Introduction
Wealthbridge
Acquisition Limited is a British Virgin Islands exempted company incorporated on May 2, 2018 as a blank check company for the
purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other
similar business combination, with one or more target businesses. Our efforts to identify a prospective target business will not
be limited to a particular industry or geographic region, although the Company intends to focus on operating businesses in and
around the air transportation and aviation industry in China.
We
believe that our management team is well positioned to identify attractive risk-adjusted returns in the marketplace and that our
contacts and transaction sources, ranging from industry executives, private owners, private equity funds, and investment bankers,
in addition to the geographical reach of our affiliates, will enable us to pursue a broad range of opportunities. Our management
team has significant experience in engaging in cross-border business in Asia, Europe, and the U.S., and understands the cultural,
business and economic differences and opportunities that will allow us to negotiate a transaction.
In
addition to our management team, our sponsor, Oriental Holdings Limited (our “Sponsor”), is jointly owned by Mr. Jining
Lim through Keen Nice Communications Limited, and our chief executive officer, Mr. Yongsheng Liu. Together with our management
team, we believe we have a broad network of contacts and corporate relationships that makes us efficient at sourcing and evaluating
businesses, and adapting to cultural and economic differences between Asia and America to negotiate and execute a transaction
in a timely and professional manner.
On
February 8, 2019, the Company consummated the initial public offering (“IPO”) of 5,000,000 units (the “Units”).
Each Unit consists of one ordinary share (“Ordinary Share”), one warrant (“Warrant”) entitling its holder
to purchase one-half of one Ordinary Share at a price of $11.50 per whole share, and one right to receive one-tenth (1/10) of
an Ordinary Share upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00
per Unit, generating gross proceeds of $50,000,000. The Company granted the underwriters a 45-day option to purchase up to 750,000
additional Units to cover over-allotments, if any. In addition, the Company sold to Chardan, for $100, an option to purchase up
to 375,000 units exercisable at $11.50 per unit, commencing on the later of the consummation of a business combination and six
months from the effective date of the Registration Statement.
On
February 8, 2019, simultaneously with the consummation of the IPO, we consummated the private placement (“Private Placement”)
with our Sponsor of 247,500 units (the “Private Units”) at a price of $10.00 per Private Unit, generating gross proceeds
of $2,475,000. The Private Units are identical to the Units sold in the IPO, except that the warrants underlying the Private Units
will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial
purchasers or their permitted transferees. Additionally, because the Private Units were issued in a private transaction, the initial
purchasers and their permitted transferees will be allowed to exercise the warrants included in the Private Units for cash even
if a registration statement covering the ordinary shares issuable upon exercise of such warrants is not effective and receive
unregistered ordinary shares. Additionally, such initial purchasers agreed not to transfer, assign or sell any of the Private
Units or underlying securities (except in limited circumstances, as described in the Registration Statement) until the completion
of the Company’s initial business combination. Such Initial Purchasers were granted certain demand and piggyback registration
rights in connection with the purchase of the Private Units. The Private Units were issued pursuant to Section 4(a)(2) of the
Securities Act of 1933, as amended, as the transactions did not involve a public offering.
The
underwriters exercised the over-allotment option in full on February 20, 2019, and the closing of the issuance and sale of the
additional Units occurred on February 21, 2019. The sale of 750,000 units at a price of $10.00 per unit resulted in total gross
proceeds of $7,500,000. On February 21, 2019, simultaneously with the sale of the over-allotment units, the Company consummated
the private sale of an additional 22,500 Private Units, generating gross proceeds of $225,000.
A
total of $57,500,000 of the net proceeds from the sale of Units in the IPO (including the over-allotment option units) and the
private placements on February 5, 2019 and February 21, 2019, were placed in a trust account established for the benefit of the
Company’s public shareholders at Morgan Stanley maintained by Continental Stock Transfer & Trust Company, LLC, acting
as trustee. None of the funds held in trust will be released from the trust account, other than interest income to pay any tax
obligations, until the earlier of the completion of an initial business combination within the required time period or our entry
into liquidation if we have not completed a business combination in the required time period. On March 7, 2019, our ordinary shares,
warrants and rights underlying the Units sold in our IPO began to trade separately on a voluntary basis.
Since
our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates.
Business
Combination Agreement
On
October 28, 2019, we entered into a share exchange agreement (the “Share Exchange Agreement” or the “Agreement”)
with Scienjoy Inc. (“Scienjoy”), Lavacano Holdings Limited (“Lavacano”), WBY Entertainment Holdings Ltd.
(“WBY,” together with Lavacano, the “Sellers”, and each “Seller”), pursuant to which we would
acquire all of the outstanding equity interests of Scienjoy (the “Acquisition”).
Upon
the closing of the transactions contemplated in the Share Exchange Agreement, Wealthbridge will acquire 100% of the issued and
outstanding securities of Scienjoy, in exchange for approximately 16.4 million ordinary shares of Wealthbridge, of which 1.64
million ordinary shares are to be issued and held in escrow to satisfy any indemnification obligations of the Sellers. Additionally,
the Sellers may be entitled to receive earnout shares as follows: (1) if Scienjoy’s net income before tax for the year ended
December 31, 2019 is greater than or equal to either US$20,900,000 or RMB 140,000,000, the Sellers will be entitled to receive
3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge); (2) if Scienjoy’s
net income before tax for the year ended December 31, 2020 is greater than or equal to either US$28,300,000 or RMB 190,000,000,
the Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary
shares of Wealthbridge); and (3) if Scienjoy’s net income before tax for the year ended December 31, 2021 is greater than
or equal to either US$35,000,000 or RMB 235,000,000, the Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge
(subject to the reclassification of the ordinary shares of Wealthbridge).
Notwithstanding
the net income before tax achieved by the post-transaction company for any period, the Sellers will receive (i) 3,000,000 earnout
shares if the share price of Wealthbridge is higher than $15.00 for any sixty days in any period of ninety consecutive trading
days during an twelve month period following the closing; (ii) 3,000,000 earnout shares if the share price of Wealthbridge is
higher than $20.00 for any sixty days in any period of ninety consecutive trading days between the 13th month and 24th month following
the Closing, and (iii) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $25.00 for any sixty days in
any period of ninety consecutive trading between the 25th month and 36th month following the Closing.
In
connection with the Acquisition, we filed and will file relevant materials with the Securities and Exchange Commission (the
“SEC”), including a proxy statement on Schedule 14A. Promptly after filing our definitive proxy statement with
the SEC, we will mail the definitive proxy statement and a proxy card to each stockholder entitled to vote at the special
meeting relating to the transaction. INVESTORS AND SECURITY HOLDERS OF WEALTHBRIDGE ACQUISITION LIMITED ARE URGED TO READ
THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE
TRANSACTION THAT WEALTHBRIDGE ACQUISITION LIMITED WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT WEALTHBRIDGE ACQUISITION LIMITED, SCIENJOY AND THE TRANSACTION. The preliminary proxy statement,
the definitive proxy statement (when it becomes available) and other relevant materials in connection with the transaction
(when they become available), and any other documents filed by us with the SEC, may be obtained free of charge at the
SEC’s website (www.sec.gov) or by writing to us at Flat A, 6/F, Block A, Tonnochy Towers, No. 272 Jaffe Road, Wanchai,
Hong Kong.
The outbreak of the COVID-19 coronavirus has resulted
in a widespread health crisis that has adversely affected the economies and financial markets worldwide. The extent to which COVID-19
impacts the Acquisition will depend on future developments, which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among
others. We may be unable to complete the Acquisition or another business combination if continued concerns relating to COVID-19
restrict travel and limit the ability to have meetings with potential investors, or if the target company’s personnel, vendors
and services providers are unavailable to negotiate and consummate a transaction in a timely manner.
Recent
Developments
On
January 28, 2020, the Company issued a $575,000 Note to Scienjoy, pursuant to which such amount was deposited into the
Company’s Trust Account in order to extend the amount of time the Company has available to complete a Business
Combination from February 8, 2020 to May 8, 2020. The Note is non-interest bearing and is payable upon the closing of a
Business Combination. In addition, the Note may be converted, at the lender’s discretion, into additional Private Units
at a price of $10.00 per unit.
Competitive
strengths
We
believe our specific competitive strengths to be the following:
Status
as a public company
We
believe our structure will make us an attractive business combination partner to target businesses. As an existing public company,
we offer a target business an alternative to the traditional initial public offering through a merger or other business combination.
In this situation, the owners of the target business would exchange their shares of stock in the target business for our ordinary
shares or for a combination of our ordinary shares and cash, allowing us to tailor the consideration to the specific needs of
the sellers. We believe target businesses might find this method a more certain and cost effective method to become a public company
than the typical initial public offering. In a typical initial public offering, there are additional expenses incurred in marketing,
roadshow and public reporting efforts that will likely not be present to the same extent in connection with a business combination
with us. Furthermore, once the business combination is consummated, 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 that could prevent the offering from occurring. Once public, we believe the target business would then have greater
access to capital and an additional means of providing management incentives consistent with shareholders’ interests than
it would have as a privately-held company. It can offer further benefits by augmenting a company’s profile among potential
new customers and vendors and aid in attracting talented employees.
While
we believe that our status as a public company will make us an attractive business partner, some potential target businesses may
view the inherent limitations in our status as a blank check company, such as our lack of an operating history and our requirements
to seek shareholder approval of any proposed initial business combination and provide holders of public shares the opportunity
to convert their shares into cash from the trust account, as a deterrent, and may prefer to effect a business combination with
a more established entity or with a private company.
Transaction
flexibility
We
offer a target business a variety of options, such as providing the owners of a target business with shares in a public company
and a public means to sell such shares, providing cash for stock, and 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 consummate 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.
Management
Experience
We
believe the experience and contacts of our management team will give us distinct advantages in sourcing, structuring and consummating
business combinations. We have a management team with extensive experience in mergers and acquisitions, including cross-border
transactions, target sourcing, financial due diligence, deal structuring and negotiation, as well as finance and investment in
the United States and Asia, and understands the cultural, business and economic differences and opportunities that will allow
us to negotiate a transaction. We believe we can source attractive deals and find good investment opportunities from private and
public sources to create value for shareholders. We believe that the network of contacts and relationships of our management team
will provide us with an important source of investment opportunities.
Competitive
Weaknesses
We
believe our competitive weaknesses to be the following:
Limited
Financial Resources
Our
financial reserves will be relatively limited when contrasted with those of venture capital firms, leveraged buyout firms and
operating businesses competing for acquisitions. In addition, our financial resources could be reduced because of our obligation
to convert shares held by our public shareholders as well as any tender offer we conduct.
Lack
of experience with blank check companies
Our
management team is not experienced in pursuing business combinations on behalf of blank check companies. Other blank check companies
may be sponsored and managed by individuals with prior experience in completing business combinations between blank check companies
and target businesses. Our managements’ lack of experience may not be viewed favorably by target businesses.
Limited
technical and human resources
As
a blank check company, we have limited technical and human resources. Many venture capital funds, leveraged buyout firms and operating
businesses possess greater technical and human resources than we do and thus we may be at a disadvantage when competing with them
for target businesses.
