxes payable
and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay
taxes, if any. 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 taxes. We
expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent
that our ordinary shares 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 $1,000,000 of proceeds held outside the trust account. We will use these funds primarily to identify
and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices,
plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and
material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes
to the extent the interest earned on the trust account is not sufficient to pay our taxes.
In 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 as may be required. Any such loans may 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 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 issued to our sponsor. The terms of such loans, 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.
We expect our primary liquidity requirements during that period
to include approximately $ for legal, accounting, due diligence, travel and other expenses in connection with any business
combinations; $ for legal and accounting fees related to regulatory reporting requirements; $75,000 for Nasdaq continued
listing fees; $ for independent director compensation; $ as a reserve for liquidation expenses and approximately $
for general working capital that will be used for miscellaneous expenses and reserves net of estimated interest income.
These amounts are estimates and may differ materially from our
actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing,
fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop”
provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies
or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although
we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity
from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined
based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such
funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for,
or conducting due diligence with respect to, prospective target businesses.
We do not believe we will need to raise additional funds following
this offering in order to meet the expenditures required for operating our business. However, if our estimates of the costs of
identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than
the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our 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.
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, 2020. Only in the event that we are deemed to be
a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, would we be required to
comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging
growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required
to comply with the independent registered public accounting firm attestation requirement.
Prior to the closing of this offering, we have not completed
an assessment, nor have our auditors tested our systems, of internal controls. We expect to assess the internal controls of our
target business or businesses prior to the
completion of our initial business combination and, if necessary,
to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system
of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy
of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have
internal controls that need improvement in areas such as:
| · | staffing for financial, accounting and external reporting areas, including segregation of duties; |
| · | reconciliation of accounts; |
| · | proper recording of expenses and liabilities in the period to which they relate; |
| · | evidence of internal review and approval of accounting transactions; |
| · | documentation of processes, assumptions and conclusions underlying significant estimates; and |
| · | documentation of accounting policies and procedures. |
Because it will take time, management involvement and perhaps
outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market
expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities,
particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also
take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s report on internal controls is complete,
we will retain our independent auditors to audit and render an opinion on such report when required by Section 404 of the Sarbanes-Oxley
Act. The independent auditors may identify additional issues concerning a target business’s internal controls while performing
their audit of internal control over financial reporting.
Quantitative and Qualitative Disclosures about Market Risk
The net proceeds of this offering and the sale of the private
placement warrants held in the trust account will be invested in U.S. government treasury bills with a maturity of 180 days or
less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment
Company Act. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest
rate risk.
Related Party Transactions
In June 2019, our sponsor purchased 7,187,500 founder shares
for an aggregate purchase price of $25,000, or $0.004 per share (assuming the over-allotment option is not exercised and the forfeiture by our sponsor of 937,500 founder shares). Our initial shareholders will collectively own 20%
of our issued and outstanding shares after this offering (assuming our initial shareholders do not purchase any units in this offering).
If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other
appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this offering
in such amount as to maintain the number of founder shares at 20% of our issued and outstanding ordinary shares upon the consummation
of this offering.
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 any of 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.
Our sponsor has agreed to loan us up to $250,000 under an unsecured
promissory note to be used for a portion of the expenses of this offering. As of June 11, 2019, we had borrowed $12,500 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 January 31, 2020 or the closing of
this offering. These loans will be repaid upon completion of this offering out of the $1,000,000 of offering proceeds that has
been allocated for the payment of offering expenses (other than underwriting commissions) 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. Any such loans may 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 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 issued to our sponsor. The terms of such loans, 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.
Our sponsor has committed to purchase an aggregate of 7,000,000
(or 7,750,000 if the underwriters’ over-allotment option is exercised in full) private placement warrants at a price of $1.00
per warrant ($7,000,000 in the aggregate or $7,750,000 in the aggregate if the underwriters’ 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 to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as provided herein.
Our sponsor will be permitted to transfer the private placement warrants held by it to certain permitted transferees, including
our officers and directors and other persons or entities affiliated with or related to them, but the transferees receiving such
securities will be subject to the same agreements with respect to such securities as our sponsor. Otherwise, these warrants will
not, subject to certain limited exceptions, be transferable or salable until 30 days after the completion of our 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 our sponsor or its permitted transferees for cash or on a cashless basis
and our sponsor and its permitted transferees will also have certain registration rights related to the private placement warrants,
as described below. 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.
Pursuant to a registration rights agreement that we will enter
into with our initial shareholders 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 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. However, the registration rights agreement provides that we will not permit any registration statement filed under
the Securities Act to become effective until the securities covered thereby are released from their lock-up restrictions, as described
herein. We will bear the costs and expenses of filing any such registration statements. See “Principal Shareholders—Registration
Rights.”
Off-Balance Sheet Arrangements; Commitments and Contractual
Obligations
As of June 11, 2019, 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.
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: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant
to Section 404 of the Sarbanes-Oxley Act; (2) 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; (3) comply with any requirement that may
be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional
information about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive
compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO’s
compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of
our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
Proposed
Business
We are a newly incorporated blank check company incorporated
as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this prospectus
as our initial business combination. To date, our efforts have been limited to organizational activities and activities related
to this offering. We have not selected any 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.
Our sponsor is an affiliate of Silver Spike Capital. Silver
Spike Capital is an asset management fund focused on the burgeoning cannabis and related health & wellness industries. Silver
Spike was formed in 2019 with an executive team consisting of seasoned investment professionals, many of whom have extensive experience
in emerging and frontier markets as well as cannabis industry investors and entrepreneurs with proven track records. With this
team, Silver Spike is positioning to become the leading institutional-quality asset manager in this nascent, fragmented sector.
While we may pursue a business combination target in any business,
industry or geographical location, we intend to focus our search for businesses in the cannabis industry that are compliant with
all applicable laws and regulations within the jurisdictions in which they are located or operate and, in particular, we will not
invest in, or consummate a business combination with, a target business that we determine has been operating, or whose business
plan is to operate, in violation of U.S. federal laws, including the U.S. Controlled Substances Act. The cannabis industry has
experienced significant growth over the last several years. With full federal legalization in Canada and 36 states in the United
States allowing for some type of legal use under state law, the cannabis industry is amongst the fastest growing industries in
the world. We believe that the normalization of cannabis and its many uses - both therapeutic and recreational - is creating a
rarely seen opportunity to invest in related businesses. At the same time, the cannabis industry is highly fragmented and subject
to a complex regulatory framework, creating significant barriers to entry. The cannabis-related investment space is currently dominated
by small funds which we believe lack both the capital and experience to see their investments through multiple rounds of funding.
We believe that there are several target businesses that could
benefit from our partnership and are compliant with all applicable laws and regulations within the jurisdictions in which they
are located or operate. In the United States, this would currently include non-plant touching businesses that support the functioning
of cannabis activity but are not directly related to cultivation, manufacturing, processing, branding, transportation, distribution,
storage or sale of cannabis and cannabis-based products. Another set of eligible targets in the U.S. would include hemp derived
CBD businesses that are compliant with the Farm Bill Act, which would include targets engaged in cultivation, manufacturing, processing,
branding, transportation, distribution, storage or sale of hemp-derived CBD. We may also consider companies pursuing an FDA track
for pharmaceutical applications and treatments that entail compounds found in cannabis. There are also a number of qualifying cannabis-related
licensed operators in industries outside of the United States. This includes companies currently operating in jurisdictions where
cannabis has been decriminalized for recreational use, such as Canada, Colombia and Uruguay. Globally, 19 countries have legalized
medical use and nearly 40 countries have decriminalized recreational use. Over the next 24 months, we believe that legislative
activity in certain jurisdictions will further broaden our opportunity set for eligible acquisitions.
The transition of the cannabis and derivative products industries
to a regulated and legal marketplace has been happening at a rapid pace over recent years. Many countries have or are contemplating
some form of legalized use, including Canada and the United States. For example, on June 28, 2018, the Marijuana Freedom and Opportunity
Act was introduced in the United States Senate, which would remove marijuana from the schedule of controlled substances under the
Controlled Substances Act and decriminalize its use. We believe that this momentum will continue to accelerate worldwide, generating
tremendous opportunity in the industry, with both broader legislative acceptance and an evolving regulatory environment. There
have already been hundreds of businesses launched across various sub-sectors of the cannabis industry, many of which are located
in Canada or the United States. These businesses have raised billions of dollars from investors in public and private markets;
including strategic investments from major multinational companies that are altering or broadening their core business focus. Many
of these businesses have valuations in excess of a billion dollars. However, the cannabis industry is still in its infancy.
In order to succeed under the new legislative and regulatory
frameworks, we believe that businesses will need strong management teams with deep operational expertise and financial acumen.
As this industry evolves from a nascent industry cycle, often
with high levels of return, we believe that investors will become more discerning and will focus on business models that can scale
profitably. Despite high profile recent investments, we believe the total quantum of invested capital in the space is scant relative
to other major industry sectors. As the industry evolves and legislative and regulatory hurdles are addressed, we anticipate an
institutionalization of capital investment, with reduced reliance on high net worth individuals, family offices and select hedge
funds. We believe that this will be manifested by new investors providing sources of liquidity that will resemble more mature markets,
including increased breadth of financial instruments across the capital structure.
We believe that the cannabis industry will continue to grow
at a rapid pace in the coming years – with the potential to reach several hundred billion dollars of sales within the next
ten years. Unlike other emerging industries, which have been driven by massive technological advances, cannabis has supported therapeutic
treatments for thousands of years across a variety of cultures. The evolution of public perception is being sustained by consumers
seeking cannabis-based treatments for a variety of health and wellness needs. We believe that there will be growth via the broader
adoption of cannabis for non-recreational use. Potential sources for additional growth include the disruption of a variety of health-related
market segments including pain management, sleep, skin care and cosmetics and anxiety, as well as many other applications that
are being explored.
Scott Gordon, our founder, is the founder and Chief Executive
Officer of Silver Spike Capital, a newly formed investment platform dedicated to the cannabis industry. Mr. Gordon began investing
in the cannabis industry in 2014 and in 2016 co-founded and became Chairman of Egg Rock Holdings, parent company of the Papa &
Barkley family of cannabis products with related subsidiary assets in manufacturing, processing, and logistics. Egg Rock Holdings
also is the parent company of Papa & Barkley Essentials, a hemp-derived CBD business based in Colorado. Mr. Gordon has spent
his career investing in emerging markets globally and has formed and managed a number of large global platforms. Prior to the formation
of Silver Spike Capital, Mr. Gordon was President of Fintech Advisory Inc., investment manager for a multibillion dollar family
office fund focused on long-term and opportunistic investments in emerging markets. Previously, Mr. Gordon held leadership positions
at several asset management firms including Marathon Asset Management, Caxton and Taconic Capital. Earlier in his career, Mr. Gordon
led the Global Special Situations Group at Bank of America, the Emerging Markets business at ING Capital and was a founding member
of the Emerging Markets business at JP Morgan.
Mr. Gordon is joined at Silver Spike by a number of investment
professionals who have experience spanning cannabis, consumer products, medical and scientific research and investment management.
See “Management” for additional information about our management team.
Business Strategy
Our business strategy is to identify and complete our initial
business combination with a target operating in the cannabis industry that is compliant with all applicable laws and regulations
within the jurisdictions in which it is located or operates. We believe that there is an opportunity to take advantage of a newly
emerging industry, with a variety of established operators seeking access to capital and managerial expertise. We intend to leverage
our team’s collective operating, technical, regulatory and legal expertise in cannabis to build a strong business with competitive
advantages to emerge as a leading public company in the space.
As the industry continues to transition to a new legislative
and regulatory framework, we believe that many companies will need a partner that can assist in providing a level of operational
and financial expertise to support their growth. Our team includes a variety of investment, operational and healthcare professionals
that will provide operating, technical, regulatory and legal expertise in cannabis to assist a target business access the public
markets. Our team consists of professionals who have decades of experience in capital markets globally, have extensive scientific
and medical knowledge of the plant and its many compounds and includes entrepreneurs and founders of consumer facing businesses.
Our acquisition plan is to leverage our management team’s
networks of potential transaction sources where we believe a combination of our management team’s industry relationships,
knowledge and experience could effect a positive transformation or augmentation of existing businesses or assets. Over the course
of their careers, the members of our management team have developed a broad network of contacts and corporate relationships that
we
believe will serve as a useful source of acquisition opportunities.
We plan to leverage relationships with management teams of public and private companies, investment professionals at private equity
firms and other financial sponsors, owners of private businesses, investment bankers, restructuring advisers, consultants, attorneys
and accountants, which we believe should provide us with a number of business combination opportunities.
Following the completion of this offering, the members of our
management team plan to communicate with their networks of relationships to articulate the parameters for our search for a target
business and a potential business combination and begin the process of pursuing and reviewing potentially interesting leads.
Acquisition Criteria
Consistent with our business strategy, we have identified the
following general, non-exclusive criteria and guidelines that we believe are important in evaluating prospective targets for our
initial business combination. We will use these criteria and guidelines in evaluating acquisition opportunities, but we may decide
to enter into our initial business combination with a target that does not meet one or more of these criteria and guidelines. We
expect to weigh potential upside from growth in the target business and an improved capital structure against any identified downside
risks. We intend to focus on target businesses that we believe:
| · | exhibit institutional-level operations and financial controls. We intend to seek a target in the cannabis space that
not only has a leading competitive position, but also has the underlying infrastructure and operations to build a public platform; |
| · | have durable competitive advantages that are differentiated in the sector. We intend to acquire an asset that not only
benefits from secular tailwinds in the industry, but also exhibit hard-to-replicate competitive advantages amongst its peers; |
| · | are fundamentally sound with consistent operational performance and free cash flow generation. We expect to target a
business that has historically exhibited profitability and strong cash flow generation. Our management team has a proven track
record accelerating growth of companies with strong past performance; |
| · | are at an inflection point, such as requiring additional capital to achieve a growth strategy. We intend to look for
targets that have clear opportunities for long-term sustainable growth, but which require our capital or expertise to achieve a
growth strategy; |
| · | have the potential to further improve their performance under our ownership. We intend to seek targets where we believe
we can improve company results by leveraging our transactional, financial, managerial and investment experience as well as our
extensive networks and insights. We believe our management team has the right skills and capabilities to enhance companies’
results and consolidate competitive positions in their sectors; |
| · | may benefit from capital markets access. We intend to seek a target that may benefit from being, or has the potential
to become, a public company with an increased public profile, enhanced corporate governance and increased access to a more diversified
pool of capital; and |
| · | exhibit unrecognized value and desirable returns on capital. We will look for targets that we believe have been undervalued
by the marketplace based on our analysis and due diligence review. |
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 criteria
and guidelines as well as other considerations, factors and criteria that our management may deem relevant. In the event that we
decide to enter into our initial business combination with a target business that does not meet the above criteria and guidelines,
we will disclose that the target business does not meet the above criteria and guidelines in our shareholder communications related
to our initial business combination, which, as discussed in this prospectus, would be in the form of proxy solicitation or tender
offer materials that we would file with the SEC.
Acquisition Process
We have not selected any 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.
Certain of our officers and directors presently have, 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 to such entity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business
combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however,
that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete
our initial business combination.
Initial Business Combination
The rules of Nasdaq require that our initial business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. We refer to this as the 80% fair market value test.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our
board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards
employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors
will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets.
The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide
public shareholders with our analysis of our satisfaction of the 80% fair market value test, as well as the basis for our determinations.
If our board is not able independently to determine the fair market value of the target business or businesses, 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. We do not currently intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination, although there is no restriction on our doing so.
We anticipate structuring our initial business combination so
that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the issued and outstanding
equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the
target or otherwise acquires a controlling interest in the target business 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 shareholders prior to our initial business combination
may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us
in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number
of new shares in exchange for all of the issued and outstanding capital stock or shares 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 shareholders
immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are
owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what
will be valued for purposes of the 80% fair market value test. If our 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 target businesses. Notwithstanding
the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80%
fair market value test.
Prior to the effectiveness of the registration statement of
which this prospectus forms a part, 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 completion of our initial business combination.
Emerging Growth Company Status and Other Corporate Information
We are an “emerging growth company,” as defined
in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups
Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited to,
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval
of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there
may be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
We will remain an emerging growth company until the earlier
of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we
have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which
means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal
year’s second fiscal quarter and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” shall have the meaning associated
with it in the JOBS Act.
Exempted companies are Cayman Islands companies wishing to conduct
business outside the Cayman Islands and, as such, are exempted from complying with certain provisions of the Companies Law. As
an exempted company, we have applied for and received a tax exemption undertaking from the Cayman Islands government that, in accordance
with Section 6 of the Tax Concessions Law (2018 Revision) of the Cayman Islands, for a period of 30 years from the date of the
undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations
shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which
is in the nature of estate duty or inheritance tax shall be payable (1) on or in respect of our shares, debentures or other obligations
or (2) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us
to our shareholders or a payment of principal or interest or other sums due under a debenture or other obligation of us.
We are a Cayman Islands exempted company incorporated on June
7, 2019. Our executive offices are located at 1114 6th Ave, 41st Floor New York, New York, 10036 and our telephone number is (212)
905-4923.
Status as a Public Company
We believe our structure will make us an attractive business
combination partner to target businesses. As an existing public company, we offer target businesses an alternative to the traditional
initial public offering through a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar
business combination. In this situation, the owners of the target business would exchange their shares or shares of stock in the
target business for our shares or for a combination of our shares and cash, allowing us to tailor the consideration to the specific
needs of the sellers. Although there are various costs and obligations associated with being a public company, we believe target
businesses will find this method a more certain and cost effective method to becoming a public company than the typical initial
public offering. In a typical initial public offering, there are additional expenses
incurred in marketing, road show and public reporting efforts
that may not be present to the same extent in connection with a business combination with us.
Furthermore, once a proposed business combination is completed,
the target business will have effectively become public, whereas an initial public offering is always subject to the underwriters’
ability to complete the offering, as well as general market conditions, which could delay or prevent the offering from occurring.
Once public, we believe the target business would then have greater access to capital and an additional means of providing management
incentives consistent with shareholders’ interests. It can offer further benefits by augmenting a company’s profile
among potential new customers and vendors and aid in attracting talented employees.
We are an “emerging growth company,” as defined
in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following
the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion,
or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held
by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter, and (2) the date on
which we have issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.
Financial Position
With funds available for a business combination initially in
the amount of $241,250,000 assuming no redemptions and after payment of $8,750,000 of deferred underwriting fees (or $277,437,500
assuming no redemptions and after payment of up to $10,062,500 of deferred underwriting fees if the underwriters’ over-allotment
option is exercised in full), we offer a target business a variety of options such as creating a liquidity event for its owners,
providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt
ratio. Because we are able to complete our 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 sale of the private placement warrants, our shares, debt or a combination
of these as the consideration to be paid in our initial business combination. We may seek to complete our initial business combination
with a company or business that may be financially unstable or in its early stages of development or growth, which would subject
us to the numerous risks inherent in such companies and businesses.
If our initial business combination is paid for using equity
or debt, 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 the redemption of our public shares, 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 have not selected any 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 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 the case of an initial business combination funded with assets
other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose
the terms of the financing and, only if required by law or we decide to do so for business or other reasons, we would seek shareholder
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.
Selection of a target business and structuring of our initial
business combination
The rules of Nasdaq require that our initial business combination
occur with one or more target businesses that together have an aggregate fair market value of at least 80% 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. We refer to this as the 80% fair market value test.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). Even though our
board of directors will rely on generally accepted standards, our board of directors will have discretion to select the standards
employed. In addition, the application of the standards generally involves a substantial degree of judgment. Accordingly, investors
will be relying on the business judgment of the board of directors in evaluating the fair market value of the target or targets.
The proxy solicitation materials or tender offer documents used by us in connection with any proposed transaction will provide
public shareholders with our analysis of our satisfaction of the 80% fair market value test, as well as the basis for our determinations.
If our board is not able independently to determine the fair market value of the target business or businesses, 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. We do not currently intend to purchase multiple businesses in unrelated industries
in conjunction with our initial business combination, although there is no restriction on our doing so.
We anticipate structuring our initial business combination so
that the post-transaction company in which our public shareholders own shares will own or acquire 100% of the issued and outstanding
equity interests or assets of the target business or businesses. We may, however, structure our initial business combination such
that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business in order to
meet certain objectives of the target management team or shareholders or for other reasons, but we will only complete such business
combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the
target or otherwise acquires a controlling interest in the target business 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 shareholders prior to our initial business combination
may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us
in our initial business combination transaction. For example, we could pursue a transaction in which we issue a substantial number
of new shares in exchange for all of the issued and outstanding capital stock or shares 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 shareholders
immediately prior to our initial business combination could own less than a majority of our issued and outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are
owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what
will be valued for purposes of the 80% fair market value test. If our 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 target businesses. Notwithstanding
the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80%
fair market value test.
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.
In evaluating a prospective target business, we expect to conduct
a thorough due diligence review which will encompass, among other things, meetings with incumbent management and employees, document
reviews, inspection of facilities, as well as a review of financial, operational, legal and other information, which will be made
available to us.
The time required to select and evaluate a target business and
to structure and complete our initial business combination, and the costs associated with this process, are not currently ascertainable
with any degree of certainty. Any costs incurred with respect to the identification and evaluation of a prospective target business
with which our 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. By completing our initial business combination with only a single entity, our lack of diversification may:
| · | subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse
impact on the particular industry in which we operate after our initial business combination; and |
| · | cause us to depend on the marketing and sale of a single product or limited number of products or services. |
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’s management may not prove to be correct. In addition, the future management may not
have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. While it is possible that one or
more of our directors will remain associated in some capacity with us following our 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 our 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.
Shareholders may not have the ability to approve our initial
business combination
We may conduct redemptions without a shareholder vote pursuant
to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association.
However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may
decide to seek shareholder approval for business or other reasons.
Under Nasdaq’s listing rules, shareholder approval would
be required for our initial business combination if, for example:
| · | we issue ordinary shares that will be equal to or in excess of 20% of the number of shares or voting power of our ordinary
shares then issued and outstanding (other than in a public offering); |
| · | any of our directors, officers or substantial shareholders (as defined by Nasdaq rules) has a 5% or greater interest (or such
persons collectively have a 10% or greater interest), directly or indirectly, in the target business or assets to be acquired or
otherwise and the present or potential issuance of ordinary shares could result in an increase in outstanding common shares or
voting power of 5% or more; or |
| · | the issuance or potential issuance of ordinary shares will result in our undergoing a change of control. |
The Companies Law and Cayman Islands law do not currently require,
and we are not aware of any other applicable law that will require, shareholder approval of our initial business combination.
Permitted purchases of our securities
In the event we seek shareholder approval of our initial business
combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer
rules, our initial shareholders, directors, officers, advisors or any of their affiliates may purchase public 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 or duty to do so. There is no limit on the number of
shares or warrants such persons may purchase, or any restriction on the price that they may pay. Any such price per share may be
different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our
initial business combination. However, such persons have no current commitments, plans or intentions to engage in such transactions
and have not formulated any terms or conditions for any such transactions. In the event our initial shareholders, directors, officers,
advisors or any of their affiliates determine to make any such purchases at the time of a shareholder vote relating to our initial
business combination, such purchases could have the effect of influencing the vote necessary to approve such transaction. None
of the funds in the trust account will be used to purchase public shares or public warrants in such transactions. If they engage
in such transactions, they will be restricted from making any such purchases when they are in possession of any material non-public
information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. Subsequent
to the consummation of this offering, we will adopt an insider trading policy which will require insiders to (1) refrain from purchasing
securities during certain blackout periods and when they are in possession of any material non-public information and (2) to clear
certain trades prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule
10b5-1 plan, as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases.
Depending on such circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such
a plan is not necessary.
In the event that our sponsor, directors, officers, advisors
or any of their affiliates purchase public shares in privately negotiated transactions from public shareholders who have already
elected to exercise their redemption rights or submitted a proxy to vote against our initial business combination, such selling
shareholders would be required to revoke their prior elections to redeem their shares and any proxy to vote against our initial
business combination. We do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the
tender offer rules under the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange
Act; however, if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers
will comply with such rules.
The purpose of such purchases could be to (1) vote such shares
in favor of the business combination and thereby increase the likelihood of obtaining shareholder approval of our initial business
combination or (2) to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or
a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise
not be met. This may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made, the public “float”
of our securities 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, advisors and/or any of their
affiliates anticipate that they may identify the shareholders with whom our sponsor, officers, directors, advisors or any of their
affiliates may pursue privately negotiated purchases by either the shareholders contacting us directly or by our receipt of redemption
requests submitted by shareholders following our mailing of proxy materials in connection with our initial business combination.
To the extent that our sponsor, officers, directors, advisors or any of their affiliates enter into a private purchase, they would
identify and contact only potential selling shareholders 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. Such persons would select the shareholders from whom
to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such person
may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per
share a public shareholder would receive if it elected to redeem its shares in connection with our initial business combination.
Our sponsor, officers, directors, advisors or any of their affiliates will purchase shares only 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 any
of their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be made only 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 any of their affiliates will be restricted
from making purchases of ordinary shares if such purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act.
Redemption rights for public shareholders upon completion
of our initial business combination
We will provide our public shareholders with the opportunity
to redeem all or a portion of their Class A ordinary 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 the initial business combination, including interest (which interest shall be net of taxes payable), divided by
the number of then issued and outstanding public shares, subject to the limitations described herein. At the completion of our
initial business combination, we will be required to purchase any Class A ordinary shares properly delivered for redemption and
not withdrawn. The amount in the trust account is initially anticipated to be $10.00 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 initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed
to waive their redemption rights with respect to their founder shares and any public shares held by them in connection with the
completion of our initial business combination. Our directors and officers have also entered into the letter agreement, imposing
similar obligations on them with respect to public shares acquired by them, if any. Permitted transferees of our initial shareholders,
officers or directors will be subject to the same obligations.
Manner of Conducting Redemptions
We will provide our public shareholders with the opportunity
to redeem all or a portion of their public shares upon the completion of our initial business combination either (1) in connection
with a shareholder meeting called to approve the business combination or (2) by means of a tender offer. The decision as to whether
we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by us, solely in our
discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction
would require us to seek shareholder approval under applicable law or stock exchange listing requirement. Asset acquisitions and
share purchases would not typically require shareholder approval while direct mergers with our company where we do not survive,
amalgamations pursuant to a scheme of arrangement and any transactions where we issue more than 20% of our issued and outstanding
ordinary shares or seek to amend our amended and restated memorandum and articles of association would typically require shareholder
approval. We intend to conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC unless shareholder
approval is required by applicable law or stock exchange listing requirement or we choose to seek shareholder approval for business
or other reasons.
If a shareholder vote is not required and we do not decide to
hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum and articles of
association:
| · | 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. |
Upon the public announcement of our initial business combination,
if we elect to conduct redemptions pursuant to the tender offer rules, we and our sponsor will terminate any plan established in
accordance with Rule 10b5-1 to purchase our Class A ordinary shares in the open market, in order to comply with Rule 14e-5 under
the Exchange Act.
In the event we conduct redemptions pursuant to the tender offer
rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a) under the Exchange
Act, and we will not be permitted to complete our initial business combination until the expiration of the tender offer period.
In addition, the tender offer will be conditioned on public shareholders not tendering more than a specified number of public shares,
which number will be based on the requirement that we may not redeem public shares in an amount that would cause our net tangible
assets, after payment of the deferred underwriting commission, to be less than $5,000,001 upon completion of our initial business
combination (so that we do not then become subject to the SEC’s “penny stock” rules), or any greater net tangible
asset or cash requirement that may be contained in the agreement relating to our initial business combination. If public shareholders
tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete such initial business combination.
If, however, shareholder approval of the transaction is required
by applicable law or stock exchange listing requirement, or we decide to obtain shareholder approval for business or other reasons,
we will, pursuant to our amended and restated memorandum and articles of association:
| · | 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. |
We expect that a final proxy statement would be mailed to public
shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available
to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction
with a proxy solicitation. Although we are not required to do so, we currently intend to comply with the substantive and procedural
requirements of Regulation 14A in connection with any shareholder vote even if we are not able to maintain our Nasdaq listing or
Exchange Act registration.
In the event that we seek shareholder approval of our initial
business combination, we will distribute proxy materials and, in connection therewith, provide our public shareholders with the
redemption rights described above upon completion of the initial business combination.
If we seek shareholder approval, we will complete our initial
business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of
a majority of the shareholders who attend and vote at a general meeting of the company. In such case, pursuant to the terms of
a letter agreement entered into with us, our initial shareholders have agreed (and their permitted transferees will agree) to vote
their founder shares and any public shares held by them in favor of our initial business combination. Our directors and officers
also have agreed to vote in favor of our initial business combination with respect to public shares acquired by them, if any. We
expect that at the time of any shareholder vote relating to our initial business combination, our initial shareholders and their
permitted transferees will own at least 20% of our issued and outstanding ordinary shares entitled to vote thereon. Each public
shareholder may elect to redeem their public shares without voting and, if they do vote, irrespective of whether they vote for
or against the proposed business combination. In addition, our initial shareholders have entered into a letter agreement with us,
pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public shares
held by them in connection with the completion of a business combination. Our directors and officers have also entered into the
letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any.
Our amended and restated memorandum and articles of association
will provide that in no event will we redeem our public shares in an amount that would cause our net tangible assets, after payment
of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination (so that
we do not then become subject to the SEC’s “penny stock” rules). Redemptions of our public shares may also be
subject to a higher net tangible asset test or cash requirement pursuant to an agreement relating to our initial business combination.
