ITEM 1. BUSINESS
Overview
We are an early stage blank
check company whose business purpose is to effect an initial business combination with one or more businesses, which we refer to throughout
this annual report as our initial business combination. Since our initial public offering, we have focused our search for an initial
business combination. We have generated no operating revenues to date and we will not generate operating revenues until we consummate
our initial business combination.
We seek to capitalize on the
decades of experience and relationships of our management team, including Anthony Kenney, our Chief Executive Officer and a director.
Mr. Kenney previously worked for Marathon Petroleum Corporation (NYSE: MPC) (“MPC”) for the past 43 years and recently
retired as President of its Speedway division, which he led since 2005. Under his leadership, Speedway became the second largest company-owned
and operated convenience and fuel store chain in the United States with over $20 billion in revenue and 35,000 employees. Mr. Kenney
led a significant increase in the scale and scope of the business through acquisitions, and ultimately increased store count from approximately
1,600 in 2005 to 3,923 locations nationwide in 2019. Moreover, he is recognized as having been instrumental in developing Speedway’s
Loyalty Program.
We also seek to capitalize
on the experience of Michael Gearhardt, our Chief Financial Officer, who has significant public company management experience having
served as Executive Vice President, Chief Financial Officer of MTCT, Inc. During his time with MTC Technologies, Inc. (NASDAQ: MTCT)
(“MTCT”), he oversaw the completion of acquisitions and capital markets transactions and ultimately led the $450 million
sale of the company to BAE Systems. Prior to MTCT, Mr. Gearhardt worked for two decades in management and finance capacities with
Mark IV Industries/Dayco Products (NYSE: IV); during which time he was appointed to Executive Vice President, Industrial Operations and
participated in a number of acquisitions and dispositions including the $2.0 billion sale of the company. Mr. Gearhardt also
has invested in and sold several manufacturing businesses and is a Certified Public Accountant.
The past performance of our
management team, or their respective affiliates, is not a guarantee either (i) of success with respect to any business combination
we may consummate or (ii) that we will be able to identify a suitable candidate for our initial business combination. No member
of our management team has been an officer or director of a special purpose acquisition corporation in the past. You should not rely
on the historical record of our management team’s or their respective affiliates’ performance as indicative of our future
performance.
Our officers and directors
may become an officer or director of any another special purpose acquisition company with a class of securities intended to be registered
under the Exchange Act, prior to the completion of our initial business combination.
Our initial public
offering
On
October 5, 2020, we consummated our initial public offering of 20,040,000 units, including 40,000 units issued pursuant to the partial
exercise of the underwriters’ over-allotment option. Each unit consists of one share of our Class A common stock and one-third
of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50
per share. The units were sold at a price of $10.00 per unit, generating gross proceeds to us of $200,404,000.
Simultaneously
with the closing of our initial public offering, we also consummated the sale of 7,750,000 private placement warrants at a price of $1.00
per private placement warrant in a private placement to SKG Sponsor LLC, or the sponsor, generating gross proceeds of $7,750,000. The
private placement warrants are identical to the warrants underlying the units sold in the initial public offering, except that the private
placement warrants are not transferable, assignable or salable until after the completion of an initial business combination, subject
to certain limited exceptions.
On
October 23, 2020, the underwriters partially exercised their over-allotment option, resulting in the purchase of an additional 40,000
units, generating total gross proceeds of $400,000. In connection with the underwriters’ partial exercise of their over-allotment
option, we also consummated the sale of an additional 12,000 private placement warrants at $1.00 per private placement warrant, generating
total proceeds of $12,000.
A
total of $200,404,000 of the proceeds from our initial public offering and the sale of the private placement warrants, was placed in
a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee.
The proceeds held in the trust account may be invested by the trustee only in U.S. government securities with a maturity of 185 days
or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7
under the Investment Company Act of 1940, as amended.
It is the job of our sponsor
and management team to complete our initial business combination. Our management
team consists of:
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Anthony
Kenney, our Chief Executive Officer and a director, who previously worked for MPC for the
past 43 years and recently retired as President of its Speedway division, which he led since
2005; and
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Michael
Gearhardt, our Chief Financial Officer, who has significant public company management experience
having served as Executive Vice President, Chief Financial Officer of MTCT, Inc.
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We must complete our initial
business combination by October 5, 2022, 24 months from the closing of our initial public offering. If our initial business combination
is not consummated within the allotted time, then our existence will terminate, and we will distribute all amounts in the trust account.
Our units, public shares and
public warrants are each traded on the Nasdaq Capital Market (“Nasdaq”) under the symbols “RCHGU,” “RCHG”
and “RCHGW,” respectively. Our units commenced public trading on October 1, 2020, and our public shares and public warrants
commenced separate public trading on November 23, 2020.
Business
strategy
We are seeking our business
strategy is to identify and complete our initial business combination with a company that complements the experience of our management
team and can benefit from their operational, marketing and finance expertise. Our selection process will leverage Mr. Kenney’s
broad and deep relationship network, unique industry experience and deal sourcing capabilities to access a wide spectrum of opportunities.
This network has been developed over the past 20 years in executive positions at MPC and while managing Speedway to industry leading
success. We believe that our management team will identify a business combination that will benefit from their experience, including
their:
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Long
history of sourcing, structuring, acquiring, operating, developing, growing and financing
businesses;
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Significant
integration experience implementing new technologies and systems to drive value and standardization;
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Strong
marketing and capital allocation decision-making to establish and maintain premium brand;
and
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Sound
understanding of public company performance requirements and ability to guide private-to-public
process.