Delay
associated with shareholder approval or tender offer
We
may be required to seek shareholder approval of our initial business combination. If we are not required to obtain shareholder
approval of an initial business combination, we will allow our shareholders to sell their shares to us pursuant to a tender offer.
Both seeking shareholder approval and conducting a tender offer will delay the consummation of our initial business combination.
Other companies competing with us for acquisition opportunities may not be subject to similar requirement, or may be able to satisfy
such requirements more quickly than we can. As a result, we may be at a disadvantage in competing for these opportunities.
Effecting
an Acquisition Transaction
General
We
are not presently engaged in, and we will not engage in, any substantive commercial business until the closing of a business combination.
We intend to utilize cash derived from the proceeds of the IPO and the Private Placements, our capital stock, debt or a combination
of these in effecting our initial business combination. Although substantially all of the net proceeds of the IPO and the Private
Placements are intended to be applied generally toward effecting a business combination, the proceeds are not otherwise being
designated for any more specific purposes. Accordingly, investors in the IPO were investing without first having an opportunity
to evaluate the specific merits or risks of any one or more business combinations.
Fair
Market Value of Target Business
Pursuant
to Nasdaq listing rules, our initial business combination must occur with one or more target businesses having an aggregate fair
market value equal to at least 80% of the value of the funds in the trust account (excluding any deferred underwriter’s
fees and taxes payable on the income earned on the trust account), which we refer to as the 80% test, at the time of the execution
of a definitive agreement for our initial business combination, although we may structure a business combination with one or more
target businesses whose fair market value significantly exceeds 80% of the trust account balance. We believe Scienjoy satisfies
this test.
Shareholder
Approval of Business Combination
In
connection with the proposed business combination with Scienjoy, we are seeking shareholder approval of the Acquisition. At the
meeting called for such purpose, public shareholders may seek to convert their public shares, regardless of whether they vote
for or against the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust
account (net of taxes payable). Our initial shareholders have agreed, pursuant to written letter agreements with us, not to convert
any public shares held by them into their pro rata share of the aggregate amount then on deposit in the trust account. We will
consummate our initial business combination only if we have net tangible assets of at least $5,000,001 upon such consummation
and, solely if we seek shareholder approval, a majority of the issued and outstanding ordinary shares voted are voted in favor
of the business combination. We chose our net tangible asset threshold of $5,000,001 to ensure that we would avoid being subject
to Rule 419 promulgated under the Securities Act.
Our
initial shareholders and our officers and directors have agreed (1) to vote any ordinary shares owned by them in favor of any
proposed business combination, (2) not to convert any ordinary shares in connection with a shareholder vote to approve a proposed
initial business combination and (3) not sell any ordinary shares in any tender in connection with a proposed initial business
combination. As a result, if only a quorum is present at the meeting at which we sought shareholder approval of the proposed Acquisition,
we would need only 126,876 of our public shares (or approximately 2.5% of our public shares) to be voted in favor of the transaction
in order to have such transaction approved.
None
of our officers, directors, initial shareholders or their affiliates has indicated any intention to purchase Units or Ordinary
Shares from persons in the open market or in private transactions (other than the Private Units). However, if we hold a meeting
to approve a proposed business combination and a significant number of shareholders vote, or indicate an intention to vote, against
such proposed business combination, our officers, directors, initial shareholders or their affiliates could make such purchases
in the open market or in private transactions in order to influence the vote. Notwithstanding the foregoing, our officers, directors,
initial shareholders and their affiliates will not make purchases of Ordinary Shares if the purchases would violate Section 9(a)(2)
or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s stock.
Ability
to Extend Time to Complete Business Combination
If
we anticipate that we may not be able to consummate our initial business combination by May 8, 2020, we may, but are not obligated
to, extend the period of time to consummate a business combination twice by an additional three months each time (for a total
of up to 21 months to complete a business combination). Pursuant to the terms of our amended and restated memorandum and articles
of association and the trust agreement entered into between us and Continental Stock Transfer & Trust Company, LLC simultaneously
with the closing of the IPO, in order to extend the time available for us to consummate our initial business combination, our
insiders or their affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the
trust account $575,000 ($0.10 per share), on or prior to the date of the applicable deadline. The insiders or their affiliates
or designees will receive a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will
not be repaid in the event that we are unable to close a business combination unless there are funds available outside the trust
account to do so. Such notes would either be paid upon consummation of our initial business combination, or, at the lender’s
discretion, converted upon consummation of our business combination into additional private units at a price of $10.00 per unit.
Our shareholders have approved the issuance of the private units upon conversion of such notes, to the extent the holder wishes
to so convert such notes at the time of the consummation of our initial business combination. In the event that we receive notice
from our insiders five days prior to the applicable deadline of their intent to effect an extension, we intend to issue a press
release announcing such intention at least three days prior to the applicable deadline. In addition, we intend to issue a press
release the day after the applicable deadline announcing whether or not the funds had been timely deposited. Our insiders and
their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business
combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to consummate our initial
business combination, such insiders (or their affiliates or designees) may deposit the entire amount required.
Conversion/Tender
Rights
At
any meeting called to approve an initial business combination, public shareholders may seek to convert their public shares, regardless
of whether they vote for or against the proposed business combination, into their pro rata share of the aggregate amount then
on deposit in the trust account, less any taxes then due but not yet paid. Notwithstanding the foregoing, our initial shareholders
have agreed, pursuant to written letter agreements with us, not to convert any public shares held by them into their pro rata
share of the aggregate amount then on deposit in the trust account. The conversion rights will be effected under our amended and
restated memorandum and articles of association and British Virgin Islands law as redemptions. If we hold a meeting to approve
an initial business combination, a holder will always have the ability to vote against a proposed business combination and not
seek conversion of his shares.
Our
initial shareholders, officers and directors will not have conversion rights with respect to any ordinary shares owned by them,
directly or indirectly, whether acquired prior to the IPO, in the IPO or in the aftermarket.
We
may also require public shareholders, whether they are a record holder or hold their shares in “street name,” to either
tender their certificates (if any) to our transfer agent or to deliver their shares to the transfer agent electronically using
Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option, at any time at or
prior to the vote on the business combination. Once the shares are converted by the holder, and effectively redeemed by us under
British Virgin Islands law, the transfer agent will then update our Register of Members to reflect all conversions. The proxy
solicitation materials that we will furnish to shareholders in connection with the vote for any proposed business combination
will indicate whether we are requiring shareholders to satisfy such delivery requirements. Accordingly, a shareholder would have
from the time our proxy statement is mailed through the vote on the business combination to deliver his shares if he wishes to
seek to exercise his conversion rights. Under our amended and restated memorandum and articles of association, we are required
to provide at least 10 days’ advance notice of any shareholder meeting, which would be the minimum amount of time a shareholder
would have to determine whether to exercise conversion rights. As a result, if we require public shareholders who wish to convert
their ordinary shares into the right to receive a pro rata portion of the funds in the trust account to comply with the foregoing
delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for conversion. Accordingly,
investors may not be able to exercise their conversion rights and may be forced to retain our securities when they otherwise would
not want to.
There
is a nominal cost associated with this 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 $45 and it would be up to the broker whether or not
to pass this cost on to the converting holder. However, this fee would be incurred regardless of whether or not we require holders
seeking to exercise conversion rights. The need to deliver shares is a requirement of exercising conversion rights regardless
of the timing of when such delivery must be effectuated. However, in the event we require shareholders seeking to exercise conversion
rights to deliver their shares prior to the consummation of the proposed business combination and the proposed business combination
is not consummated, this may result in an increased cost to shareholders.
Any
request to convert or tender such shares once made, may be withdrawn at any time up to the vote on the proposed business combination
or expiration of the tender offer. Furthermore, if a holder of a public share delivered his certificate in connection with an
election of their conversion or tender and subsequently decides prior to the vote on the business combination or the expiration
of the tender offer not to elect to exercise such rights, he may simply request that the transfer agent return the certificate
(physically or electronically).
If
the initial business combination is not approved or completed for any reason, then our public shareholders who elected to exercise
their conversion or tender rights would not be entitled to convert their shares for the applicable pro rata share of the trust
account. In such case, we will promptly return any shares delivered by public holders.
Automatic
Liquidation if No Business Combination
If
we do not complete a business combination by May 8, 2020, it will trigger our automatic winding up, dissolution and liquidation
pursuant to the terms of our amended and restated memorandum and articles of association. As a result, this has the same effect
as if we had formally gone through a voluntary liquidation procedure under the Companies Law. Accordingly, no vote would be required
from our shareholders to commence such a voluntary winding up, dissolution and liquidation. However, if we anticipate that we
may not be able to consummate our initial business combination by May 8, 2020, we may, but are not obligated to, extend the period
of time to consummate a business combination twice by an additional three months each time (for a total of up to 21 months to
complete a business combination). Pursuant to the terms of our amended and restated memorandum and articles of association and
the trust agreement entered into between us and Continental Stock Transfer & Trust Company, LLC, in order to extend the time
available for us to consummate our initial business combination, our insiders or their affiliates or designees, upon five days
advance notice prior to the applicable deadline, must deposit into the trust account $575,000 ($0.10 per share), on or prior to
the date of the applicable deadline. The insiders will receive a non-interest bearing, unsecured promissory note equal to the
amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless there
are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial business
combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional private
units at a price of $10.00 per unit. Our shareholders have approved the issuance of the private units upon conversion of such
notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination.
In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to effect an
extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had
been timely deposited. Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the
time for us to complete our initial business combination. To the extent that some, but not all, of our insiders, decide to extend
the period of time to consummate our initial business combination, such insiders (or their affiliates or designees) may deposit
the entire amount required. If we are unable to consummate our initial business combination within such time period, we will,
as promptly as possible but not more than ten business days thereafter, redeem 100% of our outstanding public shares for a pro
rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the funds held in
the trust account and not necessary to pay our taxes, and then seek to liquidate and dissolve. However, we may not be able to
distribute such amounts as a result of claims of creditors which may take priority over the claims of our public shareholders.
In the event of our dissolution and liquidation, the public rights will expire and will be worthless.
The
amount in the trust account under the Companies Law will be treated as share premium which is distributable under the Companies
Law provided that immediately following the date on which the proposed distribution is proposed to be made, we are able to pay
our debts as they fall due in the ordinary course of business. If we are forced to liquidate the trust account, we anticipate
that we would distribute to our public shareholders the amount in the trust account calculated as of the date that is two days
prior to the distribution date (including any accrued interest). Prior to such distribution, we would be required to assess all
claims that may be potentially brought against us by our creditors for amounts they are actually owed and make provision for such
amounts, as creditors take priority over our public shareholders with respect to amounts that are owed to them. We cannot assure
you that we will properly assess all claims that may be potentially brought against us. As such, our shareholders could potentially
be liable for any claims of creditors to the extent of distributions received by them as an unlawful payment in the event we enter
an insolvent liquidation. Furthermore, while we will seek to have all vendors and service providers (which would include any third
parties we engaged to assist us in any way in connection with our search for a target business) and prospective target businesses
execute agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the
trust account, there is no guarantee that they will execute such agreements. Nor is there any guarantee that, even if such entities
execute such agreements with us, they will not seek recourse against the trust account or that a court would conclude that such
agreements are legally enforceable.