For example, the proposed business combination may require: (1) cash consideration to be paid to the target or its owners; (2)
cash to be transferred to the target for working capital or other general corporate purposes; or (3) the retention of cash to satisfy
other conditions in accordance with the terms of the proposed business combination. In the event the aggregate cash consideration
we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy
cash conditions pursuant to the terms of the proposed business combination exceed the aggregate amount of cash available to us,
we will not complete such business
combination or redeem any shares in connection therewith, and
all public shares submitted for redemption will be returned to the holders thereof.
Limitation on redemption upon completion of our initial
business combination if we seek shareholder approval
Notwithstanding the foregoing redemption rights, if we seek
shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that
a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its
shares with respect to Excess Shares without our prior consent. We believe this restriction will discourage shareholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against
a proposed business combination as a means to force us or our sponsor or its affiliates to purchase their shares at a significant
premium to the then-current market price or on other undesirable terms. Absent this provision, a public shareholder 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 sponsor or its affiliates at a premium to the then-current market price or on other undesirable
terms. By limiting our shareholders’ 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 shareholders to unreasonably attempt to block our ability to complete our initial
business combination, particularly in connection with a business combination with a target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. However, we would not be restricting our shareholders’ ability
to vote all of their shares (including Excess Shares) for or against our initial business combination.
Tendering share certificates in connection with a tender
offer or redemption rights
We may require our public shareholders seeking to exercise their
redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates
to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up
to two business days prior to the vote on the proposal to approve our 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 (Deposit/Withdrawal
At Custodian) System at the holder’s option, rather than simply voting against the initial business combination. 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 shareholders to satisfy such delivery requirements. Accordingly, a public
shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to
two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if
it wishes to seek to exercise its redemption rights. Pursuant to the tender offer rules, the tender offer period will be not less
than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at
least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders
well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation.
Given the relatively short exercise period, it is advisable for shareholders 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 shareholders’ vote on an initial business combination, and a holder could simply
vote against a proposed business combination and check a box on the proxy card indicating such holder was seeking to exercise his
or her redemption rights. After the business combination was approved, the company would contact such shareholder to arrange for
him or her to deliver his or her certificate to verify ownership. As a result, the shareholder
then had an “option window” after the completion
of our initial business combination during which he or she could monitor the price of the company’s shares 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 shareholders were aware they needed
to commit before the shareholder meeting, would become “option” rights surviving past the completion of our 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 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 tender offer materials or the date of the shareholder meeting set forth in our proxy
materials, as applicable. Furthermore, if a holder of a public share delivered its certificate in connection with an election of
redemption rights and subsequently decides prior to the applicable date not to elect to exercise such rights, such holder may simply
request that the transfer agent return the certificate (physically or electronically). It is anticipated that the funds to be distributed
to holders of our public shares electing to redeem their shares will be distributed promptly after the completion of our initial
business combination.
If our initial business combination is not approved or completed
for any reason, then our public shareholders 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 business combination is not completed,
we may continue to try to complete a business combination with a different target until 24 months from the closing of this offering.
Redemption of public shares and liquidation if no initial
business combination
Our sponsor, officers and directors have agreed that we will
have only 24 months from the closing of this offering to complete our initial business combination. If we are unable to complete
our initial business combination within such 24-month period, we will: (1) cease all operations except for the purpose of winding
up; (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less up to $100,000
of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued
and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case
to our obligations under Cayman Islands 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 24-month time period.
Our initial shareholders 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 their
founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering. However,
if our initial shareholders acquire public shares, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our initial business combination within the allotted 24-month time frame.
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 memorandum and articles of association
(A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business
combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combination activity, unless we provide our public shareholders with the opportunity to redeem their
public shares 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
issued and outstanding public shares. However, we may not redeem our public shares in an amount that would cause our net tangible
assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business
combination (so that we do not then become subject to the SEC’s “penny stock” rules).
We expect that all costs and expenses associated with implementing
our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the $1,000,000 of proceeds
held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. However, if
those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent
that there is any interest accrued in the trust account not required to pay taxes, 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 shareholders upon our dissolution
would be approximately $10.00. The proceeds deposited in the trust account could, however, become subject to the claims of our
creditors which would have higher priority than the claims of our public shareholders. We cannot assure you that the actual per-share
redemption amount received by shareholders will not be substantially less than $10.00. While we intend to pay such amounts, if
any, we cannot assure you that we will have funds sufficient to pay or provide for all creditors’ claims.
Although we will seek to have all vendors, service providers
(other than our independent auditors), prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of
our public shareholders, 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 enter into an agreement with a third party that has not executed a waiver
only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver. In
addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or
arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any
reason. Upon redemption of our public shares, if we are unable to complete our initial business combination within the prescribed
time frame, 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. Our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our
independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amount of funds in the trust account to below (1) $10.00 per public share or
(2) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account, due to
reductions in the value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except
as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as
to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities under
the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then our sponsor
will not be responsible to the extent of any liability for such third-party claims. We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are securities
of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not asked our sponsor to reserve
for such obligations. None of our other officers will indemnify us for claims by third parties including, without limitation, claims
by vendors and prospective target businesses.
In the event that the proceeds in the trust account are reduced
below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the date of the liquidation
of the trust account, due to reductions in the value of the trust assets, in each case net of the 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 in any particular instance. Accordingly, we cannot assure you that
due to claims of creditors the actual value of the per-share redemption price will not be substantially less than $10.00 per share.
We will seek to reduce the possibility that our sponsor will
have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors, service providers (other than
our independent auditors), prospective target businesses or other entities with which we do business execute agreements with us
waiving any right, title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be
liable as to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities
under the Securities Act. We will have access to up to $1,000,000 from the proceeds of this offering and the sale of the private
placement warrants, with which to pay any such potential claims (including costs and expenses incurred in connection with our liquidation,
currently estimated to be no more than approximately $100,000). In the event that we liquidate and it is subsequently determined
that the reserve for claims and liabilities is insufficient, shareholders 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 $1,000,000, 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 $1,000,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
If we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable insolvency law, and
may be included in our insolvency estate and subject to the claims of third parties with priority over the claims of our shareholders.
To the extent any insolvency claims deplete the trust account, we cannot assure you we will be able to return $10.00 per share
to our public shareholders. Additionally, if we file a winding-up or bankruptcy petition or an involuntary winding-up or bankruptcy
petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable
debtor/creditor and/or insolvency laws as a voidable performance. As a result, a bankruptcy court could seek to recover some or
all amounts received by our shareholders. Furthermore, our board may be viewed as having breached its fiduciary duty to our creditors
and/or may have acted in bad faith, and thereby exposing itself and our company to claims of punitive damages, by paying public
shareholders from the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought
against us for these reasons.
Our public shareholders will be entitled to receive funds from
the trust account only upon the earliest to occur of: (1) the completion of our initial business combination, and then only in
connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described
herein, (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and
restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public
shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect
to any other provision relating to shareholders’ rights or pre-initial business combination activity and (3) the redemption
of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering,
subject to applicable law and as further described herein. In no other circumstances will a shareholder have any right or interest
of any kind to or in the trust account. In the event we seek shareholder approval in connection with our initial business combination,
a shareholder’s voting in connection with our initial business combination alone will not result in a shareholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such shareholder must have also exercised its
redemption rights described above.
Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association
will contain certain requirements and restrictions relating to this offering that will apply to us until the completion of our
initial business combination. Our amended and restated memorandum and articles of association contains a provision which provides
that, if we seek to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing
of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from
the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business
combination activity, we will provide public shareholders with the opportunity to redeem their public shares in connection with
any such amendment. Specifically, our amended and restated memorandum and articles of association will provide, among other things,
that:
| · | prior to the completion of our initial business combination, we shall either (1) seek shareholder approval of our initial business
combination at a meeting called for such purpose at which public shareholders may elect to redeem their public shares without voting,
and if they do vote, irrespective of whether they vote for or against the proposed business combination, or (2) provide our
public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business
combination by means of a tender offer (and thereby avoid the need for a shareholder vote), in each in cash, for an amount payable
in cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the completion of our
initial business combination, including interest (which interest shall be net of taxes payable), divided by the number of then
issued and outstanding public shares, subject to the limitations described herein; |
| · | we will consummate our initial business combination only if we have net tangible assets, after payment of the deferred underwriting
commissions, of at least $5,000,001 upon completion of our initial business combination and, solely if we seek shareholder approval,
a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination; |
| · | if our initial business combination is not consummated within 24 months from the closing of this offering, then our existence
will terminate and we will distribute all amounts in the trust account; and |
| · | prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (1)
receive funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or (b)
to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate
a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions. |
These provisions cannot be amended without the approval of holders
of at least two-thirds of our ordinary shares. In the event we seek shareholder approval in connection with our initial business
combination, our amended and restated memorandum and articles of association will provide that we may consummate our initial business
combination only if approved by a majority of the ordinary shares voted by our shareholders at a duly held shareholders meeting.
Additionally, our amended and restated memorandum and articles
of association provides that, prior to our initial business combination, only holders of our founder shares will have the right
to vote on the election of directors and that holders of a majority of our founder shares may remove a member of the board of directors
for any reason. These provisions of our amended and restated memorandum and articles of association may only be amended by a special
resolution passed by at least 90% of our ordinary shares voting in a general meeting. With respect to any other matter submitted
to a vote of our shareholders, including any vote in connection with our initial business combination, except as required by law,
holders of our founder shares and holders of our public shares will vote together as a single class, with each share entitling
the holder to one 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
are unable to complete our initial business combination within 24 months from the closing of this offering.
| |
Redemptions
in Connection with our Initial Business Combination
|
Other
Permitted Purchases of Public Shares by our Affiliates
|
Redemptions
if we fail to Complete an Initial Business Combination
|
| Calculation of redemption price |
Redemptions at the time of our initial business combination may be made pursuant to a tender offer or in connection with a shareholder vote. The redemption price will be the same whether we |
If we seek shareholder approval of our initial business combination, our sponsor, directors, officers, advisors or any of their affiliates may purchase shares in privately negotiated transactions or |
If we are unable to complete our initial business combination within 24 months from the closing of this offering, we will redeem all public shares at a per-share price, payable in cash, equal to |
| |
Redemptions
in Connection with our Initial Business Combination
|
Other
Permitted Purchases of Public Shares by our Affiliates
|
Redemptions
if we fail to Complete an Initial Business Combination
|
| |
conduct redemptions pursuant to a tender offer or in connection with a shareholder vote. In either case, our public shareholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to be $10.00 per share), including interest (which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, subject to the limitation that no redemptions will take place if all of the redemptions would cause our net tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial business combination and any limitations (including, but not limited to, cash requirements) agreed to in connection with the negotiation of terms of a proposed business combination. |
in the open market either prior to or following the completion of our initial business combination. Such purchases will be prohibited except to the extent they are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. None of the funds in the trust account will be used to purchase shares in such transactions. |
the aggregate amount then on deposit in the trust account (which is initially anticipated to be $10.00 per share), including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares. |
| Impact to remaining shareholders |
The redemptions in connection with our initial business combination will reduce the book value per share for our remaining shareholders, who will bear the burden of the deferred underwriting commissions and interest withdrawn in order to pay taxes (to the extent not paid from amounts accrued as interest on the funds held in the trust account). |
If the permitted purchases described above are made, there will be no impact to our remaining shareholders because the purchase price would not be paid by us. |
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 shareholders, who will be our only remaining shareholders after such redemptions. |
Comparison of This Offering to Those of Blank Check Companies
Subject to Rule 419
The following table compares the terms of this offering to the
terms of an offering by a blank check company subject to the provisions of Rule 419. This comparison assumes that the gross proceeds,
underwriting commissions and underwriting expenses of our offering would be identical to those of an offering undertaken by a company
subject to Rule 419, and that the underwriters will not exercise their over-allotment option. None of the provisions of Rule 419
apply to our offering.
| |
Terms
of Our Offering
|
Terms
Under a Rule 419 Offering
|
| Escrow of offering proceeds |
$250,000,000 of the net proceeds of this offering and the sale of the private placement warrants will be deposited into a U.S.-based trust account at , with acting as trustee |
Approximately $212,625,000 of the offering proceeds, representing the gross proceeds of this offering less allowable underwriting commissions, expenses and company deductions under Rule 419, would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests in the account. |
| Investment of net proceeds |
$250,000,000 of the net offering proceeds and the sale of the private placement warrants held in trust will be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. |
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. |
| Receipt of interest on escrowed funds |
Interest on proceeds from the trust account to be paid to shareholders is reduced by (1) any taxes paid or payable and (2) 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. |
Interest on funds in escrow account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection with our completion of a business combination. |
| Limitation on fair value or net assets of target business |
Our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of 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. Notwithstanding the foregoing, if we are not then listed on Nasdaq for |
The fair value or net assets of a target business must represent at least 80% of the maximum offering proceeds. |
| |
Terms
of Our Offering
|
Terms
Under a Rule 419 Offering
|
| |
whatever reason, we would no longer be required to meet the foregoing 80% fair market value test. |
|
| Trading of securities issued |
The units will begin trading on or promptly after the date of this prospectus. The Class A ordinary shares and warrants constituting the units will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse Securities (USA) LLC 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. 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 |
No trading of the units or the underlying Class A ordinary shares and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account. |
| Exercise of the warrants |
The warrants cannot be exercised until the later of 30 days after the completion of our initial business combination or 12 months from the closing of this offering. |
The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account. |
| Election to remain an investor |
We will provide our public shareholders 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 completion of our initial business combination, including interest, which interest shall be net of taxes payable, upon the completion of our initial business combination, subject to the limitations described herein. We may not be required by applicable law or stock exchange rules to hold a shareholder vote. If we are not required by applicable law or stock exchange rules and do not otherwise decide to hold a shareholder vote, we will, pursuant to our amended and restated memorandum and articles of association, conduct the redemptions |
A prospectus containing information pertaining to the business combination required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of a post-effective amendment to the company’s registration statement, to decide if he, she or it elects to remain a shareholder of the company or require the return of his, her or its investment. If the company has not received the notification by the end of the 45th business day, funds and interest or dividends, if any, held in the trust or escrow account are automatically returned to the shareholder. Unless a sufficient |
| |
Terms
of Our Offering
|
Terms
Under a Rule 419 Offering
|
| |
pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules. If, however, we hold a shareholder vote, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Pursuant to the tender offer rules, the tender offer period will be not less than 20 business days and, in the case of a shareholder vote, a final proxy statement would be mailed to public shareholders at least 10 days prior to the shareholder vote. However, we expect that a draft proxy statement would be made available to such shareholders well in advance of such time, providing additional notice of redemption if we conduct redemptions in conjunction with a proxy solicitation. If we seek shareholder approval, we will complete our initial business combination only if we receive an ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the company. Additionally, each public shareholder may elect to redeem its public shares without voting and, if they do vote, irrespective of whether they vote for or against the proposed business combination. |
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. |
| Business combination deadline |
If we are unable to complete an initial business combination within 24 months from the closing of this offering, we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem 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 (less up to $100,000 of interest to pay dissolution expenses and which |
If an acquisition has not been completed within 18 months after the effective date of the company’s registration statement, funds held in the trust or escrow account are returned to investors. |
| |
Terms
of Our Offering
|
Terms
Under a Rule 419 Offering
|
| |
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any) and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. |
|
| Release of funds |
Except with respect to interest earned on the funds held in the trust account that may be released to us to pay our taxes, if any, the funds held in the trust account will not be released from the trust account until the earliest to occur of: (1) the completion of our initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of our public shares if we are unable to complete our initial business combination within 24 months from the closing of this offering, subject to applicable law. |
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. |
| Limitation on redemption rights of shareholders holding more than 15% of the shares sold in this offering if we hold a shareholder vote |
If we seek shareholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association will provide that a public shareholder, together with any |
Most blank check companies provide no restrictions on the ability of shareholders to redeem shares based on the number of shares held by such shareholders in connection with an initial business combination. |
| |
Terms
of Our Offering
|
Terms
Under a Rule 419 Offering
|
| |
affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect Excess Shares (more than an aggregate of 15% of the shares sold in this offering), without our prior consent. Our public shareholders’ inability to 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 Excess Shares in open market transactions |
|
| Tendering share certificates in connection with a tender offer or redemption rights |
We may require our public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents or proxy materials mailed to such holders, or up to two business days prior to the vote on the proposal to approve our 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 (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 shareholders to satisfy such delivery requirements. Accordingly, a public shareholder would have from the time we send out our tender offer materials until the close of the tender offer period, or up to two days prior to the vote on the business combination if we distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights. |
In order to perfect redemption rights in connection with their business combinations, holders could vote against a proposed 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 shareholders to arrange for them to deliver their certificate to verify ownership. |
Competition
We expect to encounter intense competition from other entities
having a business objective similar to ours, including private investors (which may be individuals or investment partnerships),
other blank check companies and other entities, domestic and international, competing for the types of businesses we intend to
acquire. Many of these individuals and entities are well established and have extensive experience in identifying and effecting,
directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors
possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will
be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous target businesses
we could potentially acquire with the net proceeds of this offering and the sale of the private placement warrants, our ability
to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial
resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, in the event we seek shareholder approval of our initial business combination and we are obligated to pay cash for
our Class A ordinary shares, it will potentially reduce the resources available to us for our initial business combination. Any
of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination.
Conflicts of Interest
All of our executive officers and certain of our directors have
or may have fiduciary and contractual duties to certain companies in which they have invested. These entities may compete with
us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing it.
However, we do not expect these duties to present a significant conflict of interest with our search for an initial business combination.
Certain of our officers and directors presently have, 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 to such entity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business
combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however,
that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete
our initial business combination.
Indemnity
Our sponsor has agreed that it will be liable to us if and to
the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a
prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the
trust account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the trust account as of the
date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest
which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek
access to the trust account and except as to any claims under our indemnity of the underwriters of this offering against certain
liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. We have
not independently verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s
only assets are securities of our company and, therefore, our sponsor may not be able to satisfy those obligations. We have not
asked our sponsor to reserve for such obligations.
Facilities
We currently maintain our executive offices at 1114 6th Ave,
41st Floor New York, New York, 10036. We consider our current office space adequate for our current operations.
Employees
We currently have four executive officers and do not intend
to have any full-time employees prior to the completion of our initial business combination. 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 such person will devote in any time period will vary based on whether a target business has been selected
for our initial business combination and the current stage of the business combination process.
Periodic Reporting and Financial Information
We will register our units, Class A ordinary shares and warrants
under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly and current reports
with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will contain financial statements audited
and reported on by our independent registered public auditors.
We will provide shareholders with audited financial
statements of the prospective target business as part of the tender offer materials or proxy solicitation materials sent to
shareholders to assist them in assessing the target business. These financial statements may be required to be prepared in
accordance with, or be reconciled to, U.S. GAAP or IFRS, depending on the circumstances and the historical financial
statements may be required to be audited in accordance with PCAOB standards. These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time
for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame. 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, 2020 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 business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
adequacy of their internal controls. The development of the internal controls of any such entity to achieve compliance with the
Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
Prior to the effectiveness of the registration statement of
which this prospectus forms a part, 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 completion of our initial business combination.
We are an “emerging growth company,” as defined
in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions
from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute
payments not previously approved. If some investors find our securities less attractive as a result, there may be a less active
trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107 of the JOBS Act also provides that
an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of
the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company”
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend
to take advantage of the benefits of this extended transition period.
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 ordinary shares that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal
year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in non-convertible debt securities
during the prior three-year period. References herein to “emerging growth company” shall 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 ordinary shares held by non-affiliates exceeds $250
million as of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100 million during such
completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the end of
that year’s second fiscal quarter.
Legal Proceedings
There is no material litigation, arbitration or governmental
proceeding currently pending against us or any members of our management team in their capacity as such, and we and the members
of our management team have not been subject to any such proceeding in the 12 months preceding the date of this prospectus.
Management
Directors, Director Nominees and Executive Officers
|
Name
|
Age
|
Title
|
| Scott Gordon |
57 |
Chief Executive Officer and Chairman |
| William Healy |
56 |
President and Director |
| Greg Gentile |
42 |
Chief Financial Officer |
| Mohammed Grimeh |
52 |
Chief Operating Officer |
| |
|
Director Nominee |
| |
|
Director Nominee |
| |
|
Director Nominee |
Our directors, director nominees and executive officers are
as follows:
Scott Gordon has been the Chairman of our board
of directors and has served as our Chief Executive Officer since our inception. Since 2016, Mr. Gordon has been the co-founder
and Chairman of Egg Rock Holdings, parent company of the Papa & Barkley family of cannabis products with related subsidiary
assets in manufacturing, processing, and logistics. Egg Rock Holdings also is the parent company of Papa & Barkley Essentials,
a hemp-derived CBD business based in Colorado. From 2016 to 2018, Mr. Gordon was also President of Fintech Advisory Inc., investment
manager for a multibillion dollar family office fund focused on long-term and opportunistic investments in emerging markets. From
late 2013 to 2016, Mr. Gordon served as a Portfolio Manager at Taconic Capital Advisors, a multi-strategy investment firm. Prior
to joining Taconic, Mr. Gordon was a Partner and Portfolio Manager at Caxton Associates from 2009 to 2012. He was also a Senior
Managing Director and Head of Emerging Markets at Marathon Asset Management from 2007 to 2009. Earlier in his career, Mr. Gordon
held leadership positions at Bank of America and ING Capital. Mr. Gordon was a founding member of the Emerging Markets business
at JP Morgan where he worked upon graduating from Bowdoin College in 1983. We believe Mr. Gordon’s experience in emerging
markets and in the cannabis sector make him well qualified to serve as a member of our board of directors.
William Healy has been a member of our board of
directors and has served as our President since our inception. Since 1986, Mr. Healy has advised and covered institutional clients
in a variety of roles spanning corporate finance, investment management, and investment banking in London, Brazil, and New York.
From 2018 to May 2019, he was President of Pantera Capital Management, an investment management company. From 1998 to 2016, Mr.
Healy managed several hedge fund and private equity dedicated institutional sales teams at Deutsche Bank and the firm’s wealth
and asset management division. He began his career with The Chase Manhattan Bank based in London, Brazil, and New York where he
advised multinational corporations on cross-border funding of their Latin America-domiciled operations. From 1993 to 1998, he formed
and managed the ING Barings emerging markets institutional debt sales team where he covered clients and often traveled to Latin
America, Europe, and Asia to structure, price, and pre-market many of the firm’s capital markets transactions. Mr. Healy
received a BA, International Business from The George Washington University, Washington DC. He is multi-lingual (English, Spanish,
and Portuguese) and a Chartered Alternative Investment Analyst Association (CAIA) member. We believe Mr. Healy’s experience
as an investment professional make him well qualified to serve as a member of our board of directors.
Gregory M. Gentile has served as our Chief Financial
Officer since our inception. From 2010 to 2018, Mr. Gentile was Chief Executive Officer of GMG Investment Advisors, LLC, an investment
management company. From 2008 to 2009, Mr. Gentile served as Managing Director of Barclays Capital, an investment bank. Prior to
joining Barclays Capital, Mr. Gentile was a Managing Director at Lehman Brothers, where he was employed from 1997 until 2008. Mr.
Gentile received a bachelor’s degree in management from the Massachusetts Institute of Technology, where he graduated in
1997.
Mohammed Grimeh has served as our Chief Operating
Officer since our inception. From 2016 to 2018, Mr. Grimeh was deputy Global Head Fixed Income at Millennium Management, a global
Alternative Asset Manager based in New York. From 2009 to 2016, Mr. Grimeh was Managing Director and head of Global Markets for
Standard Chartered Bank, Americas. From 1998 to 2008, Mr. Grimeh was at Lehman Brothers where he held various roles including managing
director and global head Emerging Markets. Prior to that, he was aa Managing Director at ING
Barings from 1993 to 1998. He started his career at Societe
Generale, a French Bank in 1990 and moved in 1992 to London to join Westpac banking Corporation. Mr. Grimeh graduated from Ecole
Centrale in Paris in 1990.
In addition to our directors, director nominees and executive
officers, the following individuals will be advising us in making our initial business combination:
Rob Josephson has served as an investment consultant
since our inception. From October 2017 to present Mr. Josephson has acted as CEO of Seed Capital, a merchant bank. From January
2014 to October 2017 Mr. Josephson acted as financial consultant to various companies in the Cannabis industry including, Cronos
Group, WeedMd, Lord Jones, Lune Rouge, and DNA Genetics. Mr. Josephson holds a Bachelor of Arts degree from the University of Western
Ontario, where he graduated in 1985.
Number, Terms of Office and Election of Officers and Directors
Upon the effectiveness of the registration statement of which
this prospectus forms a part, we expect that our board of directors will consist of five members. Our board of directors is divided
into two classes with only one class of directors being elected in each year and each (except for those directors appointed prior
to our first annual meeting of shareholders) serving a two-year term. The term of office of the first class of directors will expire
at our first annual meeting of shareholders and the term of office of the second class of directors will expire at our second annual
meeting of shareholders. We may not hold an annual meeting of shareholders until after we consummate our initial business combination
(unless required by Nasdaq). Subject to any other special rights applicable to the shareholders, any vacancies on our board of
directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board or
by a majority of the holders of our ordinary shares (or, prior to our initial business combination, holders of our founder shares).
Our officers are elected by the board of directors and serve
at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to
appoint persons to the offices set forth in our amended and restated memorandum and articles of association as it deems appropriate.
Our amended and restated memorandum and articles of association will provide that our officers may consist of a Chairman, a Chief
Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries,
a Treasurer and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq listing standards require that a majority of our board
of directors be independent within one year of our initial public offering. 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
, and 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 or directors have received any cash compensation
for services rendered to us. 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 any of their affiliates.
After the completion of our initial business combination, directors
or members of our management team who remain with us may be paid consulting, management or other compensation from the combined
company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy
solicitation materials furnished to our shareholders in connection with a proposed business combination. It is unlikely the amount
of such compensation will be known at the time, because the directors of the post-combination business will be responsible for
determining executive officer and director compensation. Any compensation to be paid to our
officers after the completion of our initial business combination
will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements with our executive officers
and directors that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting
arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe
that the ability of our management to remain with us after the completion of our initial business combination should be a determining
factor in our decision to proceed with any potential business combination.
Committees of the Board of Directors
Pursuant to Nasdaq listing rules we will establish three standing
committees - an audit committee in compliance with Section 3(a)(58)(A) of the Exchange Act, a compensation committee and a nominating
committee, each comprised of independent directors. Under Nasdaq listing rule 5615(b)(1), a company listing in connection with
its initial public offering is permitted to phase in its compliance with the independent committee requirements. We do not intend
to rely on the phase-in schedules set forth in Nasdaq listing rule 5615(b)(1).
Audit Committee
Upon the effectiveness of the registration statement of which
this prospectus forms a part, we will establish an audit committee of the board of directors. The members of our audit committee
will be . will serve as chairman of the audit committee.
Each member of the audit committee is financially literate and
our board of directors has determined that qualifies as an “audit committee financial
expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We will adopt an audit committee charter, which will detail
the purpose and principal functions of the audit committee, including:
| · | assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements,
(3) our independent auditor’s qualifications and independence and (4) the performance of our internal audit function and
independent auditors; |
| · | the appointment, compensation, retention, replacement and oversight of the work of the independent auditors and any other independent
registered public accounting firm engaged by us; |
| · | pre-approving all audit and non-audit services to be provided by the independent auditors or any other registered public accounting
firm engaged by us and establishing pre-approval policies and procedures; |
| · | reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their
continued independence; |
| · | setting clear hiring policies for employees or former employees of the independent auditors; |
| · | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
| · | obtaining and reviewing a report, at least annually, from the independent auditors describing (1) the independent auditor’s
internal quality-control procedures and (2) 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; |
| · | meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and
the independent auditor, including reviewing our specific disclosures under “Management’s Discussion and Analysis of
Financial Condition and Results of Operations”; |
| · | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated
by the SEC prior to us entering into such transaction; and |
| · | reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance
matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that
raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards
or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
Compensation Committee
Upon the effectiveness of the registration statement of which
this prospectus forms a part, we will establish a compensation committee of the board of directors. The members of our Compensation
Committee will be . will serve as chairman of the compensation committee. We will adopt a compensation committee charter, which
will detail the purpose and responsibility of the compensation committee, including:
| · | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s
compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
| · | reviewing and making recommendations to our board of directors with respect to the compensation and any incentive-compensation
and equity-based plans that are subject to board approval of all of our other officers; |
| · | reviewing our executive compensation policies and plans; |
| · | implementing and administering our incentive compensation equity-based remuneration plans; |
| · | assisting management in complying with our proxy statement and annual report disclosure requirements; |
| · | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers
and employees; |
| · | producing a report on executive compensation to be included in our annual proxy statement; and |
| · | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
The charter will also provide that the compensation committee
may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent 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.
Nominating Committee
Upon the effectiveness of the registration statement of which
this prospectus forms a part, we will establish a nominating committee of the board of directors. The members of our nominating
committee will be . will serve as chair of the nominating committee. We will adopt a nominating committee charter, which will detail
the purpose and responsibilities of the nominating committee, including:
| · | identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the
board, and recommending to the board of directors candidates for nomination for election at the annual meeting of shareholders
or to fill vacancies on the board of directors; |
| · | developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines; |
| · | coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and
management in the governance of the company; and |
| · | reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary. |
The charter will also provide that the nominating committee
may, in their sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates,
and will be directly responsible for approving the search firm’s fees and other retention terms.
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 shareholders.