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Acquisition
criteria
Our acquisition strategy will
leverage Mr. Kenney’s network of long-standing relationships and industry contacts as well as inbound opportunities to source
a business combination. Consistent with our business strategy, we have identified the following general criteria and guidelines that
we believe are important in evaluating prospective target businesses. We intend to use these criteria and guidelines in evaluating acquisition
opportunities, but we may decide to enter into our initial business combination with a target business that does not meet these criteria
and guidelines. If the business we seek to acquire is directly in the retail convenience store channel, we will seek the following attributes:
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Well
established market presence with recognizable brand and reputation for quality service;
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Platform
with sufficient scale and geographic concentration from which to expand through acquisitions;
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Generates
stable free cash flow or has the potential to do so near term;
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Generates
returns well in excess of the cost of capital;
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Easily
identified cost savings that can be realized near term;
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Modest
capital requirements to refurbish locations to quality standards;
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Can
benefit from new technologies and systems to meaningfully enhance financial performance;
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Quality
management and personnel with ability to contribute to growth strategy; and
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Would
benefit from being publicly traded and having access to incremental growth capital.
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Possesses
a preponderance of convenience and fuel store locations that are well situated and in good
condition; and
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Portfolio
of stores with sufficient scale to expand product offerings and maximize gross profit.
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These criteria and guidelines
are not intended to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to
the extent relevant, on these general criteria and guidelines as well as other considerations, factors, criteria and guidelines that
our management may deem relevant to that business. In addition to any potential business candidates we may identify on our own, we anticipate
that other target business candidates will be brought to our attention from various unaffiliated sources, including investment market
participants, private equity funds and large business enterprises seeking to divest non-core assets or divisions.
Acquisition
Process
In evaluating a prospective
target business, we will conduct an extensive due diligence review which may encompass, as applicable and among other things, meetings
with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection of facilities and a review
of financial and other information about the target and its industry. We will also utilize our management team’s operational and
capital planning experience.
Each of our directors and
officers directly or indirectly owns founder shares and/or private placement warrants and, accordingly, may have a conflict of interest
in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination.
Further, such officers and directors may have a conflict of interest with respect to evaluating a particular business combination if
the retention or resignation of any such officers and directors was included by a target business as a condition to any agreement with
respect to our initial business combination.
Certain of our directors and
officers currently have, and any of them in the future may have additional, fiduciary or contractual obligations to another entity pursuant
to which such officer or director is or will be required to present a business combination opportunity to such entity subject to his
or her fiduciary duties. If any of our directors or officers becomes aware of a business combination opportunity that falls within the
line of business of any entity to which he or she has then-existing fiduciary or contractual obligations, he or she may be required to
present such business combination opportunity to such entity prior to presenting such business combination opportunity to us.
No members of our management
team have any obligation to present us with any opportunity for a potential business combination of which they become aware, unless presented
to such member specifically in his or her capacity as an officer or a director of the company. Members of our management team may be
required to present potential business combinations to other entities to whom they have fiduciary duties before they present such opportunities
to us. Any knowledge or presentation of such opportunities may therefore present conflicts of interest.
Initial Business Combination
In accordance with the rules
of Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market
value of at least 80% of the value of the assets held in the trust account (net of amounts disbursed to management for working capital
purposes, if any, and excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain an opinion
from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the
satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make an independent determination
of the fair market value of our initial business combination, it may be unable to do so if it is less familiar or experienced with the
business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects.
Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
If we are no longer listed on Nasdaq, we would not be required to satisfy the above-referenced fair market value test or approval by
the independent directors requirement.
We anticipate structuring
our initial business combination so that the post-transaction company in which our public stockholders own shares will own or acquire
100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business combination
in such a way so that the post-transaction company owns or acquires less than 100% of such interests or assets of the target business
in order to meet certain objectives of the target management team or stockholders, or for other reasons. However, we will only complete
an initial business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of
the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities
of the target, our stockholders prior to the initial business combination may collectively own a minority interest in the post-transaction
company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case,
we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares,
our stockholders immediately prior to our initial business combination could own less than a majority of our outstanding shares subsequent
to our initial business combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be taken
into account for purposes of Nasdaq’s 80% of fair market value test. If the initial business combination involves more than one
target business, the 80% of fair market value test will be based on the aggregate value of all of the transactions and we will treat
the target businesses together as our initial business combination for purposes of seeking stockholder approval or conducting a tender
offer, as applicable.
The net proceeds of our initial
public offering and the sale of the private placement warrants released to us from the trust account upon the closing of our initial
business combination may be used as consideration to pay the sellers of a target business with which we complete our initial business
combination. If our initial business combination is paid for using equity or debt securities, or not all of the funds released from the
trust account are used for payment of the consideration in connection with our initial business combination or used for redemption of
our public shares, we may use the balance of the cash released to us from the trust account following the closing for general corporate
purposes, including for maintenance or expansion of operations of the post-transaction businesses, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.
In addition, we may be required to obtain additional financing in connection with the closing of our initial business combination to
be used following the closing for general corporate purposes as described above. There is no limitation on our ability to raise funds
through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial
business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation
of our initial public offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously
with the completion of our initial business combination. None of our sponsor, officers, directors or stockholders is required to provide
any financing to us in connection with or after our initial business combination. We may also obtain financing prior to the closing of
our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion
of our initial business combination. Our amended and restated certificate of incorporation provides that prior to the consummation of
our initial business combination, we are prohibited from issuing additional securities that would entitle the holders thereof to (i) receive
funds from the trust account or (ii) vote as a class with our public shares (a) on any initial business combination or (b) to
approve an amendment to our amended and restated certificate of incorporation to (x) extend the time we have to consummate a business
combination beyond October 5, 2022 or (y) amend the foregoing provisions, unless (in connection with any such amendment to our amended
and restated certificate of incorporation) we offer our public stockholders the opportunity to redeem their public shares.
Our Business Combination Process
In evaluating prospective
business combinations, we have conducted and will continue conduct a thorough due diligence review process that encompasses, among other
things, a review of historical and projected financial and operating data, meetings with management and their advisors and, as applicable,
on-site inspection of facilities and assets, discussion with customers and suppliers, legal reviews and other reviews as we deem appropriate.
We will utilize the expertise of our management team and board of directors in analyzing companies and evaluating operating projections,
financial projections and determining the appropriate return expectations given the risk profile of the target business.
