PROXY STATEMENT
The special meeting
(the “special meeting”) of stockholders of Schultze Special Purpose Acquisition Corp. (“Schultze,” “Company,”
“we,” “us” or “our”), a Delaware corporation, will be held on September 29, 2020 at 11:00 a.m.,
local time, at the offices of Greenberg Traurig, LLP, located at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102 to consider
and vote upon the following proposals:
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a proposal to amend (the “Charter Amendment”) Schultze’s amended and restated
certificate of incorporation (the “charter”) to extend the date by which Schultze has to consummate a business combination
(the “Extension”) for an additional three months, from September 30, 2020 to December 31, 2020 (the “Extended
Date”); and
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a proposal to direct (the “Adjournment Proposal”) the chairman of the special meeting
to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based
upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the foregoing proposal.
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The Charter Amendment
is essential to the overall implementation of the Board’s plan to extend the date that Schultze has to complete a business
combination. The purpose of the Charter Amendment is to allow Schultze more time to complete its proposed business combination
(the “Business Combination”) with Clever Leaves International Inc. (“Clever Leaves”) pursuant to the Business
Combination Agreement, dated as of July 25, 2020 (as it may be amended, the “Business Combination Agreement”), by and
among Schultze, Clever Leaves Holdings Inc. (“Holdco”), Novel Merger Sub Inc. and Clever Leaves. Schultze’s charter
provides that Schultze has until September 30, 2020 to complete a business combination. While we have entered into the Business
Combination Agreement and Holdco has filed a registration statement on Form S-4 (File No. 333-241707) (the “Registration
Statement”) containing a preliminary proxy statement/prospectus with the U.S. Securities and Exchange Commission (“SEC”)
in respect of the Business Combination, Schultze’s board of directors (the “Board”) currently believes that there
may not be sufficient time before September 30, 2020 to hold a special meeting for stockholder approval of the Business Combination
and to consummate the Business Combination, including as a result of delays due to the coronavirus (COVID-19) pandemic. Accordingly,
the Board believes that, in order to be able to consummate the Business Combination, we will need to obtain the Extension. Therefore,
the Board has determined that it is in the best interests of Schultze’s stockholders to extend the date that Schultze has
to consummate a business combination to the Extended Date.
The affirmative vote
of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock, par value $0.0001 per share
(“common stock”), entitled to vote thereon at the special meeting is required to approve the Charter Amendment, and
the affirmative vote of at least a majority of the shares of Schultze’s common stock entitled to vote thereon and voted (in
person or by proxy) at the special meeting is required to approve the Adjournment Proposal.
Holders (“public
stockholders”) of shares of Schultze’s common stock (“public shares”) sold in Schultze’s initial
public offering (“IPO”) may elect to redeem their shares for their pro rata portion of the funds available in
the trust account in connection with the Charter Amendment (the “Election”) regardless of whether such public stockholders
vote “FOR” or “AGAINST” the Charter Amendment and an Election can also be made by public stockholders who
do not vote, or do not instruct their broker or bank how to vote, at the special meeting. Public stockholders may make an Election
regardless of whether such public stockholders were holders as of the record date. In addition, regardless of whether public stockholders
vote “FOR” or “AGAINST” the Charter Amendment, or do not vote, or do not instruct their broker or bank
how to vote, at the special meeting, if the Charter Amendment is approved by the requisite vote of stockholders (and not abandoned),
the remaining public stockholders will retain their right to redeem their public shares for their pro rata portion of the
funds available in the trust account upon consummation of a business combination.
The withdrawal of funds
from the trust account in connection with the Election will reduce the amount held in the trust account following the redemption,
and the amount remaining in the trust account may be significantly reduced from the approximately $132.4 million that was in the
trust account as of June 30, 2020. In such event, Schultze may need to obtain additional funds to complete a business combination
and there can be no assurance that such funds will be available on terms acceptable to Schultze or at all.
If the Charter Amendment
is not approved and we do not consummate the Business Combination (or another business combination) by September 30, 2020, in accordance
with our charter, or if the Charter Amendment is approved and we do not consummate a business combination by the Extended Date,
we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the
aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account net
of interest that may be used by us to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation
related expenses, as applicable, divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law.
Prior to the IPO, Schultze’s
initial stockholders waived their rights to participate in any liquidation distribution with respect to their shares of Schultze’s
common stock which were acquired by them prior to the IPO (the “founder shares”). As a consequence of such waivers,
a liquidating distribution will be made only with respect to the public shares. There will be no distribution from the trust account
with respect to Schultze’s warrants, which will expire worthless in the event we wind up.
To protect amounts
held in the trust account, Schultze Special Purpose Acquisition Sponsor, LLC (our “sponsor”) has agreed that it will
be liable to ensure that the proceeds in the trust account are not reduced below $10.00 per share by the claims of target businesses
or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us,
but we cannot assure you that our sponsor will be able to satisfy its indemnification obligations if it is required to do so. Additionally,
the agreement entered into by our sponsor specifically provides for two exceptions to the indemnity it has given: it will have
no liability (1) as to any claimed amounts owed to a target business or vendor or other entity who has executed an agreement with
us waiving any right, title, interest or claim of any kind they may have in or to any monies held in the trust account, or (2)
as to any claims for indemnification by the underwriters of the IPO against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the “Securities Act”). We have not independently verified whether our sponsor has
sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are Schultze’s securities.
We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that our sponsor
would be able to satisfy those obligations. As a result, if we liquidate, the per-share distribution from the trust account could
be less than $10.00 due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion
to their respective equity interests, an aggregate amount then on deposit in the trust account, including any interest earned on
the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable.
Under the Delaware
General Corporation Law (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 100% of our outstanding public shares in the event we do not complete our initial business
combination within the required time period may be considered a liquidation 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.
However, because we
will not be complying with Section 280 of the DGCL, 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 ten years. However, because we are a blank check company, rather than an operating company, and
our operations have been 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, such as Clever Leaves.