Compensation Committee Interlocks and Insider Participation
None of our officers currently serves, and in the past year
has not served, as a member of the board of directors or compensation committee of any entity that has one or more officers serving
on our board of directors.
Code of Ethics
Prior to the effectiveness of the registration statement of
which this prospectus is a part, we will have adopted a code of ethics applicable to our directors, officers and employees (our
“Code of Ethics”). Our Code of Ethics will be available on our website upon the completion of this offering. Our Code
of Ethics is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures
regarding amendments to, or waivers of, provisions of our Code of Ethics on our website.
Conflicts of Interest
All of our executive officers and certain of our directors have
or may have fiduciary and contractual duties to certain companies in which they have invested. These entities may compete with
us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing it.
However, we do not expect these duties to present a significant conflict of interest with our search for an initial business combination.
Under Cayman Islands law, directors and officers owe the following
fiduciary duties:
| · | duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; |
| · | duty to exercise authority for the purpose for which it is conferred; |
| · | duty to not improperly fetter the exercise of future discretion; |
| · | duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal
interests; and |
| · | duty to exercise independent judgment. |
In addition to the above, directors also owe a duty of care,
which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both
the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are
carried out by that director in relation to the company and the general knowledge, skill and experience which that director has.
As set out above, directors have a duty not to put themselves
in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their
position at the expense of the company. However, in some instances what would otherwise be a breach of this duty can be forgiven
and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by
way of permission granted in the amended and restated memorandum and articles of association or alternatively by shareholder approval
at general meetings.
Certain of our officers and directors presently have, 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 to such entity. Accordingly, if any of our officers
or directors becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current
fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business
combination opportunity to such entity, subject to their fiduciary duties under Cayman Islands law. We do not believe, however,
that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete
our initial business combination.
Potential investors should also be aware of the following potential
conflicts of interest:
| · | None of our officers or directors is required to commit his or her full time to our affairs and, accordingly, may have conflicts
of interest in allocating his or her time among various business activities. |
| · | In the course of their other business activities, our officers and directors may become aware of investment and business opportunities
that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may
have conflicts of interest in determining to which entity a particular business opportunity should be presented. For a complete
description of our management’s other affiliations, see “—Directors, Director Nominees and Executive Officers.” |
| · | Our initial shareholders have agreed to waive their redemption rights with respect to their founder shares and any public shares
held by them in connection with the completion of our initial business combination. Our directors and officers have also entered
into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any. Additionally,
our initial shareholders have agreed to waive their redemption rights with respect to their founder shares if we fail to consummate
our initial business combination within 24 months after the closing of this offering. However, if our initial shareholders or any
of our officers, directors or affiliates 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 consummate our initial business combination
within the prescribed time frame. 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 or salable by our initial shareholders until the earlier of (1) one year after the completion of our
initial business combination and (2) the date on which we consummate a liquidation, merger, amalgamation, share exchange, reorganization,
or other similar transaction after our initial business combination that results in all of our shareholders having the right to
exchange their ordinary shares for cash, securities or other property. Notwithstanding the foregoing, if the last reported sale
price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period
commencing at least 150 days after our initial business combination, the founder shares will be released from the lock-up. With
certain limited exceptions, the private placement warrants and the Class A ordinary shares underlying such warrants, will not be
transferable, assignable or salable by our sponsor until 30 days after the completion of our initial business combination. Since
our sponsor and officers and directors may directly or indirectly own ordinary shares and warrants following this offering, our
officers and directors may have a conflict of interest in determining whether a particular target business is an appropriate business
with which to effectuate our initial business combination. |
| · | Our officers and directors may negotiate employment or consulting agreements with a target business in connection with a particular
business combination. These agreements may provide for them to receive compensation following our initial business combination
and as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular business combination. |
| · | Our officers and directors may have a conflict of interest with respect to evaluating a particular business combination if
the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement
with respect to our initial business combination. |
The conflicts described above may not be resolved in our favor.
Accordingly, as a result of multiple business affiliations,
our officers and directors have similar legal obligations relating to presenting business opportunities meeting the above-listed
criteria to multiple entities. Below is a table summarizing the entities to which our officers, directors and director nominees
currently have fiduciary duties or contractual obligations:
|
Individual
|
Entity
|
Entity’s
Business
|
Affiliation
|
| Scott Gordon |
Egg Rock Holdings (including subsidiaries operating the Papa & Barkley business line) |
Cannabis products, manufacturing, processing, and logistics; hemp-derived CBD |
Co-founder and Chairman |
| |
Silver Spike Capital |
Asset management fund focused on cannabis and related health & wellness industries |
Manager, CEO |
| William Healy |
Silver Spike Capital |
Asset management fund focused on cannabis and related health & wellness industries |
Manager |
| Greg Gentile |
Silver Spike Capital |
Asset management fund focused on cannabis and related health & wellness industries |
Manager, CFO |
| Mohammed Grimeh |
Silver Spike Capital |
Asset management fund focused on cannabis and related health & wellness industries |
Manager, COO |
| |
|
|
|
| |
|
|
|
| |
|
|
|
Accordingly, if any of the above officers or directors become
aware of a business combination opportunity which is suitable for any of the above entities to which he or she has then-current
fiduciary or contractual obligations, he or she may need to 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 chooses not to pursue the opportunity,
subject to their fiduciary duties under Cayman Islands law. We do not believe, however, that any of the foregoing fiduciary duties
or contractual obligations will materially affect our ability to complete our initial business combination.
We are not prohibited from pursuing an initial business combination
with a company that is affiliated with our sponsor, officers or directors. In the event we seek to complete our initial business
combination with such a company, we would obtain an opinion from an independent investment banking firm or from an independent
accounting firm, that such an initial business combination is fair to our company from a financial point of view.
In addition, our sponsor or any of its affiliates may make additional
investments in the company in connection with the initial business combination, although our sponsor and its affiliates have no
obligation or current intention to do so. If our sponsor or any of its affiliates elects to make additional investments, such proposed
investments could influence our sponsor’s motivation to complete an initial business combination.
In the event that we submit our initial business combination
to our public shareholders for a vote, our initial shareholders have agreed, pursuant to the terms of a letter agreement entered
into with us, to vote their founder shares (and their permitted transferees will agree) and any public shares held by them in favor
of our initial business combination. Our directors and officers have also entered into the letter agreement, imposing similar obligations
on them with respect to public shares acquired by them, if any.
Limitation on Liability and Indemnification of Officers
and Directors
Cayman Islands law does not limit the extent to which a company’s
memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against
willful default,
fraud or the consequences of committing a crime. Our amended
and restated memorandum and articles of association will provide for indemnification of our officers and directors to the maximum
extent permitted by law, including for any liability incurred in their capacities as such, except through their own actual fraud,
willful default or willful neglect.
We may 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. We also intend to enter into
indemnity agreements with them.
Our officers and directors have agreed to waive any right, title,
interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or
claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek
recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be
satisfied by us if we (i) have sufficient funds outside of the trust account or (ii) consummate an initial business combination.
Furthermore, a shareholder’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.
We believe that these provisions, the insurance and the indemnity
agreements are necessary to attract and retain talented and experienced officers and directors.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors and officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Principal
Shareholders
The following table sets forth information regarding the beneficial
ownership of our ordinary shares as of the date of this prospectus, and as adjusted to reflect the sale of our Class A ordinary
shares 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 issued and outstanding ordinary shares; |
| · | each of our officers, directors and director nominees; and |
| · | all our 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 ordinary shares beneficially owned by them. The following
table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within
60 days of the date of this prospectus.
The post-offering ownership percentage column below assumes
that the underwriters do not exercise their over-allotment option, that our sponsor forfeits 937,500 founder shares and that there
are 31,250,000 ordinary shares issued and outstanding after this offering.
| | |
| |
Approximate Percentage of Issued and Outstanding Ordinary Shares |
| Name and Address of Beneficial Owner(1) | |
Number of
Class A Shares Beneficially Owned(2) | |
Before Offering | |
After Offering |
| Silver Spike Sponsor, LLC | |
| 7,187,500 | (3) | |
| 100 | % | |
| 20 | % |
| Scott Gordon | |
| 7,187,500 | (3) | |
| 100 | % | |
| 20 | % |
| William Healy | |
| - | | |
| - | | |
| - | |
| Greg Gentile | |
| - | | |
| - | | |
| - | |
| Mohammed Grimeh | |
| - | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| All directors, director nominees and officers as a group ( individuals) | |
| 7,187,500 | | |
| 100.0 | % | |
| 20.0 | % |
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is 1114 6th Ave, 41st Floor,
New York, New York, 10036, United States of America. |
| (2) | Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert
into Class A ordinary shares on the first business day following our initial business combination on a one-for-one basis, subject
to adjustment as described below adjacent to the caption “Description of Securities—Founder Shares.” |
| (3) | Represents founder shares held by our sponsor. Scott Gordon, Mohammed Grimeh, William Healy and Gregory Gentile hold %, %,
% and % of the equity interests in Silver Spike Sponsor, LLC. Scott Gordon is a manager of our sponsor. Accordingly, all of the
shares held by our sponsor may be deemed to be beneficially held by Scott Gordon. Scott Gordon disclaims beneficial ownership of
the ordinary shares held by our sponsor except to the extent of his pecuniary interest therein. |
Immediately after this offering, our initial shareholders will
beneficially own 20.0% of the then issued and outstanding ordinary shares (assuming our initial shareholders do not purchase any
other units in this offering). Prior to our initial business combination, only holders of our founder shares will have the right
to vote on the election of
directors, and holders of a majority of our founder shares may
remove a member of the board of directors for any reason. In addition, because of their ownership block, our initial shareholders
may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments
to our amended and restated memorandum and articles of association and approval of significant corporate transactions. If we increase
or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption or other appropriate mechanism,
as applicable, with respect to our founder shares immediately prior to the consummation of this offering in such amount as to maintain
the number of founder shares at 20% of our issued and outstanding ordinary shares upon the consummation of this offering.
Our sponsor has committed, pursuant to a written agreement,
to purchase an aggregate of 7,000,000 (or 7,750,000 if the underwriters’ over-allotment option is exercised in full) private
placement warrants at a price of $1.00 per warrant ($7,000,000 in the aggregate or $7,750,000 in the aggregate if the underwriters’
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 to purchase one Class A ordinary share at a price of $11.50 per share, subject
to adjustment as provided herein. The purchase price of the private placement warrants will be added to the proceeds from this
offering to be held in the trust account. If we do not complete our initial business combination within 24 months from the closing
of this offering, the proceeds of the sale of the private placement warrants held in the trust account will be used to fund the
redemption of our public shares, and the private placement warrants will expire worthless. The private placement warrants are subject
to the transfer restrictions described below. The private placement warrants will not be redeemable by us so long as they are held
by our sponsor or its permitted transferees. If the private placement warrants are held by holders other than our sponsor or its
permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis
as the warrants included in the units being sold in this offering. Otherwise, the private placement warrants have terms and provisions
that are identical to those of the warrants being sold as part of the units in this offering.
Our sponsor and our officers and directors are deemed to be
our “promoters” as such term is defined under the federal securities laws. See “Certain Relationships and Related
Party Transactions” for additional information regarding our relationships with our promoters.
Transfers of Founder Shares and Private Placement Warrants
The founder shares, private placement warrants and any Class
A ordinary shares issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions
in the letter agreement with us to be entered into by our initial shareholders. Those lock-up provisions provide that such securities
are not transferable or salable (1) 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 reported sale price of
the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances,
subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing
at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination
on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results
in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property, and
(2) in the case of the private placement warrants and the respective Class A ordinary shares 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 the individual’s immediate family or to a trust, the beneficiary of which is
a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization; (c) in the
case of an individual, by virtue of laws of descent and distribution upon death of the individual; (d) in the case of an individual,
pursuant to a qualified domestic relations order; (e) by private sales or transfers made in connection with the consummation of
a business combination at prices no greater than the price at which the shares were originally purchased; (f) in the event of our
liquidation prior to our completion of our initial business combination; (g) by virtue of the laws of Delaware or our sponsor’s
limited liability company agreement, as amended, upon dissolution of our sponsor; or (h) in the event of our completion of a liquidation,
merger, amalgamation, share exchange, reorganization or other similar transaction which results in all of our shareholders having
the right to exchange their Class A ordinary shares for cash, securities or other property subsequent to our completion of our
initial business combination; provided, however, that in the case of clauses (a) through (e) and (g) these permitted transferees
must enter into a written agreement agreeing to be bound by these transfer restrictions.
Registration Rights
The holders of the founder shares, private placement
warrants and any warrants that may be issued on conversion of working capital loans (and any ordinary shares issuable upon
the exercise of the private placement warrants or warrants issued upon conversion of the 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 this offering requiring us to register such securities for resale. The holders of
these securities will be entitled to make up to three demands, excluding short form registration 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. However, the registration rights agreement
provides that we will not permit any registration statement filed under the Securities Act to become effective until
termination of the applicable lock-up period, which occurs (1) in the case of the founder shares, on 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 reported sale price of Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share
splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading
days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the
date following the completion of our initial business combination on which we complete a liquidation, merger, amalgamation,
share exchange, reorganization or other similar transaction that results in all of our public shareholders having the right
to exchange their Class A ordinary shares for cash, securities or other property, and (2) in the case of the private
placement warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of
our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration
statements.
Certain
Relationships and Related Party Transactions
In June 2019, our sponsor purchased 7,187,500 founder shares
for an aggregate purchase price of $25,000, or $0.004 per share (assuming the over-allotment option is not exercised and the forfeiture by our sponsor of 937,500 founder shares). Our initial shareholders will collectively own 20%
of our issued and outstanding shares after this offering (assuming our initial shareholders do not purchase any other units in
this offering). If we increase or decrease the size of this offering, we will effect a capitalization or share repurchase or redemption
or other appropriate mechanism, as applicable, with respect to our founder shares immediately prior to the consummation of this
offering in such amount as to maintain the number of founder shares at 20% of our issued and outstanding ordinary shares upon the
consummation of this offering.
Our sponsor has committed, pursuant to a written agreement,
to purchase an aggregate of 7,000,000 (or 7,750,000 if the underwriters’ over-allotment option is exercised in full) private
placement warrants for a purchase price of $1.00 per warrant in a private placement that will occur simultaneously with the closing
of this offering. Each private placement warrant may be exercised for one Class A ordinary share at a price of $11.50 per share,
subject to adjustment as provided herein. The private placement warrants (including the Class A ordinary shares issuable upon exercise
of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by it until
30 days after the completion of our initial business combination.
As more fully discussed in “Management—Conflicts
of Interest,” if any of our officers or directors becomes aware of a business combination opportunity that falls within the
line of business of any entity to which he or she has then-current fiduciary or contractual obligations, he or she may be required
to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.
Certain of our officers and directors presently have, 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 to such entity.
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 any of 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.
Our sponsor has agreed to loan us up to $250,000 under an unsecured
promissory note to be used for a portion of the expenses of this offering. As of June 11, 2019, we had borrowed $12,500 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 January 31, 2020 or the closing of this offering. These loans will be repaid upon completion
of this offering out of the $1,000,000 of offering proceeds that has been allocated for the payment of offering expenses (other
than underwriting commissions) not held in the trust account. The value of our sponsor’s interest in this loan 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 as may be required. Any such loans may 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 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 issued to our sponsor. The terms of such loans, 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.
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 shareholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable,
furnished to our shareholders. 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 shareholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the
post-combination business to determine executive and director compensation.
We have entered into a registration rights agreement with respect
to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any), which
is described under the heading “Principal Shareholders—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 our
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.
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. Our audit committee will review on a quarterly
basis all payments that were made to our sponsor, officers or directors, or our or any of their affiliates.
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 and disinterested directors, have obtained an opinion from an independent investment banking
firm or an independent accounting firm that our initial business combination is fair to our company from a financial point of view.
Furthermore, no finder’s fees, reimbursements or cash
payments will be made by us to our sponsor, officers or directors, or our or any of their affiliates, for services rendered to
us prior to or in connection with the completion of our initial business combination, other than the following payments, none of
which will be made from the proceeds of this offering and the sale of the private placement warrants held in the trust account
prior to the completion of our initial business combination:
| · | Repayment of an aggregate of up to $250,000 in loans that may be made to us by our sponsor to cover offering-related and organizational
expenses (as of June 11, 2019, we had borrowed $12,500 from our sponsor); |
| · | Reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination;
and |
| · | Repayment of 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, the terms of which have not been determined
nor have any written agreements been executed with respect thereto. 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 above payments may be funded using the net proceeds of this
offering and the sale of the private placement warrants not held in the trust account or, upon completion of the initial business
combination, from any amounts remaining from the proceeds of the trust account released to us in connection therewith.
Description
of Securities
We are a Cayman Islands exempted company (company number 352066)
and our affairs will be governed by our amended and restated memorandum and articles of association, the Companies Law and common
law of the Cayman Islands. Pursuant to our amended and restated memorandum and articles of association which will be adopted upon
the consummation of this offering, we will be authorized to issue ordinary shares, including 200,000,000 Class A ordinary shares,
$0.0001 par value each, and 20,000,000 Class B ordinary shares, par value $0.0001 per share, as well as 1,000,000 undesignated
preferred shares, $0.0001 par value each. The following description summarizes the material terms of our shares as set out more
particularly in our amended and restated memorandum and articles of association. 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
Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class
A ordinary share at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant to the warrant
agreement, a warrant holder may exercise its warrants only for a whole number of the company’s Class A ordinary shares. This
means only a whole warrant may be exercised at any given time by a warrant holder.
The Class A ordinary shares and warrants constituting the units
will begin separate trading on the 52nd day following the date of this prospectus unless Credit Suisse Securities (USA) LLC 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 Class A ordinary shares 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 Class A ordinary shares
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 ordinary shares 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 of the
Company 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 will include this audited balance sheet. 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.
Ordinary Shares
Prior to the date of this prospectus, there were 7,187,500 Class
B ordinary shares issued and outstanding, all of which were held of record by our sponsor, so that our sponsor will own 20% of
our issued and outstanding shares after this offering (assuming our initial shareholder does not purchase any units in this offering).
Our sponsor will forfeit up to 937,500 Class B ordinary shares depending on the extent to which the underwriter’s over-allotment
is not exercised. Upon the closing of this offering, 31,250,000 ordinary shares will be issued and outstanding (assuming no exercise
of the underwriter’s over-allotment option and forfeiture of 937,500 Class B ordinary shares by our sponsor) including:
| · | 25,000,000 Class A ordinary shares underlying the units being offered in this offering; and |
| · | 6,250,000 Class B ordinary shares held by our initial shareholders. |
If we increase or decrease the size of this offering, we will
effect a capitalization or share repurchase or redemption or other appropriate mechanism, as applicable, with respect to our founder
shares immediately prior to the consummation of this offering in such amount as to maintain the number of founder shares at 20%
of our issued and outstanding ordinary shares upon the consummation of this offering.
Class A ordinary shareholders and Class B ordinary shareholders
of record are entitled to one vote for each share held on all matters to be voted on by shareholders, except as required by law;
provided that, prior to our initial business combination, only holders of our Class B ordinary shares will have the right to vote
on the election of directors, and holders of a majority of our Class B ordinary shares may remove a member of the board of
directors for any reason. With respect to any other matter submitted to a vote of our shareholders, including any vote in connection
with our initial business combination, except as required by law, holders of Class A ordinary shares and holders of Class B ordinary
shares will vote together as a single class. Unless specified in the Companies Law, our amended and restated memorandum and articles
of association or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are voted is
required to approve any such matter voted on by our shareholders. Approval of certain actions will require a special resolution
under Cayman Islands law and pursuant to our amended and restated memorandum and articles of association; such actions include
amending our amended and restated memorandum and articles of association and approving a statutory merger or consolidation with
another company. Directors are elected for a term of two years. There is no cumulative voting with respect to the election of directors,
with the result that the holders of more than 50% of the founder shares voted for the election of directors can elect all of the
directors prior to our initial business combination. Our shareholders 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 memorandum and articles of
association will authorize the issuance of up to 200,000,000 Class A ordinary shares, if we were to enter into a business combination,
we may (depending on the terms of such a business combination) be required to increase the number of Class A ordinary shares which
we are authorized to issue at the same time as our shareholders vote on the business combination to the extent we seek shareholder
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 one year after our first fiscal year end following our listing on Nasdaq. There
is no requirement under the Companies Law for us to hold annual or general meetings to elect directors. Until we hold an annual
general meeting of shareholders, public shareholders may not be afforded the opportunity to discuss company affairs with management.
We will provide our public shareholders 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 (which interest shall be net of taxes payable), divided by the number of
then issued and outstanding public shares, subject to the limitations described herein. At the completion of our initial business
combination, we will be required to purchase any Class A ordinary shares properly delivered for redemption and not withdrawn. The
amount in the trust account is initially anticipated to be $10.00 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.
Additionally, each public shareholder may elect to redeem its public shares without voting and, if they do vote, irrespective of
whether they vote for or against the proposed business combination. Our initial shareholders have entered into a letter agreement
with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and any public
shares held by them in connection with the completion of our initial business combination. Our directors and officers have also
entered into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any.
Permitted transferees of our initial shareholders, officers or directors will be subject to the same obligations.
Unlike many blank check companies that hold shareholder 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 applicable law
or stock exchange listing requirements, if a shareholder vote is not required by applicable law or stock exchange listing requirements
and we do not decide to hold a shareholder vote for business or other reasons, we will, pursuant to our amended and restated memorandum
and articles of association, 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 memorandum and articles of association
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 shareholder approval of
the transaction is required by applicable law or stock exchange listing requirement, or we decide to obtain shareholder approval
for business or other 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 shareholder approval, we will complete our initial business combination only if we receive an
ordinary resolution under Cayman Islands law, which requires the affirmative vote of a majority of the shareholders who attend
and vote at a general meeting of the company. However, the participation of our sponsor, officers, directors, advisors or any of
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 shareholders vote, or indicate their intention to vote, against
such business combination. For purposes of seeking approval of an ordinary resolution, non-votes will have no effect on the approval
of our initial business combination once a quorum is obtained. We intend to give 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 shareholders, may make it more likely that we will consummate
our initial business combination.
If we seek shareholder approval of our initial business combination
and we do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, our amended
and restated memorandum and articles of association will provide that a public shareholder, together with any affiliate of such
shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section
13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the ordinary
shares sold in this offering, which we refer to as the “Excess Shares,” without our prior consent. However, we would
not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial
business combination. Our shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability
to complete our initial business combination, and such shareholders could suffer a material loss in their investment if they sell
such Excess Shares on the open market. Additionally, such shareholders will not receive redemption distributions with respect to
the Excess Shares if we complete the business combination. As a result, such shareholders will continue to hold that number of
shares exceeding 15% and, in order to dispose such shares would be required to sell their shares in open market transactions, potentially
at a loss.
If we seek shareholder approval in connection with our initial
business combination, our initial shareholders have agreed (and their permitted transferees will agree), pursuant to the terms
of a letter agreement entered into with us, to vote their founder shares and any public shares held by them in favor of our initial
business combination. As a result, in addition to our initial shareholders’ founder shares, we would need 9,375,001, or 37.5%,
of the 25,000,000 public shares sold in this offering to be voted in favor of a transaction (assuming all issued and outstanding
shares are voted and the over-allotment option is not exercised), subject to any higher threshold as is required by Cayman Islands
or other applicable law, in order to have such initial business combination approved. Our directors and officers have also entered
into the letter agreement, imposing similar obligations on them with respect to public shares acquired by them, if any.
Pursuant to our amended and restated memorandum and articles
of association, if we are unable to complete our initial business combination within 24 months from the closing of this offering,
we will (1) cease all operations except for the purpose of winding up, (2) as promptly as reasonably possible but not more than
10 business days thereafter, redeem 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 (less up to $100,000 of interest to pay dissolution expenses and which
interest shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will
completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any) and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law. Our initial shareholders 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 their founder shares if we fail to complete our initial business combination within 24 months from the closing of this offering.
However, if our initial shareholders acquire public shares 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 a business combination, our shareholders at such time will be 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 shares, if any, having
preference over the ordinary shares. Our shareholders have no preemptive or other subscription rights. There are no sinking fund
provisions applicable to the ordinary shares, except that we will provide our shareholders with the opportunity to
redeem their public shares for cash equal to their pro rata
share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable),
upon the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The founder shares are designated as Class B ordinary shares
and are identical to the Class A ordinary shares included in the units being sold in this offering, and holders of founder shares
have the same shareholder rights as public shareholders, except that: (1) prior to our initial business combination, only holders
of the founder shares have the right to vote on the election of directors and holders of a majority of our founder shares may remove
a member of the board of directors for any reason; (2) the founder shares are subject to certain transfer restrictions, as described
in more detail below; (3) our initial shareholders have entered into a letter agreement with us, pursuant to which they have agreed
to waive: (x) their redemption rights with respect to their founder shares and any public shares held by them in connection
with the completion of our initial business combination (and not seek to sell its shares to us in any tender offer we undertake
in connection with our initial business combination); (y) their redemption rights with respect to their founder shares and
any public shares held by them in connection with a shareholder vote to approve an amendment to our amended and restated memorandum
and articles of association (A) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do
not complete our initial business combination within 24 months from the closing of this offering or (B) with respect to any other
provision relating to shareholders’ rights or pre-initial business combination activity; and (z) their rights to liquidating
distributions from the trust account with respect to any founder shares they hold if we fail to complete our initial business combination
within 24 months from the closing of this offering (although they will be entitled to liquidating distributions from the trust
account with respect to any public shares they hold if we fail to complete our initial business combination within the prescribed
time frame); (4) the founder shares will automatically convert into our Class A ordinary shares as described below and (5) the
founder shares are entitled to registration rights. In addition, our directors and officers have also entered into the letter agreement
with respect to public shares acquired by them, if any.
The founder shares will automatically convert into Class A ordinary
shares on the first business day following the completion of our initial business combination on a one-for-one basis, subject to
adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities convertible or
exercisable for Class A ordinary shares, are issued or deemed issued in excess of the amounts issued in this offering and related
to the closing of our initial business combination, the ratio at which founder shares will convert into Class A ordinary shares
will be adjusted (subject to waiver by holders of a majority of the Class B ordinary shares then in issue) so that the number of
Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted
basis, 20% of the sum of our ordinary shares issued and outstanding upon the completion of this offering plus the number of Class
A ordinary shares and equity-linked securities issued or deemed issued in connection with our initial business combination (net
of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to any seller
in our initial business combination and any private placement warrants issued to our sponsor, an affiliate of our sponsor or any
of our officers or directors.
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 reported sale price of the ordinary
shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our
initial business combination, or (y) the date following the completion of our initial business combination on which we complete
a liquidation, merger, amalgamation, share exchange, reorganization or other similar transaction that results in all of our public
shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property. Up to 937,500 founder
shares will be forfeited for no consideration by our sponsor depending on the exercise of the over-allotment option.
Register of Members
Under Cayman Islands law, we must keep a register of members
and there shall be entered therein:
| · | the names and addresses of the members and a statement of the shares held by each member and of the amount paid or agreed to
be considered as paid on the shares of each member; |
| · | the date on which the name of any person was entered on the register as a member; and |
| · | the date on which any person ceased to be a member. |
Under Cayman Islands law, the register of members of our company
is prima facie evidence of the matters set out therein (i.e., the register of members will raise a presumption of fact on the matters
referred to above unless rebutted) and a member registered in the register of members shall be deemed as a matter of Cayman Islands
law to have legal title to the shares as set against its name in the register of members. Upon the closing of this public offering,
the register of members shall be immediately updated to reflect the issue of shares by us. Once our register of members has been
updated, the shareholders recorded in the register of members shall be deemed to have legal title to the shares set against their
name. However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination
on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order
that the register of members maintained by a company should be rectified where it considers that the register of members does not
reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect
of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands court.
Preferred Shares
Our amended and restated memorandum and articles of association
will authorize 1,000,000 preferred shares and will provide that preferred shares 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 shareholder approval, issue preferred shares with voting
and other rights that could adversely affect the voting power and other rights of the holders of the ordinary shares and could
have anti-takeover effects. The ability of our board of directors to issue preferred shares without shareholder 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 shares issued and outstanding at the date hereof. Although we do not currently intend to issue any preferred shares,
we cannot assure you that we will not do so in the future. No preferred shares are being issued or registered in this offering.
Warrants
Public Shareholders’ Redeemable Warrants
Each whole warrant entitles the registered holder to purchase
one Class A ordinary share 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 and 30 days after the completion of our initial business combination,
provided in each case that we have an effective registration statement under the Securities Act covering the issuance of the Class
A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available and such shares
are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the
holder (or we permit holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement).
Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of Class A ordinary shares.
This means only a whole warrant may be exercised at a given time by a warrant holder. 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 Class A ordinary shares
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 covering the issuance of the Class A ordinary shares issuable upon exercise of 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 public 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 is available. In the event that the conditions in the two immediately preceding sentences are not satisfied
with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no
value and expire worthless. In 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 Class A ordinary share underlying
such unit.
We are not registering the Class A ordinary shares 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 reasonable best efforts to file with the
SEC and have an effective registration statement covering the issuance, under the Securities Act, of the Class A ordinary shares
issuable upon exercise of the warrants, and we will use our reasonable best efforts to cause the same to become effective within
60 business days after the closing of our initial business combination and to maintain the effectiveness of such registration statement,
and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant
agreement. Notwithstanding the above, if our Class A ordinary shares are, at the time of any exercise of a warrant, not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1)
of the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to
file or maintain in effect a registration statement, but will use our reasonable best efforts to qualify the shares under applicable
blue sky laws to the extent an exemption is not available.