Each
of our initial shareholders and our Sponsor has agreed to waive its rights to participate in any liquidation of our trust account
or other assets with respect to the insider shares and private units and to vote their insider shares, private shares in favor
of any dissolution and plan of distribution which we submit to a vote of shareholders. There will be no distribution from the
trust account with respect to our warrants or rights, which will expire worthless.
If
we are unable to complete an initial business combination and expend all of the net proceeds of the IPO, other than the proceeds
deposited in the trust account, and without taking into account interest, if any, earned on the trust account, the initial per-share
distribution from the trust account would be $10.00.
The
proceeds deposited in the trust account could, however, become subject to the claims of our creditors which would be prior to
the claims of our public shareholders. Although we will seek to have all vendors, including lenders for money borrowed, prospective
target businesses or other entities we engage 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 a claim against
our assets, including the funds held in the trust account. If any third party refused to execute an agreement waiving such claims
to the monies held in the trust account, we would perform an analysis of the alternatives available to us if we chose not to engage
such third party and evaluate if such engagement would be in the best interest of our shareholders if such third party refused
to waive such claims. Examples of possible instances where we may engage a third party that refused to execute a waiver include
the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly
superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a provider
of required services willing to provide the waiver. In any event, our management would perform an analysis of the alternatives
available to it and would only enter into an agreement with a third party that did not execute a waiver if management believed
that such third party’s engagement would be significantly more beneficial to us than any alternative. 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.
Oriental
Holdings Limited, our Sponsor, has agreed that, if we liquidate the trust account prior to the consummation of a business combination,
it will be liable to pay debts and obligations to target businesses or vendors or other entities that are owed money by us for
services rendered or contracted for or products sold to us in excess of the net proceeds of the IPO not held in the trust account,
but only to the extent necessary to ensure that such debts or obligations do not reduce the amounts in the trust account and only
if such parties have not executed a waiver agreement. However, we cannot assure you that he will be able to satisfy those obligations
if he is required to do so. Accordingly, the actual per-share distribution could be less than $10.00 due to claims of creditors.
Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed,
the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate
and subject to the claims of third parties with priority over the claims of our shareholders. To the extent any bankruptcy claims
deplete the trust account, we cannot assure you we will be able to return to our public shareholders at least $10.00 per share.
Competition
In
identifying, evaluating and selecting a target business, we may encounter intense competition from other entities having a business
objective similar to ours. Many of these entities are well established and have extensive experience identifying and effecting
business combinations directly or through affiliates. Many of these competitors possess greater technical, human and other resources
than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While
we believe there may be numerous potential target businesses that we could acquire with the net proceeds of the IPO, our ability
to compete in acquiring certain sizable target businesses may be limited by our available financial resources.
The
following also may not be viewed favorably by certain target businesses:
|
●
|
our
obligation to seek shareholder approval of a business combination or obtain the necessary financial information to be sent
to shareholders in connection with such business combination may delay or prevent the completion of a transaction;
|
|
●
|
our
obligation to convert public shares held by our public shareholders may reduce the resources available to us for a business
combination;
|
|
●
|
NASDAQ
may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our
securities following a business combination;
|
|
●
|
our
outstanding warrants, rights and unit purchase options and the potential future dilution they represent;
|
|
●
|
our
obligation to pay the deferred underwriting discounts and commissions to Chardan Capital Markets, LLC upon consummation of
our initial business combination;
|
|
●
|
our
obligation to either repay or issue units upon conversion of up to $500,000 of working capital loans that may be made to us
by our initial shareholders, officers, directors or their affiliates;
|
|
●
|
our
obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any
securities issued to our initial shareholders, officers, directors or their affiliates upon conversion of working capital
loans; and
|
|
●
|
the
impact on the target business’ assets as a result of unknown liabilities under the securities laws or otherwise depending
on developments involving us prior to the consummation of a business combination.
|
Any
of these factors may place us at a competitive disadvantage in successfully negotiating a business combination. Our management
believes, however, that our status as a public entity and potential access to the United States public equity markets may give
us a competitive advantage over privately-held entities having a similar business objective as ours in acquiring a target business
with significant growth potential on favorable terms.
If
we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the
target business. We cannot assure you that, subsequent to a business combination, we will have the resources or ability to compete
effectively.
Facilities
We
maintain our principal executive offices at Flat A, 6/F, Block A, Tonnochy Towers, No. 272 Jaffe Road, Wanchai, Hong Kong. The
cost for this space is provided to us by Oriental Holdings Limited, a company wholly owned by our insiders, as part of the $10,000
per month payment we make to it for office space and related services. We consider our current office space adequate for our current
operations.
Employees
We
have three executive officers. These individuals are not obligated to devote any specific number of hours to our matters and intend
to devote only as much time as they deem necessary to our affairs. The amount of time they will devote in any time period will
vary based on whether a target business has been selected for the business combination and the stage of the business combination
process the company is in. Accordingly, once management locates a suitable target business to acquire, they will spend more time
investigating such target business and negotiating and processing the business combination (and consequently spend more time to
our affairs) than they would prior to locating a suitable target business. We presently expect our executive officers to devote
such amount of time as they reasonably believe is necessary to our business (which could range from only a few hours a week while
we are trying to locate a potential target business to a majority of their time as we move into serious negotiations with a target
business for a business combination). We do not intend to have any full time employees prior to the consummation of a business
combination.
As
a smaller reporting company, we are not required to make disclosures under this Item.
ITEM
1B.
|
UNRESOLVED
STAFF COMMENTS
|
Not
applicable.
We
do not own any real estate or other physical properties materially important to our operations. We maintain our principal executive
offices at Flat A, 6/F, Block A, Tonnochy Towers, No. 272 Jaffe Road, Wanchai, Hong Kong. The cost for this space is provided
to us by Oriental Holdings Limited, a company wholly owned by our insiders, as part of the $10,000 per month payment we make to
it for office space and related services. We consider our current office space adequate for our current operations.
ITEM
3.
|
LEGAL
PROCEEDINGS
|
We
may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We
are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any
legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material
adverse effect on our business, financial condition or results of operations.
ITEM
4.
|
MINE
SAFETY DISCLOSURES
|
Not
Applicable.
part
II
ITEM 10.
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
The
following table sets forth information about our directors and executive officers as of March 6, 2020.
Name
|
|
Age
|
|
Position
|
Yongsheng
Liu
|
|
50
|
|
Chairman,
Chief Executive Officer and Director
|
Xiaoyan
Tang
|
|
49
|
|
Chief
Financial Officer
|
Ray
Chen
|
|
54
|
|
Chief
Operating Officer
|
Jining
Li
|
|
62
|
|
Director
|
Kinpui
Choi
|
|
65
|
|
Director
|
Weiping
Chen
|
|
62
|
|
Director
|
Simin
Xie
|
|
63
|
|
Director
|
Below
is a summary of the business experience of each of our executive officers and directors
Yongsheng
Liu. Mr. Liu has been our Chief Executive Officer and Chairman of our Board since our inception. Throughout the past 20
years, Mr. Liu has assumed various corporate leadership positions and demonstrated his strong execution ability and in-depth knowledge
in private equity and corporate M&A transactions across a wide range of sectors including aviation, consumer, financial institutions,
and technology. From March 2017 to April 2018, Mr. Liu served as Chairman and CEO of Royal China Holdings Limited (HKEx: 01683),
during which he spearheaded the company’s international growth strategy focused at acquiring targets in aviation industry
and finance sector. From the beginning of 2013 to March 2017, Mr. Liu was the Chairman of Joy Air General Aviation, Chairman of
Cambodia Bayon Airlines, Vice Chairman of Everbright and Joy International Leasing Company, and President of General Aviation
Investment Company (Shanghai). From April 2004 to August 2008, Mr. Liu also served as Chief Strategy Officer of United Eagle Airlines
(subsequently renamed to Chengdu Airlines). From December 1994 to June 2000, Mr. Liu was a manager of China Southern Airlines
responsible for ground staff training. Mr. Liu received his Master degree from University of Ottawa.
Xiaoyan
Tang. Ms. Tang has been our Chief Financial Officer since July 2018. Since December 2017, Ms. Tang has been a Managing
Director and Chief Financial Officer of Hubei Weizi Investment Co. Ltd. From April 2014 to Nov 2017, Ms. Tang served as Chief
Financial Officer and Vice President in Beijing CNLive Culture Media Inc. From July 2012 to March 2014, Ms. Tang served as Board
Secretary and Chief Financial Officer in Beijing Konruns Pharmaceutical Ltd. From January 2011 to July 2012, Ms. Tang served as
Board Secretary and Chief Financial Officer in R&G Pharma Studies Co., Ltd. From Jan 2005 to Dec 2010, Ms. Tang served as
Chief Financial Officer in Wanmo Co. Ltd. From Aug 2001 to Dec 2004, Ms. Tang was a senior analyst in Da Gong International Credit
Rating Co. Ltd. From March 1998 to July 2001, Ms. Tang worked as an investment analyst in Hai Nan-Hong Kong-Macao International
Trust Investment Co Ltd (later known as BOC International (China) Co. Ltd). From July 1992 to Aug 1995, Ms. Tang was a researcher
in Beijing Qinyun Aviation Instrument Co. Ltd. Ms. Tang received her Master degree from Renmin University in China.
Ray
Chen. Mr. Chen has been our Chief Operating Officer since June 2018. Mr. Chen served as Chief Executive Officer at Fortissimo
Film International Ltd., a privately-owned film development and production company from August 2016 till June 2018. From March
2013 to February 2016, Mr. Chen was the Chief Executive Officer of Beijing Galloping Horse Film & TV Production Co., Ltd.
From January 2010 to March 2013, Mr. Chen was the Head of Sales in the Beijing Office of Star Jet Co., Ltd.. Prior to his Star
Jet experience, Mr. Chen was the Executive Board Member and Head of Sales in Asia Jet Partners Limited, a privately-owned holding
company specializing in general aviation and aircraft leasing. Mr. Chen joined Asia Jet after his service as Chief Executive Officer
at ABC International Inc., a business consulting company based in Cleveland, Ohio. Mr. Chen holds a graduate certificate in Marketing
from Cleveland State University.
Jining
Li. Mr. Li has served as a Director of our Board since September 2018. Mr. Li is the Founder and has
acted as the Chairman of Star Jet Co., Ltd in Shanghai, China, since 2008. Prior to Star Jet, Mr. Li founded United Eagle Airlines
as the first non-government-owned airline company in the history of Chinese aviation industry in 2004. From 2004 to 2008, Mr.
Li was the Chairman of United Eagle Airlines. He served as the Chairman of China Internet Investment Finance Holdings Limited
(HKEx: 00810) from 2005 to 2007. In 2004, He was named as the Top Ten Most Influential People in China for his pioneer achievements
in aviation industry. In 1998, Mr. Li founded Guangdong Ying Lian Tong Telecommunication Services Co., Ltd and served as Chairman
until 2004. From 1990 to 1998, Mr. Li served as Chairman of Huahui Import and Export Trading Company. From 1988 to 1990, Mr. Li
served as a manager in Guangdong Branch of China Council for the Promotion of International Trade.