Approval of the Charter
Amendment proposal will constitute consent for Schultze to instruct the trustee to (i) remove from the trust account an amount
(the “Withdrawal Amount”) equal to the pro rata portion of funds available in the trust account relating to
the redeemed public shares and (ii) deliver to the holders of such redeemed public shares their pro rata portion of the
Withdrawal Amount. The remainder of such funds will remain in the trust account and be available for use by Schultze to complete
a business combination on or before the Extended Date. Holders of public shares who do not redeem their public shares in connection
with the Charter Amendment proposal will retain their redemption rights and their ability to vote on a business combination through
the Extended Date if the Charter Amendment is approved.
The record date for
the special meeting is August 24, 2020. Record holders of Schultze’s common stock at the close of business on the record
date are entitled to vote or have their votes cast at the special meeting. On the record date, there were 16,215,132 outstanding
shares of Schultze’s common stock. Schultze’s warrants do not have voting rights.
This proxy statement
contains important information about the special meeting and the proposals. Please read it carefully and vote your shares.
This proxy statement
is dated [●], 2020 and is first being mailed to stockholders on or about that date.
TABLE OF
CONTENTS
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
These Questions and
Answers are only summaries of the matters they discuss. They do not contain all of the information that may be important to you.
You should read carefully the entire document, including the annex to this proxy statement.
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Why am I receiving this proxy statement?
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A. This proxy statement and the accompanying
materials are being sent to you in connection with the solicitation of proxies by the Board, for use at the special meeting of
stockholders to be held on September 29, 2020 at 11:00 a.m., local time, at the offices of Greenberg Traurig, LLP, located
at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102, or at any adjournments or postponements thereof. This proxy statement summarizes
the information that you need to make an informed decision on the proposals to be considered at the special meeting.
Schultze is a blank check company formed
for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization
or other similar business combination with one or more businesses or entities. In December 2018, Schultze consummated the IPO from
which it derived gross proceeds of $130 million. Like most blank check companies, our charter provides for the return of the IPO
proceeds held in trust to the public stockholders if no qualifying business combination is consummated on or before a certain date
(in our case, September 30, 2020). The Board believes that it is in the best interests of the stockholders to continue Schultze’s
existence until the Extended Date in order to allow Schultze more time to complete the Business Combination and is submitting this
proposal to the stockholders to vote upon. In addition, we are proposing a measure to direct the chairman of the special meeting
to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based
upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the foregoing proposal.
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What is being voted on?
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A. You are being asked to vote on:
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a proposal to amend Schultze’s charter to extend the date by which Schultze has to consummate a business combination to the Extended Date; and
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a proposal to direct the chairman of the special meeting to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve the foregoing proposal.
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The Charter Amendment proposal is essential to the overall implementation of the Board’s plan to extend the date that Schultze has to complete a business combination. Approval of the Charter Amendment is a condition to the implementation of the Extension.
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If the Extension is implemented, the stockholders’ approval of the Charter Amendment proposal will constitute consent for Schultze to remove the Withdrawal Amount from the trust account, deliver to the holders of such redeemed public shares their pro rata portion of the Withdrawal Amount and retain the remainder of the funds in the trust account for Schultze’s use in connection with consummating a business combination on or before the Extended Date.
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If the Charter Amendment proposal is approved and the Extension is implemented, the removal of the Withdrawal Amount from the trust account in connection with the Election will reduce the amount held in the trust account following the Election. Schultze cannot predict the amount that will remain in the trust account if the Charter Amendment proposal is approved; and the amount remaining in the trust account may be significantly reduced from the approximately $132.4 million that was in the trust account as of June 30, 2020. In such event, Schultze may need to obtain additional funds to complete a business combination and there can be no assurance that such funds will be available on terms acceptable to Schultze or at all.
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If the Charter Amendment proposal is not approved and we have not consummated a business combination by September 30, 2020, or if the Charter Amendment proposal is approved and we have not consummated a business combination by the Extended Date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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Schultze’s initial stockholders have waived their rights to participate in any liquidation distribution with respect to their founder shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless in the event we wind up. Schultze will pay the costs of liquidation from its remaining assets held outside of the trust account.
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Why is Schultze proposing the Charter Amendment proposal?
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A. Schultze’s charter provides for the return of the IPO proceeds held in trust to the public stockholders if no qualifying business combination is consummated on or before September 30, 2020. Accordingly, the trust agreement we entered into with Continental Stock Transfer & Trust Company, as trustee, in connection with the IPO (as described in the IPO prospectus), provides for the trustee to liquidate the trust account and distribute to each public stockholder its pro rata share of such funds if a qualifying business combination is not consummated on or before such date provided in Schultze’s charter. As we explain below, Schultze believes it may not be able to complete the Business Combination (or another business combination) by that date.
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While we have entered into the Business Combination Agreement and Holdco has filed the Registration Statement containing a preliminary proxy statement/prospectus with the SEC in respect of the Business Combination, the Board currently believes that there may not be sufficient time before September 30, 2020 to hold a special meeting for stockholder approval of the Business Combination and to consummate the Business Combination, including as a result of delays due to the coronavirus (COVID-19) pandemic. Accordingly, the Board believes that, in order to be able to consummate the Business Combination, we will need to obtain the Extension.
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Because Schultze believes it may not be able to conclude a business combination within the permitted time period, Schultze has determined to seek stockholder approval to extend the date by which Schultze has to complete a business combination.
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Schultze believes that given Schultze’s expenditure of time, effort and money on finding a business combination, circumstances warrant providing public stockholders an opportunity to consider the Business Combination (or another business combination). Accordingly, the Board is proposing the Charter Amendment to extend Schultze’s corporate existence.
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You are not being asked to vote on the Business Combination or any other business combination at this time. If the Extension is implemented and you do not elect to redeem your public shares, you will retain the right to vote on the Business Combination (or any other proposed business combination) when it is submitted to stockholders and the right to redeem your public shares for a pro rata portion of the trust account in the event such business combination is approved and completed or Schultze has not consummated a business combination by the Extended Date.
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Why should I vote for the Charter Amendment?