Members of our management
team may directly or indirectly own our common stock and warrants and, accordingly, may have a conflict of interest in determining whether
a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our
officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to our
initial business combination.
Our sponsor and members of
our management team are, in the ordinary course of business, continuously made aware of potential acquisition or investment opportunities,
one or more of which we may desire to pursue for an initial business combination.
Each of our officers and directors
presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to
which such officer or director is or will be required to present a business combination opportunity. Accordingly, if any of our officers
or directors become aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary
or contractual obligations to present the opportunity to such entity, he or she will honor his or her fiduciary or contractual obligations
to present such opportunity to such entity. We believe, however, that the fiduciary duties or contractual obligations of our officers
or directors will not materially affect our ability to complete our initial business combination, as we believe any such opportunities
presented would be smaller than what we are interested in, in different fields than what we would be interested in, or that such fiduciary
duties or contractual obligations are to entities that are not themselves in the business of engaging in business combinations. Our amended
and restated certificate of incorporation provides that we renounce our interest in any corporate opportunity offered to any director
or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our
company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us
to pursue, and to the extent the director or officer is permitted to refer that opportunity to us without violating another legal obligation.
Our Management Team
Members of our management
team are not obligated to devote any specific number of hours to our matters but they devote as much of their time as they deem necessary
to our affairs until we have completed our initial business combination. The amount of time that any member of our management team devotes
in any time period varies based on whether a target business has been selected for our initial business combination and the current stage
of the initial business combination process.
We believe our management
team’s operating and transaction experience and relationships with companies will provide us with a substantial number of potential
business combination targets. Over the course of their careers, the members of our management team have developed a broad network of
contacts and corporate relationships. This network has grown through the activities of our management team sourcing, acquiring and financing
businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience
of our management team in executing transactions under varying economic and financial market conditions.
Status as a Public Company
We believe our structure makes
us an attractive business combination partner to target businesses. As a public company, we offer a target business an alternative to
the traditional initial public offering through a merger or other business combination with us. Following an initial business combination,
we believe the target business would have greater access to capital and additional means of creating management incentives that are better
aligned with stockholders’ interests than it would as a private company. A target business can further benefit by augmenting its
profile among potential new customers and vendors and aid in attracting talented employees. In a business combination transaction with
us, the owners of the target business may, for example, exchange their shares of stock in the target business for our shares of Class A
common stock (or shares of a new holding company) or for a combination of our shares of Class A common stock and cash, allowing
us to tailor the consideration to the specific needs of the sellers.
Although there are various
costs and obligations associated with being a public company, we believe target businesses will find this method a more expeditious and
cost-effective method to becoming a public company than the typical initial public offering. The typical initial public offering process
takes a significantly longer period of time than the typical business combination transaction process, and there are significant expenses
and market and other uncertainties in the initial public offering process, including underwriting discounts and commissions, marketing
and road show efforts that may not be present to the same extent in connection with an initial business combination with us.
Furthermore, once a proposed
initial business combination is completed, the target business will have effectively become public, whereas an initial public offering
is always subject to the underwriters’ ability to complete the offering, as well as general market conditions, which could delay
or prevent the offering from occurring or could have negative valuation consequences. Following an initial business combination, we believe
the target business would then have greater access to capital and an additional means of providing management incentives consistent with
stockholders’ interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further
benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.
While we believe that our
structure and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may
view our status as a blank check company, such as our lack of an operating history and our ability to seek stockholder approval of any
proposed initial business combination, negatively.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404
of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any
golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may be a
less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the
adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage
of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) October 5, 2025, (b) in which we have
total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a large accelerated filer, which means
the market value of our Class A common stock that is held by non-affiliates exceeds $700 million as of the prior June 30th and
(2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year
period. References herein to emerging growth company will have the meaning associated with it in the JOBS Act.
Financial Position
With funds available for an
initial business combination in the amount of $202,483,595 as of March 18, 2021, assuming no redemptions and after payment of
up to $7,014,000 of deferred underwriting fees, in each case before fees and expenses associated with our initial business combination,
we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential
growth and expansion of its operations or strengthening its balance sheet by reducing its debt or leverage ratio. Because we are able
to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the
flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to
fit its needs and desires. However, we have not taken any steps to secure third-party financing and there can be no assurance it will
be available to us.
Effecting Our Initial Business Combination
We are not presently engaged
in, and we will not engage in, any operations other than the pursuit of our business combination, until we consummate our initial public
combination. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and
the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business
combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of our initial
public offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target,
or a combination of the foregoing. We may seek to complete our initial business combination with a company or business that may be financially
unstable or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and
businesses.
If our initial business combination
is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the consideration
in connection with our initial business combination or used for redemption of our public shares, we may use the balance of the cash released
to us from the trust account following the closing for general corporate purposes, including for maintenance or expansion of operations
of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business
combination, to fund the purchase of other companies or for working capital.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the completion of our initial business combination,
and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the
trust account. In addition, we are targeting businesses with enterprise values that are greater than we could acquire with the net proceeds
of our initial public offering and the sale of the private placement warrants, and, as a result, if the cash portion of the purchase
price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public stockholders, we
may be required to seek additional financing to complete such proposed initial business combination. Subject to compliance with applicable
securities laws, we would expect to complete such financing only simultaneously with the completion of our initial business combination.
In the case of an initial business combination funded with assets other than the trust account assets, our proxy materials or tender
offer documents disclosing the initial business combination would disclose the terms of the financing and, only if required by law, we
would seek stockholder approval of such financing. There is no limitation on our ability to raise funds through the issuance of equity
or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including
pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of our initial public offering.
None of our sponsor, officers, directors or stockholders is required to provide any financing to us in connection with or after our initial
business combination. Our amended and restated certificate of incorporation provides that, following our initial public offering and
prior to the consummation of our initial business combination, we will be prohibited from issuing additional securities that would entitle
the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a) on
any initial business combination or (b) to approve an amendment to our amended and restated certificate of incorporation to (x) extend
the time we have to consummate a business combination beyond October 5, 2022 or (y) amend the foregoing provisions, unless (in connection
with any such amendment to our amended and restated certificate of incorporation) we offer our public stockholders the opportunity to
redeem their public shares.