Kinpui
Choi. Mr. Choi has served as a Director since September 2018. He has over 24 years of senior management experience in
telecom companies in Hong Kong, U.S. and China. From 2002 to 2006, he was the President and Chief Executive Officer of Elephant
Talk Communications Inc. Mr. Choi founded Elephant Talk Limited in 1994, a wholly-owned subsidiary of Elephant Talk Communications
Inc. From April 1994 to August 2002, Mr. Choi was the Chief Executive Officer of Elephant Talk Limited. From March 2003 to present,
Mr. Choi has been the independent director of Success Universe Group Limited (HKEx:00487) Previously, he also served as the Chairman
of ET Network Services Limited (later known as Guangdong Ming Ying Financial Leasing Co Limited), a Hong Kong-based company which
specializes in providing telecommunication services in China.
Weiping
Chen. Mr. Chen has served as a Director since September 2018. Since February 2009, Mr. Chen has served as Chairman and
CEO of Shanghai Leadersco Co. Ltd. From September 2000 to December 2008, Mr. Chen was a Managing Director in Shanghai Li Shang
Trading company. From July 1993 to August 2000, Mr. Chen was the manager of QianHe Import and Export Trading Co., Ltd. From November
1989 to July 1993, Mr. Chen served as CEO in Yantai Renewable Resources Corporation.
Simin
Xie. Mr. Xie has served as a Director since September 2018. Since May 2017, Mr. Xie has been an independent director of
China Minzu Securities Co., Ltd. Since October 2015, Mr. Xie has served as an external supervisor in Mod’s Hair Group (a
JASDAQ listed company). Since November 2011, Mr. Chen has served as independent director in China Automotive Engineering Research
Institute Co., Ltd. (SSE: 601965). From 2010 to 2012, Mr. Xie was an independent director for Chongqing Min Sheng Energy Co.,
Ltd. From 2007 to 2015, Mr. Xie served as director for Shandong Yocaly Information Science & Technology Co., Ltd. From 2003
to 2009, Mr. Xie was as independent director in Tande Co., Ltd.(SSE: 600665). Since 2014, Mr. Xie has been a partner in Shenzhen
NSEW Fund Management Co., Ltd. In 1995, Mr. Xie founded C&I Partners (Beijing Xinli Law Firm) and he has been a senior partner
and managing partner of the firm ever since. Mr. Xie received his Bachelor degree in Law from Peking University in 1982 and Ph.D.
from Kobe University in Japan in 1988.
Our
directors and officers will play a key role in identifying, evaluating, and selecting target businesses, and structuring, negotiating
and consummating our initial acquisition transaction. Except as described below and under “— Conflicts of Interest,”
none of these individuals is currently a principal of or affiliated with a public company or blank check company that executed
a business plan similar to our business plan. We believe that the skills and experience of these individuals, their collective
access to acquisition opportunities and ideas, their contacts, and their transaction expertise should enable them to identify
successfully and effect an acquisition transaction, although we cannot assure you that they will, in fact, be able to do so.
Officer
and Director Qualifications
Our
officers and board of directors are composed of a diverse group of leaders with a wide array of professional roles. In these roles,
they have gained experience in core management skills, such as strategic and financial planning, financial reporting, compliance,
risk management, and leadership development. Many of our officers and directors also have experience serving on boards of directors
and board committees of other companies, and have an understanding of corporate governance practices and trends, which provides
an understanding of different business processes, challenges, and strategies. Further, our officers and directors also have other
experience that makes them valuable, managing and investing assets or facilitating the consummation of business combinations.
We,
along with our officers and directors, believe that the above-mentioned attributes, along with the leadership skills and other
experiences of our officers and board members described below, provide us with a diverse range of perspectives and judgment necessary
to facilitate our goals of consummating an acquisition transaction.
Yongsheng
Liu
Mr.
Liu is well-qualified to serve as Chief Executive Officer and Chairman of the Board due to his strong execution ability and in-depth
knowledge in private equity and corporate M&A transactions across a wide range of sectors including aviation, consumer, financial
institutions, and technology. We believe Mr. Liu’s access to contacts and sources, ranging from private and public company
contacts, private equity funds and investment bankers will allow us to generate acquisition opportunities and identify suitable
acquisition candidates.
Xiaoyan
Tang
Ms.
Tang is well-qualified to serve as our Chief Financial Officer due to her in-depth knowledge and experience in the U.S. and China
capital markets, her over ten years of experience and her leadership in financial reporting and financing management for several
companies.
Ray
Chen
Mr.
Chen is well-qualified to serve as our Chief Operating Officer due to his in-depth knowledge and experience in aviation industry
and his significant leadership experience in several companies.
Jining
Li
Mr.
Li is well-qualified to serve as a member of our board of directors given his significant leadership experience in several companies,
and in-depth knowledge and experience in the aviation industry for over 15 years.
Kinpui
Choi
Mr.
Choi is well-qualified to serve as a member of our board of directors due to his extensive experience managing several companies,
his understanding of the fiduciary duties as a board member, his high standards of ethics, as well as his demonstrated professionalism.
Weiping
Chen
Mr.
Chen is well-qualified to serve as a member of our board of directors given his number of years of service in the international
trade industry, understanding of the fiduciary duties as a board member, his high standards of ethics, as well as his demonstrated
professionalism.
Simin
Xie
Mr.
Chen is well-qualified to serve as a member of our board of directors given his number of years of service in the legal industry,
understanding of the fiduciary duties as a board member, his high standards of ethics, as well as his demonstrated professionalism.
Board
Committees
The
Board has a standing audit, nominating and compensation committee, which were established at the closing of our initial public
offering. The independent directors oversee director nominations. Each committee has a charter, which was filed with the SEC as
exhibits to the Registration Statement on Form S-1 on February 5, 2019.
Audit
Committee
The
Audit Committee, which is established in accordance with Section 3(a)(58)(A) of the Exchange Act, engages Company’s independent
accountants, reviewing their independence and performance; reviews the Company’s accounting and financial reporting processes
and the integrity of its financial statements; the audits of the Company’s financial statements and the appointment, compensation,
qualifications, independence and performance of the Company’s independent auditors; the Company’s compliance with
legal and regulatory requirements; and the performance of the Company’s internal audit function and internal control over
financial reporting. The Audit Committee held six meetings during 2019.
The
members of the Audit Committee are Kinpui Choi, Weiping Chen, and Simin Xie, each of whom is an independent director under NASDAQ’s
listing standards. Kinpui Choi is the Chairperson of the audit committee. The Board has determined that both Kinpui Choi qualify
as an “audit committee financial expert,” as defined under the rules and regulations of the SEC.
Nominating
Committee
The
Nominating Committee is responsible for overseeing the selection of persons to be nominated to serve on our Board. Specifically,
the Nominating Committee makes recommendations to the Board regarding the size and composition of the Board, establishes procedures
for the director nomination process and screens and recommends candidates for election to the Board. On an annual basis, the Nominating
Committee recommends for approval by the Board certain desired qualifications and characteristics for board membership. Additionally,
the Nominating Committee establishes and administers a periodic assessment procedure relating to the performance of the Board
as a whole and its individual members. The Nominating Committee will consider a number of qualifications relating to management
and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership
on the Board. The Nominating Committee may require certain skills or attributes, such as financial or accounting experience, to
meet specific board needs that arise from time to time and will also consider the overall experience and makeup of its members
to obtain a broad and diverse mix of board members. The nominating committee does not distinguish among nominees recommended by
shareholders and other persons. The Nominating Committee held no meetings during 2019.
The
members of the Nominating Committee are Kinpui Choi, Weiping Chen, and Simin Xie, each of whom is an independent director under
NASDAQ’s listing standards. Kinpui Choi is the Chairperson of the Nominating Committee.
Compensation
Committee
The
Compensation Committee reviews annually the Company’s corporate goals and objectives relevant to the officers’ compensation,
evaluates the officers’ performance in light of such goals and objectives, determines and approves the officers’ compensation
level based on this evaluation; makes recommendations to the Board regarding approval, disapproval, modification, or termination
of existing or proposed employee benefit plans, makes recommendations to the Board with respect to non-CEO and non-CFO compensation
and administers the Company’s incentive-compensation plans and equity-based plans. The Compensation Committee has the authority
to delegate any of its responsibilities to subcommittees as it may deem appropriate in its sole discretion. The chief executive
officer of the Company may not be present during voting or deliberations of the Compensation Committee with respect to his compensation.
The Company’s executive officers do not play a role in suggesting their own salaries. Neither the Company nor the Compensation
Committee has engaged any compensation consultant who has a role in determining or recommending the amount or form of executive
or director compensation. The Compensation Committee held no meetings during 2019.
Notwithstanding
the foregoing, as indicated above, no compensation of any kind, including finders, consulting or other similar fees, will be paid
to any of our existing shareholders, including our directors, or any of their respective affiliates, prior to, or for any services
they render in order to effectuate, the consummation of a business combination. Accordingly, it is likely that prior to the consummation
of an initial business combination, the compensation committee will only be responsible for the review and recommendation of any
compensation arrangements to be entered into in connection with such initial business combination.
The
members of the Compensation Committee are Kinpui Choi, Weiping Chen, and Simin Xie, each of whom is an independent director under
NASDAQ’s listing standards. Kinpui Choi is the Chairperson of the Compensation Committee.
Conflicts
of Interest
Investors
should be aware of the following potential conflicts of interest:
|
●
|
None
of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts
of interest in allocating their time among various business activities.
|
|
●
|
In
the course of their other business activities, our officers and directors may become aware of investment and business opportunities
which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our
management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining
to which entity a particular business opportunity should be presented.
|
|
●
|
Our
officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in
business activities similar to those intended to be conducted by our company.
|
|
●
|
The
insider shares owned by our officers and directors will be released from escrow only if a business combination is successfully
completed and subject to certain other limitations. Additionally, our officers and directors will not receive distributions
from the trust account with respect to any of their insider shares if we do not complete a business combination. In addition,
our officers and directors may loan funds to us after the IPO and may be owed reimbursement for expenses incurred in connection
with certain activities on our behalf which would only be repaid if we complete an initial business combination. For the foregoing
reasons, the personal and financial interests of our directors and executive officers may influence their motivation in identifying
and selecting a target business, completing a business combination in a timely manner and securing the release of their shares.
|
Under
British Virgin Islands law, directors owe the following fiduciary duties:
|
●
|
duty
to act in good faith in what the director believes to be in the best interests of the company as a whole;
|
|
●
|
duty
to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
|
|
●
|
directors
should not properly 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. 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 memorandum and articles of association or alternatively by shareholder approval
at general meetings.
Accordingly,
as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting
business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when
our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any
of the above mentioned conflicts will be resolved in our favor. Furthermore, most of our officers and directors have pre-existing
fiduciary obligations to other businesses of which they are officers or directors. To the extent they identify business opportunities
which may be suitable for the entities to which they owe pre-existing fiduciary obligations, our officers and directors will honor
those fiduciary obligations. Accordingly, it is possible they may not present opportunities to us that otherwise may be attractive
to us unless the entities to which they owe pre-existing fiduciary obligations and any successors to such entities have declined
to accept such opportunities.