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A. The Board believes stockholders should have an opportunity to evaluate the Business Combination. Accordingly, the Board is proposing the Charter Amendment to extend the date by which Schultze has to complete a business combination until the Extended Date and to allow for the Election. The Extension would give Schultze the opportunity to hold a stockholder meeting for the approval of the Business Combination.
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The affirmative vote of the holders of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock is required to effect an amendment to Schultze’s charter that would extend its corporate existence beyond September 30, 2020. Additionally, Schultze’s charter requires that all public stockholders have an opportunity to redeem their public shares in the case Schultze’s corporate existence is extended. We believe that this charter provision was included to protect Schultze stockholders from having to sustain their investments for an unreasonably long period if Schultze does not consummate a suitable business combination in the timeframe contemplated by the charter. Given Schultze’s expenditure of time, effort and money on the potential Business Combination with Clever Leaves, circumstances warrant providing those who would like to consider whether the proposed Business Combination is an attractive investment with an opportunity to consider such transaction, inasmuch as Schultze is also affording stockholders who wish to redeem their public shares the opportunity to do so, as required under its charter. Accordingly, we believe the Extension is consistent with Schultze’s charter and IPO prospectus.
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How do the Schultze insiders intend to vote their shares?
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A. All of Schultze’s directors, executive officers and their respective affiliates are expected to vote any shares of Schultze’s common stock over which they have voting control (including any public shares owned by them) in favor of the Charter Amendment proposal and the Adjournment Proposal.
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Schultze’s directors, executive officers and their respective affiliates are not entitled to redeem their founder shares. With respect to shares purchased in the open market by Schultze’s directors, executive officers and their respective affiliates, such public shares may be redeemed. On the record date, Schultze’s directors, executive officers and their affiliates beneficially owned and were entitled to vote 3,250,000 founder shares, representing approximately 20% of Schultze’s issued and outstanding common stock. Schultze’s directors, executive officers and their affiliates did not beneficially own any public shares as of such date.
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Schultze’s directors, executive officers and their affiliates may choose to buy public shares in the open market and/or through negotiated private purchases. In the event that purchases do occur, the purchasers may seek to purchase shares from stockholders who would otherwise have voted against the Charter Amendment proposal. Any public shares held by affiliates of Schultze may be voted in favor of the Charter Amendment proposal.
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What vote is required to approve each of the proposals?
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A. The affirmative vote of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock entitled to vote thereon at the special meeting is required to approve the Charter Amendment, and the affirmative vote of at least a majority of the shares of Schultze’s common stock entitled to vote thereon and voted (in person or by proxy) at the special meeting is required to approve the Adjournment Proposal.
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Abstentions will be counted in connection with the determination of whether a valid quorum is established, but will have no effect on the approval of the Adjournment Proposal. With respect to the Charter Amendment proposal, abstentions and broker non-votes will have the same effect as “AGAINST” votes.
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What if I don’t want to vote for the Charter Amendment proposal?
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A. If you do not want the Charter Amendment to be approved, you must abstain, not vote, or vote against the proposal. If the Charter Amendment is approved, and the Extension is implemented, the Withdrawal Amount will be withdrawn from the trust account and paid to the redeeming public stockholders.
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Will you seek any further extensions to liquidate the trust account?
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A. Other than the Extension until the Extended Date as described in this proxy statement, Schultze does not currently anticipate seeking any further extension to consummate a business combination. Schultze has provided that all holders of public shares, including those who vote for the Charter Amendment, may elect to redeem their public shares into their pro rata portion of the trust account and should receive the funds shortly after the special meeting which is scheduled for September 29, 2020. Those holders of public shares who elect not to redeem their shares in connection with the Charter Amendment proposal will retain redemption rights with respect to the Business Combination or any other business combination Schultze may propose if the Business Combination is not consummated, or, if Schultze does not consummate a business combination by the Extended Date, such holders will be entitled to their pro rata portion of the trust account on such date.
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What happens if the Charter Amendment is not approved?
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A. If the Charter Amendment is not approved and we have not consummated a business combination by September 30, 2020, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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Schultze’s initial stockholders waived their rights to participate in any liquidation distribution with respect to their founder shares. There will be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up. Schultze will pay the costs of liquidation from its remaining assets held outside of the trust account, which it believes are sufficient for such purposes.
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If the Charter Amendment proposal is approved, what happens next?
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A. Schultze will continue its efforts to obtain approval for the Business Combination at a special meeting of its stockholders and consummate the Business Combination prior to the Extended Date, which will involve:
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completing proxy materials;
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establishing a meeting date and record date for considering the Business Combination and distributing proxy materials to stockholders; and
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holding a special meeting to consider the Business Combination.
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Schultze is seeking approval of the Charter Amendment because Schultze believes it may not be able to obtain approval for the Business Combination at a special meeting of its stockholders and consummate the Business Combination prior to September 30, 2020.
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Upon approval by holders of at least sixty-five percent (65%) of Schultze’s common stock outstanding as of the record date, Schultze will file an amendment to the charter with the Secretary of State of the State of Delaware in the form of Annex A hereto. Schultze will remain a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and its units, common stock and warrants will remain publicly traded.
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If the Charter Amendment proposal is approved, the removal of the Withdrawal Amount from the trust account will reduce the amount remaining in the trust account and increase the percentage interest of Schultze’s common stock held by Schultze’s directors and officers through the founder shares.
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If the Charter Amendment proposal is approved, but Schultze does not consummate a business combination by the Extended Date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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Schultze’s initial stockholders waived their rights to participate in any liquidation distribution with respect to their founder shares. There will be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up. Schultze will pay the costs of liquidation from its remaining assets held outside of the trust account, which it believes are sufficient for such purposes.
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Would I still be able to exercise my redemption rights if I vote against the Business Combination (or any other proposed business combination)?
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A. Unless you elect to redeem all of your shares, you will be able to vote on the Business Combination (or any other proposed business combination) when it is submitted to stockholders. If you disagree with the business combination, you will retain your right to redeem your public shares upon consummation of a business combination in connection with the stockholder vote to approve the business combination, subject to any limitations set forth in Schultze’s charter.