Once the warrants become exercisable, we may redeem the warrants
for redemption:
| · | in whole and not in part; |
| · | at a price of $0.01 per warrant; |
| · | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant
holder; and |
| · | if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted
for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20
trading days within a 30-trading day period ending on the third trading day prior to the date we send the notice of redemption
to the warrant holders. |
We will not redeem the warrants unless a registration statement
under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective
and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period, except
if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities
Act. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or
qualify the underlying securities for sale under all applicable state securities laws.
We have established the last of the redemption criterion discussed
above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price.
If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled
to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A ordinary shares may
fall below the $18.00 redemption trigger price 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 his, her or its warrant to do so on a “cashless
basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” our management
will consider, among other factors, our cash position, the number of warrants that are outstanding and the dilutive effect on our
shareholders of issuing the maximum number of Class A ordinary shares 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 Class A ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares
underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over
the exercise price of the warrants by (y) the fair market value.
The “fair market value” shall mean the average last reported sale price of the Class A ordinary shares 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 Class A ordinary shares to be received upon exercise of the warrants, including the “fair market value” in
such case. Requiring a cashless exercise in this manner will reduce the number of shares to be issued and thereby lessen the dilutive
effect of a warrant redemption. We believe this feature is an attractive option to us if we do not need the cash from the exercise
of the warrants after our initial business combination. If we call our warrants for redemption and our management does not take
advantage of this option, our sponsor and its permitted transferees would still be entitled to exercise their private placement
warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been required
to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
A holder of a warrant may notify us in writing in the event
it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that
after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s
actual knowledge, would beneficially own in excess of 9.8% (or such other amount as a holder may specify) of the Class A ordinary
shares issued and outstanding immediately after giving effect to such exercise.
If the number of issued and outstanding ordinary shares is increased
by a capitalization or share dividend payable in ordinary shares, or by a split-up of ordinary shares or other similar event, then,
on the effective date of such share dividend, split-up or similar event, the number of Class A ordinary shares issuable on exercise
of each warrant will be increased in proportion to such increase in the issued and outstanding ordinary shares. A rights offering
to holders of ordinary shares entitling holders to purchase ordinary shares at a price less than the fair market value will be
deemed a share dividend of a number of ordinary shares equal to the product of (1) the number of ordinary shares 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 ordinary shares) multiplied by (2) one minus the quotient of (x) the price per ordinary share paid in such rights
offering divided by (y) the fair market value. For these purposes (1) if the rights offering is for securities convertible into
or exercisable for Class A ordinary shares, in determining the price payable for Class A ordinary shares, there will be taken into
account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (2)
fair market value means the volume weighted average price of Class A ordinary shares as reported during the 10 trading day period
ending on the trading day prior to the first date on which the Class A ordinary shares 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 ordinary shares
on account of such Class A ordinary shares (or other securities 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 ordinary shares in connection
with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of Class A ordinary shares in
connection with a shareholder vote to amend our amended and restated memorandum and articles of association (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 24
months from the closing of this offering or (ii) with respect to any other provision relating to shareholders’ 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 Class A ordinary
share in respect of such event.
If the number of issued and outstanding Class A ordinary shares
is decreased by a consolidation, combination, reverse share split or reclassification of Class A ordinary shares or other similar
event, then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event,
the number of Class A ordinary shares issuable on exercise of each warrant will be decreased in proportion to such decrease in
issued and outstanding Class A ordinary shares.
Whenever the number of Class A ordinary shares 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 Class A ordinary
shares
purchasable upon the exercise of the warrants immediately prior
to such adjustment, and (y) the denominator of which will be the number of Class A ordinary shares so purchasable immediately thereafter.
In addition, if (x) we issue additional Class A ordinary shares
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 Class A ordinary share (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 completion of our initial business combination (net of redemptions),
and (z) 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 higher 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 higher of the Market Value and the Newly Issued
Price.
In case of any reclassification or reorganization of the issued
and outstanding Class A ordinary shares (other than those described above or that solely affects the par value of such Class A
ordinary shares), 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
issued and outstanding Class A ordinary shares), 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 our Class A ordinary shares immediately theretofore purchasable and receivable upon the exercise
of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable
upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer,
that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event.
However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets
receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant
will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in
such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made
to and accepted by such holders (other than a tender, exchange or redemption offer made by the company in connection with redemption
rights held by shareholders of the company as provided for in the company’s amended and restated memorandum and articles
of association or as a result of the redemption of Class A ordinary shares by the company if a proposed initial business combination
is presented to the shareholders of the company for approval) under circumstances in which, upon completion of such tender or exchange
offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of
which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under
the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within
the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the issued and outstanding ordinary shares, the holder of a
warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually
have been entitled as a shareholder if such warrant holder had exercised the warrant prior to the expiration of such tender or
exchange offer, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to such
tender or exchange offer, subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent
as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable
by the holders of Class A ordinary shares in such a transaction is payable in the form of ordinary shares 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 30 days following public disclosure of such transaction, the warrant exercise price will be reduced as specified
in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement)
of the warrant.
The warrants will be issued in registered form under a warrant
agreement between ,
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 defective provision, but requires the approval by the holders of at least 65% of the then
issued and outstanding public warrants to make any change that
adversely affects the interests of the registered holders of public warrants.
The warrants may be exercised upon surrender of the warrant
certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side
of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (or on a cashless
basis, if applicable), by certified or official bank check payable to us, for the number of warrants being exercised. The warrant
holders do not have the rights or privileges of holders of ordinary shares and any voting rights until they exercise their warrants
and receive Class A ordinary shares. After the issuance of Class A ordinary shares upon exercise of the warrants, each holder will
be entitled to one vote for each share held of record on all matters to be voted on by shareholders.
No fractional warrants will be issued upon separation of the
units and only whole warrants will trade.
Private Placement Warrants
The private placement warrants (including the Class A ordinary
shares issuable upon exercise of the private placement warrants) will not be transferable, assignable or salable until 30 days
after the completion of our initial business combination (except, among other limited exceptions as described under “Principal
Shareholders—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, as well as its permitted transferees, have the option to exercise the private placement warrants on a
cashless basis and will have certain registration rights related to such private placement warrants. Otherwise, the private placement
warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in this offering.
If the private placement warrants are held by holders other than our sponsor or its permitted transferees, the private placement
warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being
sold in this offering.
If holders of the private placement warrants elect to exercise
them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that number of Class A
ordinary shares equal to the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying
the warrants, multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants
by (y) the fair market value. The “fair market value” shall mean the average last reported sale price of the Class
A ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise
is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless basis so long
as they are held by our sponsor and its permitted transferees is because it is not known at this time whether they will be affiliated
with us following a business combination. If they remain affiliated with us, their ability to sell our securities in the open market
will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities except during
specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider cannot
trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public shareholders
who could exercise their warrants and sell the Class A ordinary shares received upon such exercise freely in the open market in
order to recoup the cost of such exercise, the insiders could be significantly restricted from selling such securities. As a result,
we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
Dividends
We have not paid any cash dividends on our ordinary shares to
date and do not intend to pay cash dividends prior to the completion of our initial business combination. The payment of cash dividends
in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent
to completion of our initial business combination. The payment of any cash dividends subsequent to our initial business combination
will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating
and does not anticipate declaring any share dividends in the foreseeable future, except if we increase the size of this offering,
in which case we will effect a capitalization or other appropriate mechanism immediately prior to the consummation of this offering
in such amount as to maintain the number of founder shares at 20% of our issued and outstanding ordinary shares 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.
Our Transfer Agent and Warrant Agent
The transfer agent for our ordinary shares and warrant agent
for our warrants is .
We have agreed to indemnify
in its roles as transfer agent and warrant agent, its agents and each of its shareholders, directors, officers and employees against
all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its
activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified
person or entity.
Certain Differences in Corporate Law
Cayman Islands companies are governed by the Companies Law.
The Companies Law is modeled on English Law but does not follow recent English Law statutory enactments and differs from laws applicable
to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions
of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.
Mergers and Similar Arrangements. In certain circumstances,
the Companies Law allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands exempted
company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction).
Where the merger or consolidation is between two Cayman Islands
companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information.
That plan of merger or consolidation must then be authorized by (a) a special resolution (at least a majority of 66 2/3% in value
who attend and vote at a general meeting) of the shareholders of each company; and (b) such other authorization, if any, as may
be specified in such constituent company’s articles of association. No shareholder resolution is required for a merger between
a parent company (i.e., a company that owns at least 90% of the issued shares of each class in a subsidiary company) and its subsidiary
company. The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless
the court waives such requirement. If the Cayman Islands Registrar of Companies is satisfied that the requirements of the Companies
Law (which includes certain other formalities) have been complied with, the Registrar of Companies will register the plan of merger
or consolidation.
Where the merger or consolidation involves a foreign company,
the procedure is similar, save that with respect to the foreign company, the directors of the Cayman Islands exempted company are
required to make a declaration to the effect that, having made due enquiry, they are of the opinion that the requirements set out
below have been met: (1) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the
foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements
of those constitutional documents have been or will be complied with; (2) that no petition or other similar proceeding has been
filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions;
(3) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect
of the foreign company, its affairs or its property or any part thereof; and (4) that no scheme, order, compromise or other similar
arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue
to be suspended or restricted; and (5) there is no other reason why it would be against the public interest to permit the merger
or consolidation.
Where the surviving company is the Cayman Islands exempted company,
the directors of the Cayman Islands exempted company are further required to make a declaration to the effect that, having made
due enquiry, they are of the opinion that the requirements set out below have been met: (1) that the foreign company is able to
pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors
of the foreign company; (2) that in respect of the transfer of any security interest granted by the foreign company to the surviving
or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted
by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction
of the foreign company with respect to the transfer have been or will be complied with; and (3) that the foreign company will,
upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant
foreign jurisdiction.
The Companies Law provides for a right of dissenting shareholders
to be paid a payment of the fair value of his or her shares upon their dissenting to the merger or consolidation in certain circumstances
if they follow a prescribed
procedure. In essence, where such rights apply, that procedure
is as follows: (a) the shareholder must give his or her written objection to the merger or consolidation to the constituent company
before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his or
her shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger
or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made
a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give
the constituent company a written notice of his or her intention to dissent including, among other details, a demand for payment
of the fair value of his or her shares; (d) within seven days following the date of the expiration of the period set out in paragraph
(b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent
company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase
his or her shares at a price that the company determines is the fair value and if the company and the shareholder agrees to the
price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; and (e)
if the company and the shareholder fails to agree to a price within such 30-day period, within 20 days following the date on which
such 30-day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court
to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders
with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition,
the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by
the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by
the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting
shareholder are not to be available in certain circumstances, for example, to dissenters holding shares of any class in respect
of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or
where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or
shares of the surviving or consolidated company, or in the context of a parent and subsidiary merger.
Moreover, Cayman Islands law also has separate statutory provisions
that facilitate the reconstruction or amalgamation of companies in certain circumstances, such schemes of arrangement will generally
be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands
as a “scheme of arrangement” which may be tantamount to a merger. In the event that a merger was sought pursuant to
a scheme of arrangement (the procedures of which are more rigorous and take longer to complete than the procedures typically required
to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class
of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value
of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at
a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must
be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court
the view that the transaction should not be approved, the court can be expected to approve the arrangement if it is satisfied that:
| · | we are not proposing to act illegally or beyond the scope of our corporate authority and we have complied with the statutory
provisions as to majority vote; |
| · | the shareholders have been fairly represented at the meeting in question; |
| · | the arrangement is such as a business-person would reasonably approve; and |
| · | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law or that would
amount to a “fraud on the minority.” |
If a scheme of arrangement or takeover offer (as described below)
is approved, any dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be
available to dissenting shareholders of U.S. corporations, providing rights to receive payment in cash for the judicially determined
value of the shares.
Squeeze-out Provisions. When a takeover offer is made
and accepted by holders of 90% of the shares to whom the offer relates within four months, the offeror may, within a two-month
period, require the holders of the remaining
shares to transfer such shares on the terms of the offer. An
objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud,
bad faith, collusion or inequitable treatment of the shareholders.
Further, transactions similar to a merger, reconstruction and/or
an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital
exchange, asset acquisition or control, through contractual arrangements, of an operating business.
Shareholders’ Suits. Our Cayman Islands counsel
is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in
the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability of such actions. In most cases, we will
be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors
usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which
would in all likelihood be of persuasive authority and applied by a court in the Cayman Islands, exceptions to the foregoing principle
apply in circumstances in which:
| · | a company is acting, or proposing to act, illegally or beyond the scope of its authority; |
| · | the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the
number of votes that have actually been obtained; or |
| · | those who control the company are perpetrating a “fraud on the minority.” |
A shareholder may have a direct right of action against us where
the individual rights of that shareholder have been infringed or are about to be infringed.
Enforcement of Civil Liabilities. The Cayman Islands
has a different body of securities laws as compared to the United States and provides less protection to investors. Additionally,
Cayman Islands companies may not have standing to sue before the federal courts of the United States.
We have been advised by our Cayman Islands legal counsel that
the courts of the Cayman Islands are unlikely (1) to recognize or enforce against us judgments of courts of the United States predicated
upon the civil liability provisions of the federal securities laws of the United States or any state and (2) in original actions
brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities
laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances,
although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the
Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial
on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation
to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in
the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or
a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud
or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the
Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court
may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
Special Considerations for Exempted Companies. We are
an exempted company with limited liability (meaning our public shareholders have no liability, as members of the Company, for liabilities
of the Company over and above the amount paid for their shares) under the Companies Law. The Companies Law distinguishes between
ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business
mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company
are essentially the same as for an ordinary company except for the exemptions and privileges listed below:
| · | annual reporting requirements are minimal and consist mainly of a statement that the company has conducted its operations mainly
outside of the Cayman Islands and has complied with the provisions of the Companies Law; |
| · | an exempted company’s register of members is not open to inspection; |
| · | an exempted company does not have to hold an annual general meeting; |
| · | an exempted company may issue negotiable or bearer shares or shares with no par value; |
| · | an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually
given for 30 years in the first instance); |
| · | an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
| · | an exempted company may register as a limited duration company; and |
| · | an exempted company may register as a segregated portfolio company. |
Our Amended and Restated Memorandum and Articles of Association
Our amended and restated memorandum and articles of association
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 a special resolution. As a matter of Cayman Islands law,
a resolution is deemed to be a special resolution where it has been approved by either (1) at least two-thirds (or any higher threshold
specified in a company’s articles of association) of a company’s shareholders at a general meeting for which notice
specifying the intention to propose the resolution as a special resolution has been given or (2) if so authorized by a company’s
articles of association, by a unanimous written resolution of all of the company’s shareholders. Our amended and restated
memorandum and articles of association will provide that special resolutions must be approved either by at least two-thirds of
our shareholders who attend and vote at a shareholders meeting (i.e., the lowest threshold permissible under Cayman Islands law)
(other than amendments relating to the appointment or removal of directors prior to our initial business combination, which require
the approval of at least 90% of our ordinary shares voting in a general meeting), or by a unanimous written resolution of all of
our shareholders.
Our initial shareholders, who collectively will beneficially
own 20% of our ordinary shares upon the closing of this offering (assuming they do not purchase any units in this offering), may
participate in any vote to amend our amended and restated memorandum and articles of association and will have the discretion to
vote in any manner they choose. Specifically, our amended and restated memorandum and articles of association will provide, among
other things, that:
| · | if we are unable to complete our initial business combination within 24 months from the closing of this offering, we will:
(1) cease all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than 10 business
days thereafter, redeem 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 (less up to $100,000 of interest to pay dissolution expenses and which interest
shall be net of taxes payable), divided by the number of then issued and outstanding public shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions,
if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide
for claims of creditors and the requirements of other applicable law; |
| · | prior to our initial business combination, we may not issue additional shares that would entitle the holders thereof to (1)
receive funds from the trust account or (2) vote as a class with our public shares (a) on any initial business combination or (b)
to approve an amendment to our amended and restated memorandum and articles of association to (x) extend the time we have to consummate
a business combination beyond 24 months from the closing of this offering or (y) amend the foregoing provisions; |
| · | in the event we enter into a business combination with a target business that is affiliated with our sponsor, our directors
or our officers (which we currently do not intend to do), we, or a committee of independent |
and disinterested directors, will
obtain an opinion from an independent investment banking firm, or from an independent accounting firm, that such a business combination
is fair to our company from a financial point of view;
| · | if a shareholder vote on our initial business combination is not required by law and we do not decide to hold a shareholder
vote for business or other 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; |
| · | in the event our units are listed on Nasdaq, our initial business combination must be with one or more operating businesses
or assets with a fair market value equal to at least 80% 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; |
| · | (x) in the event we enter into a business combination with a target business in the cannabis industry, we must determine
that such target business is compliant with all applicable laws and regulations within the jurisdictions in which they are located
or operate, and (y) we will not invest in, or consummate a business combination with, a target business that we determine
has been operating, or whose business plan is to operate, in violation of U.S. federal laws, including the U.S. Controlled Substances
Act; |
| · | if our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) to modify the
substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination
within 24 months from the closing of this offering or (B) with respect to any other provision relating to shareholders’ rights
or pre-initial business combination activity, we will provide our public shareholders with the opportunity to redeem all or a portion
of their ordinary shares 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 (which interest shall be net of taxes payable), divided by the number of then issued and
outstanding public shares; and |
| · | we will not effectuate our initial business combination with another blank check company or a similar company with nominal
operations. |
In addition, our amended and restated memorandum and articles
of association will provide that under no circumstances will we redeem our public shares in an amount that would cause our net
tangible assets, after payment of the deferred underwriting commissions, to be less than $5,000,001 upon completion of our initial
business combination.
The Companies Law permits a company incorporated in the Cayman
Islands to amend its memorandum and articles of association with the approval of the holders of at least two-thirds of such company’s
issued and outstanding ordinary shares. A company’s articles of association may specify that the approval of a higher majority
is required. Accordingly, although we could amend any of the provisions relating to our proposed offering, structure and business
plan which are contained in our amended and restated memorandum and articles of association, we view all of these provisions as
binding obligations to our shareholders and neither we, nor our officers or directors, will take any action to amend or waive any
of these provisions unless we provide dissenting public shareholders with the opportunity to redeem their public shares.
Anti-Money Laundering—Cayman Islands
In order to comply with legislation or regulations aimed at
the prevention of money laundering, we are required to adopt and maintain anti-money laundering procedures, and may require subscribers
to provide evidence to verify their identity, the identity of their beneficial owners/controllers and source of funds. Where permitted,
and subject to certain conditions, we may also delegate the maintenance of our anti-money laundering procedures (including the
acquisition of due diligence information) to a suitable person.
We reserve the right to request such information as is necessary
to verify the identity of a subscriber. In some cases, the directors may be satisfied that no further information is required since
an exemption applies under the Anti-
Money Laundering Regulations (2018 Revision) of the Cayman Islands,
as amended and revised from time to time (the “Regulations”). Depending on the circumstances of each application, a
detailed verification of identity might not be required where:
| (a) | the subscriber makes the payment for their investment from an account held in the subscriber’s name at a recognized financial
institution; |
| (b) | the subscriber is regulated by a recognized regulatory authority and is based or incorporated in, or formed under the law of,
a recognized jurisdiction; or |
| (c) | the application is made through an intermediary which is regulated by a recognized regulatory authority and is based in or
incorporated in, or formed under the law of a recognized jurisdiction and an assurance is provided in relation to the procedures
undertaken on the underlying investors. |
For the purposes of these exceptions, recognition of a financial
institution, regulatory authority or jurisdiction will be determined in accordance with the Regulations by reference to those jurisdictions
recognized by the Cayman Islands Monetary Authority as having equivalent anti-money laundering regulations.
In the event of delay or failure on the part of the subscriber
in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds
received will be returned without interest to the account from which they were originally debited.
We also reserve the right to refuse to make any payment to a
shareholder if our directors or officers suspect or are advised that the payment to such shareholder may be non-compliant with
applicable anti-money laundering or other laws or regulations, or if such refusal is considered necessary or appropriate to ensure
our compliance with any such laws or regulations in any applicable jurisdiction.
If any person resident in the Cayman Islands knows or suspects
or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or is involved with terrorism
or terrorist property and the information for that knowledge or suspicion came to their attention in the course of business in
the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge
or suspicion to (i) the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Law (2019 Revision)
of the Cayman Islands if the disclosure relates to criminal conduct or money laundering, or (ii) a police officer of the rank of
constable or higher, or the Financial Reporting Authority, pursuant to the Terrorism Law (2018 Revision) of the Cayman Islands,
if the disclosure relates to involvement with terrorism or terrorist financing and property. Such a report will not be treated
as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.
Certain Anti-Takeover Provisions of Our Amended and Restated
Memorandum and Articles of Association
Our authorized but unissued Class A ordinary shares and preferred
shares are available for future issuances without shareholder 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 Class A ordinary shares and preferred shares could render more difficult or discourage an attempt to obtain
control of us by means of a proxy contest, tender offer, merger or otherwise.
Securities Eligible for Future Sale
Immediately after this offering we will have 31,250,000 (or
35,937,500 if the underwriters’ over-allotment option is exercised in full) ordinary shares issued and outstanding. Of these
shares, the 25,000,000 Class A ordinary shares (or 28,750,000 shares 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
6,250,000 (or 7,187,500 if the underwriters’ over-allotment option is exercised in full) founder shares and all 7,000,000
(or 7,750,000 if the underwriters’ over-allotment option is 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 are subject to
transfer restrictions as set forth elsewhere in this prospectus.
Rule 144
Pursuant to Rule 144, a person who has beneficially owned restricted
shares or warrants for at least six months would be entitled to sell their securities provided that (1) 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 (2) 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 or warrants
for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would
be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number
of securities that does not exceed the greater of:
| · | 1% of the total number of ordinary shares then issued and outstanding, which will equal 312,500 shares immediately after this
offering (or 359,375 if the underwriters exercise their over-allotment option in full); or |
| · | the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing
of a notice on Form 144 with respect to the sale. |
Sales by our affiliates under Rule 144 are also limited by manner
of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144 by Shell Companies
or Former Shell Companies
Rule 144 is not available for the resale of securities initially
issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously
a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:
| · | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
| · | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
| · | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the
preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Current
Reports on Form 8-K; and |
| · | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting
its status as an entity that is not a shell company. |
As a result, our initial shareholders will be able to sell their
founder shares and our sponsor will be able to sell its private placement warrants, 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 any warrants that may be issued on conversion of working capital loans (and any ordinary shares issuable upon
the exercise of the private placement warrants or warrants issued upon conversion of the 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 this offering requiring us to register such securities for resale. The holders of
these securities will be entitled to make up to three demands, excluding short form registration 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. However, the registration rights agreement
provides that we will not permit any registration statement filed under the Securities Act to become effective until
termination of the applicable lock-up period, which occurs (1) in the case of the founder shares, on 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 reported sale price of Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion
of our initial business combination on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or
other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares
for cash, securities or other property, and (2) in the case of the private placement warrants and the respective Class A ordinary
shares underlying such warrants, 30 days after the completion of our initial business combination. We will bear the expenses incurred
in connection with the filing of any such registration statements.
Listing of Securities
We intend to apply to list our units, Class A ordinary shares
and warrants on Nasdaq under the symbols “ ,” “ ” and “ ,”
respectively. We expect that our units will be listed on Nasdaq promptly on or after the effective date of the registration statement.
Following the date the Class A ordinary shares and warrants are eligible to trade separately, we anticipate that the Class A ordinary
shares 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.
Income Tax
Considerations
The following summary of certain Cayman Islands and U.S. federal
income tax considerations relevant to an investment in our units, Class A ordinary shares and warrants is based upon laws and relevant
interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not
deal with all possible tax consequences relating to an investment in our ordinary shares and warrants, such as the tax consequences
under state, local and other tax laws.
Prospective investors should consult their professional advisors
on the possible tax consequences of buying, holding or selling any securities under the laws of their country of citizenship, residence
or domicile.
Cayman Islands Taxation
The following is a discussion on certain Cayman Islands income
tax consequences of an investment in our securities. The discussion is a general summary of present law, which is subject to prospective
and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances and does
not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
Payments of dividends and capital in respect of our securities
will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital
to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income
or corporation tax. The Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance
tax or gift tax.
No stamp duty is payable in respect of the issue of our securities
or on an instrument of transfer in respect of our securities.
The Company has been incorporated under the laws of the Cayman
Islands as an exempted company with limited liability and, as such, has applied for and received an undertaking from the Financial
Secretary of the Cayman Islands in the following form:
The Tax Concessions Law
(2018 Revision)
Undertaking as to Tax Concessions
In accordance with the provision of section 6 of The Tax Concessions
Law (2018 Revision), the Financial Secretary undertakes with Silver Spike Acquisition Corp. (“the Company”).
| 1. | That no law which is hereafter enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations
shall apply to the Company or its operations; and |
| 2. | In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or
inheritance tax shall be payable: |
2.1 on or in respect of the shares, debentures or
other obligations of the Company;
OR
2.2 by way of the withholding in whole or part, of
any relevant payment as defined in Section 6(3) of the Tax Concessions Law (2018 Revision).
| 3. | These concessions shall be for a period of 30 years from the date hereof. |
United States Federal Income Taxation
General
The following discussion summarizes certain United States federal
income tax considerations generally applicable to the acquisition, ownership and disposition of our units (each consisting of one
Class A ordinary share and one-half of one 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 United States federal income tax purposes, as the owner of the underlying Class
A ordinary share and warrant components of the unit. As a result, the discussion below with respect to holders of Class A ordinary
shares and warrants should also apply to holders of units (as the deemed owners of the underlying Class A ordinary shares and warrants
that constitute the units).
This discussion is limited to certain United States 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 a capital asset under the U.S. Internal Revenue Code of 1986, as amended (the
“Code”). This discussion assumes that the Class A ordinary shares and warrants will trade separately and that any distributions
made (or deemed made) by us on our Class A ordinary shares 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 United States 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, including:
| · | financial institutions or financial services entities; |
| · | taxpayers that are subject to the mark-to-market accounting rules; |
| · | governments or agencies or instrumentalities thereof; |
| · | regulated investment companies; |
| · | real estate investment trusts; |
| · | persons liable for alternative minimum tax; |
| · | expatriates or former long-term residents of the United States; |
| · | persons that actually or constructively own five percent or more of our voting shares or ten percent or more of the total value
of our shares; |
| · | persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive
plans or otherwise as compensation; |
| · | persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated or similar
transaction; or |
| · | U.S. Holders whose functional currency is not the U.S. dollar. |
Moreover, the discussion below is based upon the provisions
of the Code, the Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all as of
the date hereof, and such provisions may be repealed, revoked, modified or subject to differing interpretations, possibly on a
retroactive basis, so as to result
in United States federal income tax consequences different from
those discussed below. Furthermore, this discussion does not address any aspect of United States 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 United States 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 change the accuracy of the statements in this discussion.
As used herein, the term “U.S. Holder” means a beneficial
owner of units, Class A ordinary shares or warrants who or that is for United States federal income tax purposes: (i) an individual
citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States 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 United States 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 U.S. persons have the authority to control all substantial decisions of the trust,
or (B) it has in effect a valid election to be treated as a U.S. person.
This discussion does not consider the tax treatment of partnerships
or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity or arrangement
classified as a partnership for United States federal income tax purposes) is the beneficial owner of our securities, the United
States federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the
activities of the partnership. Partnerships holding our securities and partners in such partnerships are urged to consult their
own tax advisors.
THIS DISCUSSION IS ONLY A SUMMARY OF CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSIDERATIONS ASSOCIATED WITH THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES. EACH PROSPECTIVE
INVESTOR IN OUR SECURITIES 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 SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND
NON-U.S. TAX LAWS.
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 United States federal income tax purposes, and therefore,
that treatment is not entirely clear. The acquisition of a unit should be treated for United States federal income tax purposes
as the acquisition of one share of our Class A ordinary shares and one-half of one warrant, a whole one of which is exercisable
to acquire one share of our Class A ordinary shares. We intend to treat the acquisition of a unit in this manner and, by purchasing
a unit, you must adopt such treatment for tax purposes. For United States federal income tax purposes, each holder of a unit must
allocate the purchase price paid by such holder for such unit between the one Class A ordinary share and the one-half of one warrant
based on the relative fair market value of each at the time of issuance. The price allocated to each Class A ordinary share and
one-half of one warrant should be the shareholder’s tax basis in such share or warrant. Any disposition of a unit should
be treated for United States federal income tax purposes as a disposition of the Class A ordinary share and one-half of one warrant
comprising the unit, and the amount realized on the disposition should be allocated between the Class A ordinary share and warrant
based on their respective relative fair market values. The separation of the Class A ordinary share and the one-half of one warrant
constituting a unit should not be a taxable event for United States federal income tax purposes.
The foregoing treatment of the Class A ordinary shares 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
advisors 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 United States federal income
tax purposes.
U.S. Holders
Taxation of Distributions
Subject to the passive foreign investment company (“PFIC”)
rules discussed below, a U.S. Holder generally will be required to include in gross income as dividends the amount of any cash
distribution paid on our Class A ordinary shares to the extent the distribution is paid out of our current or accumulated earnings
and profits (as determined under United States federal income tax principles). Such dividends paid by us will be taxable to a corporate
U.S. Holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations
in respect of dividends received from other domestic corporations. Subject to the PFIC rules discussed below, distributions in
excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Class A ordinary
shares (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such
Class A ordinary shares.