Sources of Target Businesses
Target business candidates
are brought to our attention from various unaffiliated sources, including investment bankers and investment professionals. Target businesses
are brought to our attention by such unaffiliated sources as a result of being solicited by us by calls or mailings. These sources may
also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read the prospectus of our initial public offering dated September 30, 2020 and know what types of businesses we are targeting.
Our officers and directors, as well as our sponsor and its affiliates, may also bring to our attention target business candidates that
they become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well
as attending trade shows, conferences or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors and our
sponsor and their respective industry and business contacts as well as their affiliates. We may engage firms or other individuals in
the future, in which event we may pay a finder’s fee, consulting fee, advisory fee or other compensation to be determined in an
arm’s length negotiation based on the terms of the transaction. We will engage a finder only to the extent our management determines
that the use of a finder may bring opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited
basis with a potential transaction that our management determines is in our best interest to pursue. Payment of finder’s fees is
customarily tied to completion of a transaction, in which case any such fee will be paid out of the funds held in the trust account.
In no event, however, will our sponsor or any of our existing officers or directors, or any entity with which our sponsor or officers
are affiliated, be paid any finder’s fee, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation
by the Company prior to, or in connection with any services rendered for any services they render in order to effectuate, the completion
of our initial business combination (regardless of the type of transaction that it is). Although none of our sponsor, executive officers
or directors, or any of their respective affiliates, will be allowed to receive any compensation, finder’s fees or consulting fees
from a prospective business combination target in connection with a contemplated initial business combination, we do not have a policy
that prohibits our sponsor, executive officers or directors, or any of their respective affiliates, from negotiating for the reimbursement
of out-of-pocket expenses by a target business. Commencing on September 30, 2020, we have paid our sponsor a total of $10,000 per month
for office space, utilities and secretarial and administrative support. Upon completion of our initial business combination or our liquidation,
we will cease paying these monthly fees. Some of our officers and directors may enter into employment or consulting agreements with the
post-transaction company following our initial business combination. The presence or absence of any such fees or arrangements will not
be used as a criterion in our selection process of an initial business combination candidate.
We are not prohibited from
pursuing an initial business combination with an initial business combination target that is affiliated with our sponsor, officers or
directors or making the initial business combination through a joint venture or other form of shared ownership with our sponsor, officers
or directors. In the event we seek to complete our initial business combination with an initial business combination target that is affiliated
with our sponsor, officers or directors, we, or a committee of independent directors, would obtain an opinion from an independent investment
banking firm or another independent entity that commonly renders valuation opinions that such an initial business combination is fair
to our company from a financial point of view.
If any of our officers or
directors becomes aware of an initial business combination opportunity that falls within the line of business of any entity to which
he or she has then-existing fiduciary or contractual obligations, he or she may be required to present such business combination opportunity
to such entity prior to presenting such business combination opportunity to us. Our officers and directors currently have certain relevant
fiduciary duties or contractual obligations that may take priority over their duties to us.
Selection of a Target Business and Structuring of our Initial Business
Combination
In accordance with the rules
of Nasdaq, our initial business combination must occur with one or more target businesses that together have an aggregate fair market
value of at least 80% of the value of the assets held in the trust account (net of amounts disbursed to management for working capital
purposes, if any, and excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income earned on
the trust account) at the time of our signing a definitive agreement in connection with our initial business combination. The fair market
value of our initial business combination will be determined by our board of directors based upon one or more standards generally accepted
by the financial community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses
or a valuation based on the financial metrics of M&A transactions of comparable businesses. If our board of directors is not able
to independently determine the fair market value of our initial business combination (including with the assistance of financial advisors),
we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions
with respect to the satisfaction of such criteria. While we consider it unlikely that our board of directors will not be able to make
an independent determination of the fair market value of our initial business combination, it may be unable to do so if it is less familiar
or experienced with the business of a particular target or if there is a significant amount of uncertainty as to the value of a target’s
assets or prospects. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one
or more prospective target businesses, although we will not be permitted to effectuate our initial business combination with another
blank check company or a similar company with nominal operations.
In any case, we will only
complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or
otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses,
the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account
for purposes of Nasdaq’s 80% of fair market value test. There is no basis for our investors in our initial public offering to evaluate
the possible merits or risks of any target business with which we may complete our initial business combination.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective
business target, we will conduct a thorough due diligence review, which may encompass, among other things, meetings with incumbent ownership,
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information that will be made available to us.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of,
and negotiation with, a prospective target business with which our initial business combination is not ultimately completed will result
in our incurring losses and will reduce the funds we can use to complete another business combination.
Lack of Business Diversification
For an indefinite period of
time after the completion of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or all of which may
have a substantial adverse impact on the particular industry in which we operate after our
initial business combination, and
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cause
us to depend on the marketing and sale of a single product or limited number of products
or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we closely scrutinize
the management of a prospective target business when evaluating the desirability of effecting our initial business combination with that
business, our assessment of the target business’ management may not prove to be correct. In addition, the future management may
not have the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of members of our
management team, if any, in the target business cannot presently be stated with any certainty. The determination as to whether any of
the members of our management team will remain with the combined company will be made at the time of our initial business combination.
While it is possible that one or more of our directors will remain associated in some capacity with us following our initial business
combination, it is unlikely that any of them will devote their full efforts to our affairs subsequent to our initial business combination.
Moreover, we cannot assure you that members of our management team will have significant experience or knowledge relating to the operations
of the particular target business.
We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with the combined company. The determination as to whether
any of our key personnel will remain with the combined company will be made at the time of our initial business combination.
Following our initial business
combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure
you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge
or experience necessary to enhance the incumbent management.