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How do I change my vote?
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A. If you have submitted a proxy to vote your shares and wish to change your vote, you may do so by delivering a later-dated, signed proxy card to Morrow Sodali LLC, Schultze’s proxy solicitor, prior to the date of the special meeting or by voting in person at the special meeting. Attendance at the special meeting alone will not change your vote. You also may revoke your proxy by sending a notice of revocation to: Morrow Sodali LLC, 470 West Avenue, Stamford, CT 06902. As discussed below, in light of the ongoing health concerns relating to the coronavirus (COVID-19) pandemic, we urge stockholders not to attend the special meeting in person.
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How are votes counted?
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A. Votes will be counted by the inspector of election appointed for the special meeting, who will separately count “FOR” and “AGAINST” votes, abstentions and broker non-votes. The Charter Amendment proposal must be approved by the affirmative vote of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock entitled to vote thereon at the special meeting. The Adjournment Proposal must be approved by the affirmative vote of at least a majority of the shares of Schultze’s common stock entitled to vote thereon and voted (in person or by proxy) at the special meeting.
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With respect to the Charter Amendment proposal, abstentions and broker non-votes will have the same effect as “AGAINST” votes. A stockholder’s failure to vote by proxy or to vote in person at the special meeting will not be counted towards the number of shares of Schultze’s common stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of any vote on the Adjournment Proposal.
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If your shares are held by your broker as your nominee (that is, in “street name”), you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do not give instructions to your broker, your broker can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the rules of various national securities exchanges applicable to member brokerage firms. These rules provide that for routine matters your broker has the discretion to vote shares held in street name in the absence of your voting instructions. On non-discretionary items for which you do not give your broker instructions, the shares will be treated as broker non-votes.
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If my shares are held in “street name,” will my broker automatically vote them for me?
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A. With respect to the Charter Amendment proposal and the Adjournment Proposal, your broker can vote your shares only if you provide them with instructions on how to vote. You should instruct your broker to vote your shares. Your broker can tell you how to provide these instructions.
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What is a quorum requirement?
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A. A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present with regard to each of the Charter Amendment proposal and the Adjournment Proposal if at least a majority of the outstanding shares of Schultze’s common stock on the record date are represented by stockholders present at the special meeting or by proxy.
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Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the special meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the chairman of the special meeting may adjourn the special meeting to another date.
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Q.
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Who can vote at the special meeting?
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A. Only holders of record of Schultze’s common stock at the close of business on August 24, 2020, the record date, are entitled to have their vote counted at the special meeting and any adjournments or postponements thereof. On the record date, 16,215,132 shares of Schultze’s common stock, including 12,965,132 public shares, were outstanding and entitled to vote.
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Stockholder of Record: Shares Registered in Your Name. If on the record date your shares were registered directly in your name with Schultze’s transfer agent, Continental Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record, you may vote in person at the special meeting or vote by proxy.
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Beneficial Owner: Shares Registered in the Name of a Broker or Bank. If on the record date your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker or other agent.
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In light of the ongoing health concerns relating to the coronavirus (COVID-19) pandemic and to best protect the health and welfare of Schultze’s stockholders and personnel, we urge stockholders not to attend the special meeting in person. Stockholders are nevertheless urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope, or to direct their brokers or other agents on how to vote the shares in their accounts, as applicable.
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Q.
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How does the Board recommend I vote?
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A. After careful consideration of the terms and conditions of these proposals, the Board has determined that the Charter Amendment is fair to and in the best interests of Schultze and its stockholders. The Board recommends that Schultze’s stockholders vote “FOR” the Charter Amendment. In addition, the Board recommends that you vote “FOR” the Adjournment Proposal.
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Q.
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What interests do Schultze’s directors and officers have in the approval of the proposals?
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A. Schultze’s directors and officers have interests in the proposals that may be different from, or in addition to, your interests as a stockholder. These interests include ownership of founder shares and warrants that may become exercisable in the future and the possibility of future compensatory arrangements. See the section entitled “The Charter Amendment Proposal—Interests of Schultze’s Directors and Officers.”
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What if I object to the Charter Amendment? Do I have appraisal rights?
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A. If you do not want the Charter Amendment to be approved, you must vote against the proposal, abstain from voting or refrain from voting. If holders of public shares do not elect to redeem their public shares, such holders will retain redemption rights in connection with the Business Combination or any other business combination Schultze may propose if the Business Combination is not consummated. You will still be entitled to make the Election if you vote against, abstain or do not vote on the Charter Amendment. In addition, public stockholders who do not make the Election would be entitled to redemption if Schultze has not completed a business combination by the Extended Date. Schultze stockholders do not have appraisal rights in connection with the Charter Amendment under the DGCL.
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Q.
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What happens to the Schultze warrants if the Charter Amendment is not approved?
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A. If the Charter Amendment is not approved and we have not consummated a business combination by September 30, 2020, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest earned on the funds held in the trust account not previously released to us, divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up.
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Q.
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What happens to the Schultze warrants if the Charter Amendment is approved?
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A. If the Charter Amendment proposal is approved, Schultze will continue to attempt to complete the Business Combination by the Extended Date and will retain the blank check company restrictions previously applicable to it. The warrants will remain outstanding in accordance with their terms and will become exercisable 30 days after the completion of a business combination. The warrants will expire at 5:00 p.m., New York City time, five years after the completion of the initial business combination or earlier upon redemption or liquidation.
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What do I need to do now?
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A. Schultze urges you to read carefully and consider the information contained in this proxy statement, including the annex, and to consider how the proposals will affect you as a Schultze stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement and on the enclosed proxy card.
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How do I vote?
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A. If you are a holder of record of Schultze’s common stock, you may vote in person at the special meeting or by submitting a proxy for the special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You may still attend the special meeting and vote in person if you have already voted by proxy.
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If your shares of Schultze’s common stock are held in “street name” by a broker or other agent, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your broker or other agent.