With respect to non-corporate U.S. Holders, under tax laws currently
in effect, dividends generally will be taxed at the lower applicable long-term capital gains rate (see “Gain or Loss on Sale,
Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” below) only if our Class A ordinary
shares are readily tradable on an established securities market in the United States and certain other requirements are met, including
that we are not classified as a PFIC during the taxable year in which the dividend is paid or the preceding taxable year. U.S.
Holders should consult their tax advisors regarding the availability of such lower rate for any dividends paid with respect to
our Class A ordinary shares.
Gain or Loss on Sale, Taxable Exchange or Other Taxable
Disposition of Class A Ordinary Shares and Warrants
Subject to the PFIC rules discussed below, a U.S. Holder generally
will recognize capital gain or loss on the sale or other taxable disposition of our Class A ordinary shares or warrants (including
on our dissolution and liquidation if we do not consummate 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 Class
A ordinary shares or warrants exceeds one year. It is unclear, however, whether certain redemption rights described in this prospectus
may suspend the running of the applicable holding period for this purpose.
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 Class A ordinary shares 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 Class A ordinary shares or warrants
based upon the then fair market values of the Class A ordinary shares and the warrants included in the units) and (ii) the U.S.
Holder’s adjusted tax basis in its Class A ordinary shares or warrants so disposed of. A U.S. Holder’s adjusted tax
basis in its Class A ordinary shares or 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 Class A ordinary shares or one-half of one warrant, as described above
under “— Allocation of Purchase Price and Characterization of a Unit”) reduced by any prior distributions treated
as a return of capital. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced
rates. See “— Exercise or Lapse of a Warrant” below for a discussion regarding a U.S. Holder’s basis in
a Class A ordinary share acquired pursuant to the exercise of a warrant. The deduction of capital losses is subject to certain
limitations.
Redemption of Class A Ordinary Shares
Subject to the PFIC rules discussed below, in the event that
a U.S. Holder’s Class A ordinary shares are redeemed pursuant to the redemption provisions described in this prospectus under
“Description of Securities — Ordinary Shares” or if we purchase a U.S. Holder’s Class A ordinary shares
in an open market transaction, the treatment of the transaction for United States federal income tax purposes will depend on whether
the redemption qualifies as a sale of the Class A ordinary shares under Section 302 of the Code. If the redemption or purchase
by us qualifies as a sale of Class A ordinary shares, the U.S. Holder will be treated as described under “Gain or Loss on
Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants” above. If the redemption or
purchase by us does not qualify as a sale of Class A ordinary shares, the U.S. Holder will be treated as receiving a corporate
distribution with the tax consequences described above under “Taxation of Distributions.” Whether a redemption or purchase
by us qualifies for sale treatment will depend largely on the total number of our shares treated as held by the U.S. Holder (including
any Class A ordinary shares constructively owned by the U.S. Holder
as a result of owning warrants) relative to all of our shares
outstanding both before and after such redemption or purchase. The redemption or purchase by us of Class A ordinary shares generally
will be treated as a sale of the Class A ordinary shares (rather than as a corporate distribution) if such redemption or purchase
(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. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied,
a U.S. Holder takes into account not only our shares actually owned by the U.S. Holder, but also our shares that are constructively
owned by such holder. A U.S. Holder may constructively own, in addition to shares owned directly, shares 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
shares the U.S. Holder has a right to acquire by exercise of an option, which would generally include Class A ordinary shares 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 Class
A ordinary shares must, among other requirements, be less than 80 percent of the percentage of our outstanding voting shares actually
and constructively owned by the U.S. Holder immediately before the redemption. Prior to our initial business combination the ordinary
shares 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 ours. The redemption of the Class
A ordinary shares will not be essentially equivalent to a dividend if such redemption results in a “meaningful reduction”
of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S.
Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated
in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held
corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. Holder
should consult 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 “Taxation of Distributions”
above. After the application of those rules, any remaining tax basis of the U.S. Holder in the redeemed Class A ordinary shares
will be added to the U.S. Holder’s adjusted tax basis in its remaining shares. If there are no remaining shares, a U.S. Holder
is urged to consult its tax advisor as to the allocation of any remaining tax basis.
Exercise or Lapse of a Warrant
Subject to the PFIC rules discussed below and 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 Class A ordinary share on the exercise of a warrant for cash. A U.S. Holder’s tax basis in a Class A ordinary share
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. It is unclear
whether a U.S. Holder’s holding period for the Class A ordinary share 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 United States federal income tax purposes. In either situation, a U.S.
Holder’s tax basis in the Class A ordinary shares received generally would equal the U.S. Holder’s tax basis in the
warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for
the Class A ordinary share 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 Class A ordinary shares would include
the holding period of the warrants.
It is also possible that a cashless exercise may be treated
as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder may be deemed to have surrendered
warrants with an aggregate fair market value equal to the exercise price for the total number of warrants to be exercised. The
U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the warrants
deemed surrendered and the U.S. Holder’s tax basis in such warrants. In this case, a U.S. Holder’s tax basis in the
Class A ordinary shares received would equal the sum of the U.S. Holder’s initial investment in the warrants exercised (i.e.,
the portion of the U.S. Holder’s purchase price for the units that is allocated to the warrant, as described above under
“— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrants. It
is unclear whether a U.S. Holder’s holding period for the Class A ordinary shares would commence on the date of exercise
of the warrant or the day following the date of exercise of the warrant.
Due to the absence of authority on the United States federal
income tax treatment of a cashless exercise, 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.
Possible Constructive Distributions
The terms of each warrant provide for an adjustment to the number
of Class A ordinary shares for which the warrant may be exercised or to the exercise price of the warrant in certain events, as
discussed in the section of this prospectus captioned “Description of Securities — Warrants — Public Shareholders’
Warrants.” An adjustment which has the effect of preventing dilution 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
U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of Class
A ordinary shares that would be obtained upon exercise) as a result of a distribution of cash to the holders of our Class A ordinary
shares which is taxable to the U.S. Holders of such Class A ordinary shares as described under “— Taxation of Distributions”
above. Such constructive distribution would be subject to tax as described under that section 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 the increase in the interest. For
certain information reporting purposes, we are required to determine the date and amount of any such constructive distributions.
Proposed Treasury regulations, which we may rely on prior to the issuance of final regulations, specify how the date and amount
of constructive distributions are determined.
Passive Foreign Investment Company Rules
A non-U.S. corporation will be classified as a PFIC for United
States federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including its pro rata share
of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive income
or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value and averaged quarterly over
the year), including its pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares
by value, are held for the production of, or produce, passive income. Passive income generally includes dividends, interest, rents
and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition
of passive assets.
Because we are a blank check company, with no current active
business, we believe that it is likely that we will meet the PFIC asset or income test for our current taxable year ending December
31, 2019. However, pursuant to a startup exception, a corporation will not be a PFIC for the first taxable year the corporation
has gross income (the “startup year”), if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies
the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (3) the corporation
is not in fact a PFIC for either of those years. Although subject to uncertainty, we may qualify for the startup exception for
2019, and, accordingly, we would not be treated as a PFIC for 2019. The applicability of the startup exception to us will not be
known until after the close of our current taxable year ending December 31, 2019 and, perhaps, until after the close of the first
two taxable years following our startup year (within the meaning of the startup exception). Although subject to uncertainty, it
is possible that we could be treated as a PFIC for a taxable year prior to our startup year (within the meaning of the startup
exception). Further, after the acquisition of a company or assets in a business combination, we may still meet one of the PFIC
tests depending on the timing of the acquisition and the amount of our passive income and assets as well as the passive income
and assets of the acquired business. If the company that we acquire in a business combination is a PFIC, then we will likely not
qualify for the startup exception and will be
a PFIC for our current taxable year ending December 31, 2019.
Our actual PFIC status for our current taxable year or any subsequent taxable year will not be determinable until after the end
of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year
ending December 31, 2019 or any future taxable year.
Although our PFIC status is determined annually, an initial
determination that our company is a PFIC will generally apply for subsequent years to a U.S. Holder who held ordinary shares or
warrants while we were a PFIC, whether or not we meet the test for PFIC status in those subsequent years. If we are determined
to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of our Class A ordinary
shares or warrants and, in the case of our Class A ordinary shares, the U.S. Holder did not make either a timely qualified electing
fund (“QEF”) election or a mark-to-market election for our first taxable year as a PFIC in which the U.S. Holder held
(or was deemed to hold) Class A ordinary shares, as described below, such U.S. Holder generally will be subject to special rules
with respect to (i) any gain recognized by the U.S. Holder on the sale or other disposition of its Class A ordinary shares or warrants
and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during
a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in
respect of the Class A ordinary shares during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s
holding period for the Class A ordinary shares).
Under these rules:
| · | the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for
the Class A ordinary shares or warrants; |
| · | the amount allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess
distribution, or to the period in the U.S. Holder’s holding period before the first day of our first taxable year in which
we are a PFIC, will be taxed as ordinary income; |
| · | the amount allocated to other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will
be taxed at the highest tax rate in effect for that year and applicable to the U.S. Holder; and |
| · | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder
with respect to the tax attributable to each such other taxable year of the U.S. Holder. |
In general, if we are determined to be a PFIC, a U.S. Holder
will avoid the PFIC tax consequences described above in respect to our Class A ordinary shares (but not our warrants) by making
a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of our net capital gains (as long-term
capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed,
in the taxable year of the U.S. Holder in which or with which our taxable year ends. A U.S. Holder generally may make a separate
election to defer the payment of taxes on undistributed income inclusions under the QEF rules, but if deferred, any such taxes
will be subject to an interest charge.
A U.S. Holder may not make a QEF election with respect to its
warrants to acquire our Class A ordinary shares. As a result, if a U.S. Holder sells or otherwise disposes of such warrants (other
than upon exercise of such warrants) and we were a PFIC at any time during the U.S. Holder’s holding period of such warrants,
any gain recognized generally will be treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises
such warrants properly makes a QEF election with respect to the newly acquired Class A ordinary shares (or has previously made
a QEF election with respect to our Class A ordinary shares), the QEF election will apply to the newly acquired Class A ordinary
shares. Notwithstanding the foregoing, the adverse tax consequences relating to PFIC shares, adjusted to take into account the
current income inclusions resulting from the QEF election, will continue to apply with respect to such newly acquired Class A ordinary
shares (which generally will be deemed to have a holding period for purposes of the PFIC rules that includes the period the U.S.
Holder held the warrants), unless the U.S. Holder makes a purging election under the PFIC rules. Under the purging election, the
U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will
be treated as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will have a new
basis and holding period in the Class A ordinary shares acquired upon the exercise of the warrants for purposes of the PFIC rules.
The QEF election is made on a shareholder-by-shareholder basis
and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes a QEF election by attaching a completed
IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including
the information provided in a PFIC annual information statement, to a timely filed United States federal income tax return for
the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective statement
with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders should consult their tax
advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
In order to comply with the requirements of a QEF election,
a U.S. Holder must receive a PFIC annual information statement from us. If we determine we are a PFIC for any taxable year (of
which there can be no assurance), we will endeavor to provide to a U.S. Holder such information as the IRS may require, including
a PFIC annual information statement, in order to enable the U.S. Holder to make and maintain a QEF election, but there is no assurance
that we will timely provide such required information. There is also no assurance that we will have timely knowledge of our status
as a PFIC in the future or of the required information to be provided.
If a U.S. Holder has made a QEF election with respect to our
Class A ordinary shares, and the excess distribution rules discussed above do not apply to such shares (because of a timely QEF
election for our first taxable year as a PFIC in which the U.S. Holder holds (or is deemed to hold) such shares or a purge of the
PFIC taint pursuant to a purging election, as described above), any gain recognized on the sale of our Class A ordinary shares
generally will be taxable as capital gain and no additional tax charge will be imposed under the PFIC rules. As discussed above,
if we are a PFIC for any taxable year, a U.S. Holder of our Class A ordinary shares that has made a QEF election will be currently
taxed on its pro rata share of our earnings and profits, whether or not distributed for such year. A subsequent distribution of
such earnings and profits that were previously included in income generally should not be taxable when distributed to such U.S.
Holder. The tax basis of a U.S. Holder’s shares in a QEF will be increased by amounts that are included in income, and decreased
by amounts distributed but not taxed as dividends, under the above rules. In addition, if we are not a PFIC for any taxable year,
such U.S. Holder will not be subject to the QEF inclusion regime with respect to our Class A ordinary shares for such a taxable
year.
If we are a PFIC and our Class A ordinary shares constitute
“marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed above if such U.S. Holder,
at the close of the first taxable year in which it holds (or is deemed to hold) our Class A ordinary shares, makes a mark-to-market
election with respect to such shares for such taxable year. Such U.S. Holder generally will include for each of its taxable years
as ordinary income the excess, if any, of the fair market value of its Class A ordinary shares at the end of such year over its
adjusted basis in its Class A ordinary shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if
any, of its adjusted basis of its Class A ordinary shares over the fair market value of its Class A ordinary shares at the end
of its taxable year (but only to the extent of the net amount of previously included income as a result of the mark-to-market election).
The U.S. Holder’s basis in its Class A ordinary shares will be adjusted to reflect any such income or loss amounts, and any
further gain recognized on a sale or other taxable disposition of its Class A ordinary shares will be treated as ordinary income.
Currently, a mark-to-market election may not be made with respect to warrants.
The mark-to-market election is available only for “marketable
stock,” generally, stock that is regularly traded on a national securities exchange that is registered with the Securities
and Exchange Commission, including Nasdaq, or on a foreign exchange or market that the IRS determines has rules sufficient to ensure
that the market price represents a legitimate and sound fair market value. U.S. Holders should consult their own tax advisors regarding
the availability and tax consequences of a mark-to-market election in respect to our ordinary shares under their particular circumstances.
If we are a PFIC and, at any time, have a foreign subsidiary
that is classified as a PFIC, U.S. Holders generally would be deemed to own a portion of the shares of such lower-tier PFIC, and
generally could incur liability for the deferred tax and interest charge described above if we receive a distribution from, or
dispose of all or part of our interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an
interest in the lower-tier PFIC. We will endeavor to cause any lower-tier PFIC to provide to a U.S. Holder the information that
may be required to make or maintain a QEF election with respect to the lower-tier PFIC. There can be no assurance that we will
have timely knowledge of the status of any such lower-tier PFIC. In addition, we may not hold a controlling interest in any such
lower-tier PFIC and thus there can be no assurance we will be able to cause the
lower-tier PFIC to provide such required information. U.S. Holders
are urged to consult their tax advisors regarding the tax issues raised by lower-tier PFICs.
A U.S. Holder that owns (or is deemed to own) shares in a PFIC
during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to-market election
is made) and such other information as may be required by the U.S. Treasury Department. Failure to do so, if required, will extend
the statute of limitations until such required information is furnished to the IRS.
The rules dealing with PFICs and with the QEF and mark-to-market
elections are very complex and are affected by various factors in addition to those described above. Accordingly, U.S. Holders
of our Class A ordinary shares or warrants should consult their own tax advisors concerning the application of the PFIC rules to
our securities under their particular circumstances.
Tax Reporting
Certain U.S. Holders may be required to file an IRS Form 926
(Return by a U.S. Transferor of Property to a Foreign Corporation) to report a transfer of property (including cash) to us. Substantial
penalties may be imposed on a U.S. Holder that fails to comply with this reporting requirement. Furthermore, certain U.S. Holders
who are individuals and certain entities will be required to report information with respect to such U.S. Holder’s investment
in “specified foreign financial assets” on IRS Form 8938 (Statement of Specified Foreign Financial Assets), subject
to certain exceptions. Persons who are required to report specified foreign financial assets and fail to do so may be subject to
substantial penalties. Potential investors are urged to consult their tax advisers regarding the foreign financial asset and other
reporting obligations and their application to an investment in our Class A ordinary shares and warrants.
Non-U.S. Holders
This section applies to you if you are a “Non-U.S. Holder.”
As used herein, the term “Non-U.S. Holder” means a beneficial owner of our units, Class A ordinary shares or warrants
that is for U.S. federal income tax purposes:
| · | a non-resident alien individual (other than certain former citizens and residents of the United States subject to U.S. tax
as expatriates); |
| · | a foreign corporation; or |
| · | an estate or trust that is not a U.S. Holder; |
but 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 sale or other disposition of our securities.
Dividends (including constructive distributions treated as dividends)
paid or deemed paid to a Non-U.S. Holder in respect of our Class A ordinary shares generally will not be subject to United States
federal income tax, unless the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business
within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment or
fixed base that such Non-U.S. Holder maintains in the United States). In addition, a Non-U.S. Holder generally will not be subject
to United States federal income tax on any gain attributable to a sale or other disposition of our Class A ordinary shares or warrants
unless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an
applicable income tax treaty, is attributable to a permanent establishment or fixed base that such Non-U.S. Holder maintains in
the United States).
Dividends (including constructive distributions treated as dividends)
and gains that are effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and,
if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base in the United States)
generally will be subject to United States federal income tax at the same regular United States federal income tax rates applicable
to a comparable U.S. Holder and, in the case of a Non-U.S. Holder that is a corporation for United States federal income tax purposes,
also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate.
The United States 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 United
States federal income tax treatment of the exercise or lapse of a warrant by a U.S. Holder, as described under “U.S. Holders
— Exercise or Lapse of a Warrant,” above, although to the extent a cashless exercise results in a taxable exchange,
the consequences would be similar to those described in the preceding paragraphs above for a Non-U.S. Holder’s gain on the
sale or other disposition of our Class A ordinary shares and warrants.
Information Reporting and Backup Withholding
Dividend payments with respect to our Class A ordinary shares
and proceeds from the sale, exchange or redemption of our Class A ordinary shares may be subject to information reporting to the
IRS and possible United States backup withholding. Backup withholding will not apply, however, 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. A Non-U.S. Holder generally will eliminate the requirement for information reporting and backup
withholding by providing 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
as backup withholding 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 under the backup withholding rules by timely filing the appropriate claim for refund with
the IRS and furnishing any required information. Holders are urged to consult their own tax advisors regarding the application
of backup withholding and the availability of and procedure for obtaining an exemption from backup withholding in their particular
circumstances.
Underwriting
Under the terms and subject to the conditions contained in an
underwriting agreement dated , 2019, we have agreed to sell to the underwriters named below the following respective numbers of
units:
| Underwriter | |
Number of Units |
| Credit Suisse Securities (USA) LLC | |
| | |
| | |
| | |
| | |
| | |
| Total | |
| 25,000,000 | |
The underwriting agreement provides that the underwriters are
obligated to purchase all the units in this offering if any are purchased, other than those units covered by the over-allotment
option described below.
We have granted to the underwriters a 45-day option to purchase
on a pro rata basis up to 3,750,000 additional units at the initial public offering price, less the underwriting discounts and
commissions. The option may be exercised only to cover any over-allotments of units.
The underwriters propose to offer the units initially at the
public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession
of $ per unit.
The following table summarizes the compensation and estimated
expenses we will pay:
| | |
Per Unit(1) | |
Total(2) |
| | |
Without Over-allotment | |
With Over-Allotment | |
Without Over-allotment | |
With Over-Allotment |
| Underwriting Discounts and Commissions paid by us | |
$ | 0.55 | | |
$ | 0.55 | | |
$ | 13,750,000 | | |
$ | 15,812,500 | |
| (1) | Includes $0.35 per unit, or $8,750,000 (or $10,062,500 if the over-allotment option is exercised in full) in the aggregate,
payable to the underwriters for deferred underwriting commissions to be placed in a trust account located in the United States
as described herein. The deferred commissions will be released to the underwriters only on completion of an initial business combination,
in an amount equal to $0.35 multiplied by the number of Class A ordinary shares sold as part of the units in this offering, as
described in this prospectus. |
We estimate that our non-reimbursed out-of-pocket expenses for
this offering will be approximately $1,000,000. We have agreed to pay for the FINRA-related fees and expenses of the underwriters’
legal counsel, not to exceed $ .
The representative has informed us that the underwriters do
not intend to make sales to discretionary accounts.
We, our sponsor and our officers and directors have agreed that
we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, without the prior written consent
of Credit Suisse Securities (USA) LLC for a period of 180 days after the date of this prospectus, any units, warrants, ordinary
shares or any other securities convertible into, or exercisable, or exchangeable for, ordinary shares; 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 the ordinary shares issuable upon
exercise of the warrants and the founder shares; and (4) issue securities in connection with our initial business combination.
However, the foregoing shall not apply to the forfeiture of any founder shares pursuant to their terms or any transfer of founder
shares to any current or future independent director of the Company (as long as such current or future independent director is
subject to the terms of the letter agreement, filed herewith, at the time of such transfer; and as long as, to the extent any Section
16 reporting obligation is triggered as a result of such transfer, any related Section 16 filing includes a practical explanation
as to the nature of the transfer). Credit Suisse Securities (USA) LLC in its sole discretion may release any of the securities
subject to these lock-up agreements at any time without notice.
Our initial shareholders have agreed not to transfer, assign
or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof 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 Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share
dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion
of our initial business combination on which we complete a liquidation, merger, amalgamation, share exchange, reorganization or
other similar transaction that results in all of our public shareholders having the right to exchange their Class A ordinary shares
for cash, securities or other property (except with respect to permitted transferees as described herein under “Principal
Shareholders—Transfers of Founder Shares and Private Placement Warrants”). Any permitted transferees would be subject
to the same restrictions and other agreements of our initial shareholders with respect to any founder shares.
The private placement warrants (including the Class A ordinary
shares 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
“Principal Shareholders—Transfers of Founder Shares and Private Placement Warrants”).
We have agreed to indemnify the underwriters against certain
liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.
We expect our units to be listed on Nasdaq, under the symbol
“ ” and, once the Class A ordinary shares and warrants begin separate trading,
to have our Class A ordinary shares and warrants listed on Nasdaq under the symbols “ ”
and “ ,” respectively.
Prior to this offering, there has been no public market for
our securities. Consequently, the initial public offering price for the units was determined by negotiations between us and the
representative.
The determination of our per unit offering price was more arbitrary
than would typically be the case if we were an operating company. Among the factors considered in determining the initial public
offering price 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 cannot assure
you, however, that the price at which the units, Class A ordinary shares or warrants will sell in the public market after
this offering will not be lower than the initial public offering price or that an active trading market in our units, Class A
ordinary shares or warrants will develop and continue after this offering.
If we do not complete our initial business combination within
the period provided in our amended and restated memorandum and articles of association, the underwriters have agreed that: (1)
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 (2) the deferred underwriters’ discounts and commissions will be distributed on a
pro rata basis, together with any accrued interest thereon (which interest shall be net of taxes payable) to the public shareholders.
In connection with this offering, the underwriters may engage
in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids in accordance with Regulation
M under the Exchange Act.
| · | Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified
maximum. |
| · | Over-allotment involves sales by the underwriters of units in excess of the number of units the underwriters are obligated
to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short
position. In a covered short position, the number of units over-allotted by the underwriters is not greater than the number of
units that they may purchase in the over-allotment option. In a naked short position, the number of units involved is greater than
the number of units in the over-allotment option. The underwriters may close out any covered short position by either exercising
their over-allotment option and/or purchasing units in the open market. |
| · | Syndicate covering transactions involve purchases of the units in the open market after the distribution has been completed
in order to cover syndicate short positions. In determining the source of units to close out the 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 over-allotment option. If the underwriters sell more units than could be covered by the over-allotment
option, a naked short position, the position can only be closed out by buying units in the open market. A naked short position
is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the units
in the open market after pricing that could adversely affect investors who purchase in this offering. |
| · | Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the units originally sold
by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions. |
These stabilizing transactions, syndicate covering transactions
and penalty bids 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 the units. As a result, the price of our units may be higher than the price that might otherwise exist in
the open market. These transactions may be effected on Nasdaq or otherwise and, if commenced, may be discontinued at any time.
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 90 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.
Some of the underwriters and their affiliates have engaged in,
and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or
our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.
In addition, in the ordinary course of their business activities,
the underwriters and 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. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates.
The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views
in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short
positions in such securities and instruments.
A prospectus in electronic format may be made available on the
websites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one
or more of the underwriters participating in this offering may distribute prospectuses electronically. The representative may agree
to allocate a number of units to underwriters and selling group members for sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same
basis as other allocations.
The units are offered for sale in the United States and other
jurisdictions where it is lawful to make such offers.
Each of the underwriters has represented and agreed that it
has not offered, sold or delivered and will not offer, sell or deliver any of the units directly or indirectly, or distribute this
prospectus or any other offering material relating to the units, in or from any jurisdiction except under circumstances that will
result in compliance with the applicable laws and regulations thereof and that will not impose any obligations on us except as
set forth in the underwriting agreement.
European Economic Area
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of our common
shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our common
shares may be made at any time under the following exemptions under the Prospectus Directive:
| (a) | to any legal entity which is a qualified investor as defined in the Prospectus Directive; |
| (b) | to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject
to obtaining the prior consent of the Representative for any such offer; or |
| (c) | in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of
our common stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article
3 of the Prospectus Directive. |
For the purposes of this provision, the expression an “offer
to the public” in relation to our common shares in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and our common shares to be offered so as to enable an investor to decide
to purchase our common shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive
in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (as amended), including by Directive
2010/73/EU, and includes any relevant implementing measure in the Relevant Member State.
This European Economic Area selling restriction is in addition
to any other selling restrictions set out below.
Notice to Investors in the United Kingdom
Each of the underwriters severally represents, warrants and
agrees as follows:
| (a) | it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of section 21 of FSMA) to persons who have professional experience
in matters relating to investments falling with Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005 or in circumstances in which section 21 of FSMA does not apply to the company; and |
| (b) | it has complied with, and will comply with all applicable provisions of FSMA with respect to anything done by it in relation
to the units in, from or otherwise involving the United Kingdom. |
Notice to Residents of Japan
The underwriters will not offer or sell any of our units directly
or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly
in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes
of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity
organized under the laws of Japan.
Notice to Residents of Hong Kong
The underwriters and each of their affiliates have not (1) offered
or sold, and will not offer or sell, in Hong Kong, by means of any document, our units other than (A) to “professional investors”
as defined in the Securities and Futures Ordinance (Cap.571) of Hong Kong and any rules made under that Ordinance or (B) in other
circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap.
32 of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance or (2) issued or had in
its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong
Kong or elsewhere any advertisement, invitation or document relating to our units which is directed at, or the contents of which
are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong)
other than with respect to our 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 Securities and Futures
Ordinance and any rules made under that Ordinance. The contents
of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation
to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.
Notice to Residents of Singapore
This prospectus or any other offering material relating to our
units has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the units will be offered
in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore
(the “Securities and Futures Act”). Accordingly our units may not be offered or sold, or be the subject of an invitation
for subscription or purchase, nor may this prospectus or any other offering material relating to our units be circulated or distributed,
whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor
or other person specified in Section 274 of the Securities and Futures Act, (b) to a sophisticated investor, and in accordance
with the conditions specified in Section 275 of the Securities and Futures Act or (c) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provision of the Securities and Futures Act.
Notice to Residents of Germany
Each person who is in possession of this prospectus is aware
that no German sales prospectus (Verkaufsprospekt) within the meaning of the Securities Sales Prospectus Act (Wertpapier-Verkaufsprospektgesetz,
the “Act”) of the Federal Republic of Germany has been or will be published with respect to our units. In particular,
each underwriter has represented that it has not engaged and has agreed that it will not engage in a public offering (offentliches
Angebot) within the meaning of the Act with respect to any of our units otherwise then in accordance with the Act and all other
applicable legal and regulatory requirements.
Notice to Residents of France
The units are being issued and sold outside the Republic of
France and that, in connection with their initial distribution, it has not offered or sold and will not offer or sell, directly
or indirectly, any units to the public in the Republic of France, and that it has not distributed and will not distribute or cause
to be distributed to the public in the Republic of France this prospectus or any other offering material relating to the units,
and that such offers, sales and distributions have been and will be made in the Republic of France only to qualified investors
(investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and Financial Code and decrét no. 98-880
dated October 1, 1998.
Notice to Residents of the Netherlands
Our units may not be offered, sold, transferred or delivered
in or from the Netherlands as part of their initial distribution or at any time thereafter, directly or indirectly, other than
to, individuals or legal entities situated in The Netherlands who or which trade or invest in securities in the conduct of a business
or profession (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds,
collective investment institution, central governments, large international and supranational organizations, other institutional
investors and other parties, including treasury departments of commercial enterprises, which as an ancillary activity regularly
invest in securities; hereinafter, “Professional Investors”); provided that in the offer, prospectus and in any other
documents or advertisements in which a forthcoming offering of our units is publicly announced (whether electronically or otherwise)
in The Netherlands it is stated that such offer is and will be exclusively made to such Professional Investors. Individual or legal
entities who are not Professional Investors may not participate in the offering of our units, and this prospectus or any other
offering material relating to our units may not be considered an offer or the prospect of an offer to sell or exchange our units.
Notice to Prospective Investors in the Cayman Islands
No invitation, whether directly or indirectly, may be made to
the public in the Cayman Islands to subscribe for our securities.
Notice to Canadian Residents
Resale Restrictions
The distribution of units 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 units 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 units 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 units 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 Credit Suisse Securities
(USA) LLC 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 units should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the units in their particular circumstances and about
the eligibility of the units for investment by the purchaser under relevant Canadian legislation.
Legal Matters
Davis Polk & Wardwell LLP, New York, New York, is acting
as counsel in connection with the registration of our securities under the Securities Act, and as such, will pass upon the validity
of the securities offered in this prospectus with respect to units and warrants. Maples and Calder will pass upon the validity
of the securities offered in this prospectus with respect to the ordinary shares and matters of Cayman Islands law. In connection
with this offering, Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California, is acting as counsel to the underwriters.