Stockholders May Not Have the Ability to Approve Our Initial Business
Combination
We may conduct redemptions
without a stockholder vote pursuant to the tender offer rules of the SEC. However, we will seek stockholder approval if it is required
by law or applicable stock exchange rule, or we may decide to seek stockholder approval for business or other legal reasons. Presented
in the table below is a graphic explanation of the types of initial business combinations we may consider and whether stockholder approval
is currently required under Delaware law for each such transaction.
Type
of Transaction
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Whether
Stockholder
Approval is
Required
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Purchase of assets
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No
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Purchase of stock of target not involving a merger
with the company
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No
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Merger of target into a subsidiary of the company
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No
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Merger of the company with a target
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Yes
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Under Nasdaq’s listing
rules, stockholder approval would be required for our initial business combination if, for example:
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we
issue shares of Class A common stock that will be equal to or in excess of 20% of the
number of shares of our Class A common stock then outstanding;
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any
of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has a
5% or greater interest (or such persons collectively have a 10% or greater interest), directly
or indirectly, in the target business or assets to be acquired or otherwise and the present
or potential issuance of common stock could result in an increase in outstanding common shares
or voting power of 5% or more; or
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the
issuance or potential issuance of common stock will result in our undergoing a change of
control.
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Permitted Purchases of Our Securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, initial stockholders, directors, officers, advisors or their affiliates may purchase public shares
or public warrants in privately-negotiated transactions or in the open market either prior to or following the completion of our initial
business combination. There is no limit on the number of shares or warrants our initial stockholders, directors, officers, advisors or
their affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have no
current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such
transactions. If they engage in such transactions, they will not make any such purchases when they are in possession of any material
non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the Exchange Act. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under the
Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however, if the purchasers determine
at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply with such rules. Any such
purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers are subject
to such reporting requirements. None of the funds held in the trust account will be used to purchase shares or public warrants in such
transactions prior to completion of our initial business combination.
We have adopted an insider
trading policy which requires insiders to: (i) refrain from purchasing our securities during certain blackout periods when they
are in possession of any material non-public information and (ii) clear all trades of company securities with a compliance officer
prior to execution. We cannot currently determine whether our insiders will make such purchases pursuant to a Rule 10b5-1 plan,
as it will be dependent upon several factors, including but not limited to, the timing and size of such purchases. Depending on such
circumstances, our insiders may either make such purchases pursuant to a Rule 10b5-1 plan or determine that such a plan is not necessary.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining
stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that
such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public
warrants outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial
business combination. Any such purchases of our securities may result in the completion of our initial business combination that may
not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of Class A
common stock or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult
to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors
and/or any of their affiliates anticipate that they may identify the stockholders with whom our sponsor, officers, directors or their
affiliates may pursue privately-negotiated purchases by either the stockholders contacting us directly or by our receipt of redemption
requests tendered by stockholders following our mailing of proxy materials in connection with our initial business combination. To the
extent that our sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify and contact
only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share
of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a proxy
with respect to our initial business combination. Such persons would select the stockholders from whom to acquire shares based on the
number of shares available, the negotiated price per share and such other factors as any such person may deem relevant at the time of
purchase. The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive
if it elected to redeem its shares in connection with our initial business combination. Our sponsor, officers, directors, advisors or
their affiliates will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the other federal
securities laws.
Any purchases by our sponsor,
officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange Act will be made
only to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor from liability for
manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical requirements
that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers, directors and/or their
affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange
Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchases
are subject to such reporting requirements.
Redemption Rights for Public Stockholders upon Completion of our
Initial Business Combination
We will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon the completion of our
initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account
as of two business days prior to the consummation of the initial business combination including interest earned on the funds held in
the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject
to the limitations described herein. The amount in the trust account, as of December 31, 2020, was $10.10 per public share. The per-share
amount we will distribute to investors who properly redeem their shares will not be reduced by deferred underwriting commissions we will
pay to the underwriters. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the
completion of our initial business combination.
Manner of Conducting Redemptions
We will provide our public
stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination
either (i) in connection with a stockholder meeting called to approve the initial business combination or (ii) without a stockholder
vote by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed initial business combination
or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing
of the transaction and whether the terms of the transaction would require us to seek stockholder approval under applicable law or stock
exchange listing requirements.
Asset acquisitions and stock
purchases would not typically require stockholder approval while direct mergers with our company where we do not survive and any transactions
where we issue more than 20% of our outstanding common stock or seek to amend our amended and restated certificate of incorporation would
require stockholder approval. So long as we obtain and maintain a listing for our securities on Nasdaq, we will be required to comply
with Nasdaq’s stockholder approval rules.
The requirement that we provide
our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above is contained in provisions
of our amended and restated certificate of incorporation and will apply whether or not we maintain our registration under the Exchange
Act or our listing on Nasdaq. Such provisions may be amended if approved by holders of 65% of our common stock entitled to vote thereon.
If we provide our public stockholders
with the opportunity to redeem their public shares in connection with a stockholder meeting, we will:
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conduct
the redemptions in conjunction with a proxy solicitation pursuant to Regulation 14A
of the Exchange Act, which regulates the solicitation of proxies, and not pursuant to the
tender offer rules, and
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file
proxy materials with the SEC.
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If we seek stockholder approval,
we will complete our initial business combination only if a majority of the outstanding shares of common stock voted are voted in favor
of the initial business combination. A quorum for such meeting will consist of the holders present in person or by proxy of shares of
outstanding capital stock of the Company representing a majority of the voting power of all outstanding shares of capital stock of the
Company entitled to vote at such meeting. Our initial stockholders will count towards this quorum and, pursuant to the letter agreement,
our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after our initial
public offering (including in open market and privately-negotiated transactions) in favor of our initial business combination. For purposes
of seeking approval of the majority of our outstanding shares of common stock voted, non-votes will have no effect on the approval of
our initial business combination once a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares,
we would need only 7,500,001, or 37.5%, of the 20,000,000 public shares sold in our initial public offering to be voted in favor of an
initial business combination in order to have our initial business combination approved (assuming all outstanding shares are voted).