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In light of the ongoing health concerns relating to the coronavirus (COVID-19) pandemic and to best protect the health and welfare of Schultze’s stockholders and personnel, we urge stockholders not to attend the special meeting in person. Stockholders are nevertheless urged to vote their proxies by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope, or to direct their brokers or other agents on how to vote the shares in their accounts, as applicable.
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The special meeting is currently scheduled to be held in person as indicated above. However, we are actively monitoring the COVID-19 situation, and if we determine that it is not possible or advisable to hold the special meeting in person, or to hold the special meeting on the time or date or at the location indicated above, we will announce alternative arrangements for the special meeting as promptly as practicable, which may include switching to a virtual meeting format, or changing the time, date or location of the special meeting. Any such change will be announced via press release and the filing of additional proxy materials with the SEC.
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Q.
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How do I redeem my shares of Schultze’s common stock?
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A. If the Extension is implemented, each public stockholder may seek to redeem such stockholder’s public shares for its pro rata portion of the funds available in the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable. You will also be able to redeem your public shares in connection with any stockholder vote to approve the Business Combination (or any other proposed business combination), or if Schultze has not consummated a business combination by the Extended Date.
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In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Continental Stock Transfer & Trust Company, Schultze’s transfer agent, at Continental Stock Transfer & Trust Company, One State Street, 30th Floor, New York, New York 10004-1561, Attn: Mark Zimkind, mzimkind@continentalstock.com, at least two business days prior to the special meeting or to deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your shares.
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Certificates that have not been tendered in accordance with these procedures at least two business days prior to the special meeting will not be redeemed for cash. In the event that a public stockholder tenders its shares and decides prior to the special meeting that it does not want to redeem its shares, the stockholder may withdraw the tender. If you delivered your shares for redemption to our transfer agent and decide prior to the special meeting not to redeem your shares, you may request that our transfer agent return the shares (physically or electronically). You may make such request by contacting our transfer agent at the address listed above.
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What should I do if I receive more than one set of voting materials?
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A. You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards, if your shares are registered in more than one name or are registered in different accounts. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of Schultze’s common stock.
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Who is paying for this proxy solicitation?
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A. Schultze will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
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Q.
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Who can help answer my questions?
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A. If you have questions, you may write
or call Schultze’s proxy solicitor:
Morrow Sodali LLC
470 West Avenue
Stamford, CT 06902
Telephone: (800) 662-5200
Banks and brokers: (203) 658-9400
Email: SAMA.info@investor.morrowsodali.com
You may also obtain additional information
about Schultze from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find
More Information.”
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FORWARD-LOOKING
STATEMENTS
This proxy statement
and the documents to which we refer you in this proxy statement contain “forward-looking statements” as that term is
defined by the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Any statements that do not relate
to historical or current facts or matters are forward-looking statements. You can identify some of the forward-looking statements
by the use of forward-looking words such as “anticipate,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “should,” “may” and other similar expressions, although not
all forward-looking statements contain these identifying words. There can be no assurance that actual results will not materially
differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate
a business combination, and any other statements that are not statements of current or historical facts. These forward-looking
statements are based on information available to Schultze as of the date of the proxy materials and current expectations, forecasts
and assumptions and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon
as representing Schultze’s views as of any subsequent date and Schultze undertakes no obligation to update forward-looking
statements to reflect events or circumstances after the date they were made.
These forward-looking
statements involve a number of known and unknown risks and uncertainties or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. Some factors that could
cause actual results to differ include:
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Schultze’s ability to effect the Charter Amendment or consummate a business combination,
including the Business Combination;
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unanticipated delays in the distribution of the funds from the trust account;
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claims by third parties against the trust account; or
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Schultze’s ability to finance and consummate a business combination.
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You should carefully
consider these risks, in addition to the risk factors set forth in our other filings with the SEC, including the final prospectus
related to the IPO dated December 10, 2018 (File No. 333-228494) and Schultze’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2019, and the Registration Statement, which includes a preliminary proxy statement/prospectus in respect
of the Business Combination, initially filed with the SEC by Holdco on August 6, 2020, and any amendments thereto. The documents
we file with the SEC, including those referred to above, also discuss some of the risks that could cause actual results to differ
from those contained or implied in the forward-looking statements. See “Where You Can Find More Information” for additional
information about our filings.
BACKGROUND
Schultze
We are a blank check
company formed pursuant to the laws of the State of Delaware on June 11, 2018 for the purpose of entering into a merger, stock
exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or
more businesses or entities.
On December 13, 2018,
we consummated the IPO of 13,000,000 units, with each unit consisting of one share of common stock and one warrant. Each warrant
entitles the holder to purchase one share of common stock at a price of $11.50 per share. The units in the IPO were sold at an
offering price of $10.00 per unit, generating total gross proceeds of $130,000,000. Simultaneously with the closing of the IPO,
we consummated the sale of 4,150,000 warrants (“private placement warrants”) at a price of $1.00 per private placement
warrant in a private placement to our sponsor, generating gross proceeds of $4,150,000 (the “private placement”).
Immediately following
the closing of the IPO, a total of $130,000,000 ($10.00 per unit) of the net proceeds from the IPO and the private placement was
placed in a trust account established for the benefit of our public stockholders, with Continental Stock Transfer & Trust Company
acting as trustee. As of June 30, 2020, Schultze had approximately $132.4 million in the trust account.
In September 2018,
our sponsor purchased 4,312,500 founder shares for an aggregate purchase price of $25,000. Our sponsor subsequently transferred
certain founder shares to our independent directors at the same price originally paid for such shares. In December 2018, our sponsor
forfeited 575,000 founder shares. Following the expiration of the underwriters’ over-allotment option on January 24, 2019,
our sponsor forfeited 487,500 shares, so that our initial stockholders continue to own 20% of our issued and outstanding shares.