Experts
The financial statements of Silver Spike Acquisition Corp. as
of June 11, 2019 and for the period from June 7, 2019 (inception) through June 11, 2019 appearing in this prospectus 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 Silver Spike 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 upon such report given
on the authority of such firm 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.
SILVER SPIKE ACQUISITION CORP.
Index to
Financial Statements
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholder and the Board of Directors of
Silver Spike Acquisition Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Silver Spike
Acquisition Corp. (the “Company”) as of June 11, 2019 and the related statements of operations, changes in shareholder's
equity and cash flows for the period from June 7, 2019 (inception) through June 11, 2019 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 June 11, 2019 and the results of its operations and its cash flows for the period from
June 7, 2019 (inception) through June 11, 2019, 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 discussed in Note 1 to the financial statements, the Company's
business plan is dependent on the completion of a financing and the Company's cash and working capital as of June 11, 2019
are not sufficient to complete its planned activities. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans in regard to these matters are also described in Note 1 and 3 to the
financial statements. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
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 and in accordance with auditing standards generally accepted in the United States of America. 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 2019.
New York, NY
June 20, 2019
SILVER SPIKE ACQUISITION CORP.
BALANCE SHEET
JUNE 11, 2019
| ASSETS | |
|
| Deferred offering costs | |
$ | 32,500 | |
| Total Assets | |
$ | 32,500 | |
| LIABILITIES AND SHAREHOLDER'S EQUITY | |
| | |
| Current liability – Promissory note – related party | |
$ | 12,500 | |
| Total Current Liabilities | |
| 12,500 | |
| Commitments | |
| | |
| Shareholder's Equity | |
| | |
| Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| — | |
| Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding | |
| — | |
| Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding(1) | |
| 719 | |
| Additional paid in capital | |
| 24,281 | |
| Accumulated deficit | |
| (5,000 | ) |
| Total Shareholder's Equity | |
| 20,000 | |
| Total Liabilities and Shareholder's Equity | |
$ | 32,500 | |
| (1) | Includes an aggregate of up to 937,500 shares subject to forfeiture if the over-allotment option is not exercised in full or
in part by the underwriters (see Note 6). |
The accompanying notes are an integral
part of these financial statements.
SILVER SPIKE ACQUISITION CORP.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JUNE 7, 2019 (INCEPTION) THROUGH JUNE 11, 2019
| Formation costs | |
$ | 5,000 | |
| Net loss | |
$ | (5,000 | ) |
| Weighted average shares outstanding, basic and diluted (1) | |
| 6,250,000 | |
| Basic and diluted net loss per ordinary share | |
$ | (0.00 | ) |
| (1) | Excludes an aggregate of up to 937,500 shares subject to forfeiture if the over-allotment option is not exercised in full or
in part by the underwriters (see Note 6). |
The accompanying notes are an integral
part of these financial statements.
SILVER SPIKE ACQUISITION CORP.
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE PERIOD FROM JUNE 7, 2019 (INCEPTION) THROUGH JUNE 11, 2019
| | |
Ordinary
Shares | |
| |
| |
|
| | |
Shares | |
Amount | |
Additional
Paid in Capital | |
Accumulated
Deficit | |
Total
Shareholder's Equity |
| Balance – June 7, 2019 | |
| — | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | — | |
| Issuance of Class B ordinary shares to Sponsor(1) | |
| 7,187,500 | | |
| 719 | | |
| 24,281 | | |
| — | | |
| 25,000 | |
| Net loss | |
| — | | |
| — | | |
| — | | |
| (5,000 | ) | |
| (5,000 | ) |
| Balance – June 11, 2019 | |
| 7,187,500 | | |
$ | 719 | | |
$ | 24,281 | | |
$ | (5,000 | ) | |
$ | 20,000 | |
| (1) | Includes an aggregate of up to 937,500 shares subject to forfeiture if the over-allotment option is not exercised in full or
in part by the underwriters (see Note 6). |
The accompanying notes are an integral
part of these financial statements.
SILVER SPIKE ACQUISITION CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JUNE 7, 2019 (INCEPTION) THROUGH JUNE 11, 2019
| Cash Flows from Operating Activities: | |
|
| Net loss | |
$ | (5,000 | ) |
| Net cash
used in operating activities | |
| (5,000 | ) |
| Cash Flows from Financing Activities: | |
| | |
| Proceeds from promissory note – related party | |
| 12,500 | |
| Payment of offering costs | |
| (7,500 | ) |
| Net cash
provided by financing activities | |
| 5,000 | |
| Net Change in Cash | |
| — | |
| Cash at the beginning of the period | |
| — | |
| Cash at the end of the period | |
$ | — | |
| Non-cash investing and financing activities: | |
| | |
| Deferred offering costs paid directly by Sponsor from proceeds from issuance of ordinary shares to Sponsor | |
$ | 25,000 | |
The accompanying notes are an integral
part of these financial statements.
Note 1 — Organization and plan of business operations
Silver Spike Acquisition Corp. (the “Company”) is
a newly organized blank check company incorporated as a Cayman Islands exempted company on June 7, 2019. The Company was formed
for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses (“Business Combination”).
Although the Company is not limited to a particular
industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on businesses
in the cannabis industry that are compliant with all applicable laws and regulations within the jurisdictions in which they
are located or operate and, in particular, the Company will not invest in, or consummate a Business Combination with, a
target business that the Company determines has been operating, or whose business plan is to operate, in violation of U.S.
federal laws, including the U.S. Controlled Substances Act. 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 June 11, 2019, the Company had not commenced any operations.
All activity for the period from June 7, 2019 (inception) through June 11, 2019 relates to the Company's formation and the proposed
initial public offering (“Proposed Offering”), which is described below. The Company will not generate any operating
revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income
in the form of interest income from the proceeds derived from the Proposed Public 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 Offering of 25,000,000 units (the “Units” and, with
respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per unit
(or 28,750,000 Units if the underwriters’ over-allotment option is exercised in full), which is discussed in Note 3 and the
sale of 7,000,000 warrants (or 7,750,000 warrants if the underwriters’ over-allotment option is exercised on full) (the “Private
Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Company’s sponsor,
Silver Spike Sponsor, LLC (the “Sponsor”), that will close simultaneously with the Proposed Offering.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Proposed Offering and 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 an aggregate fair
market value of at least 80% of the assets held in the Trust Account (as defined below) (excluding any deferred underwriting commissions
and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into 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 issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business
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 $10.00 per Unit sold in the Proposed Offering,
including proceeds of the sale of the Private Placement Warrants, will be held in a trust account (“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 180 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 completion of
a Business Combination and (ii) the distribution of the funds in the Trust Account to the Company’s shareholders, as described
below.
The Company will provide its shareholders 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 shareholder meeting called to approve the
Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will
be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account (initially $10.00 per share)
as of two business days prior to the completion of a Business Combination, including 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 shareholders
who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as
discussed in Note 7). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s
warrants. The Class A ordinary shares will be recorded at 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.” The Company will proceed with a Business Combination only if the Company has net tangible assets,
after payment of the deferred underwriting commission, of at least $5,000,001 upon such completion of a Business Combination and,
if the Company seeks shareholder approval, it receives an ordinary resolution under Cayman Islands law approving a Business Combination,
which requires the affirmative vote of a majority of the shareholders who attend and vote and a general meeting of the Company.
If a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons,
the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association, conduct the redemptions pursuant
to the tender offer rules of the Securities and Exchange Commission (“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.
If the Company seeks shareholder approval in connection with a Business Combination, the Company’s Sponsor has agreed to
vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Proposed Offering in favor of
approving a Business Combination and to waive its redemption rights with respect to any such shares in connection with a shareholder
vote to approve a Business Combination or seek to sell any shares to the Company in a tender offer in connection with a Business
Combination. Additionally, subject to the immediately succeeding paragraph, each public shareholder may elect to redeem their Public
Shares, without voting, and if they do vote, irrespective of whether they vote for or against a proposed Business Combination.
If the Company seeks shareholder approval
of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and
Restated Memorandum and Articles of Association provides that a public shareholder, together with any affiliate of such shareholder
or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares
with respect to 15% or more of the Public Shares without the Company’s prior written consent.
The Sponsor has agreed (a) to waive its
redemption rights with respect to any Founder Shares and Public Shares held by it in connection with the completion of a Business
Combination (and not seek to sell its shares to the Company in any tender offer the Company undertakes in connection with its initial
business combination) and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify
the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete
a Business Combination within 24 months from the closing of the Public Offering or (ii) with respect to any other provision relating
to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders
with the opportunity to redeem their Public Shares in conjunction with any such amendment and (c) 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.
The Company will have until 24 months from the closing of the Proposed Offering (the “Combination
Period”) to consummate a Business Combination. If the Company is unable to complete a Business Combination within 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 10 business days thereafter, redeem 100% of the outstanding 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 (less up to $100,000 of interest
to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then outstanding Public
Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive
further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to
the approval of the remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each
case to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account 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 Proposed Offering price per Unit ($10.00).
The Sponsor has agreed that it will be
liable to the Company, if and to the extent any claims by a third party (other than the Company’s independent auditors) for
services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering
into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per Public Share or (2) such
lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions
in the value of trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by
a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under
the Company’s indemnity of the underwriters of the Proposed Offering against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be
unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
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 (other than the Company’s independent auditors), 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 June 11, 2019, the Company had no cash and a working capital
deficiency of $12,500. 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
within one year after the date that the financial statements are issued. Management plans to address this uncertainty through a
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 Sponsor has agreed to loan the Company
up to an aggregate amount of $250,000 to be used, in part, for transaction costs incurred in connection with the Proposed Offering
(the “Promissory Note”). As of June 11, 2019, $12,500 was outstanding under the Promissory Note (see Note 5). 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 U.S.
Dollars and 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 auditor 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 shareholder 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 June
11, 2019.
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 shareholder’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 accounts for
income taxes under ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax
assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and
liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally
requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will
not be realized.
ASC 740 also clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position 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 as income tax expense. There were no unrecognized tax benefits
and no amounts accrued for interest and penalties as of June 11, 2019. 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 Company is considered an exempted Cayman Islands Company,
and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such,
the Company's tax provision was zero for the period presented.
Net loss per share
Net loss per share is computed by dividing net loss by the weighted
average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Weighted average
shares were reduced for the effect of an aggregate of 937,500 ordinary shares that are subject to forfeiture if the over-allotment
option is not exercised by the underwriters (see Note 6). At June 11, 2019, the Company did not have any dilutive securities and
other contracts that could, potentially, be exercised or converted into ordinary shares 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.
Concentration of credit risk
Financial instruments that potentially subject the Company to
concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository
insurance coverage of $250,000. At June 11, 2019, the Company had not experienced losses on this account and management believes
the Company is not exposed to significant risks on such account.
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 Measurements and Disclosures,” approximates
the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recently issued accounting standards
Management does not believe that any recently issued, but not
yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s consolidated
financial statements.
NOTE 3. PROPOSED OFFERING
Pursuant to the Proposed Offering, the
Company will offer for sale up to 25,000,000 Units (or 28,750,000 Units if the underwriters’ over-allotment option is exercised
in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one Class A ordinary share and one-half of one redeemable
warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share
at an exercise price of $11.50 per whole share (see Note 7).
NOTE 4. PRIVATE PLACEMENT
The Sponsor has committed to purchase an
aggregate of 7,000,000 Private Placement Warrants (or 7,750,000 Private Placement Warrants if the underwriters’ over-allotment
is exercised in full) at a price of $1.00 per Private Placement Warrant from the Company in a private placement that will occur
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 the Trust Account. Each Private Placement
Warrant is exercisable for one Class A Share at a price of $11.50 per share, subject to adjustment (see Note 7). If the
Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement
Warrants held in the Trust Account 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
In June 2019, the Company issued an aggregate
of 7,187,500 Class B ordinary shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000.
The Founder Shares will automatically convert into Class A ordinary shares on the first business day following the completion of
a Business Combination on a one-for-one basis, subject to certain adjustments, as described in Note 7.
The Founder Shares include an aggregate
of up to 937,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised
in full or in part, so that the number of Founder Shares will collectively represent 20% of the Company’s issued and outstanding
shares upon the completion of the Proposed Offering.
The Sponsor has agreed, subject to limited
exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier of: (A) one year after the completion of
a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business
Combination, or (y) the date on which the Company completes a liquidation, merger, amalgamation, share exchange, reorganization
or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A
ordinary shares for cash, securities or other property.
Promissory Note – Related Party
On June 10, 2019, the Company issued an
unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $250,000,
of which $12,500 was outstanding under the Promissory Note as of June 11, 2019. The note is non-interest bearing and payable on
the earlier of (i) January 31, 2020 and (ii) the completion of the Proposed Offering.
Related Party Loans
In order to finance transaction costs in
connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers
and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such
Working Capital Loans would be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination,
without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business
Combination into warrants at a price of $1.00 per warrant. Such warrants would 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.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Director Compensation
The Company intends to compensate the independent
directors. The amount and form of compensation to the independent directors has not yet been determined.
Registration Rights
The holders of the Founder Shares, Private
Placement Warrants and any warrants that may be issued on conversion of the Working Capital Loans (and any Class A ordinary shares
issuable upon the exercise of the Private Placement Warrants or 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.
The holders of these securities will be entitled to make up to three demands, excluding short form registration 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 completion of a Business Combination and rights to require the Company to register
for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that
the Company will not permit any registration statement filed under the Securities Act to become effective until termination of
the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company will grant the underwriters
a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments at the Proposed Offering price, less the
underwriting discounts and commissions.
The underwriters will be entitled to a cash underwriting discount of $0.20 per Unit, or $5,000,000 in
the aggregate (or $5,750,000 in the aggregate 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 $8,750,000
in the aggregate (or $10,062,500 in the aggregate if the underwriters’ over-allotment option is exercised
in full). The deferred fee will become
payable to the underwriters 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.
NOTE 7. STOCKHOLDERS’ EQUITY
Preferred Shares —
The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001. The Company's 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. The board
of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could adversely
affect the voting power and other rights of the holders of the ordinary shares and could have anti-takeover effects. At June 11,
2019, there were no preference shares issued or outstanding.
Class A Ordinary Shares —
The Company is authorized to issue 200,000,000 Class A ordinary shares, with a par value of $0.0001 per share. Holders of Class
A ordinary shares are entitled to one vote for each share. At June 11, 2019, there were no Class A ordinary shares issued or outstanding.
Class B Ordinary Shares —
The Company is authorized to issue 20,000,000 Class B ordinary shares, with a par value of $0.0001 per share. Holders of the Class
B ordinary shares are entitled to one vote for each share. At June 11, 2019, there were 7,187,500 Class
B ordinary shares issued and outstanding, of which an aggregate of up to 937,500 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 ordinary shares after the Proposed Offering (assuming the Sponsor does not purchase
any Public Shares in the Proposed Offering).
Only holders of the Class B ordinary shares
will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A ordinary shares
and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of our shareholders
except as otherwise required by law.
The Class B Shares will automatically convert
into Class A ordinary shares on the first business day following the completion of the Business Combination, on a one-for-one basis,
subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued
in excess of the amounts issued in the Proposed Offering and related to the closing of a Business Combination, the ratio at which
Founder Shares will convert into Class A ordinary shares will be adjusted (subject to waiver by holders of a majority of the Class B
ordinary shares) so that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the
aggregate, on an as-converted basis, 20% of the sum of the ordinary shares issued and outstanding upon completion of the Proposed
Offering plus the number of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business
Combination (net of redemptions), excluding any Class A ordinary shares or equity-linked securities issued, or to be issued, to
any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor.
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 completion of a Business Combination and (b) 12 months
from the closing of the Proposed Offering. The Public Warrants will expire five years from the completion of a Business Combination
or earlier upon redemption or liquidation.
The Company will not be obligated to deliver
any Class A ordinary shares 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 ordinary shares
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 Public Warrant will be exercisable for cash or on a cashless basis,
and the Company will not be obligated to issue any shares to holders seeking to exercise their Public 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.
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 reasonable best efforts to
file with the SEC a registration statement registering the issuance, under the Securities Act, of the Class A ordinary
shares issuable upon exercise of the Public Warrants. The Company will use it reasonable best efforts to cause the same to
become effective within 60 business days after the closing of the Business Combination and to maintain the effectiveness of
such registration statement, and a current prospectus relating thereto, until the expiration of the Public Warrants in
accordance with the provisions of the warrant agreement. Notwithstanding the above, if the Class A ordinary shares are,
at the time of any exercise of a Public 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, the Company may, at its
option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in
accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be
required to file or maintain in effect a registration statement, but will use its reasonable best efforts to qualify
the shares under applicable blue sky laws to the extent an exemption is not available.
Once the Public Warrants become exercisable,
the Company may redeem the Public Warrants for redemption:
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in whole and not in part; |
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at a price of $0.01 per Public Warrant; |
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● |
upon not less than 30 days’ prior written notice of redemption to each warrant holder and |
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● |
if, and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the notice of redemption to the warrant holders. |
If and when the Public Warrants become
redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying
securities for sale under all applicable state securities laws.
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 ordinary shares issuable
upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary
dividend or recapitalization, reorganization, merger or consolidation. However, the Public Warrants will not be adjusted for issuances
of ordinary shares at a price below its exercise price. 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 Public Warrants will not receive any of such funds with respect to their
Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with
respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per Class
A ordinary share (with such issue 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 a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z) the volume weighted
average trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior
to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20
per share, the exercise price of the Public Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of
the Market Value and the newly issued price, and the $18.00 per share redemption trigger price described above will be adjusted
(to the nearest cent) to be equal to 180% of the higher 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 and the Class A ordinary shares 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 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 the date that the financial statements were available to be issued.
Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in
the financial statements.
25,000,000 Units
Silver Spike Acquisition Corp.
PRELIMINARY PROSPECTUS
,
2019
Credit Suisse
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 | |
$ | | |
| Accounting fees and expenses | |
| | |
| SEC expenses | |
| 34,845 | |
| FINRA expenses | |
| 43,625 | |
| Travel and road show | |
| | |
| Directors and officers insurance premiums | |
| | |
| Nasdaq listing and filing fees | |
| 75,000 | |
| Printing and engraving expenses | |
| | |
| Miscellaneous expenses | |
| | |
| Total offering expenses | |
$ | 1,000,000 | |
Item 14. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to which a company’s
memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against
willful default, willful neglect, civil fraud or the consequences of committing a crime. Our amended and restated memorandum and
articles of association will provide for indemnification of our officers and directors to the maximum extent permitted by law,
including for any liability incurred in their capacities as such, except through their own actual fraud, willful default or willful
neglect.
We may 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. We also intend to enter into
indemnity agreements with them.
Our officers and directors have agreed to waive any right, title,
interest or claim of any kind in or to any monies in the trust account, and have agreed to waive any right, title, interest or
claim of any kind they may have in the future as a result of, or arising out of, any services provided to us and will not seek
recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will only be able to be
satisfied by us if we (i) have sufficient funds outside of the trust account or (ii) consummate an initial business combination.
Furthermore, a shareholder’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.
We believe that these provisions and the insurance are necessary
to attract and retain talented and experienced officers and directors.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Item 15. Recent Sales of Unregistered Securities.
On June 11, 2019, Silver Spike Sponsor, LLC, our sponsor,
subscribed for an aggregate of 7,187,500 founder shares, for an aggregate offering price of $25,000 at an average purchase
price of $0.004 per share (assuming the over-allotment option is not exercised and the forfeiture by our sponsor of 937,500 founder shares). The number of founder shares issued was determined based on the expectation that the founder
shares would represent 20% of the issued and outstanding ordinary shares upon completion of this offering. Such securities
were issued in connection with our incorporation 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 7,000,000 (or 7,750,000 if the underwriters’ over-allotment option is exercised
in full) private placement warrants at $1.00 per warrant (for an aggregate purchase price of $7,000,000 or $7,750,000 if the underwriters’
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.
No underwriting discounts or commissions were paid with respect
to such sales.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
The list of exhibits following the signature page of this registration statement is incorporated herein by reference.
|
Exhibit
No.
|
|
Description
|
| 1.1 |
|
Form of Underwriting Agreement* |
| 3.1 |
|
Memorandum and Articles of Association |
| 3.2 |
|
Form of Amended and Restated Memorandum and Articles of Association* |
| 4.1 |
|
Specimen Unit Certificate* |
| 4.2 |
|
Specimen Ordinary Share Certificate* |
| 4.3 |
|
Specimen Warrant Certificate* |
| 4.4 |
|
Form of Warrant Agreement between and the Registrant* |
| 5.1 |
|
Opinion of Maples and Calder* |
| 5.2 |
|
Opinion of Davis Polk & Wardwell LLP* |
| 10.1 |
|
Promissory Note, dated June 10, 2019, issued to Silver Spike Sponsor, LLC |
| 10.2 |
|
Form of Letter Agreement among the Registrant and its officers, directors and Silver Spike Sponsor, LLC* |
| 10.3 |
|
Form of Investment Management Trust Agreement between and the Registrant* |
| 10.4 |
|
Form of Registration Rights Agreement between the Registrant and certain security holders* |
| 10.5 |
|
Securities Subscription Agreement, dated June 11, 2019, between the Registrant and Silver Spike Sponsor, LLC |
| 10.6 |
|
Form of Sponsor Warrants Purchase Agreement between the Registrant and Silver Spike Sponsor, LLC* |
| 10.7 |
|
Form of Indemnity Agreement.* |
| 23.1 |
|
Consent of Marcum LLP* |
| 23.2 |
|
Consent of Maples and Calder (included in Exhibit 5.1)* |
| 23.3 |
|
Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.2)* |
| 24 |
|
Power of Attorney (included on signature page of this Registration Statement)* |
| 99.1 |
|
Consent of [·]* |
| 99.2 |
|
Consent of [·]* |
| 99.3 |
|
Consent of [·]* |
| * | To be filed by amendment. |
(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 underwriter at the closing specified in the underwriting agreements, certificates
in such denominations and registered in such names as required by the underwriter 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.
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, on , 2019.
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Silver Spike Acquisition Corp. |
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By: |
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Name: |
Scott Gordon |
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Title: |
Chief Executive Officer and Chairman |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Scott Gordon his true and lawful attorney-in-fact, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any and all amendments including pre- and post-effective
amendments to this registration statement, any subsequent registration statement for the same offering which may be filed pursuant
to Rule 462(b) under the Securities Act of 1933, as amended, and pre- or post-effective amendments thereto, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue
thereof.
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.
| Name |
Position |
Date |
| |
|
|
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Chief Executive Officer and Chairman (Principal Executive Officer) |
, 2019 |
| Scott Gordon |
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President and Director |
, 2019 |
| William Healy |
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Chief Financial Officer (Principal Financial and Accounting Officer) |
, 2019 |
| Greg Gentile |
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|
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AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of Section 6(a) of the Securities
Act of 1933, as amended, the undersigned has signed this registration statement, solely in its capacity as the duly authorized
representative of Silver Spike Acquisition Corp., in , on .
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By: |
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Name: |
Scott Gordon |
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Title: |
Chief Executive Officer and Chairman |
Exhibit 3.1
THE COMPANIES LAW (2018 REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM AND ARTICLES OF ASSOCIATION
OF
Silver
Spike Acquisition Corp.
THE COMPANIES LAW (2018 REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
Silver
Spike Acquisition Corp.
| 1 | The name of the Company is Silver Spike Acquisition Corp. |
| 2 | The Registered Office of the Company shall be at the offices of Maples Corporate Services Limited,
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, or at such other place within the Cayman Islands as the Directors
may decide. |
| 3 | The objects for which the Company is established are unrestricted and the Company shall have full
power and authority to carry out any object not prohibited by the laws of the Cayman Islands. |
| 4 | The liability of each Member is limited to the amount unpaid on such Member's shares. |
| 5 | The share capital of the Company is US$22,100 divided into 200,000,000 Class A ordinary shares
of a par value of US$0.0001 each, 20,000,000 Class B ordinary shares of a par value of US$0.0001 each and 1,000,000 preference
shares of a par value of US$0.0001 each. |
| 6 | The Company has power to register by way of continuation as a body corporate limited by shares
under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. |
| 7 | Capitalised terms that are not defined in this Memorandum of Association bear the respective meanings
given to them in the Articles of Association of the Company. |
WE, the subscriber to this Memorandum of
Association, wish to form a company pursuant to this Memorandum of Association, and we agree to take the number of shares shown
opposite our name.
Dated this 7th day of June 2019.
| Signature and Address of Subscriber |
Number of Shares Taken |
| |
|
| |
|
|
Maples Corporate Services Limited
of PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
acting by:
/s/ Marcia Borden
Marcia Borden
/s/ Ahmaree Piercy
Ahmaree Piercy
Witness to the above signature
|
One Class B ordinary share
|
THE COMPANIES LAW (2018 REVISION)
OF THE CAYMAN ISLANDS
COMPANY LIMITED BY SHARES
\
ARTICLES OF ASSOCIATION
OF
Silver
Spike Acquisition Corp.
| 1.1 | In the Articles Table A in the First Schedule to the Statute does not apply and, unless there is
something in the subject or context inconsistent therewith: |
| "Articles" |
means these articles of association of the Company. |
| "Auditor" |
means the person for the time being performing the duties of auditor of the Company (if any). |
| "Business Combination" |
means a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination involving the Company, with one or more businesses or entities (the "target business"), which Business Combination: (a) must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Fund (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Fund) at the time of the agreement to enter into a Business Combination; and (b) must not be effectuated with another blank cheque company or a similar company with nominal operations. |
| "Class A Share" |
means a Class A ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| "Class B Share" |
means a Class B ordinary share of a par value of US$0.0001 in the share capital of the Company. |
| "Company" |
means the above named company. |
| "Directors" |
means the directors for the time being of the Company. |
| "Dividend" |
means any dividend (whether interim or final) resolved to be |
| |
paid on Shares pursuant to the Articles. |
| "Electronic Record" |
has the same meaning as in the Electronic Transactions Law. |
| "Electronic Transactions Law" |
means the Electronic Transactions Law (2003 Revision) of the Cayman Islands. |
| "IPO" |
means the Company's initial public offering of securities. |
| "Member" |
has the same meaning as in the Statute. |
| "Memorandum" |
means the memorandum of association of the Company. |
| "Ordinary Resolution" |
means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles. |
| "Preference Share" |
means a preference share of a par value of US$0.0001 in the share capital of the Company. |
| "Register of Members" |
means the register of Members maintained in accordance with the Statute and includes (except where otherwise stated) any branch or duplicate register of Members. |
| "Registered Office" |
means the registered office for the time being of the Company. |
| "Seal" |
means the common seal of the Company and includes every duplicate seal. |
| "Share" |
means a Class A Share, a Class B Share or a Preference Share in the Company and includes a fraction of a share in the Company. |
| "Special Resolution" |
has the same meaning as in the Statute, and includes a unanimous written resolution. |
| "Statute" |
means the Companies Law (2018 Revision) of the Cayman Islands. |
| "Subscriber" |
means the subscriber to the Memorandum. |
| "Treasury Share" |
means a Share held in the name of the Company as a treasury share in accordance with the Statute. |
| "Trust Fund" |
means the trust account established by the Company upon the consummation of its IPO and into which a certain amount of the net proceeds of the IPO, together with the proceeds of the private placement of the warrants simultaneously with the closing date of the IPO, will be deposited. |
| (a) | words importing the singular number include the plural number and vice versa; |
| (b) | words importing the masculine gender include the feminine gender; |
| (c) | words importing persons include corporations as well as any other legal or natural person; |
| (d) | "written" and "in writing" include all modes of representing or reproducing
words in visible form, including in the form of an Electronic Record; |
| (e) | "shall" shall be construed as imperative and "may" shall be construed as permissive; |
| (f) | references to provisions of any law or regulation shall be construed as references to those provisions
as amended, modified, re-enacted or replaced; |
| (g) | any phrase introduced by the terms "including", "include", "in particular"
or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; |
| (h) | the term "and/or" is used herein to mean both "and" as well as "or."