In
order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers and
directors has contractually agreed, pursuant to a written agreement with us, until the earliest of a business combination, our
liquidation or such time as he ceases to be an officer or director, to present to our company for our consideration, prior to
presentation to any other entity, any suitable business opportunity which may reasonably be required to be presented to us, subject
to any pre-existing fiduciary or contractual obligations he might have.
The
following table summarizes the current pre-existing fiduciary or contractual obligations of our officers and directors.
Name
of Individual
|
|
Name
of Affiliated Company
|
|
Affiliation
|
Jining
Li
|
|
Star
Jet Co., Ltd.
|
|
Founder
and Chairman
|
Weiping
Chen
|
|
Shanghai
Leadersco Co., Ltd.
|
|
Chairman
and CEO
|
Simin
Xie
|
|
China
Minzu Securities Co., Ltd.
|
|
Independent
Director
|
|
|
Mod’s
Hair Group
|
|
External
Supervisor
|
|
|
China
Automotive Engineering Research Institute Co., Ltd.
|
|
Independent
Director
|
|
|
C&I
Partners
|
|
Senior
Partner and Managing Partner
|
In
connection with the vote required for any business combination, all of our existing shareholders, including all of our officers
and directors, have agreed to vote their respective insider shares and private shares in favor of any proposed business combination.
In addition, they have agreed to waive their respective rights to participate in any liquidation distribution with respect to
those ordinary shares acquired by them prior to the IPO. If they purchased ordinary shares in the IPO or in the open market, however,
they would be entitled to participate in any liquidation distribution in respect of such shares but have agreed not to convert
such shares (or sell their shares in any tender offer) in connection with the consummation of our initial business combination
or an amendment to our amended and restated memorandum and articles of association relating to pre-business combination activity.
All
ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms
believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions will require
prior approval by our audit committee and a majority of our uninterested “independent” directors, or the members of
our board who do not have an interest in the transaction, in either case who had access, at our expense, to our attorneys or independent
legal counsel. We will not enter into any such transaction unless our audit committee and a majority of our disinterested “independent”
directors determine that the terms of such transaction are no less favorable to us than those that would be available to us with
respect to such a transaction from unaffiliated third parties.
To
further minimize conflicts of interest, we have agreed not to consummate our initial business combination with an entity that
is affiliated with any of our officers, directors or initial shareholders, unless we have obtained (i) an opinion from an independent
investment banking firm that the business combination is fair to our unaffiliated shareholders from a financial point of view
and (ii) the approval of a majority of our disinterested and independent directors (if we have any at that time). Furthermore,
in no event will any of our initial shareholders, officers, directors, special advisors or their respective affiliates be paid
any finder’s fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate,
the consummation of our initial business combination.
Code
of Ethics
We
adopted a code of conduct and ethics applicable to our directors, officers and employees in accordance with applicable federal
securities laws. The code of ethics codifies the business and ethical principles that govern all aspects of our business.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and
persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of our ordinary shares and other equity securities.
These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with
copies of all Section 16(a) forms filed by such reporting persons.
Based solely on our review of such forms furnished to us and
written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers,
directors and greater than 10% beneficial owners were filed in a timely manner.
ITEM 11.
|
EXECUTIVE
COMPENSATION
|
Employment
Agreements
We
have not entered into any employment agreements with our executive officers, and have not made any agreements to provide benefits
upon termination of employment.
Executive
Officers and Director Compensation
Other
than the HKD$50,000 (or approximately USD$6,370 based on an exchange rate of HKD$7.85 to USD$1.00 on March 29, 2019) per month
that has been paid since July 2018 to Yongsheng Liu, our Chief Executive Officer, for his services to us, no compensation of any
kind, including finders, consulting or other similar fees, has been paid or will be paid to any of our existing shareholders,
including our directors, or any of their respective affiliates, prior to, or for any services they render in order to effectuate,
the consummation of a business combination. However, such individuals will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. There is no limit on the amount of these out-of-pocket expenses and there will be no review of the reasonableness
of the expenses by anyone other than our board of directors and audit committee, which includes persons who may seek reimbursement,
or a court of competent jurisdiction if such reimbursement is challenged.
ITEM 12.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
The
following table sets forth as of March 6, 2020 the number of ordinary shares beneficially owned by (i) each person who is known
by us to be the beneficial owner of more than five percent of our issued and outstanding ordinary shares (ii) each of our officers
and directors; and (iii) all of our officers and directors as a group. As of March 6, 2020, we had 7,457,500 ordinary shares issued
and outstanding.
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 of beneficial ownership of any ordinary
shares issuable upon exercise of the warrants or conversion of rights, as the warrants are not exercisable within 60 days of March
6, 2020 and the rights are not convertible within 60 days of March 6, 2020.
Name and Address of Beneficial Owner(1)
|
|
Amount and Nature of
Beneficial Ownership of
Ordinary Shares
|
|
|
Approximate Percentage
of Outstanding Shares of
Ordinary Shares
|
|
Oriental Holdings Limited (2)
|
|
|
1,470,000
|
|
|
|
19.71
|
%
|
Yongsheng Liu
|
|
|
143,750
|
|
|
|
1.93
|
%
|
Xiaoyan Tang
|
|
|
12,500
|
|
|
|
*
|
|
Ray Chen
|
|
|
6,250
|
|
|
|
*
|
|
Jining Li (3)
|
|
|
1,470,000
|
|
|
|
19.71
|
%
|
Kinpui Choi
|
|
|
12,500
|
|
|
|
*
|
|
Weiping Chen
|
|
|
12,500
|
|
|
|
*
|
|
Simin Xie
|
|
|
12,500
|
|
|
|
*
|
|
Yuehai Zhou
|
|
|
12,500
|
|
|
|
*
|
|
Zhean Bao
|
|
|
25,000
|
|
|
|
*
|
|
Boothbay Absolute Return Strategies LP(4)
|
|
|
375,000
|
|
|
|
5.03
|
%
|
Boothbay Fund Management, LLC(4)
|
|
|
375,000
|
|
|
|
5.03
|
%
|
Ari Glass(4)
|
|
|
375,000
|
|
|
|
5.03
|
%
|
Periscope Capital Inc.(5)
|
|
|
436,661
|
|
|
|
5.86
|
%
|
Basso SPAC Fund LLC(6)
|
|
|
431,539
|
|
|
|
5.79
|
%
|
Basso Management, LLC(6)
|
|
|
431,539
|
|
|
|
5.79
|
%
|
Basso Capital Management, L.P.(6)
|
|
|
431,539
|
|
|
|
5.79
|
%
|
Basso GP, LLC(6)
|
|
|
431,539
|
|
|
|
5.79
|
%
|
Howard I. Fischer(6)
|
|
|
431,539
|
|
|
|
5.79
|
%
|
Hudson Bay Capital Management LP(7)
|
|
|
425,000
|
|
|
|
5.70
|
%
|
Sander Gerber(7)
|
|
|
425,000
|
|
|
|
5.70
|
%
|
Mizuho Financial Group, Inc.(8)
|
|
|
656,400
|
|
|
|
8.80
|
%
|
All directors and officers as a group (7 individuals)
|
|
|
1,670,000
|
|
|
|
22.39
|
%
|
|
(1)
|
Unless
otherwise indicated, the business address of each of the individuals is c/o Wealthbridge Acquisition Limited, Flat A, 6/F,
Block A, Tonnochy Towers, No. 272 Jaffe Road, Wanchai, Hong Kong.
|
|
(2)
|
Mr.
Jining Li and Mr. Yongsheng Liu jointly own, and Jining Li controls, Oriental Holdings Limited, our sponsor.
|
|
(3)
|
Mr.
Jining Li has voting and dispositive power over the shares owned by Oriental Holdings Limited.
|
|
(4)
|
Based
on a Schedule 13G filed by the reporting persons. The address for the reporting persons is 810 7th Avenue, Suite 615, New
York, NY 10019-5818. Boothbay Absolute Return Strategies LP, a Delaware limited partnership (the “Fund”), is managed
by Boothbay Fund Management, LLC, a Delaware limited liability company (the “Adviser”). The Adviser, in its capacity
as the investment manager of the Fund, has the power to vote and the power to direct the disposition of all Units held by
the Fund. Ari Glass is the Managing Member of the Adviser. Shares reported may be deemed beneficially owned by Boothbay Absolute
Return Strategies LP, Boothbay Fund Management, LLC and Ari Glass.
|
|
(5)
|
Based on a Schedule 13G filed by the reporting person. The address
for the reporting persons is 333 Bay Street, Suite 1240, Toronto, Ontario, Canada M5H 2R2. Periscope Capital Inc. (“Periscope”),
which is the beneficial owner of 334,700 Ordinary Shares, acts as investment manager of, and exercises investment discretion with
respect to, certain private investment funds (each, a “Periscope Fund”) that collectively directly own 101,961 Ordinary
Shares.
|
|
|
|
|
(6)
|
Based on a Schedule 13G filed by the reporting persons. The address
for the reporting persons is 1266 East Main Street, Fourth Floor, Stamford, Connecticut 06902. Basso Management, LLC (“Basso
Management”) is the manager of Basso SPAC Fund LLC (“Basso SPAC”). Basso Capital Management, L.P. (“BCM”)
serves as the investment manager of Basso SPAC. Basso GP, LLC (Basso GP”) is the general partner of BCM. Howard I. Fischer
is the sole portfolio manager for Basso SPAC, the Chief Executive Officer and a founding partner of BCM, and a member of each of
Basso Management and Basso GP. Accordingly, each of Basso Management, BCM, Basso GP and Howard I. Fischer may be deemed to indirectly
beneficially own the Shares reported herein.
|
|
|
|
|
(7)
|
Based on a Schedule 13G filed by the reporting persons. The address
for the reporting persons is 777 Third Avenue, 30th Floor, New York, NY 10017. Hudson Bay Capital Management LP (the “Investment
Manager”) serves as the investment manager to Hudson Bay Master Fund Ltd. Tech Opportunities LLC, in whose name the securities
reported herein are held, is controlled by Hudson Bay Master Fund Ltd. As such, the Investment Manager may be deemed to be the
beneficial owner of all securities held by Tech Opportunities LLC. Sander Gerber serves as the managing member of Hudson Bay Capital
GP LLC, which is the general partner of the Investment Manager. Mr. Gerber disclaims beneficial ownership of these securities.
|
|
|
|
|
(8)
|
Based on a Schedule 13G filed by the reporting person. The address
for the reporting persons is –5–5, Otemachi, Chiyoda–ku, Tokyo 100–8176, Japan. Mizuho Financial Group,
Inc., Mizuho Bank, Ltd. and Mizuho Americas LLC may be deemed to be indirect beneficial owners of said equity securities directly
held by Mizuho Securities USA LLC which is their wholly-owned subsidiary.
|
All
of the insider shares issued and outstanding prior to the IPO were placed in escrow with Continental Stock Transfer & Trust
Company, LLC, as escrow agent, until (1) with respect to 50% of the insider shares, the earlier of one year after the date of
the consummation of our initial business combination and the date on which the closing price of our ordinary shares equals or
exceeds $12.50 per share (as adjusted for share splits, share capitalizations, reorganizations and recapitalizations) for any
20 trading days within any 30-trading day period commencing after our initial business combination and (2) with respect to the
remaining 50% of the insider shares, one year after the date of the consummation of our initial business combination, or earlier,
in either case, if, subsequent to our initial business combination, we consummate a liquidation, merger, share exchange or other
similar transaction which results in all of our shareholders having the right to exchange their shares for cash, securities or
other property.