The units began trading
on December 11, 2018 on the Nasdaq Capital Market (“Nasdaq”) under the symbol “SAMAU.” Commencing on January
9, 2019, the securities comprising the units began separate trading. The units, common stock and warrants are trading on Nasdaq
under the symbols “SAMAU,” “SAMA” and “SAMAW,” respectively.
On June 9, 2020, at
Schultze’s special meeting in lieu of the 2020 annual meeting of stockholders, Schultze’s stockholders approved an
amendment to the charter to extend the date by which Schultze has to consummate a business combination from June 13, 2020 to September
30, 2020. In connection with such special meeting and the resulting amendment to the charter, 34,868 shares of Schultze’s
common stock were redeemed from funds available in the trust account, for a redemption amount of approximately $10.22 per share.
The mailing address
of Schultze’s principal executive office is Schultze Special Purpose Acquisition Corp., 800 Westchester Avenue, Suite 632,
Rye Brook, NY 10573, and our telephone number is (914) 701-5260. Our corporate website is www.samcospac.com. The contents of our
corporate website are not incorporated into this filing and our reference to the URL of our corporate website is intended to be
an inactive textual reference only.
The Potential Business Combination
The proposed Business
Combination with Clever Leaves qualifies as an initial business combination under Schultze’s charter, but Schultze believes
it may not be able to complete the Business Combination by September 30, 2020, including as a result of delays due to the coronavirus
(COVID-19) pandemic. The Charter Amendment is essential to allowing Schultze more time to obtain approval for the Business Combination
at a special meeting of its stockholders and consummate the Business Combination prior to the Extended Date. Approval of the Charter
Amendment is a condition to the implementation of the Extension. Schultze believes that, given Schultze’s expenditure of
time, effort and money on the proposed Business Combination with Clever Leaves, circumstances warrant providing public stockholders
an opportunity to consider the proposed Business Combination.
You are not being
asked to vote on the Business Combination or any other business combination at this time. If the Extension is implemented and you
do not elect to redeem your public shares, you will retain the right to vote on the Business Combination (or any other proposed
business combination) if and when it is submitted to stockholders and the right to redeem your public shares for a pro rata
portion of the trust account in the event such business combination is approved and completed or Schultze has not consummated a
business combination by the Extended Date.
The Special Meeting
Date, Time and Place.
The special meeting of Schultze’s stockholders will be held on September 29, 2020 at 11:00 a.m., local time, at the offices
of Greenberg Traurig, LLP, located at 1750 Tysons Boulevard, Suite 1000, McLean, VA 22102.
Voting Power; Record
Date. You will be entitled to vote or direct votes to be cast at the special meeting, if you owned shares of Schultze’s
common stock at the close of business on August 24, 2020, the record date for the special meeting. You will have one vote per proposal
for each share you owned at that time. Schultze’s warrants do not carry voting rights.
Votes Required.
The affirmative vote of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock entitled
to vote thereon at the special meeting is required to approve the Charter Amendment, and the affirmative vote of at least a majority
of the shares of Schultze’s common stock entitled to vote thereon and voted (in person or by proxy) at the special meeting
is required to approve the Adjournment Proposal. If you do not vote (i.e., you “abstain” from voting on a proposal),
your action will have the effect of a vote against the Charter Amendment and no effect on the Adjournment Proposal. Likewise, abstentions
and broker non-votes will have the effect of a vote against the Charter Amendment and no effect on the Adjournment Proposal.
At the close of business
on the record date, there were 16,215,132 outstanding shares of Schultze’s common stock, including 12,965,132 public shares,
each of which entitles its holder to cast one vote per proposal.
If you do not want
the Charter Amendment approved, you should vote against the proposal or abstain from voting on the proposal. If you want to obtain
your pro rata portion of the trust account in the event the Extension is implemented, which will be paid shortly after the
special meeting scheduled for September 29, 2020, you must demand redemption of your shares. Holders of public shares may redeem
their public shares regardless of whether they vote for or against the Charter Amendment, abstain or do not vote.
Proxies; Board Solicitation.
Your proxy is being solicited by the Board on the proposals being presented to stockholders at the special meeting to approve the
Charter Amendment and the Adjournment Proposal. No recommendation is being made as to whether you should elect to redeem your shares.
Proxies may be solicited in person or by telephone. If you grant a proxy, you may still revoke your proxy and vote your shares
in person at the special meeting.
Schultze has retained
Morrow Sodali LLC to aid in the solicitation of proxies. Morrow Sodali LLC will receive a fee of approximately $22,500, as well
as reimbursement for certain costs and out-of-pocket expenses incurred by them in connection with their services, all of which
will be paid by Schultze. In addition, officers and directors of Schultze may solicit proxies by mail, telephone, facsimile, and
personal interview, for which no additional compensation will be paid, though they may be reimbursed for their out-of-pocket expenses.
Schultze will bear the cost of preparing, assembling and mailing the enclosed form of proxy, this proxy statement and other material
which may be sent to stockholders in connection with this solicitation. Schultze may reimburse brokerage firms and other nominee
holders for their reasonable expenses in sending proxies and proxy material to the beneficial owners of our shares.
THE
CHARTER AMENDMENT PROPOSAL
Charter Amendment Proposal
Schultze is proposing
to amend its charter to extend the date by which Schultze has to consummate a business combination from September 30, 2020 to the
Extended Date.
The Charter Amendment
is essential to the overall implementation of the Board’s plan to extend the date that Schultze has to complete a business
combination. Approval of the Charter Amendment is a condition to the implementation of the Extension.
If the Charter Amendment
proposal is not approved and we have not consummated a business combination by September 30, 2020, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us
to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable,
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and
(iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the
Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law. There will be no distribution from the trust account with respect
to our warrants which will expire worthless in the event we wind up.
A copy of the proposed
amendment to the charter of Schultze is attached to this proxy statement as Annex A.