We intend to give not less than 10 days’ nor more than 60 days’ prior written notice of any such meeting, if required,
at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds, and the voting agreements
of our initial stockholders, may make it more likely that we will consummate our initial business combination. Each public stockholder
may elect to redeem its public shares irrespective of whether they vote for or against the proposed transaction or whether they were
a stockholder on the record date for the stockholder meeting held to approve the proposed transaction.
If a stockholder vote is not
required and we do not decide to hold a stockholder vote for business or other legal reasons, we will:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act,
which regulate issuer tender offers, and
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·
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file
tender offer documents with the SEC prior to completing our initial business combination,
which contain substantially the same financial and other information about the initial business
combination and the redemption rights as is required under Regulation 14A of the Exchange
Act, which regulates the solicitation of proxies.
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In the event we conduct redemptions
pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business days, in accordance with Rule 14e-1(a)
under the Exchange Act, and we will not be permitted to complete our initial business combination until the expiration of the tender
offer period. In addition, the tender offer will be conditioned on public stockholders not tendering more than a specified number of
public shares, which number will be based on the requirement that we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of deferred underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial business
combination. If public stockholders tender more shares than we have offered to purchase, we will withdraw the tender offer and not complete
the initial business combination.
Upon the public announcement
of our initial business combination, if we elect to conduct redemptions pursuant to the tender offer rules, we or our sponsor will terminate
any plan established in accordance with Rule 10b5-1 to purchase shares of our Class A common stock in the open market, in order
to comply with Rule 14e-5 under the Exchange Act.
We intend to require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver their shares to our transfer
agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system, prior to the date set
forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date may be up to two business
days prior to the vote on the proposal to approve the initial business combination. In addition, if we conduct redemptions in connection
with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares to also submit a written request
for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial owner of such shares is
included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our public shares in connection
with our initial business combination will indicate whether we are requiring public stockholders to satisfy such delivery requirements.
We believe that this will allow our transfer agent to efficiently process any redemptions without the need for further communication
or action from the redeeming public stockholders, which could delay redemptions and result in additional administrative cost. If the
proposed initial business combination is not approved and we continue to search for a target company, we will promptly return any certificates
or shares delivered by public stockholders who elected to redeem their shares.
Our amended and restated certificate
of incorporation provides that we will only redeem our public shares so long as (after such redemption) our net tangible assets will
be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of deferred
underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater
net tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. For example,
the proposed initial business combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash
to be transferred to the target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy
other conditions in accordance with the terms of the proposed initial business combination. In the event the aggregate cash consideration
we would be required to pay for all shares of Class A common stock that are validly submitted for redemption plus any amount required
to satisfy cash conditions pursuant to the terms of the proposed initial business combination exceed the aggregate amount of cash available
to us, we will not complete the initial business combination or redeem any shares, and all shares of Class A common stock submitted
for redemption will be returned to the holders thereof.
Limitation on Redemption upon Completion of
our Initial Business Combination if we Seek Stockholder Approval
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation provides that a public
stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as
a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with
respect to more than an aggregate of 15% of the shares sold in our initial public offering, which we refer to as the “Excess Shares.”
Such restriction shall also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating
large blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed
initial business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the
shares sold in our initial public offering could threaten to exercise its redemption rights if such holder’s shares are not purchased
by us or our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’
ability to redeem no more than 15% of the shares sold in our initial public offering without our prior consent, we believe we will limit
the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our initial business combination,
particularly in connection with an initial business combination with a target that requires as a closing condition that we have a minimum
net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares
(including Excess Shares) for or against our initial business combination.
Delivering Stock Certificates in Connection with the Exercise of
Redemption Rights
As described above, we intend
to require our public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares
in “street name,” to, at the holder’s option, either deliver their stock certificates to our transfer agent or deliver
their shares to our transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) system,
prior to the date set forth in the proxy materials or tender offer documents, as applicable. In the case of proxy materials, this date
may be up to two business days prior to the vote on the proposal to approve the initial business combination. In addition, if we conduct
redemptions in connection with a stockholder vote, we intend to require a public stockholder seeking redemption of its public shares
to also submit a written request for redemption to our transfer agent two business days prior to the vote in which the name of the beneficial
owner of such shares is included. The proxy materials or tender offer documents, as applicable, that we will furnish to holders of our
public shares in connection with our initial business combination will indicate whether we are requiring public stockholders to satisfy
such delivery requirements. Accordingly, a public stockholder would have up to two business days prior to the vote on the initial business
combination if we distribute proxy materials, or from the time we send out our tender offer materials until the close of the tender offer
period, as applicable, to submit or tender its shares if it wishes to seek to exercise its redemption rights. In the event that a stockholder
fails to comply with these or any other procedures disclosed in the proxy or tender offer materials, as applicable, its shares may not
be redeemed. Given the relatively short exercise period, it is advisable for stockholders to use electronic delivery of their public
shares.
There is a nominal cost associated
with the above-referenced process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent
will typically charge the broker submitting or tendering shares a fee of approximately $80.00 and it would be up to the broker whether
or not to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether or not we require holders
seeking to exercise redemption rights to submit or tender their shares. The need to deliver shares is a requirement of exercising redemption
rights regardless of the timing of when such delivery must be effectuated.
Any request to redeem such
shares, once made, may be withdrawn at any time up to the date set forth in the proxy materials or tender offer documents, as applicable.
Furthermore, if a holder of a public share delivered its certificate in connection with an election of redemption rights and subsequently
decides prior to the applicable date not to elect to exercise such rights, such holder may simply request that the transfer agent return
the certificate (physically or electronically). It is anticipated that the funds to be distributed to holders of our public shares electing
to redeem their shares will be distributed promptly after the completion of our initial business combination.
If our initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption rights would not be
entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly
return any certificates delivered by public holders who elected to redeem their shares.
If our initial proposed initial
business combination is not completed, we may continue to try to complete an initial business combination with a different target until
October 5, 2022.