During
the escrow period, the holders of these shares will not be able to sell or transfer their securities except (i) for transfers
to our officers, directors or their respective affiliates (including for transfers to an entity’s members upon its liquidation),
(ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death,
(iv) pursuant to a qualified domestic relations order, (v) by certain pledges to secure obligations incurred in connection with
purchases of our securities, (vi) by private sales made at or prior to the consummation of a business combination at prices no
greater than the price at which the shares were originally purchased or (vii) to us for no value for cancellation in connection
with the consummation of our initial business combination, in each case (except for clause (vii)) where the transferee agrees
to the terms of the escrow agreement, but will retain all other rights as our shareholders, including, without limitation, the
right to vote their ordinary shares and the right to receive cash dividends, if declared. If dividends are declared and payable
in ordinary shares, such dividends will also be placed in escrow. If we are unable to effect a business combination and liquidate
the trust account, none of our initial shareholders will receive any portion of the liquidation proceeds with respect to their
insider shares.
In
order to meet our working capital needs, our initial shareholders, officers and directors or their affiliates may, but are not
obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion.
Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination,
without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our
business combination into private units at a price of $10.00 per unit (which, for example, would result in the holders being issued
units to acquire 55,000 ordinary shares (which includes 5,000 shares issuable upon conversion of rights) and warrants to purchase
25,000 ordinary shares if $500,000 of notes were so converted). Our shareholders have approved the issuance of the units and underlying
securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of
our initial business combination. If we do not complete a business combination, the loans will not be repaid.
Our
Sponsor and our executive officers and directors are deemed to be our “promoters,” as that term is defined under the
Federal securities laws.
ITEM 13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
In
July 2018, the Company issued an aggregate of 1,150,000 insider shares to the initial shareholders for an aggregate purchase
price of $25,100 in cash. On October 15, 2018, the Company effected a 5 for 4 stock split of its common stock, resulting
in 1,437,500 insider shares outstanding. All share and per-share amounts have been retroactively restated to reflect the stock
split.
Simultaneously
with the closing of the IPO, the Company consummated the private placement with certain of its initial shareholders of 247,500
units at a price of $10.00 per Private Unit, generating total proceeds of $2,475,000. In addition, the Company also consummated
the sale of an additional 22,500 Private Units at $10.00 per Private Unit to certain of its initial shareholders, generating total
gross proceeds of $225,000, in connection with the exercise of the underwriter’s over-allotment option.
In
order to meet our working capital needs following the consummation of the IPO, our initial shareholders, officers and directors
and their respective affiliates may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount
they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid
upon consummation of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000
of the notes may be converted upon consummation of our business combination into private units at a price of $10.00 per unit (which,
for example, would result in the holders being issued units to acquire 55,000 ordinary shares (which includes 5,000 shares issuable
upon conversion of rights) and warrants to purchase 25,000 ordinary shares if $500,000 of notes were so converted). Our shareholders
have approved the issuance of the units and underlying securities upon conversion of such notes, to the extent the holder wishes
to so convert them at the time of the consummation of our initial business combination. If we do not complete a business combination,
the loans would be repaid out of funds not held in the trust account, and only to the extent available.
The
holders of our insider shares issued and outstanding prior to the date of the IPO, as well as the holders of the private units
(and all underlying securities) and any securities our initial shareholders, officers, directors or their affiliates may be issued
in payment of working capital loans made to us, will be entitled to registration rights pursuant to offering registration rights
agreement. The holders of a majority of these securities are entitled to make up to two demands that we register such securities.
The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three
months prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the private
units or securities issued in payment of working capital loans made to us can elect to exercise these registration rights at any
time after we consummate a business combination. In addition, the holders have certain “piggy-back” registration rights
with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses
incurred in connection with the filing of any such registration statements.
We
will reimburse our officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with
certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. There
is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed
the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account,
such expenses would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review
and approve all reimbursements and payments made to any initial shareholder or member of our management team, or our or their
respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved
by our Board of Directors, with any interested director abstaining from such review and approval.
Other than $10,000 per month to Oriental
Holdings Limited for its general and administrative services, which includes the HKD$50,000 (or approximately USD$6,370 based
on an exchange rate of HKD$7.85 to USD$1.00 on March 29, 2019) has been paid since July 2018 to Yongsheng Liu, our Chief Executive
Officer, for his services to us, no compensation or fees of any kind, including finder’s fees, consulting fees or other
similar compensation, will be paid to any of our initial shareholders, officers or directors who owned our ordinary shares prior
to the IPO, or to any of their respective affiliates, prior to or with respect to the business combination (regardless of the
type of transaction that it is).
All
ongoing and future transactions between us and any of our officers and directors or their respective affiliates will be on terms
believed by us to be no less favorable to us than are available from unaffiliated third parties. Such transactions, including
the payment of any compensation, will require prior approval by a majority of our uninterested “independent” directors
(to the extent we have any) or the members of our board who do not have an interest in the transaction, in either case who had
access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction unless our
disinterested “independent” directors (or, if there are no “independent” directors, our disinterested
directors) determine that the terms of such transaction are no less favorable to us than those that would be available to us with
respect to such a transaction from unaffiliated third parties.
On January 28, 2020, the Company issued
a $575,000 Note to Scienjoy, pursuant to which such amount was deposited into the Company’s Trust Account in order to extend
the amount of time the Company has available to complete a Business Combination from February 8, 2020 to May 8, 2020. The Note
is non-interest bearing and is payable upon the closing of a Business Combination. In addition, the Note may be converted, at
the lender’s discretion, into additional Private Units at a price of $10.00 per unit.
Related
Party Policy
Our
Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential
conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions
are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar
year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election
as a director, (b) greater than 5% beneficial owner of our ordinary shares, or (c) immediate family member, of the persons referred
to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director
or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions
or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may
also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.
We
also require each of our directors and executive officers to annually complete a directors’ and officers’ questionnaire
that elicits information about related party transactions.
Our
audit committee, pursuant to its written charter, will be responsible for reviewing and approving related-party transactions to
the extent we enter into such transactions. All ongoing and future transactions between us and any of our officers and directors
or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated
third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested “independent”
directors, or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense,
to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority
of our disinterested “independent” directors determine that the terms of such transaction are no less favorable to
us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Additionally,
we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that
elicits information about related party transactions.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents
a conflict of interest on the part of a director, employee or officer.
To
further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity which
is affiliated with any of our initial shareholders unless we obtain an opinion from an independent investment banking firm that
the business combination is fair to our unaffiliated shareholders from a financial point of view. Furthermore, in no event will
any of our existing officers, directors or initial shareholders, or any entity with which they are affiliated, be paid any finder’s
fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of
a business combination.
Director
Independence
Nasdaq
listing standards require that within one year of the listing of our securities on the Nasdaq Capital Market we have at least
three independent directors and that a majority of our board of directors be independent. For a description of the director independence,
see above Part III, Item 10 - Directors, Executive Officers and Corporate Governance.
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
The
following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.
Audit Fees. Audit fees consist of fees
billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided
by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for professional services rendered for the
audit of our annual financial statements, review of the financial information included in our Forms 10-Q for the respective periods
and other required filings with the SEC for the year ended December 31, 2019 and for the period from May 2, 2018 (inception) through
December 31, 2018 totaled approximately $75,000 and $42,500, respectively. The above amounts include interim procedures and audit
fees, as well as attendance at audit committee meetings.
Audit-Related Fees. Audit-related services
consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of
our financial statements and are not reported under “Audit Fees.” These services include attest services that are not
required by statute or regulation and consultations concerning financial accounting and reporting standards. For the year ended
December 31, 2019 and for the period from May 2, 2018 (inception) through December 31, 2018, we incurred approximately $11,300
and no fees, respectively.
Tax
Fees. We did not pay Marcum for tax planning and tax advice for the year ended December 31, 2019 and for the period from May
2, 2018 (inception) through December 31, 2018.
All
Other Fees. We did not pay Marcum for other services for the year ended December 31, 2019 and for the period from May 2, 2018
(inception) through December 31, 2018.
Pre-Approval
Policy
Our
audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve
all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our
board of directors. All services subsequent to the formation of the audit committee have been approved by the audit committee.
part
IV
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Wealthbridge Acquisition Limited (the “Company”)
is a blank check company incorporated in the British Virgin Islands on May 2, 2018. The Company was formed for the purpose of entering
into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination
with one or more businesses or entities (“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
and around the air transportation and aviation industry in China.
All activity through December 31, 2019
relates to the Company’s formation, the Initial Public Offering (as defined below), identifying a target business for a Business
Combination, and activities in connection with the potential acquisition of Scienjoy, Inc. (“Scienjoy”) (see Note 7).
The Company is subject to all of the risks associated with early stage and emerging growth companies.
The registration statement for the Company’s
Initial Public Offering was declared effective on February 5, 2019. On February 8, 2019, the Company consummated the Initial Public
Offering of 5,000,000 units (“Units” and, with respect to the ordinary shares included in the Units sold, the “Public
Shares”) at $10.00 per Unit, generating gross proceeds of $50,000,000, which is described in Note 3.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 247,500 units (the “Private Units”) at a price of $10.00
per Private Unit in a private placement to the Company’s sponsor, Oriental Holdings Limited (the “Sponsor”),
jointly owned by the Company’s director, Jining Li, through Keen Nice Communications Limited and Yongsheng Liu, generating
gross proceeds of $2,475,000, which is described in Note 4.
Following the closing of the Initial Public
Offering on February 8, 2019, an amount of $50,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the
Initial Public Offering and the sale of the Private Units was placed 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 of 1940, as amended
(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 selected by the Company 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 or (ii) the distribution of the funds
in the Trust Account to the Company’s shareholders, as described below.
On February 20, 2019, the underwriters
exercised their over-allotment option in full, resulting in an additional 750,000 Units issued for $7,500,000, less the underwriters’
discount of $225,000. In connection with the underwriters’ exercise of their over-allotment option in full, the Company also
consummated the sale of an additional 22,500 Private Units at $10.00 per Private Unit, generating total gross proceeds of $225,000.
A total of $7,500,000 was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to $57,500,000.
Transaction costs amounted to $4,415,225,
consisting of $1,725,000 of underwriting fees, $2,012,500 of deferred underwriting fees and $677,725 of other costs. In addition,
as of December 31, 2019, cash of $11,610 was held outside of the Trust Account and is available for working capital purposes.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Initial Public Offering and sale of the Private
Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market
value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and interest released
to pay taxes payable) at the time of signing a definitive agreement in connection with a Business Combination. The Company will
only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting
securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There
is no assurance that the Company will be able to successfully effect a Business Combination.
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 Public Shares for a pro rata portion of the
amount then on deposit in the Trust Account (initially $10.00 per share, plus any pro rata interest earned on the funds held in
the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed
to shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the
underwriter (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.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
The Company will proceed with a Business
Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and,
if the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination.
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, offer such redemption 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.