Reasons for the Proposal
Schultze’s IPO
prospectus and charter provide that Schultze has until September 30, 2020 to consummate a business combination. The proposed Business
Combination with Clever Leaves qualifies as an initial business combination under Schultze’s charter, but Schultze believes
it may not be able to complete the Business Combination by September 30, 2020, including as a result of delays due to the coronavirus
(COVID-19) pandemic. The Charter Amendment is essential to allowing Schultze more time to obtain approval for the Business Combination
at a special meeting of its stockholders and consummate the Business Combination prior to the Extended Date. Approval of the Charter
Amendment is a condition to the implementation of the Extension. Schultze believes that, given Schultze’s expenditure of
time, effort and money on the proposed Business Combination with Clever Leaves, circumstances warrant providing public stockholders
an opportunity to consider the proposed Business Combination. The affirmative vote of the holders of at least sixty-five percent
(65%) of all then outstanding shares of Schultze’s common stock is required to extend Schultze’s corporate existence,
except in connection with, and effective upon consummation of, a business combination. Additionally, Schultze’s IPO prospectus
and charter provide for all public stockholders to have an opportunity to redeem their public shares in the case that Schultze’s
corporate existence is extended as described above. Because Schultze continues to believe that a business combination would be
in the best interests of Schultze’s stockholders, and because Schultze believes it may not be able to conclude a business
combination within the permitted time period, Schultze has determined to seek stockholder approval to extend the date by which
Schultze has to complete a business combination beyond September 30, 2020 to the Extended Date.
We believe that the
foregoing charter provisions were included to protect Schultze stockholders from having to sustain their investments for an unreasonably
long period if Schultze does not consummate a suitable business combination in the timeframe contemplated by the charter. We also
believe, however, that given Schultze’s expenditure of time, effort and money on the proposed Business Combination with Clever
Leaves, circumstances warrant providing those who would like to consider whether the proposed Business Combination is an attractive
investment with an opportunity to consider such transaction, inasmuch as Schultze is also affording stockholders who wish to redeem
their public shares the opportunity to do so, as required under its charter. Accordingly, the Extension is consistent with Schultze’s
charter and IPO prospectus.
If the Charter Amendment Proposal Is Not Approved
If the Charter Amendment
proposal is not approved and we have not consummated a business combination by September 30, 2020, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account, including any interest earned on the funds held in the trust account not previously released to us, divided
by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights
as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the Board,
dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law.
Schultze’s initial
stockholders have waived their rights to participate in any liquidation distribution with respect to their founder shares. There
will be no distribution from the trust account with respect to Schultze’s warrants which will expire worthless in the event
we wind up. Schultze will pay the costs of liquidation from its remaining assets held outside of the trust account.
If the Charter Amendment
proposal is not approved, Schultze will not effect the Extension, and in the event Schultze does not complete a business combination
on or before September 30, 2020, the trust account will be liquidated and distributed to the public stockholders on a pro rata
basis as described above.
If the Charter Amendment Proposal Is Approved
If the Charter Amendment
proposal is approved, Schultze will file an amendment to the charter with the Secretary of State of the State of Delaware in the
form of Annex A hereto. Schultze will remain a reporting company under the Exchange Act and its units, common stock and warrants
will remain publicly traded. Schultze will then continue to attempt to complete the Business Combination by the Extended Date.
If the Charter Amendment
proposal is approved, but Schultze does not consummate a business combination by the Extended Date, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in
the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by us
to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable,
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and
(iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the
Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law.
Schultze’s initial
stockholders waived their rights to participate in any liquidation distribution with respect to their founder shares. There will
be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up. Schultze
will pay the costs of liquidation from its remaining assets held outside of the trust account, which it believes are sufficient
for such purposes.
You are not being
asked to vote on the Business Combination or any other business combination at this time. If the Extension is implemented and you
do not elect to redeem your public shares, you will retain the right to vote on the Business Combination (or any other proposed
business combination) when it is submitted to stockholders and the right to redeem your public shares for a pro rata portion
of the trust account in the event such business combination is approved and completed or Schultze has not consummated a business
combination by the Extended Date.
If the Charter Amendment
proposal is approved, and the Extension is implemented, the removal of the Withdrawal Amount from the trust account in connection
with the Election will reduce the amount held in the trust account and Schultze’s net asset value. Schultze cannot predict
the amount that will remain in the trust account if the Charter Amendment proposal is approved; and the amount remaining in the
trust account may be significantly reduced from the approximately $132.4 million that was in the trust account as of June 30, 2020.
Redemption Rights
If the Charter Amendment
proposal is approved, Schultze will provide the public stockholders making the Election, the opportunity to receive, at the time
the Charter Amendment becomes effective, and in exchange for the surrender of their shares, a pro rata portion of the funds
available in the trust account, including any interest earned on the funds held in the trust account net of interest that may be
used by us to pay our franchise and income taxes payable. You will also be able to redeem your public shares in connection with
any stockholder vote to approve a the Business Combination (or any other proposed business combination), or if Schultze has not
consummated a business combination by the Extended Date.
TO DEMAND REDEMPTION,
PRIOR TO 5:00 P.M. EASTERN TIME ON SEPTEMBER 25, 2020 (TWO BUSINESS DAYS BEFORE THE SPECIAL MEETING), YOU SHOULD ELECT EITHER TO
PHYSICALLY TENDER YOUR SHARE CERTIFICATES TO OUR TRANSFER AGENT OR TO DELIVER YOUR SHARES TO OUR TRANSFER AGENT ELECTRONICALLY
USING DTC’S DWAC (DEPOSIT/WITHDRAWAL AT CUSTODIAN), AS DESCRIBED HEREIN. YOU SHOULD ENSURE THAT YOUR BANK OR BROKER COMPLIES
WITH THE REQUIREMENTS IDENTIFIED ELSEWHERE HEREIN.
In connection with
tendering your shares for redemption, you must elect either to physically tender your stock certificates to Continental Stock Transfer
& Trust Company, Schultze’s transfer agent, at Continental Stock Transfer & Trust Company, One State Street, 30th
Floor, New York, New York 10004-1561, Attn: Mark Zimkind, mzimkind@continentalstock.com, prior to the vote for the Charter Amendment
or to deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal
At Custodian) System, which election would likely be determined based on the manner in which you hold your shares. The requirement
for physical or electronic delivery prior to the vote at the special meeting ensures that a redeeming holder’s election is
irrevocable once the Charter Amendment is approved. In furtherance of such irrevocable election, stockholders making the election
will not be able to tender their shares after the vote at the special meeting.