Redemption of Public Shares and Liquidation
if no Initial Business Combination
Our amended and restated certificate
of incorporation provides that we will have only until October 5, 2022 to complete our initial business combination. If we are unable
to complete our initial business combination by October 5, 2022, we will: (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held
in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights
as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, liquidate and dissolve,
subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we
fail to complete our initial business combination by October 5, 2022.
Our sponsor, officers and
directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination by October
5, 2022. However, if our sponsor, officers or directors acquire public shares in or after our initial public offering, they will be entitled
to liquidating distributions from the trust account with respect to such public shares if we fail to complete our initial business combination
by October 5, 2022.
Our sponsor, officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated
certificate of incorporation to (A) modify the substance or timing of our obligation to provide for the redemption of our public
shares in connection with an initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination by October 5, 2022 or (B) with respect to any other material provisions relating to stockholders’ rights or pre-initial
business combination activity, unless we provide our public stockholders with the opportunity to redeem their shares of Class A
common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our taxes,
divided by the number of then outstanding public shares. However, we will only redeem our public shares so long as (after such redemption)
our net tangible assets will be at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of deferred underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy
the net tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our public
shares at such time.
We expect to use the amounts
held outside the trust account $1,305,305 as of December 31, 2020 to pay for all costs and expenses associated with implementing our
plan of dissolution, as well as payments to any creditors, if we do not complete an initial business combination prior to October 5,
2022, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being
earned on the proceeds held in the trust account to pay any tax obligations we may owe. However, if those funds are not sufficient to
cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in
the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release
to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.
If we were to expend all of
the net proceeds of our initial public offering and the sale of the private placement warrants, other than the proceeds deposited in
the trust account, and without taking into account interest, if any, earned on the trust account, the per-share redemption amount received
by stockholders upon our dissolution would be approximately $10.10. The proceeds deposited in the trust account could, however, become
subject to the claims of our creditors which would have higher priority than the claims of our public stockholders. We cannot assure
you that the actual per-share redemption amount received by stockholders will not be substantially less than $10.10. Under Section 281(b)
of the DGCL, our plan of dissolution must provide for all claims against us to be paid in full or make provision for payments to be made
in full, as applicable, if there are sufficient assets. These claims must be paid or provided for before we make any distribution of
our remaining assets to our stockholders. While we intend to pay such amounts, if any, we cannot assure you that we will have funds sufficient
to pay or provide for all creditors’ claims.
Although we will seek to have
all vendors, service providers, prospective target businesses and other entities with which we do business execute agreements with us
waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders,
such parties may not execute such agreements or even if they execute such agreements, they may not be prevented from bringing claims
against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar
claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim
against our assets, including the funds held in the trust account. If any third party refuses to enter into an agreement waiving such
claims to the monies held in the trust account, our management will consider whether competitive alternatives are reasonably available
to the Company, and will only enter into an agreement with such third party if our management believes that such third party’s
engagement would be in the best interests of the Company under the circumstances. Examples of possible instances where we may engage
a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills
are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases
where management is unable to find a service provider willing to execute a waiver. Marcum LLP, our independent registered public accounting
firm, and the underwriters of the offering will not execute agreements with us waiving such claims to the monies held in the trust account.
In addition, there is no guarantee
that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts
or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of our public shares, if we
are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in
connection with our initial business combination, we will be required to provide for payment of claims of creditors that were not waived
that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount received by
public stockholders could be less than the $10.10 per share initially held in the trust account, due to claims of such creditors. Pursuant
to a letter agreement, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party for services
rendered or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality
or similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser of (i) $10.10
per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation of the
trust account, if less than $10.10 per share due to reductions in the value of the trust assets, less taxes payable; provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to
the monies held in the trust account (whether or not such waiver is enforceable) nor will it apply to any claims under our indemnity
of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. However,
we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently verified whether our sponsor
has sufficient funds to satisfy their indemnity obligations, and believe that our sponsor’s only assets are securities of our company.
Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. As a result, if any such claims were successfully
made against the trust account, the funds available for our initial business combination and redemptions could be reduced to less than
$10.10 per public share. In such event, we may not be able to complete our initial business combination, and you would receive such lesser
amount per share in connection with any redemption of your public shares. None of our officers or directors will indemnify us for claims
by third parties, including, without limitation, claims by vendors and prospective target businesses.
In the event that the proceeds
in the trust account are reduced below (i) $10.10 per public share or (ii) such lesser amount per public share held in the
trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets, in each case net
of the amount of interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable to satisfy its indemnification
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether
to take legal action against our sponsor to enforce its indemnification obligations. While we currently expect that our independent directors
would take legal action on our behalf against our sponsor to enforce its indemnification obligations to us, it is possible that our independent
directors in exercising their business judgment may choose not to do so if, for example, the cost of such legal action is deemed by the
independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome
is not likely. We have not asked our sponsor to reserve for such indemnification obligations and we cannot assure you that our sponsor
would be able to satisfy those obligations, and believe that our sponsor’s only assets are securities of our company. Accordingly,
we cannot assure you that due to claims of creditors the actual value of the per-share redemption price will not be less than $10.10
per public share.
We will seek to reduce the
possibility that our sponsor will have to indemnify the trust account due to claims of creditors by endeavoring to have all vendors,
service providers, prospective target businesses or other entities with which we do business execute agreements with us waiving any right,
title, interest or claim of any kind in or to monies held in the trust account. Our sponsor will also not be liable as to any claims
under our indemnity of the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities
Act. We have access to use the amounts held outside the trust account $1,305,305 as of December 31, 2020) to pay any such potential claims
(including costs and expenses incurred in connection with our liquidation, currently estimated to be no more than approximately $100,000)
but these amounts may be spent on expenses incurred as a result of being a public company or due diligence expenses on prospective business
combination candidates. In the event that we liquidate and it is subsequently determined that the reserve for claims and liabilities
is insufficient, stockholders who received funds from our trust account could be liable for claims made by creditors.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public
shares in the event we do not complete our initial business combination by October 5, 2022 may be considered a liquidating distribution
under Delaware law. If the corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure
that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can
be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day
waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating
distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed
to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro rata portion
of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination by October 5, 2022, is not considered a liquidating distribution under Delaware law and such redemption
distribution is deemed to be unlawful (potentially due to the imposition of legal proceedings that a party may bring or due to other
circumstances that are currently unknown), then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors
could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidating
distribution. If we are unable to complete our initial business combination October 5, 2022, we will: (i) cease all operations except
for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest
earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to
pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public
stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
liquidate and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law. Accordingly, it is our intention to redeem our public shares as soon as reasonably possible following our 24th month
and, therefore, we do not intend to comply with those procedures. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third
anniversary of such date.