The Company’s initial shareholders
(the “initial shareholders”) have agreed (a) to vote their founder shares, the ordinary shares included in the Private
Units (the “Private Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of
a Business Combination, (b) not to propose, or vote in favor of, an amendment to the Company’s Amended and Restated Memorandum
and Articles of Association that would stop the public shareholders from converting or selling their shares to the Company in connection
with a Business Combination or affect 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 the Combination Period (as defined below) unless the Company provides
dissenting public shareholders with the opportunity to convert their Public Shares into the right to receive cash from the Trust
Account in connection with any such vote; (c) not to convert any founder shares and Private Units (including underlying securities)
(as well as any Public Shares purchased during or after the Initial Public Offering) into the right to receive cash from the Trust
Account in connection with a shareholder vote to approve a Business Combination (or sell any shares in a tender offer in connection
with a Business Combination) or a vote to amend the provisions of the Amended and Restated Memorandum and Articles of Association
relating to shareholders’ rights of pre-Business Combination activity and (d) that the founder shares and Private Units (including
underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not
consummated. However, the initial shareholders will be entitled to liquidating distributions from the Trust Account with respect
to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination.
The Company initially had until February
8, 2020 to consummate a Business Combination. However, if the Company anticipated that it may not be able to consummate a Business
Combination by February 8, 2020, the Company may, but was not obligated to, extend the period of time to consummate a Business
Combination three times by an additional three months each time (for a total of up to 21 months to complete a Business Combination)
(the “Combination Period”). In order to extend the time available for the Company to consummate a Business Combination,
the initial shareholders or their affiliates or designees must deposit into the Trust Account $575,000 ($0.10 per share), on or
prior to the applicable deadline.
On January 29, 2020, Scienjoy deposited
$575,000 into the Company’s Trust Account in order to extend the amount of time it has available to complete a business combination
from February 8, 2020 to May 8, 2020. The Company issued a promissory note to Scienjoy with a principal amount equal to the amount
deposited (the “Note”). The Note is non-interest bearing and is payable upon the closing of a Business Combination.
In addition, the Note may be converted, at the lender’s discretion, into additional Private Units at a price of $10.00 per
unit.
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 ten 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 (net of taxes payable), which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the remaining shareholders and the Company’s board of directors,
proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations
to provide for claims of creditors and the requirements of applicable law. The underwriter has agreed to waive its rights to the
deferred underwriting commission held in the Trust Account 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 $10.00.
The Sponsor has agreed that it will be
liable to the Company, if and to the extent any claims by a vendor 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 amounts in the
Trust Account to below $10.00 per share, 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 Initial
Public 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,
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.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation
The accompanying financial statements have
been prepared in accordance 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and 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 December 31, 2019 and 2018.
Marketable securities held in Trust
Account
At December 31, 2019, the assets held in
the Trust Account were substantially held in U.S. Treasury Bills.
Ordinary shares subject to possible redemption
The Company accounts for its ordinary share
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability
instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely
within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’
equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented
at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
Income taxes
The Company complies with the accounting
and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial
accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the
financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on
enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC Topic 740 prescribes a recognition
threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected
to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon
examination by taxing authorities. The Company’s management determined that the British Virgin Islands is the Company’s
major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as
income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31,
2019 and 2018. 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 may be subject to potential
examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the
timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.
The Company’s tax provision is zero
because the Company is organized in the British Virgin Islands with no connection to any other taxable jurisdiction. As such, the
Company has no deferred tax assets. The Company is considered to be an exempted British Virgin Islands Company and is presently
not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States.
Net loss per ordinary 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. At December 31, 2018, weighted average shares were reduced for the effect of an aggregate of 187,500 ordinary shares
that were subject to forfeiture if the over-allotment option was not exercised by the underwriters (see Note 5). Ordinary shares
subject to possible redemption at December 31, 2019, which are not currently redeemable and are not redeemable at fair value, have
been excluded from the calculation of basic net loss per ordinary share since such shares, if redeemed, only participate in their
pro rata share of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public
Offering and the private placement to purchase 3,010,000 ordinary shares, (2) rights sold in the Initial Public Offering and the
private placement that convert into 602,000 ordinary shares, and (3) 431,250 ordinary shares, warrants to purchase 215,625 ordinary
shares and rights that convert into 43,125 ordinary shares in the unit purchase option sold to the underwriter, in the calculation
of diluted loss per share, since the exercise of the warrants, the conversion of the rights into ordinary shares and the exercise
of the unit purchase option are contingent upon the occurrence of future events. As a result, diluted net loss per ordinary share
is the same as basic net loss per ordinary share for the periods presented.
Reconciliation of net loss per ordinary
share
The Company’s net income (loss) is
adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only
participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss
per ordinary share is calculated as follows:
|
|
Year Ended
December 31,
|
|
|
For the Period from May 2,
2018
(inception) Through
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Net income (loss)
|
|
$
|
151,393
|
|
|
$
|
(60,837
|
)
|
Less: Income attributable to ordinary shares subject to possible redemption
|
|
|
(945,374
|
)
|
|
|
—
|
|
Adjusted net loss
|
|
$
|
(793,981
|
)
|
|
$
|
(60,837
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
|
2,276,509
|
|
|
|
1,250,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per ordinary share
|
|
$
|
(0.35
|
)
|
|
$
|
(0.05
|
)
|
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
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. 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 sheets, 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
financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering,
the Company sold 5,750,000 Units at a purchase price of $10.00 per Unit, which includes the exercise by the underwriters of their
over-allotment option in full of 750,000 Units at $10.00 per Unit. Each Unit consists of one ordinary share, one redeemable warrant
(“Public Warrant”) and one right (“Public Right”). Each Public Warrant entitles the holder to purchase
one-half of one ordinary share at an exercise price of $11.50 per whole share (see Note 8). However, the Public Warrants may only
be exercised for a whole number of shares, meaning that the Public Warrants must be exercised in multiples of two. Each Public
Right entitles the holder to receive one-tenth of one ordinary share at the closing of a Business Combination (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Sponsor purchased an aggregate of 247,500 Private Units at a price of $10.00 per Private Unit, or
$2,475,000 in the aggregate. On February 20, 2019, in connection with the underwriters’ exercise of the over-allotment option
in full, the Sponsor purchased an additional 22,500 Private Units for an aggregate purchase price of $225,000. Each Private Unit
consists of one Private Share, one redeemable warrant (each, a “Private Warrant”) and one right (each, a “Private
Right”). Each Private Warrant is exercisable to purchase one-half of one ordinary share at a price of $11.50 per whole share.
However, the Private Warrants may only be exercised for a whole number of shares, meaning that the Private Warrants must be exercised
in multiples of two. Each Private Right entitles the holder to receive one-tenth of one ordinary share at the closing of a Business
Combination. The proceeds from the sale of the Private Units were added to the net proceeds from the Initial Public Offering held
in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from
the sale of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable
law) and the Private Warrants and Private Rights will expire worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
In July 2018, the Company issued an aggregate
of 1,150,000 founder shares to the initial shareholders for an aggregate purchase price of $25,100 in cash. On October 15, 2018,
the Company effected a 5 for 4 stock split of its ordinary share, resulting in 1,437,500 founder shares outstanding. The founder
shares included an aggregate of up to 187,500 shares subject to forfeiture by the initial shareholders to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the initial shareholders would collectively own 20% of the Company’s
issued and outstanding shares after the Initial Public Offering (assuming the initial shareholders did not purchase any Public
Shares in the Initial Public Offering and excluding the Private Units and underlying securities). In connection with the underwriters’
exercise of the over-allotment option in full on February 20, 2019, 187,500 founder shares are no longer subject to forfeiture.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
The initial shareholders have agreed not
to transfer, assign or sell any of the founder shares (except to certain permitted transferees) until (1) with respect to 50% of
the founder shares, the earlier of six months after the completion of a Business Combination and the date on which the closing
price of the ordinary shares equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing
after a Business Combination and (2) with respect to the remaining 50% of the founder shares, six months after the completion of
a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation,
merger, share exchange or other similar transaction which results in all of the Company’s shareholders having the right to
exchange their ordinary shares for cash, securities or other property.
Advance from Related Party
Keen Nice Communications Limited advanced
the Company an aggregate of $12,821 to be used for the payment of costs related to the Initial Public Offering. The advances were
non-interest bearing, unsecured and due on demand. As of December 31, 2019 and 2018, advances amounting to $0 and $12,821, respectively,
were outstanding (see below).
Promissory Note — Related Party
The Company issued Keen Nice Communications
Limited a promissory note, pursuant to which the Company borrowed an aggregate of $390,000 (the “Promissory Note”).
The Promissory Note was non-interest bearing, unsecured and due on the closing of the Initial Public Offering. As of December 31,
2019 and 2018, $0 and $390,000, respectively, was outstanding under the Promissory Note.
On February 14, 2019, the Company amended
the Promissory Note with Keen Nice Communications Limited pursuant to which outstanding advances in the amount of $25,641 and the
outstanding loans under the Promissory Note in the amount of $390,000 were combined into one note for an aggregate amount of $415,641.
The Promissory Note was further amended on May 10, 2019 (the “Amended Promissory Note”) such that the Company can borrow
up to an aggregate amount of $800,000 under the Amended Promissory Note. The Amended Promissory Note is non-interest bearing, unsecured
and due upon the consummation of a Business Combination. As of December 31, 2019, $465,641 was outstanding under the Amended Promissory
Note.
Administrative Services Agreement
The Company entered into an agreement,
commencing on February 5, 2019 through the earlier of the consummation of a Business Combination or the Company’s liquidation,
to pay the Sponsor a monthly fee of $10,000 for general and administrative services, including office space, utilities and administrative
services, of which HKD50,000 (or approximately USD$6,369 based on an exchange rate of HKD$7.85 to USD$1.00 on September 30, 2019)
per month will be paid to the Company’s Chief Executive Officer for services to the Company. However, pursuant to the terms
of such agreement, the Company may delay payment of such monthly fee upon a determination by the audit committee that the Company
lacks sufficient funds held outside the Trust Account to pay actual or anticipated expenses in connection with a Business Combination.
Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of a Business
Combination. For the year ended December 31, 2019, the Company incurred $110,000, in fees for these services, of which $45,897
is included in accounts payable and accrued expenses in the accompanying balance sheets.
Services Arrangement
The Company entered into a services arrangement
with Star Jet Co., Ltd., a company whose founder and Chairman is also a Director of the Company. During the year ended December
31, 2019 and for the period from May 2, 2018 (inception) through December 31,2018, the Company paid Star Jet Co., Ltd. $33,180
and $12,821 in fees for services provided, respectively.
Related Party Loans
In order to finance transaction costs in
connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or the Company’s officers
and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such
Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business
Combination, without interest, or, at the lender’s discretion, up to $500,000 of notes may be converted upon consummation
of a Business Combination into additional Private Units at a price of $10.00 per Unit. 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.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
Related Party Extension Loans
As discussed in Note 1, the Company may
extend the period of time to consummate a Business Combination three times by an additional three months each time (for a total
of 21 months to complete a Business Combination). In order to extend the time available for the Company to consummate a Business
Combination, the initial shareholders or their affiliates or designees must deposit into the Trust Account for each three-month
extension $575,000 ($0.10 per Unit), on or prior to the date of the applicable deadline. The initial shareholders will receive
a non-interest bearing, unsecured promissory note equal to the amount of any such deposit that will not be repaid in the event
that the Company is unable to complete a Business Combination unless there are funds available outside the Trust Account to do
so. Such notes would either be paid upon consummation of a Business Combination, or, at the lender’s discretion, converted
upon consummation of a Business Combination into additional Private Units at a price of $10.00 per unit.