The use of "and/or" in certain contexts in no respects qualifies or modifies the use of the terms "and" or
"or" in others. The term "or" shall not be interpreted to be exclusive and the term "and" shall not
be interpreted to require the conjunctive (in each case, unless the context otherwise requires); |
| (i) | headings are inserted for reference only and shall be ignored in construing the Articles; |
| (j) | any requirements as to delivery under the Articles include delivery in the form of an Electronic
Record; |
| (k) | any requirements as to execution or signature under the Articles including the execution of the
Articles themselves can be satisfied in the form of an electronic signature as defined in the Electronic Transactions Law; |
| (l) | sections 8 and 19(3) of the Electronic Transactions Law shall not apply; |
| (m) | the term "clear days" in relation to the period of a notice means that period excluding
the day when the notice is received or deemed to be received and the day for which it is given or on which it is to take effect;
and |
| (n) | the term "holder" in relation to a Share means a person whose name is entered in the
Register of Members as the holder of such Share. |
| 2 | Commencement of Business |
| 2.1 | The business of the Company may be commenced as soon after incorporation of the Company as the
Directors shall see fit. |
| 2.2 | The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred
in or about the formation and establishment of the Company, including the expenses of registration. |
| 3.1 | Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by
the Company in general meeting) and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue,
grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other
rights or restrictions, whether in regard to Dividend or other distribution, voting, return of capital or otherwise and to such
persons, at such times and on such other terms as they think proper, and may also (subject to the Statute and the Articles) vary
such rights, save that the Directors shall not allot, issue, grant options over or otherwise dispose of Shares (including fractions
of a Share) to the extent that it may affect the ability of the Company to carry out a Class B Share Conversion described in the
Articles. |
| 3.2 | Notwithstanding the foregoing, the Subscriber shall have the power to: |
| (a) | issue one Share to itself; |
| (b) | transfer that Share by an instrument of transfer to any person; and |
| (c) | update the Register of Members in respect of the issue and transfer of that Share. |
| 3.3 | The Company shall not issue Shares to bearer. |
| 4.1 | The Company shall maintain or cause to be maintained the Register of Members in accordance with
the Statute. |
| 4.2 | The Directors may determine that the Company shall maintain one or more branch registers of Members
in accordance with the Statute. The Directors may also determine which register of Members shall constitute the principal register
and which shall constitute the branch register or registers, and to vary such determination from time to time. |
| 5 | Closing Register of Members or Fixing Record Date |
| 5.1 | For the purpose of determining Members entitled to notice of, or to vote at any meeting of Members
or any adjournment thereof, or Members entitled to receive payment of any Dividend or other distribution, or in order to make a
determination of Members for any other purpose, the Directors may provide that the Register of Members shall be closed for transfers
for a stated period which shall not in any case exceed forty days. |
| 5.2 | In lieu of, or apart from, closing the Register of Members, the Directors may fix in advance or
arrears a date as the record date for any such determination of Members entitled to notice of, or to vote at any meeting of the
Members or any adjournment thereof, or for the purpose of determining the Members entitled to receive payment of any Dividend or
other distribution, or in order to make a determination of Members for any other purpose. |
| 5.3 | If the Register of Members is not so closed and no record date is fixed for the determination of
Members entitled to notice of, or to vote at, a meeting of Members or Members entitled to receive payment of a Dividend or other
distribution, the date on which notice of the meeting is sent or the date on which the resolution of the Directors resolving to
pay such Dividend or other distribution is passed, as the case may be, shall be the record date for such determination of Members.
When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Article, such determination
shall apply to any adjournment thereof. |
| 6.1 | A Member shall only be entitled to a share certificate if the Directors resolve that share certificates
shall be issued. Share certificates representing Shares, if any, shall be in such form as the Directors may determine. Share certificates
shall be signed by one or more Directors or other person authorised by the Directors. The Directors may authorise certificates
to be issued with the authorised signature(s) affixed by mechanical process. All certificates for Shares shall be consecutively
numbered or otherwise identified and shall specify the Shares to which they relate. All certificates surrendered to the Company
for transfer shall be cancelled and subject to the Articles no new certificate shall be issued until the former certificate representing
a like number of relevant Shares shall have been surrendered and cancelled. |
| 6.2 | The Company shall not be bound to issue more than one certificate for Shares held jointly by more
than one person and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them. |
| 6.3 | If a share certificate is defaced, worn out, lost or destroyed, it may be renewed on such terms
(if any) as to evidence and indemnity and on the payment of such expenses reasonably incurred by |
the Company
in investigating evidence, as the Directors may prescribe, and (in the case of defacement or wearing out) upon delivery of the
old certificate.
| 6.4 | Every share certificate sent in accordance with the Articles will be sent at the risk of the Member
or other person entitled to the certificate. The Company will not be responsible for any share certificate lost or delayed in the
course of delivery. |
| 7.1 | Subject to Article 3.1, Shares are transferable subject to the approval of the Directors by resolution
who may, in their absolute discretion, decline to register any transfer of Shares without giving any reason. If the Directors refuse
to register a transfer they shall notify the transferee within two months of such refusal. |
| 7.2 | The instrument of transfer of any Share shall be in writing and shall be executed by or on behalf
of the transferor (and if the Directors so require, signed by or on behalf of the transferee). The transferor shall be deemed to
remain the holder of a Share until the name of the transferee is entered in the Register of Members. |
| 8 | Redemption, Repurchase and Surrender of Shares |
| 8.1 | Subject to the provisions of the Statute the Company may issue Shares that are to be redeemed or
are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall be effected in such manner
and upon such other terms as the Company may, by Special Resolution, determine before the issue of the Shares. |
| 8.2 | Subject to the provisions of the Statute, the Company may purchase its own Shares (including any
redeemable Shares) in such manner and on such other terms as the Directors may agree with the relevant Member. |
| 8.3 | The Company may make a payment in respect of the redemption or purchase of its own Shares in any
manner permitted by the Statute, including out of capital. |
| 8.4 | The Directors may accept the surrender for no consideration of any fully paid Share. |
| 9.1 | The Directors may, prior to the purchase, redemption or surrender of any Share, determine that
such Share shall be held as a Treasury Share. |
| 9.2 | The Directors may determine to cancel a Treasury Share or transfer a Treasury Share on such terms
as they think proper (including, without limitation, for nil consideration). |
| 10 | Variation of Rights of Shares |
| 10.1 | If at any time the share capital of the Company is divided into different classes of Shares, all
or any of the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether
or not the Company is being wound up, be varied without the consent of the holders of the issued Shares of that class where such
variation is considered by the Directors not to have a material adverse effect upon such rights; otherwise, any such variation
shall be made only with the consent in writing of the holders of not less than two thirds of the issued Shares of that class, or
with the approval of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the
holders of the Shares of that class. For the avoidance of doubt, the Directors reserve the right, notwithstanding that any such
variation may not have a material adverse effect, to obtain consent from the holders of Shares of the relevant class. To any such
meeting all the provisions of the Articles relating to general meetings shall apply mutatis mutandis, except that the necessary
quorum shall be one person holding or representing by proxy at least one third of the issued Shares of the class and that any holder
of Shares of the class present in person or by proxy may demand a poll. |
| 10.2 | For the purposes of a separate class meeting, the Directors may treat two or more or all the classes
of Shares as forming one class of Shares if the Directors consider that such class of Shares would be affected in the same way
by the proposals under consideration, but in any other case shall treat them as separate classes of Shares. |
| 10.3 | The rights conferred upon the holders of the Shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied
by the creation or issue of further Shares ranking pari passu therewith. |
| 11 | Commission on Sale of Shares |
The Company may, in so far as
the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely
or conditionally) or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any Shares. Such
commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on
any issue of Shares pay such brokerage as may be lawful.
| 12 | Non Recognition of Trusts |
The Company shall not be bound
by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share,
or (except only as is otherwise provided by the Articles or the Statute) any other rights in respect of any Share other than an
absolute right to the entirety thereof in the holder.
| 13.1 | The Company shall have a first and paramount lien on all Shares (whether fully paid-up or not)
registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with
the Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether
a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this
Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's
lien on a Share shall also extend to any amount payable in respect of that Share. |
| 13.2 | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company
has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after
notice has been received or deemed to have been received by the holder of the Shares, or to the person entitled to it in consequence
of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may
be sold. |
| 13.3 | To give effect to any such sale the Directors may authorise any person to execute an instrument
of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be
registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the
purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of
the Company's power of sale under the Articles. |
| 13.4 | The net proceeds of such sale after payment of costs, shall be applied in payment of such part
of the amount in respect of which the lien exists as is presently payable and any balance shall (subject to a like lien for sums
not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the
sale. |
| 14.1 | Subject to the terms of the allotment and issue of any Shares, the Directors may make calls upon
the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall
(subject to receiving at least fourteen clear days' notice specifying the time or times of payment) pay to the Company at the time
or times so specified the amount called on the Shares. A call may be revoked or postponed, in whole or in part, as the Directors
may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls
made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. |
| 14.2 | A call shall be deemed to have been made at the time when the resolution of the Directors authorising
such call was passed. |
| 14.3 | The joint holders of a Share shall be jointly and severally liable to pay all calls in respect
thereof. |
| 14.4 | If a call remains unpaid after it has become due and payable, the person from whom it is due shall
pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine
(and in addition all expenses that have been incurred by the Company by reason of such non-payment), but the Directors may waive
payment of the interest or expenses wholly or in part. |
| 14.5 | An amount payable in respect of a Share on issue or allotment or at any fixed date, whether on
account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions
of the Articles shall apply as if that amount had become due and payable by virtue of a call. |
| 14.6 | The Directors may issue Shares with different terms as to the amount and times of payment of calls,
or the interest to be paid. |
| 14.7 | The Directors may, if they think fit, receive an amount from any Member willing to advance all
or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable)
pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. |
| 14.8 | No such amount paid in advance of calls shall entitle the Member paying such amount to any portion
of a Dividend or other distribution payable in respect of any period prior to the date upon which such amount would, but for such
payment, become payable. |
| 15.1 | If a call or instalment of a call remains unpaid after it has become due and payable the Directors
may give to the person from whom it is due not less than fourteen clear days' notice requiring payment of the amount unpaid together
with any interest which may have accrued and any expenses incurred by the Company by reason of such non-payment. The notice shall
specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the
call was made will be liable to be forfeited. |
| 15.2 | If the notice is not complied with, any Share in respect of which it was given may, before the
payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all
Dividends, other distributions or other monies payable in respect of the forfeited Share and not paid before the forfeiture. |
| 15.3 | A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner
as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms
as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors
may authorise some person to execute an instrument of transfer of the Share in favour of that person. |
| 15.4 | A person any of whose Shares have been forfeited shall cease to be a Member in respect of them
and shall surrender to the Company for cancellation the certificate for the Shares forfeited |
and shall remain
liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those
Shares together with interest at such rate as the Directors may determine, but his liability shall cease if and when the Company
shall have received payment in full of all monies due and payable by him in respect of those Shares.
| 15.5 | A certificate in writing under the hand of one Director or officer of the Company that a Share
has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to
be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title
to the Share and the person to whom the Share is sold or otherwise disposed of shall not be bound to see to the application of
the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in
reference to the forfeiture, sale or disposal of the Share. |
| 15.6 | The provisions of the Articles as to forfeiture shall apply in the case of non payment of any sum
which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by
way of premium as if it had been payable by virtue of a call duly made and notified. |
| 16.1 | If a Member dies the survivor or survivors (where he was a joint holder) or his legal personal
representatives (where he was a sole holder), shall be the only persons recognised by the Company as having any title to his Shares.
The estate of a deceased Member is not thereby released from any liability in respect of any Share, for which he was a joint or
sole holder. |
| 16.2 | Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation
or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may be required by
the Directors, elect, by a notice in writing sent by him to the Company, either to become the holder of such Share or to have some
person nominated by him registered as the holder of such Share. If he elects to have another person registered as the holder of
such Share he shall sign an instrument of transfer of that Share to that person. The Directors shall, in either case, have the
same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member
before his death or bankruptcy or liquidation or dissolution, as the case may be. |
| 16.3 | A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution
of a Member (or in any other case than by transfer) shall be entitled to the same Dividends, other distributions and other advantages
to which he would be entitled if he were the holder of such Share. However, he shall not, before becoming a Member in respect of
a Share, be entitled in respect of it to exercise any right conferred by membership in relation to general meetings of the Company
and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to have some
person nominated by him be registered as the holder of the Share (but the Directors shall, in either case, have the same right
to decline or suspend registration as they would have had in the case of a transfer of the Share by the relevant Member before
his death or bankruptcy or liquidation or dissolution or any other |
case than by
transfer, as the case may be). If the notice is not complied with within ninety days of being received or deemed to be received
(as determined pursuant to the Articles) the Directors may thereafter withhold payment of all Dividends, other distributions, bonuses
or other monies payable in respect of the Share until the requirements of the notice have been complied with.
| 17 | Class B Share Conversion |
| 17.1 | Class B Shares shall automatically convert into Class A Shares on a one-for-one basis (the "Initial
Conversion Ratio"): (a) at any time and from time to time at the option of the holder thereof; and (b) automatically on
a Business day following the closing of a Business Combination. |
| 17.2 | Notwithstanding the Initial Conversion Ratio, in the case that additional Class A Shares or any
other equity linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing
of a Business Combination, all Class B Shares in issue shall automatically convert into Class A Shares at the time of the closing
of a Business Combination at a ratio for which the Class B Shares shall convert into Class A Shares will be adjusted (unless the
holders of a majority of the Class B Shares in issue agree to waive such anti-dilution adjustment with respect to any such issuance
or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate,
20% of the sum of all Class A Shares and Class B Shares in issue upon completion of the IPO plus all Class A Shares 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. |
| 17.3 | Notwithstanding anything to the contrary contained herein, the foregoing adjustment to the Initial
Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional Class A Shares or equity-linked
securities by the written consent or agreement of holders of a majority of the Class B Shares then in issue consenting or
agreeing separately as a separate class in the manner provided in Article 10. |
| 17.4 | The foregoing conversion ratio shall also be adjusted to account for any subdivision (by share
split, subdivision, exchange, capitalisation, rights issue, reclassification, recapitalisation or otherwise) or combination (by
reverse share split, share consolidation, exchange, reclassification, recapitalisation or otherwise) or similar reclassification
or recapitalisation of the Class A Shares in issue into a greater or lesser number of shares occurring after the original filing
of the Articles without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalisation
of the Class B Shares in issue. |
| 17.5 | Each Class B Share shall convert into its pro rata number of Class A Shares pursuant to this Article.
The pro rata share for each holder of Class B Shares will be determined as follows: each Class B Share shall convert into such
number of Class A Shares as is equal to the product of 1 multiplied by a fraction, the numerator of which shall be the total number
of Class A Shares into which all of the Class B Shares in issue shall be converted pursuant to this Article and the denominator
of which shall be the total number of Class B Shares in issue at the time of conversion. |
| 17.6 | References in this Article to "converted", "conversion" or "exchange"
shall mean the compulsory redemption without notice of Class B Shares of any Member and, on behalf of such Members, automatic application
of such redemption proceeds in paying for such new Class A Shares into which the Class B Shares have been converted or exchanged
at a price per Class B Share necessary to give effect to a conversion or exchange calculated on the basis that the Class A Shares
to be issued as part of the conversion or exchange will be issued at par. The Class A Shares to be issued on an exchange or conversion
shall be registered in the name of such Member or in such name as the Member may direct. |
| 17.7 | Notwithstanding anything to the contrary in this Article, in no event may any Class B Share convert
into Class A Shares at a ratio that is less than one-for-one. |
| 18 | Amendments of Memorandum and Articles of Association and Alteration of Capital |
| 18.1 | The Company may by Ordinary Resolution: |
| (a) | increase its share capital by such sum as the Ordinary Resolution shall prescribe and with such
rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; |
| (b) | consolidate and divide all or any of its share capital into Shares of larger amount than its existing
Shares; |
| (c) | convert all or any of its paid-up Shares into stock, and reconvert that stock into paid-up Shares
of any denomination; |
| (d) | by subdivision of its existing Shares or any of them divide the whole or any part of its share
capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and |
| (e) | cancel any Shares that at the date of the passing of the Ordinary Resolution have not been taken
or agreed to be taken by any person and diminish the amount of its share capital by the amount of the Shares so cancelled. |
| 18.2 | All new Shares created in accordance with the provisions of the preceding Article shall be subject
to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise
as the Shares in the original share capital. |
| 18.3 | Subject to the provisions of the Statute and the provisions of the Articles as regards the matters
to be dealt with by Ordinary Resolution, the Company may by Special Resolution: |
| (b) | alter or add to the Articles; |
| (c) | alter or add to the Memorandum with respect to any objects, powers or other matters specified therein;
and |
| (d) | reduce its share capital or any capital redemption reserve fund. |
| 19 | Offices and Places of Business |
Subject to the provisions of the
Statute, the Company may by resolution of the Directors change the location of its Registered Office. The Company may, in addition
to its Registered Office, maintain such other offices or places of business as the Directors determine.
| 20.1 | All general meetings other than annual general meetings shall be called extraordinary general meetings. |
| 20.2 | The Company may, but shall not (unless required by the Statute) be obliged to, in each year hold
a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. Any annual general
meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them,
it shall be held at the Registered Office on the second Wednesday in December of each year at ten o'clock in the morning. At these
meetings the report of the Directors (if any) shall be presented. |
| 20.3 | The Directors may call general meetings, and they shall on a Members' requisition forthwith proceed
to convene an extraordinary general meeting of the Company. |
| 20.4 | A Members' requisition is a requisition of Members holding at the date of deposit of the requisition
not less than ten per cent. in par value of the issued Shares which as at that date carry the right to vote at general meetings
of the Company. |
| 20.5 | The Members' requisition must state the objects of the meeting and must be signed by the requisitionists
and deposited at the Registered Office, and may consist of several documents in like form each signed by one or more requisitionists. |
| 20.6 | If there are no Directors as at the date of the deposit of the Members' requisition or if the Directors
do not within twenty-one days from the date of the deposit of the Members' requisition duly proceed to convene a general meeting
to be held within a further twenty-one days, the requisitionists, or any of them representing more than one-half of the total voting
rights of all of the requisitionists, may themselves convene a general meeting, but any meeting so convened shall be held no later
than the day which falls three months after the expiration of the said twenty-one day period. |
| 20.7 | A general meeting convened as aforesaid by requisitionists shall be convened in the same manner
as nearly as possible as that in which general meetings are to be convened by Directors. |
| 21 | Notice of General Meetings |
| 21.1 | At least five clear days' notice shall be given of any general meeting. Every notice shall specify
the place, the day and the hour of the meeting and the general nature of the business to be conducted at the general meeting and
shall be given in the manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided
that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or
not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if
it is so agreed: |
| (a) | in the case of an annual general meeting, by all of the Members entitled to attend and vote thereat;
and |
| (b) | in the case of an extraordinary general meeting, by a majority in number of the Members having
a right to attend and vote at the meeting, together holding not less than ninety five per cent. in par value of the Shares giving
that right. |
| 21.2 | The accidental omission to give notice of a general meeting to, or the non receipt of notice of
a general meeting by, any person entitled to receive such notice shall not invalidate the proceedings of that general meeting. |
| 22 | Proceedings at General Meetings |
| 22.1 | No business shall be transacted at any general meeting unless a quorum is present. Two Members
being individuals present in person or by proxy or if a corporation or other non-natural person by its duly authorised representative
or proxy shall be a quorum unless the Company has only one Member entitled to vote at such general meeting in which case the quorum
shall be that one Member present in person or by proxy or (in the case of a corporation or other non-natural person) by its duly
authorised representative or proxy. |
| 22.2 | A person may participate at a general meeting by conference telephone or other communications equipment
by means of which all the persons participating in the meeting can communicate with each other. Participation by a person in a
general meeting in this manner is treated as presence in person at that meeting. |
| 22.3 | A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by
or on behalf of all of the Members for the time being entitled to receive notice of and to attend and vote at general meetings
(or, being corporations or other non-natural persons, signed by their duly authorised representatives) shall be as valid and effective
as if the resolution had been passed at a general meeting of the Company duly convened and held. |
| 22.4 | If a quorum is not present within half an hour from the time appointed for the meeting to commence
or if during such a meeting a quorum ceases to be present, the meeting, if convened upon a Members' requisition, shall be dissolved
and in any other case it shall stand adjourned to the same day in the next week at the same time and/or place or to such other
day, time and/or |
place as the
Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for
the meeting to commence, the Members present shall be a quorum.
| 22.5 | The Directors may, at any time prior to the time appointed for the meeting to commence, appoint
any person to act as chairman of a general meeting of the Company or, if the Directors do not make any such appointment, the chairman,
if any, of the board of Directors shall preside as chairman at such general meeting. If there is no such chairman, or if he shall
not be present within fifteen minutes after the time appointed for the meeting to commence, or is unwilling to act, the Directors
present shall elect one of their number to be chairman of the meeting. |
| 22.6 | If no Director is willing to act as chairman or if no Director is present within fifteen minutes
after the time appointed for the meeting to commence, the Members present shall choose one of their number to be chairman of the
meeting. |
| 22.7 | The chairman may, with the consent of a meeting at which a quorum is present (and shall if so directed
by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned
meeting other than the business left unfinished at the meeting from which the adjournment took place. |
| 22.8 | When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice of an adjourned meeting. |
| 22.9 | A resolution put to the vote of the meeting shall be decided on a show of hands unless before,
or on the declaration of the result of, the show of hands, the chairman demands a poll, or any other Member or Members collectively
present in person or by proxy (or in the case of a corporation or other non-natural person, by its duly authorised representative
or proxy) and holding at least ten per cent. in par value of the Shares giving a right to attend and vote at the meeting demand
a poll. |
| 22.10 | Unless a poll is duly demanded and the demand is not withdrawn a declaration by the chairman that
a resolution has been carried or carried unanimously, or by a particular majority, or lost or not carried by a particular majority,
an entry to that effect in the minutes of the proceedings of the meeting shall be conclusive evidence of that fact without proof
of the number or proportion of the votes recorded in favour of or against such resolution. |
| 22.11 | The demand for a poll may be withdrawn. |
| 22.12 | Except on a poll demanded on the election of a chairman or on a question of adjournment, a poll
shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting
at which the poll was demanded. |
| 22.13 | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith.
A poll demanded on any other question shall be taken at such date, time and place as |
the chairman
of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may
proceed pending the taking of the poll.
| 22.14 | In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall
be entitled to a second or casting vote. |
| 23.1 | Subject to any rights or restrictions attached to any Shares, on a show of hands every Member who
(being an individual) is present in person or by proxy or, if a corporation or other non-natural person is present by its duly
authorised representative or by proxy, shall have one vote and on a poll every Member present in any such manner shall have one
vote for every Share of which he is the holder. |
| 23.2 | In the case of joint holders the vote of the senior holder who tenders a vote, whether in person
or by proxy (or, in the case of a corporation or other non-natural person, by its duly authorised representative or proxy), shall
be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the
names of the holders stand in the Register of Members. |
| 23.3 | A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction
in lunacy, may vote, whether on a show of hands or on a poll, by his committee, receiver, curator bonis, or other person on such
Member's behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy. |
| 23.4 | No person shall be entitled to vote at any general meeting unless he is registered as a Member
on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares have been paid. |
| 23.5 | No objection shall be raised as to the qualification of any voter except at the general meeting
or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall
be valid. Any objection made in due time in accordance with this Article shall be referred to the chairman whose decision shall
be final and conclusive. |
| 23.6 | On a poll or on a show of hands votes may be cast either personally or by proxy (or in the case
of a corporation or other non-natural person by its duly authorised representative or proxy). A Member may appoint more than one
proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where a Member appoints more than one proxy
the instrument of proxy shall state which proxy is entitled to vote on a show of hands and shall specify the number of Shares in
respect of which each proxy is entitled to exercise the related votes. |
| 23.7 | On a poll, a Member holding more than one Share need not cast the votes in respect of his Shares
in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution
and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy
appointed under one |
or more instruments
may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain
from voting a Share or some or all of the Shares in respect of which he is appointed.
| 24.1 | The instrument appointing a proxy shall be in writing and shall be executed under the hand of the
appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation or other non natural person, under
the hand of its duly authorised representative. A proxy need not be a Member. |
| 24.2 | The Directors may, in the notice convening any meeting or adjourned meeting, or in an instrument
of proxy sent out by the Company, specify the manner by which the instrument appointing a proxy shall be deposited and the place
and the time (being not later than the time appointed for the commencement of the meeting or adjourned meeting to which the proxy
relates) at which the instrument appointing a proxy shall be deposited. In the absence of any such direction from the Directors
in the notice convening any meeting or adjourned meeting or in an instrument of proxy sent out by the Company, the instrument appointing
a proxy shall be deposited physically at the Registered Office not less than 48 hours before the time appointed for the meeting
or adjourned meeting to commence at which the person named in the instrument proposes to vote. |
| 24.3 | The chairman may in any event at his discretion declare that an instrument of proxy shall be deemed
to have been duly deposited. An instrument of proxy that is not deposited in the manner permitted, or which has not been declared
to have been duly deposited by the chairman, shall be invalid. |
| 24.4 | The instrument appointing a proxy may be in any usual or common form (or such other form as the
Directors may approve) and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked.
An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. |
| 24.5 | Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding
the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed,
or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation
or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting
at which it is sought to use the proxy. |
Any corporation or other non-natural
person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution
of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of
the Company or of any class of Members, and the person so authorised shall be entitled to
exercise the same powers on behalf
of the corporation which he represents as the corporation could exercise if it were an individual Member.
| 26 | Shares that May Not be Voted |
Shares in the Company that are
beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding Shares at any given time.
There shall be a board of Directors
consisting of not less than one person (exclusive of alternate Directors) provided however that the Company may by Ordinary Resolution
increase or reduce the limits in the number of Directors. The first Directors of the Company shall be determined in writing by,
or appointed by a resolution of, the Subscriber.
| 28.1 | Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions
given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the
Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which
would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors
at which a quorum is present may exercise all powers exercisable by the Directors. |
| 28.2 | All cheques, promissory notes, drafts, bills of exchange and other negotiable or transferable instruments
and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may
be in such manner as the Directors shall determine by resolution. |
| 28.3 | The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement
to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may
make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. |
| 28.4 | The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge
its undertaking, property and assets (present and future) and uncalled capital or any part thereof and to issue debentures, debenture
stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the
Company or of any third party. |
| 29 | Appointment and Removal of Directors |
| 29.1 | The Company may by Ordinary Resolution appoint any person to be a Director or may by Ordinary Resolution
remove any Director. |
| 29.2 | The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional
Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with
the Articles as the maximum number of Directors. |
| 30 | Vacation of Office of Director |
The office of a Director shall
be vacated if:
| (a) | the Director gives notice in writing to the Company that he resigns the office of Director; or |
| (b) | the Director absents himself (for the avoidance of doubt, without being represented by proxy or
an alternate Director appointed by him) from three consecutive meetings of the board of Directors without special leave of absence
from the Directors, and the Directors pass a resolution that he has by reason of such absence vacated office; or |
| (c) | the Director dies, becomes bankrupt or makes any arrangement or composition with his creditors
generally; or |
| (d) | the Director is found to be or becomes of unsound mind; or |
| (e) | all of the other Directors (being not less than two in number) determine that he should be removed
as a Director, either by a resolution passed by all of the other Directors at a meeting of the Directors duly convened and held
in accordance with the Articles or by a resolution in writing signed by all of the other Directors. |
| 31 | Proceedings of Directors |
| 31.1 | The quorum for the transaction of the business of the Directors may be fixed by the Directors,
and unless so fixed shall be two if there are two or more Directors, and shall be one if there is only one Director. A person who
holds office as an alternate Director shall, if his appointor is not present, be counted in the quorum. A Director who also acts
as an alternate Director shall, if his appointor is not present, count twice towards the quorum. |
| 31.2 | Subject to the provisions of the Articles, the Directors may regulate their proceedings as they
think fit. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman
shall have a second or casting vote. A Director who is also an alternate Director shall be entitled in the absence of his appointor
to a separate vote on behalf of his appointor in addition to his own vote. |
| 31.3 | A person may participate in a meeting of the Directors or any committee of Directors by conference
telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with
each other at the same time. Participation by a person in a meeting in this manner is treated as presence in person at that meeting.
Unless otherwise determined by the Directors the meeting shall be deemed to be held at the place where the chairman is located
at the start of the meeting. |
| 31.4 | A resolution in writing (in one or more counterparts) signed by all the Directors or all the members
of a committee of the Directors or, in the case of a resolution in writing relating to the removal of any Director or the vacation
of office by any Director, all of the Directors other than the Director who is the subject of such resolution (an alternate Director
being entitled to sign such a resolution on behalf of his appointor and if such alternate Director is also a Director, being entitled
to sign such resolution both on behalf of his appointer and in his capacity as a Director) shall be as valid and effectual as if
it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. |
| 31.5 | A Director or alternate Director may, or other officer of the Company on the direction of a Director
or alternate Director shall, call a meeting of the Directors by at least two days' notice in writing to every Director and alternate
Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors
(or their alternates) either at, before or after the meeting is held. To any such notice of a meeting of the Directors all the
provisions of the Articles relating to the giving of notices by the Company to the Members shall apply mutatis mutandis. |
| 31.6 | The continuing Directors (or a sole continuing Director, as the case may be) may act notwithstanding
any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to the Articles
as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors
to be equal to such fixed number, or of summoning a general meeting of the Company, but for no other purpose. |
| 31.7 | The Directors may elect a chairman of their board and determine the period for which he is to hold
office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time
appointed for the meeting to commence, the Directors present may choose one of their number to be chairman of the meeting. |
| 31.8 | All acts done by any meeting of the Directors or of a committee of the Directors (including any
person acting as an alternate Director) shall, notwithstanding that it is afterwards discovered that there was some defect in the
appointment of any Director or alternate Director, and/or that they or any of them were disqualified, and/or had vacated their
office and/or were not entitled to vote, be as valid as if every such person had been duly appointed and/or not disqualified to
be a Director or alternate Director and/or had not vacated their office and/or had been entitled to vote, as the case may be. |
| 31.9 | A Director but not an alternate Director may be represented at any meetings of the board of Directors
by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes
be deemed to be that of the appointing Director. |
A Director or alternate Director
who is present at a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written
dissent from such action with
the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered
post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director or alternate
Director who voted in favour of such action.
| 33.1 | A Director or alternate Director may hold any other office or place of profit under the Company
(other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration
and otherwise as the Directors may determine. |
| 33.2 | A Director or alternate Director may act by himself or by, through or on behalf of his firm in
a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he
were not a Director or alternate Director. |
| 33.3 | A Director or alternate Director may be or become a director or other officer of or otherwise interested
in any company promoted by the Company or in which the Company may be interested as a shareholder, a contracting party or otherwise,
and no such Director or alternate Director shall be accountable to the Company for any remuneration or other benefits received
by him as a director or officer of, or from his interest in, such other company. |
| 33.4 | No person shall be disqualified from the office of Director or alternate Director or prevented
by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any
contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any
way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested
be liable to account to the Company for any profit realised by or arising in connection with any such contract or transaction by
reason of such Director or alternate Director holding office or of the fiduciary relationship thereby established. A Director (or
his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is interested
provided that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed
by him at or prior to its consideration and any vote thereon. |
| 33.5 | A general notice that a Director or alternate Director is a shareholder, director, officer or employee
of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient
disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and
after such general notice it shall not be necessary to give special notice relating to any particular transaction. |
The Directors shall cause minutes
to be made in books kept for the purpose of recording all appointments of officers made by the Directors, all proceedings at meetings
of the Company or the holders of any class of Shares and of the Directors, and of committees of the Directors, including the names
of the Directors or alternate Directors present at each meeting.
| 35 | Delegation of Directors' Powers |
| 35.1 | The Directors may delegate any of their powers, authorities and discretions, including the power
to sub-delegate, to any committee consisting of one or more Directors. They may also delegate to any managing director or any Director
holding any other executive office such of their powers, authorities and discretions as they consider desirable to be exercised
by him provided that an alternate Director may not act as managing director and the appointment of a managing director shall be
revoked forthwith if he ceases to be a Director. Any such delegation may be made subject to any conditions the Directors may impose
and either collaterally with or to the exclusion of their own powers and any such delegation may be revoked or altered by the Directors.
Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings
of Directors, so far as they are capable of applying. |
| 35.2 | The Directors may establish any committees, local boards or agencies or appoint any person to be
a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees, local
boards or agencies. Any such appointment may be made subject to any conditions the Directors may impose, and either collaterally
with or to the exclusion of their own powers and any such appointment may be revoked or altered by the Directors. Subject to any
such conditions, the proceedings of any such committee, local board or agency shall be governed by the Articles regulating the
proceedings of Directors, so far as they are capable of applying. |
| 35.3 | The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company
on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and
may be revoked by the Directors at any time. |
| 35.4 | The Directors may by power of attorney or otherwise appoint any company, firm, person or body of
persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for
such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under
the Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other
appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys or authorised
signatories as the Directors may think fit and may also authorise any such attorney or authorised signatory to delegate all or
any of the powers, authorities and discretions vested in him. |
| 35.5 | The Directors may appoint such officers of the Company (including, for the avoidance of doubt and
without limitation, any secretary) as they consider necessary on such terms, at such remuneration and to perform such duties, and
subject to such provisions as to disqualification and removal as the Directors may think fit. Unless otherwise specified in the
terms of his appointment an officer of the Company may be removed by resolution of the Directors or Members. An officer of the
Company may vacate his office at any time if he gives notice in writing to the Company that he resigns his office. |
| 36.1 | Any Director (but not an alternate Director) may by writing appoint any other Director, or any
other person willing to act, to be an alternate Director and by writing may remove from office an alternate Director so appointed
by him. |
| 36.2 | An alternate Director shall be entitled to receive notice of all meetings of Directors and of all
meetings of committees of Directors of which his appointor is a member, to attend and vote at every such meeting at which the Director
appointing him is not personally present, to sign any written resolution of the Directors, and generally to perform all the functions
of his appointor as a Director in his absence. |
| 36.3 | An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director. |
| 36.4 | Any appointment or removal of an alternate Director shall be by notice to the Company signed by
the Director making or revoking the appointment or in any other manner approved by the Directors. |
| 36.5 | Subject to the provisions of the Articles, an alternate Director shall be deemed for all purposes
to be a Director and shall alone be responsible for his own acts and defaults and shall not be deemed to be the agent of the Director
appointing him. |
| 37 | No Minimum Shareholding |
The Company in general meeting
may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed
a Director is not required to hold Shares.
| 38 | Remuneration of Directors |
| 38.1 | The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors
shall determine. The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by
them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company,
or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business
of the Company or the discharge of their duties as a Director, or to receive a fixed allowance in respect thereof as may be determined
by the Directors, or a combination partly of one such method and partly the other. |
| 38.2 | The Directors may by resolution approve additional remuneration to any Director for any services
which in the opinion of the Directors go beyond his ordinary routine work as a Director. Any fees paid to a Director who is also
counsel, attorney or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration
as a Director. |
| 39.1 | The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the
authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has
been affixed shall be signed by at least one person who shall be either a Director or some officer of the Company or other person
appointed by the Directors for the purpose. |
| 39.2 | The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal
or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition
on its face of the name of every place where it is to be used. |
| 39.3 | A Director or officer, representative or attorney of the Company may without further authority
of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under
seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. |
| 40 | Dividends, Distributions and Reserve |
| 40.1 | Subject to the Statute and this Article and except as otherwise provided by the rights attached
to any Shares, the Directors may resolve to pay Dividends and other distributions on Shares in issue and authorise payment of the
Dividends or other distributions out of the funds of the Company lawfully available therefor. A Dividend shall be deemed to be
an interim Dividend unless the terms of the resolution pursuant to which the Directors resolve to pay such Dividend specifically
state that such Dividend shall be a final Dividend. No Dividend or other distribution shall be paid except out of the realised
or unrealised profits of the Company, out of the share premium account or as otherwise permitted by law. |
| 40.2 | Except as otherwise provided by the rights attached to any Shares, all Dividends and other distributions
shall be paid according to the par value of the Shares that a Member holds. If any Share is issued on terms providing that it shall
rank for Dividend as from a particular date, that Share shall rank for Dividend accordingly. |
| 40.3 | The Directors may deduct from any Dividend or other distribution payable to any Member all sums
of money (if any) then payable by him to the Company on account of calls or otherwise. |
| 40.4 | The Directors may resolve that any Dividend or other distribution be paid wholly or partly by the
distribution of specific assets and in particular (but without limitation) by the distribution of shares, debentures, or securities
of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors
may settle the same as they think expedient and in particular may issue fractional Shares and may fix the value for distribution
of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of
the value so fixed in order to adjust the rights of all Members and |
may vest any
such specific assets in trustees in such manner as may seem expedient to the Directors.
| 40.5 | Except as otherwise provided by the rights attached to any Shares, Dividends and other distributions
may be paid in any currency. The Directors may determine the basis of conversion for any currency conversions that may be required
and how any costs involved are to be met. |
| 40.6 | The Directors may, before resolving to pay any Dividend or other distribution, set aside such sums
as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for any purpose of
the Company and pending such application may, at the discretion of the Directors, be employed in the business of the Company. |
| 40.7 | Any Dividend, other distribution, interest or other monies payable in cash in respect of Shares
may be paid by wire transfer to the holder or by cheque or warrant sent through the post directed to the registered address of
the holder or, in the case of joint holders, to the registered address of the holder who is first named on the Register of Members
or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall
be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts
for any Dividends, other distributions, bonuses, or other monies payable in respect of the Share held by them as joint holders. |
| 40.8 | No Dividend or other distribution shall bear interest against the Company. |
| 40.9 | Any Dividend or other distribution which cannot be paid to a Member and/or which remains unclaimed
after six months from the date on which such Dividend or other distribution becomes payable may, in the discretion of the Directors,
be paid into a separate account in the Company's name, provided that the Company shall not be constituted as a trustee in respect
of that account and the Dividend or other distribution shall remain as a debt due to the Member. Any Dividend or other distribution
which remains unclaimed after a period of six years from the date on which such Dividend or other distribution becomes payable
shall be forfeited and shall revert to the Company. |
The Directors may at any time
capitalise any sum standing to the credit of any of the Company's reserve accounts or funds (including the share premium account
and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for
distribution; appropriate such sum to Members in the proportions in which such sum would have been divisible amongst such Members
had the same been a distribution of profits by way of Dividend or other distribution; and apply such sum on their behalf in paying
up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid.
In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power given
to the Directors to make such provisions as they think fit in the case of Shares becoming distributable in fractions (including
provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors
may authorise any person to enter on behalf of all of the Members
interested into an agreement with
the Company providing for such capitalisation and matters incidental or relating thereto and any agreement made under such authority
shall be effective and binding on all such Members and the Company.
| 42.1 | The Directors shall cause proper books of account (including, where applicable, material underlying
documentation including contracts and invoices) to be kept with respect to all sums of money received and expended by the Company
and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and
the assets and liabilities of the Company. Such books of account must be retained for a minimum period of five years from the date
on which they are prepared. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary
to give a true and fair view of the state of the Company's affairs and to explain its transactions. |
| 42.2 | The Directors shall determine whether and to what extent and at what times and places and under
what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members
not being Directors and no Member (not being a Director) shall have any right of inspecting any account or book or document of
the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting. |
| 42.3 | The Directors may cause to be prepared and to be laid before the Company in general meeting profit
and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. |
| 43.1 | The Directors may appoint an Auditor of the Company who shall hold office on such terms as the
Directors determine. |
| 43.2 | Every Auditor of the Company shall have a right of access at all times to the books and accounts
and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and
explanation as may be necessary for the performance of the duties of the Auditor. |
| 43.3 | Auditors shall, if so required by the Directors, make a report on the accounts of the Company during
their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered
with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment
in the case of a company which is registered with the Registrar of Companies as an exempted company, and at any other time during
their term of office, upon request of the Directors or any general meeting of the Members. |
| 44.1 | Notices shall be in writing and may be given by the Company to any Member either personally or
by sending it by courier, post, cable, telex, fax or e-mail to him or to his address as shown in the Register of Members (or where
the notice is given by e-mail by sending it to the e-mail address provided by such Member). Any notice, if posted from one country
to another, is to be sent by airmail. |
| 44.2 | Where a notice is sent by courier, service of the notice shall be deemed to be effected by delivery
of the notice to a courier company, and shall be deemed to have been received on the third day (not including Saturdays or Sundays
or public holidays) following the day on which the notice was delivered to the courier. Where a notice is sent by post, service
of the notice shall be deemed to be effected by properly addressing, pre paying and posting a letter containing the notice, and
shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays in the Cayman Islands)
following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of the notice shall be
deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day
that it was transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting the e-mail to
the e-mail address provided by the intended recipient and shall be deemed to have been received on the same day that it was sent,
and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient. |
| 44.3 | A notice may be given by the Company to the person or persons which the Company has been advised
are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which
are required to be given under the Articles and shall be addressed to them by name, or by the title of representatives of the deceased,
or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so
entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death
or bankruptcy had not occurred. |
| 44.4 | Notice of every general meeting shall be given in any manner authorised by the Articles to every
holder of Shares carrying an entitlement to receive such notice on the record date for such meeting except that in the case of
joint holders the notice shall be sufficient if given to the joint holder first named in the Register of Members and every person
upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of
a Member where the Member but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person
shall be entitled to receive notices of general meetings. |
| 45.1 | If the Company shall be wound up the liquidator shall apply the assets of the Company in satisfaction
of creditors' claims in such manner and order as such liquidator thinks fit. Subject to the rights attaching to any Shares, in
a winding up: |
| (a) | if the assets available for distribution amongst the Members shall be insufficient to repay the
whole of the Company's issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be
borne by the Members in proportion to the par value of the Shares held by them; or |
| (b) | if the assets available for distribution amongst the Members shall be more than sufficient to repay
the whole of the Company's issued share capital at the commencement of the winding up, the surplus shall be distributed amongst
the Members in proportion to the par value of the Shares held by them at the commencement of the winding up subject to a deduction
from those Shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise. |
| 45.2 | If the Company shall be wound up the liquidator may, subject to the rights attaching to any Shares
and with the approval of a Special Resolution of the Company and any other approval required by the Statute, divide amongst the
Members in kind the whole or any part of the assets of the Company (whether such assets shall consist of property of the same kind
or not) and may for that purpose value any assets and determine how the division shall be carried out as between the Members or
different classes of Members. The liquidator may, with the like approval, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the Members as the liquidator, with the like approval, shall think fit, but so that no Member
shall be compelled to accept any asset upon which there is a liability. |
| 46 | Indemnity and Insurance |
| 46.1 | Every Director and officer of the Company (which for the avoidance of doubt, shall not include
auditors of the Company), together with every former Director and former officer of the Company (each an "Indemnified Person")
shall be indemnified out of the assets of the Company against any liability, action, proceeding, claim, demand, costs, damages
or expenses, including legal expenses, whatsoever which they or any of them may incur as a result of any act or failure to act
in carrying out their functions other than such liability (if any) that they may incur by reason of their own actual fraud or wilful
default. No Indemnified Person shall be liable to the Company for any loss or damage incurred by the Company as a result (whether
direct or indirect) of the carrying out of their functions unless that liability arises through the actual fraud or wilful default
of such Indemnified Person. No person shall be found to have committed actual fraud or wilful default under this Article unless
or until a court of competent jurisdiction shall have made a finding to that effect. |
| 46.2 | The Company shall advance to each Indemnified Person reasonable attorneys' fees and other costs
and expenses incurred in connection with the defence of any action, suit, proceeding or investigation involving such Indemnified
Person for which indemnity will or could be sought. In connection with any advance of any expenses hereunder, the Indemnified Person
shall execute an undertaking to repay the advanced amount to the Company if it shall be determined by final judgment or other final
adjudication that such Indemnified Person was not entitled to indemnification pursuant to this Article. If it shall be determined
by a final judgment or other final adjudication that such Indemnified Person was not entitled to indemnification with respect to
such |
judgment, costs
or expenses, then such party shall not be indemnified with respect to such judgment, costs or expenses and any advancement shall
be returned to the Company (without interest) by the Indemnified Person.
| 46.3 | The Directors, on behalf of the Company, may purchase and maintain insurance for the benefit of
any Director or other officer of the Company against any liability which, by virtue of any rule of law, would otherwise attach
to such person in respect of any negligence, default, breach of duty or breach of trust of which such person may be guilty in relation
to the Company. |
Unless the Directors otherwise
prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation,
shall begin on 1st January in each year.
| 48 | Transfer by Way of Continuation |
If the Company is exempted as
defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have
the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands
and to be deregistered in the Cayman Islands.
| 49 | Mergers and Consolidations |
The Company
shall have the power to merge or consolidate with one or more other constituent companies (as defined in the Statute) upon such
terms as the Directors may determine and (to the extent required by the Statute) with the approval of a Special Resolution.
Dated this 7th day of June 2019
Maples Corporate Services Limited
of PO Box 309, Ugland House
Grand Cayman
KY1-1104
Cayman Islands
/s/ Marcia Borden
Marcia Borden
/s/ Ahmaree Piercy
Ahmaree Piercy
Witness to the above signature
Exhibit 10.1
THIS PROMISSORY NOTE (“NOTE”)
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED
FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
PROMISSORY NOTE
| Principal Amount: $250,000 |
Dated as of June 10, 2019 |
Silver Spike Acquisition Corp., a Cayman Islands exempted
company and blank check company (the “Maker”), promises to pay to the order of Silver Spike Sponsor, LLC, or
its registered assigns or successors in interest (the “Payee”), or order, the principal sum of two hundred and
fifty thousand U.S. dollars ($ 250,000) in lawful money of the United States of America, on the terms and conditions described
below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined
by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of
this Note.
1. Principal.
The principal balance of this Note shall be payable on the earlier of: (i) January 31, 2020 or (ii) the date on which Maker
consummates an initial public offering of its securities. The principal balance may be prepaid at any time.
| 2. | Interest. No interest shall accrue on the unpaid principal balance of this Note. |
3. Application of Payments.
All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note,
including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to
the reduction of the unpaid principal balance of this Note.
| 4. | Events of Default. The following shall constitute an event of default (“Event of
Default”): |
(a) Failure
to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business
days of the date specified above.
(b) Voluntary Bankruptcy, Etc.
The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other
similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment
for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate
action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy, Etc. The entry of
a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any
applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.
5. Remedies.
(a) Upon the occurrence of an Event of Default specified in
Section 4(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the
unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or
in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of
Default specified in Sections 4(b) and 4(c), the unpaid principal balance of this Note, and all other sums payable with regard
to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
6. Waivers. Maker and all endorsers and guarantors of,
and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard
to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all
benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part
of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any
stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may
be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such
writ in whole or in part in any order desired by Payee.
7. Unconditional Liability. Maker
hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this
Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be
affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee,
and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to
the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become
parties hereto without notice to Maker or affecting Maker’s liability hereunder.
8. Notices. All notices, statements or other documents
which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered
or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii)
by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing
by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic
mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to
have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation,
if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5)
days after mailing if sent by mail.
9. Construction.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
10. Severability. Any
provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
2
11. Trust Waiver. Notwithstanding anything herein to
the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or
to any distribution of or from the trust account to be established in which the proceeds of the initial public offering (the “
IPO”) conducted by the Maker (including the deferred underwriting discounts and commissions) and the proceeds of the
sale of the warrants issued in a private placement to occur prior to the effectiveness of the IPO are to be deposited, as described
in greater detail in the registration statement and prospectus to be filed with the Securities and Exchange Commission in connection
with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account
for any reason whatsoever.
12. Amendment;
Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the
Maker and the Payee.
13. Assignment. No assignment
or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise)
without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be
void.
[Signature page follows]
3
IN
WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned
as of the day and year first above written.
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SILVER SPIKE ACQUISITION CORP. |
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a
Cayman Islands exempted company
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By: |
/s/
Scott Gordon |
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Name: |
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Scott Gordon |
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Title: |
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Director |
[Signature Page to Promissory
Note]
Exhibit 10.5
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”), effective as of June 11, 2019, is made and entered into by and between Silver Spike Acquisition
Corp., a Cayman Islands exempted company (the “Company”), and Silver Spike Sponsor, LLC, a Delaware limited liability
company (the “Buyer”).
RECITALS:
WHEREAS, the Buyer wishes
to subscribe for an aggregate of 7,187,500 Class B ordinary shares (the “Shares”), par value $0.0001 per share, of
the Company, and the Company wishes to issue the Shares to the Buyer, on the terms and subject to the conditions set forth in this
Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration
of the premises, representations, warranties and the mutual covenants contained in this Agreement, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article
I shall have for all purposes of this Agreement the respective meanings set forth below:
“Agreement” shall have the meaning set
forth in the preamble to this Agreement.
“Buyer” shall have the meaning set forth
in the preamble to this Agreement.
“Class B ordinary shares” shall have the
meaning set forth in the recitals to this Agreement.
“Closing” shall have the meaning set forth
in Section 2.3 of this Agreement.
“Closing Date” shall have the meaning
set forth in Section 2.3 of this Agreement.
“Company” shall have the meaning set forth
in the preamble to this Agreement.
“Consent” means any
consent, approval, notification, waiver, or other similar action that is necessary or convenient.
“Governmental Body”
shall mean any legislature, agency, bureau, branch, department, division, commission, court, tribunal or other similar recognized
organization or body of any federal, state, county, municipal, local or foreign government or other similar recognized organization
or body exercising similar powers or authority.
“Law” shall mean any
law (statutory, common or otherwise), constitution, ordinance, rule, regulation, executive order or other similar authority enacted,
adopted, promulgated or applied by any Governmental Body.
“Lien” shall mean a mortgage,
deed of trust, pledge, hypothecation, assignment, encumbrance, charge, restriction, lien (statutory or otherwise, including, without
limitation, any lien for taxes), security interest, preference, participation interest, priority or security agreement or preferential
arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the foregoing and the filing of any document under
the law of any applicable jurisdiction to evidence any of the foregoing, other than (i) statutory, mechanics’ or other Liens
incurred in the Company’s ordinary course of business or (ii) Liens for taxes incurred but not yet due.
“Order” shall mean an order,
ruling, decision, award, judgment, injunction or other similar determination or finding by, before or under the supervision of
any Governmental Body or arbitrator.
“Permit” shall mean a permit, license,
certificate, waiver, notice or similar authorization.
“Purchase Price” shall have the meaning
set forth in Section 2.2 of this Agreement.
“SEC” shall mean the United States Securities
and Exchange Commission.
“Securities Act” shall
mean the United States Securities Act of 1933, as amended, or any successor federal statute, and the applicable rules and regulations
promulgated and in effect from time to time thereunder.
“Shares” shall have the meaning set forth
in the recitals to this Agreement.
ARTICLE II
PURCHASE OF THE SHARES
Section 2.1 Purchase and Sale
of the Shares. Subject to the terms and conditions hereof and in reliance upon the representations and warranties of the parties
contained or incorporated by reference herein, simultaneous with the execution hereof, the Company shall issue to the Buyer, and
the Buyer shall subscribe for the Shares, in consideration of the payment of the Purchase Price noted herein.
Section 2.2
Purchase Price. As payment in full for the Shares being purchased under this Agreement and against issue of such Shares,
simultaneous with the execution hereof, the Buyer shall pay $ 25,000 on behalf of and at the direction of the Company by wire transfer
of immediately available funds or by such other method as may be reasonably acceptable to the Company (the “Purchase Price”).
Section 2.3 Closing.
The closing of the purchase and sale of the Shares (the “Closing”) shall be held on the date of this Agreement (“Closing
Date”) at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York 10017, or such other place
as may be agreed upon by the parties hereto.
Section 2.4 Closing Deliveries.
All actions taken at the Closing shall be deemed to have been taken simultaneously.
| (a) | Buyer Deliveries. At the Closing the Buyer shall deliver to the Company the Purchase Price. |
(b) Company
Deliveries. At the Closing, or within a reasonable time after the Closing, the Company shall issue to the Buyer the Shares
and make the necessary entries in the Register of Members of the Company.
Section 2.5 Further Assurances.
The parties hereto shall execute and deliver such additional documents and take such additional actions as any party reasonably
may deem to be practical and necessary in order to consummate the transactions contemplated by this Agreement.
Section 2.6 Legend. Any certificate
evidencing the Shares and any certificate issued in exchange for or upon the transfer of any Shares shall be stamped or otherwise
imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT AND LAWS.”
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE LETTER AGREEMENT BY AND BETWEEN THE COMPANY AND THE SPONSOR.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED FROM THE COMPANY AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants
that the statements contained in this ARTICLE III are correct and complete as of the date of this Agreement.
Section 3.1 Organization and
Good Standing. The Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws
of the state of Delaware.
Section 3.2 Power and Authority;
Enforceability. This Agreement constitutes the legal, valid, and binding obligation of the Buyer, enforceable against the Buyer
in accordance with its terms. The Buyer has full entity power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. The Buyer has taken all actions necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder and the consummation of the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by, and is enforceable against, the Buyer.
Section 3.3 Investment Representations.
| (a) | The Buyer is an “accredited investor” as defined in Rule 501 of Regulation D under
the Securities Act. |
| (b) | The Buyer has received, has thoroughly read, is familiar with and understands the contents of
this Agreement. |
(c) The Buyer hereby acknowledges
that an investment in the Shares involves certain significant risks. The Buyer acknowledges that there is a substantial risk that
it will lose all or a portion of its investment and that it is financially capable of bearing the risk of such investment for an
indefinite period of time. The Buyer has no need for liquidity in its investment in the Shares for the foreseeable future and is
able to bear the risk of that investment for an indefinite period. The Buyer understands that there presently is no public market
for the Shares and none is anticipated to develop in the foreseeable future. The Buyer’s present financial condition is such
that the Buyer is under no present or contemplated future need to dispose of any portion of the Shares subscribed for hereby to
satisfy any existing or contemplated undertaking, need or indebtedness. The Buyer’s overall commitment to investments which
are not readily marketable is not disproportionate to its net worth and the investment in the Company will not cause such overall
commitment to become excessive.
(d) The Buyer acknowledges
that the Shares have not been and will not be registered under the Securities Act, or any state securities act, and are being sold
on the basis of exemptions from registration under the Securities Act and applicable state securities acts, except those state
securities acts that require registration of the Shares thereunder. Reliance on such exemptions, where applicable, is predicated
in part on the accuracy of the Buyer’s representations and warranties set forth herein. The Buyer acknowledges and hereby
agrees that the Shares will not be transferable under any circumstances unless the Buyer either registers the Shares in accordance
with federal and state securities laws or finds and complies with an available exemption under such laws. Accordingly, the Buyer
hereby acknowledges that there can be no assurance that it will be able to liquidate its investment in the Company.
(e) There are substantial
risk factors pertaining to an investment in the Company. The Buyer acknowledges that it has read the information set forth above
regarding certain of such risks and is familiar with the nature and scope of all such risks, including, without limitation, risks
arising from the fact that the Company is an entity with
limited operating history and financial resources;
and the Buyer is fully able to bear the economic risks of such investment for an indefinite period, and can afford a complete loss
thereof.
(f) The Buyer has been given
the opportunity to (i) ask questions of and receive answers from the Company and its designated representatives concerning the
terms and conditions of the offering, the Company and the business and financial condition of the Company and (ii) obtain any additional
information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to assist the Buyer
in evaluating the advisability of the purchase of the Shares and an investment in the Company. The Buyer further represents and
warrants that, prior to signing this Agreement, it has asked such questions, received such answers and obtained such information
as it has deemed necessary or advisable to evaluate the merits and risks of the purchase of the Shares and an investment in the
Company. The Buyer is not relying on any oral representation made by any person as to the Company or its operations, financial
condition or prospects.
(g)
The Buyer understands that no federal, state or other governmental authority has made any recommendation, findings or determination
relating to the merits of an investment in the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Incorporation and Good Standing.
The Company is an exempted company duly incorporated, validly existing, and in good standing under the laws of the Cayman Islands.
Section 4.2 Power and Authority;
Enforceability. This Agreement constitutes the legal, valid, and binding obligation of the Company, enforceable against the
Company in accordance with its terms. The Company has full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder. The Company has taken all actions necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder, and the consummation of the transactions contemplated hereby. This Agreement has
been duly authorized, executed, and delivered by, and is enforceable against, the Company.
Section 4.3 No Violation; Necessary
Approvals. Neither the execution and delivery of this Agreement by the Company, nor the consummation or performance by the
Company of any of the transactions contemplated hereby, will: (a) with or without notice or lapse of time, constitute, create or
result in a breach or violation of, default under, loss of benefit or right under or acceleration of performance of any obligation
required under any Law, Order, contract or Permit to which the Company is a party or by which it is bound or any of its assets
are subject, or any provision of the Company’s organizational documents as in effect on the Closing Date, (b) result in the
imposition of any lien, claim or encumbrance upon any assets owned by the Company; (c) require any Consent under any contract or
organizational document to which the Company is a party or by which it is bound; or (d) require any Permit under any Law or Order
other than (i) required filings, if any, with the SEC and (ii) notifications or other filings with state or federal regulatory
agencies after the Closing that are necessary or convenient and do not require approval of the agency as a condition to the validity
of the transactions contemplated hereunder; or (e) trigger any rights of first refusal, preferential purchase or similar rights
with respect to any of the Shares.
Section 4.4 Authorization of
the Shares. The Shares have been duly authorized and, when issued in accordance with this Agreement, the Shares will be duly
and validly issued, fully paid and non-assessable Class B ordinary shares of the Company and will be free and clear of all Liens
and claims, other than restrictions on transfer imposed by the Securities Act and applicable state securities laws.
ARTICLE V
MISCELLANEOUS
Section 5.1 Entire Agreement. This Agreement, together with any certificates, documents, instruments and writings that are delivered pursuant hereto, constitutes
the entire agreement and understanding of the parties hereto in respect of its subject matter 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.
Section 5.2 Successors. All
of the terms, agreements, covenants, representations, warranties, and conditions of this Agreement are binding upon, and inure
to the benefit of and are enforceable by, the parties hereto and their respective successors.
Section 5.3 Assignments. Except as
otherwise provided herein, no party hereto may assign either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other party. Any purported assignment in violation of this Section 5.3 shall be
void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.
Section 5.4 Waiver of Jury Trial.
THE PARTIES HERETO EACH HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL ACTIONS THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THE TRANSACTIONS, INCLUDING, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THE PARTIES HERETO EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP AND
THAT THEY WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. IN THE EVENT OF AN ACTION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO TRIAL BY A COURT.
Section 5.5 Counterparts.
This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
Section 5.6 Headings. The
article and section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning
or interpretation of this Agreement.
Section 5.7 Governing Law.
This Agreement, the entire relationship of the parties hereto, and any litigation between the parties (whether grounded in contract,
tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State
of Delaware, without giving effect to its choice of laws principles.
Section 5.8 Amendments.
This Agreement may not be amended, modified or waived as to any particular provision, except by a written instrument executed by
the parties hereto.
Section 5.9 Severability. The provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision will not affect
the validity or enforceability of the other provisions hereof; provided that if any provision of this Agreement, as applied to
any party hereto or to any circumstance, is adjudged by a Governmental Body, arbitrator, or mediator not to be enforceable in accordance
with its terms, the parties hereto agree that the Governmental Body, arbitrator, or mediator making such determination will have
the power to modify the provision in a manner consistent with its objectives such that it is enforceable, and/or to delete specific
words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced.
Section 5.10 Expenses. Except as
otherwise expressly provided in this Agreement, each party hereto will bear its own costs and expenses incurred in connection with
the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated hereby, including
all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.
Section 5.11 Construction. The parties
hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will
arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. Any reference to any
federal, state, local, or foreign Law will be deemed also to refer to Law as amended and all rules and regulations promulgated
thereunder, unless the context requires otherwise. The words “include,” “includes,” and “including
” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders
will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice
versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,”
“hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract
from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.
Section 5.12 Waiver. No
waiver by any party hereto of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional
or not, may be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder
or affect in any way any rights arising because of any prior or subsequent occurrence.
[Signature page follows]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the date first set forth above.
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COMPANY: |
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SILVER SPIKE ACQUISITION CORP. |
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By: |
/s/ Scott Gordon |
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Name: |
Scott Gordon |
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Title: |
Director |
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BUYER: |
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SILVER SPIKE SPONSOR, LLC |
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By: |
/s/ Scott Gordon |
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Name: |
Scott Gordon |
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Title: |
Manager |