Because we will not be complying
with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will
provide for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent
10 years. However, because we are a blank check company, rather than an operating company, and our operations will be limited to
searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. As described above, pursuant to the obligation contained in our underwriting agreement,
we will seek to have all vendors, service providers, prospective target businesses or other entities with which we do business execute
agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. As a result
of this obligation, the claims that could be made against us are significantly limited and the likelihood that any claim that would result
in any liability extending to the trust account is remote. Further, our sponsor may be liable only to the extent necessary to ensure
that the amounts in the trust account are not reduced below (i) $10.10 per public share or (ii) such lesser amount per public
share held in the trust account as of the date of the liquidation of the trust account, due to reductions in value of the trust assets,
in each case net of the amount of interest released to us to pay taxes and will not be liable as to any claims under our indemnity of
the underwriters of our initial public offering against certain liabilities, including liabilities under the Securities Act. In the event
that an executed waiver is deemed to be unenforceable against a third party, our sponsor will not be responsible to the extent of any
liability for such third-party claims.
If we file a bankruptcy petition
or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject
to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over
the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, we cannot assure you we will be able to
return $10.10 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition
is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor
and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy
court could seek to recover some or all amounts received by our stockholders. Furthermore, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or may have acted in bad faith, thereby exposing itself and our company to claims of
punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors. We cannot assure
you that claims will not be brought against us for these reasons.
Our public stockholders will
be entitled to receive funds from the trust account only upon the earlier to occur of: (i) the completion of our initial business
combination, (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend any provisions
of our amended and restated certificate of incorporation to (A) modify the substance or timing of our obligation to provide for
the redemption of our public shares in connection with an initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination by October 5, 2022 or (B) with respect to any other material provisions relating to
stockholders’ rights or pre-initial business combination activity, and (iii) the redemption of all of our public shares if
we are unable to complete our business combination by October 5, 2022, subject to applicable law. In no other circumstances will a stockholder
have any right or interest of any kind to or in the trust account. In the event we seek stockholder approval in connection with our initial
business combination, a stockholder’s voting in connection with the initial business combination alone will not result in a stockholder’s
redeeming its shares to us for an applicable pro rata share of the trust account. Such stockholder must have also
exercised its redemption rights as described above. These provisions of our amended and restated certificate of incorporation, like all
provisions of our amended and restated certificate of incorporation, may be amended with a stockholder vote.
Competition
In identifying, evaluating
and selecting a target business for our initial business combination, we may encounter competition from other entities having a business
objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, public companies
and operating businesses seeking strategic business combinations. Many of these entities are well established and have extensive experience
identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial,
technical, human and other resources than we do. Our ability to acquire larger target businesses will be limited by our available financial
resources. This inherent limitation gives others an advantage in pursuing the initial business combination of a target business. Furthermore,
our obligation to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available
to us for our initial business combination and our outstanding warrants, and the future dilution they potentially represent, may not
be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully
negotiating an initial business combination.
Facilities
Our executive offices are
located at 1900 Main Street, Suite 201, Sarasota, FL 34236, and our telephone number is (937) 610-4057. We agreed to pay our sponsor
a total of $10,000 per month for office space, utilities and secretarial and administrative support. We consider our current office space
adequate for our current operations.
Employees
We currently have two officers.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their
time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they will devote
in any time period will vary based on whether a target business has been selected for our initial business combination and the stage
of the initial business combination process we are in.
Periodic Reporting and Financial Information
We have registered our units,
Class A common stock and warrants under the Exchange Act and have reporting obligations, including the requirement that we file
annual, quarterly and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual reports will
contain financial statements audited and reported on by our independent registered public accountants.
We will provide stockholders
with audited financial statements of the prospective target business as part of the proxy solicitation materials or tender offer documents
sent to stockholders to assist them in assessing the target business. In all likelihood, these financial statements will need to be prepared
in accordance with, or reconciled to, GAAP or IFRS, depending on the circumstances, and the historical financial statements may be required
to be audited in accordance with the standards of the PCAOB. These financial statement requirements may limit the pool of potential targets
we may conduct an initial business combination with because some targets may be unable to provide such statements in time for us to disclose
such statements in accordance with federal proxy rules and complete our initial business combination within the prescribed time frame.
We cannot assure you that any particular target business identified by us as a potential business combination candidate will have financial
statements prepared in accordance with GAAP or that the potential target business will be able to prepare its financial statements in
accordance with the requirements outlined above. To the extent that these requirements cannot be met, we may not be able to acquire the
proposed target business. While this may limit the pool of potential business combination candidates, we do not believe that this limitation
will be material.
We will be required to evaluate
our internal control procedures for the fiscal year ending December 31, 2021 as required by the Sarbanes-Oxley Act. Only in the
event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will
we be required to have our internal control procedures audited. A target company may not be in compliance with the provisions of the
Sarbanes-Oxley Act regarding adequacy of their internal controls. The development of the internal controls of any such entity to achieve
compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such business combination. We have filed
a Registration Statement on Form 8-A with the SEC to voluntarily register our securities under Section 12 of the Exchange Act. As
a result, we will be subject to the rules and regulations promulgated under the Exchange Act. We have no current intention of filing
a Form 15 to suspend our reporting or other obligations under the Exchange Act prior or subsequent to the consummation of our initial
business combination.