NOTE 6. PROMISSORY NOTE
On January 28, 2020, the Company issued
the $575,000 Note to Scienjoy, pursuant to which such amount was deposited into the Company’s Trust Account in order to extend
the amount of time the Company has available to complete a Business Combination from February 8, 2020 to May 8, 2020. The Note
is non-interest bearing and is payable upon the closing of a Business Combination. In addition, the Note may be converted, at the
lender’s discretion, into additional Private Units at a price of $10.00 per unit.
NOTE 7. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement
entered into on February 5, 2019, the holders of the founder shares, Private Units (and their underlying securities) and any Units
that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to registration rights.
The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities.
The holders of the majority of the founder shares can elect to exercise these registration rights at any time commencing three
months prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the Private
Units (and underlying securities) and securities issued in payment of Working Capital Loans (or underlying securities) or loans
to extend our life can elect to exercise these registration rights at any time after the Company consummates a Business Combination.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed
subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing
of any such registration statements.
Underwriters Agreement
The underwriters are entitled to a deferred
fee of 3.50% of the gross proceeds of the Initial Public Offering, or $2,012,500. The deferred fee will be paid in cash upon the
closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.
Right of First Refusal
Subject to certain conditions, the Company
granted Chardan Capital Markets, LLC (“Chardan”), for a period of 15 months after the date of the consummation of a
Business Combination, a right of first refusal to act as lead underwriters or minimally as a co-manager, with at least 30% of the
economics; or, in the case of a three-handed deal 20% of the economics, for any and all future public and private equity and debt
offerings. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three
years from the effective date of the registration statement related to the Initial Public Offering.
Advisory Agreement
The Company entered into an agreement with
Chardan to provide financial advisory services to the Company in connection with the identification of and negotiation with potential
targets, assistance with due diligence, marketing, financial analyses and investor relations. In the event a Business Combination
is consummated, the Company shall pay Chardan an aggregate fee based on the Aggregate Value (as defined in the agreement) of the
Business Combination immediately following the closing of the Business Combination in the form of newly issued Company shares.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
M&A Advisory Agreement
The Company engaged China Fuhua Hong Kong
Financial Group Limited (“Fuhua”), a financial services company in Hong Kong, China, to introduce Scienjoy to the Company.
Pursuant to the engagement letter entered on April 15, 2019, Fuhua will assist the Company with due diligence, developing and designing
the transaction structure and negotiation of the valuation of Scienjoy as reasonably requested by the Company. In the event the
Scienjoy Business Combination (see below) is consummated, the Company will pay Fuhua equal to 1.8% of the Purchase Price (as defined
in the agreement) of the Scienjoy Business Combination in the form of newly issued Company shares.
Share Exchange Agreement
On October 28, 2019, the Company entered
into a share exchange agreement (as may be amended or supplemented from time to time, the “Share Exchange Agreement”)
with Scienjoy, Lavacano Holdings Limited (“Lavacano”), WBY Entertainment Holdings Ltd. (“WBY,” together
with Lavacano, the “Sellers”, and each “Seller”).
Upon the closing of the transactions contemplated
in the Share Exchange Agreement (the “Scienjoy Business Combination”), the Company will acquire 100% of the issued
and outstanding securities of Scienjoy, in exchange for approximately 16.4 million ordinary shares of the Company, of which 1.64
million ordinary shares are to be issued and held in escrow to satisfy any indemnification obligations of the Sellers. Additionally,
the Sellers may be entitled to receive earnout shares as follows: (1) if Scienjoy’s net income before tax for the year ended
December 31, 2019 is greater than or equal to either US$20,900,000 or RMB 140,000,000, the Sellers will be entitled to receive
3,000,000 ordinary shares of the Company; (2) if Scienjoy’s net income before tax for the year ended December 31, 2020 is
greater than or equal to either US$28,300,000 or RMB 190,000,000, the Sellers will be entitled to receive 3,000,000 ordinary shares
of the Company; and (3) if Scienjoy’s net income before tax for the year ended December 31, 2021 is greater than or equal
to either US$35,000,000 or RMB 235,000,000, the Sellers will be entitled to receive 3,000,000 ordinary shares of the Company.
Notwithstanding the net income before tax
achieved by the post-transaction company for any period, the Sellers will receive (i) 3,000,000 earnout shares if the share price
of the Company is higher than $15.00 for any sixty days in any period of ninety consecutive trading days during an twelve month
period following the closing; (ii) 3,000,000 earnout shares if the share price of the Company is higher than $20.00 for any sixty
days in any period of ninety consecutive trading days between the 13th month and 24th month following the Closing, and (iii) 3,000,000
earnout shares if the share price of the Company is higher than $25.00 for any sixty days in any period of ninety consecutive trading
between the 25th month and 36th month following the Closing.
The Business Combination will be consummated
subject to the deliverables and provisions as further described in the Share Exchange Agreement.
NOTE 8. SHAREHOLDERS’ EQUITY
Ordinary Shares — The
Company is authorized to issue an unlimited number of no par value ordinary shares. Holders of the Company’s ordinary shares
are entitled to one vote for each share. At December 31, 2019 and 2018, there were 2,461,983 and 1,437,500 ordinary shares issued
and outstanding, excluding 4,995,517 and no ordinary shares subject to possible redemption, respectively.
Warrants — The Public
Warrants will become exercisable on the later of (a) the consummation of a Business Combination or (b) February 5, 2020. No Public
Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary
shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. The Public Warrants
may only be exercised for a whole number of shares, meaning that the Public Warrants must be exercised in multiples of two. Notwithstanding
the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not
effective within 90 days from the consummation of a Business Combination, the holders may, until such time as there is an effective
registration statement and during any period when the Company shall have failed to maintain an effective registration statement,
exercise the Public Warrants on a cashless basis pursuant to the exemption from registration provided by Section 3(a)(9) of the
Securities Act provided that such exemption is available. If an exemption from registration is not available, holders will not
be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the effective date
of the registration statement relating to the Initial Public Offering.
The Company may call the warrants for redemption
(excluding the Private Warrants), in whole and not in part, at a price of $0.01 per warrant:
|
●
|
at any time while the Public Warrants are exercisable,
|
|
●
|
upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder,
|
|
●
|
if, and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a 30 trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and
|
|
●
|
if, and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.
|
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
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 warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary
dividend or recapitalization, reorganization, merger or consolidation. The Public Warrants may only be exercised for a whole number
of shares, meaning that the Public Warrants must be exercised in multiples of two. However, the 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 warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company
liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants,
nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants.
Accordingly, the warrants may expire worthless.
The Private Warrants are identical to the
Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Warrants and the ordinary
shares issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion
of a Business Combination, subject to certain limited exceptions. The Private Warrants may only be exercised for a whole number
of shares, meaning that the Private Warrants must be exercised in multiples of two. Additionally, the Private Warrants will be
exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted
transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the
Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
Rights — Except in
cases where the Company is not the surviving company in a Business Combination, each holder of a Public Right will automatically
receive one-tenth (1/10) of an ordinary share upon consummation of a Business Combination, even if the holder of a Public Right
converted all ordinary shares held by him, her or it in connection with a Business Combination or an amendment to the Company’s
Amended and Restated Memorandum and Articles of Association with respect to its pre-business combination activities. In the event
that the Company will not be the surviving company upon completion of a Business Combination, each holder of a Public Right will
be required to affirmatively convert his, her or its rights in order to receive the one-tenth (1/10) of a share underlying each
Public Right upon consummation of the Business Combination. No additional consideration will be required to be paid by a holder
of Public Rights in order to receive his, her or its additional ordinary shares upon consummation of a Business Combination. The
shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company). If
the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity,
the definitive agreement will provide for the holders of Public Rights to receive the same per share consideration the holders
of ordinary shares will receive in the transaction on an as-converted into ordinary shares basis.
The Company will not issue fractional shares
in connection with an exchange of Public Rights. Fractional shares will either be rounded down to the nearest whole share or otherwise
addressed in accordance with the applicable provisions of the British Virgin Islands law. As a result, the holders of the Public
Rights must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business
Combination. 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 Rights will not receive any of such funds with respect to their Public Rights,
nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public
Rights, and the Public Rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities
to the holders of the Public Rights upon consummation of a Business Combination. Additionally, in no event will the Company be
required to net cash settle the rights. Accordingly, the rights may expire worthless.
Unit Purchase Option
On February 8, 2019, the Company sold to
Chardan, for $100, an option to purchase up to 375,000 Units exercisable at $11.50 per Unit (or an aggregate exercise price of
$4,312,500) commencing on the later of August 5, 2019 and the consummation of a Business Combination. On February 20, 2019, in
connection with the underwriters’ election to exercise the over-allotment option in full, the Company issued Chardan an option
to purchase up to an additional 56,250 Units exercisable at $11.50 per Unit for no additional consideration. The unit purchase
option may be exercised for cash or on a cashless basis, at the holder’s option, and expires February 5, 2024. The Units
issuable upon exercise of the option are identical to those offered in the Initial Public Offering. The Company accounted for the
unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the Initial Public Offering resulting in
a charge directly to shareholders’ equity. The Company estimated the fair value of the unit purchase option is approximately
$1,286,000, or $2.98 per Unit, using the Black-Scholes option-pricing model. The fair value of the unit purchase option granted
to the underwriters was estimated as of the date of grant using the following assumptions: (1) expected volatility of 35%, (2)
risk-free interest rate of 2.44% and (3) expected life of five years. The option and such units purchased pursuant to the option,
as well as the ordinary shares underlying such units, the rights included in such units, the ordinary shares that are issuable
for the rights included in such units, the warrants included in such units, and the shares underlying such warrants, have been
deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA’s NASDAQ
Conduct Rules. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated for a one-year period (including
the foregoing 180-day period) following the date of Initial Public Offering except to any underwriter and selected dealer participating
in the Initial Public Offering and their bona fide officers or partners. The option grants to holders demand and “piggy back”
rights for periods of five and seven years, respectively, from the effective date of the registration statement with respect to
the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The Company
will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid
for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain
circumstances including in the event of a stock dividend, or the Company’s recapitalization, reorganization, merger or consolidation.
However, the option will not be adjusted for issuances of ordinary shares at a price below its exercise price.
WEALTHBRIDGE ACQUISITION
LIMITED
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2019
AND 2018
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC
820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with
the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants
at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize
the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal
assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify
assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table presents information
about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2019 and indicates the fair
value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description
|
|
Level
|
|
|
December 31,
2019
|
|
Assets:
|
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
|
1
|
|
|
$
|
58,588,138
|
|
NOTE 10. 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 issued. Other than
as described in these financial statements, the Company did not identify any subsequent events that would have required adjustment
or disclosure in the financial statements.
F-16