Through the DWAC system,
this electronic delivery process can be accomplished by the stockholder, whether or not it is a record holder or its shares are
held in “street name,” by contacting the transfer agent or its broker and requesting delivery of its shares through
the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a
stockholder’s broker and/or clearing broker, DTC, and Schultze’s transfer agent will need to act together to facilitate
this request. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares
or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $100 and the broker would
determine whether or not to pass this cost on to the redeeming holder. It is Schultze’s understanding that stockholders should
generally allot at least two weeks to obtain physical certificates from the transfer agent. Schultze does not have any control
over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. Such
stockholders will have less time to make their investment decision than those stockholders that deliver their shares through the
DWAC system. Stockholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering
their shares before exercising their redemption rights and thus will be unable to redeem their shares.
Certificates that have
not been tendered in accordance with these procedures prior to the vote for the Charter Amendment will not be redeemed for a pro
rata portion of the funds held in the trust account. In the event that a public stockholder tenders its shares and decides
prior to the vote at the special meeting that it does not want to redeem its shares, the stockholder may withdraw the tender. If
you delivered your shares for redemption to our transfer agent and decide prior to the vote at the special meeting not to redeem
your shares, you may request that our transfer agent return the shares (physically or electronically). You may make such request
by contacting our transfer agent at the address listed above. In the event that a public stockholder tenders shares and the Charter
Amendment is not approved or is abandoned, these shares will not be redeemed and the physical certificates representing these shares
will be returned to the stockholder promptly following the determination that the Charter Amendment will not be approved or will
be abandoned. Schultze anticipates that a public stockholder who tenders shares for redemption in connection with the vote to approve
the Charter Amendment would receive payment of the redemption price for such shares soon after the completion of the Charter Amendment.
The transfer agent will hold the certificates of public stockholders that make the election until such shares are redeemed for
cash or returned to such stockholders.
If properly demanded,
Schultze will redeem each public share for a pro rata portion of the funds available in the trust account, including any
interest earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes
payable, calculated as of two days prior to the filing of the amendment to the charter. As of June 30, 2020, this would amount
to approximately $10.21 per share. The closing price of Schultze’s common stock on [●], 2020 was $[●]. Accordingly,
if the market price were to remain the same until the date of the special meeting, exercising redemption rights would result in
a public stockholder receiving $[●] more for each share than if such stockholder sold the shares in the open market.
If you exercise your
redemption rights, you will be exchanging your shares of Schultze’s common stock for cash and will no longer own the shares.
You will be entitled to receive cash for these shares only if you properly demand redemption and tender your stock certificate(s)
to Schultze’s transfer agent at least two business days prior to the special meeting. If the Charter Amendment is not approved
or if it is abandoned, these shares will be returned promptly following the special meeting as described above.
Possible Claims Against and Impairment of the Trust Account
To protect amounts
held in the trust account, our sponsor has agreed that it will be liable to ensure that the proceeds in the trust account are not
reduced below $10.00 per share by the claims of target businesses or claims of vendors or other entities that are owed money by
us for services rendered or contracted for or products sold to us, but we cannot assure you that our sponsor will be able to satisfy
its indemnification obligations if it is required to do so. Additionally, the agreement entered into by our sponsor specifically
provides for two exceptions to the indemnity it has given: it will have no liability (1) as to any claimed amounts owed to a target
business or vendor or other entity who has executed an agreement with us waiving any right, title, interest or claim of any kind
they may have in or to any monies held in the trust account, or (2) as to any claims for indemnification by the underwriters of
the IPO against certain liabilities, including liabilities under the Securities Act. We have not independently verified whether
our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets are Schultze’s
securities. We have not asked our sponsor to reserve for such indemnification obligations. Therefore, we cannot assure you that
our sponsor would be able to satisfy those obligations. As a result, if we liquidate, the per-share distribution from the trust
account could be less than $10.00 due to claims or potential claims of creditors. We will distribute to all of our public stockholders,
in proportion to their respective equity interests, an aggregate amount then on deposit in the trust account, including any interest
earned on the funds held in the trust account net of interest that may be used by us to pay our franchise and income taxes payable.
In the event that the
proceeds in the trust account are reduced below $10.00 per public share and our sponsor asserts that it is unable to satisfy its
obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine
whether to take legal action against our sponsor to enforce such indemnification obligations. While we currently expect that our
independent directors would take legal action on our behalf against our sponsor to enforce such indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular
instance. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust
account available for distribution to our public stockholders may be reduced below $10.00 per share.
Required Vote
Approval of the Charter
Amendment proposal requires the affirmative vote of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s
common stock entitled to vote thereon at the special meeting. If the Charter Amendment proposal is not approved and Schultze is
unable to complete a business combination on or before September 30, 2020, it will be required by its charter to (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,
redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit
in the trust account, including any interest earned on the funds held in the trust account net of interest that may be used by
us to pay our franchise and income taxes payable and $150,000 for any dissolution or liquidation related expenses, as applicable,
divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and
(iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and the
Board, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for
claims of creditors and the requirements of other applicable law.
All of Schultze’s
directors, executive officers and their affiliates are expected to vote any shares of Schultze’s common stock owned by them
in favor of the Charter Amendment. On the record date, directors and executive officers of Schultze and their affiliates beneficially
owned and were entitled to vote 3,250,000 shares of Schultze’s common stock representing approximately 20% of Schultze’s
issued and outstanding common stock.
In addition, Schultze’s
directors, executive officers and their affiliates may choose to buy public shares in the open market and/or through negotiated
private purchases. In the event that purchases do occur, the purchasers may seek to purchase shares from stockholders who would
otherwise have voted against the Charter Amendment proposal and elected to redeem their shares for a portion of the trust account.
Any shares of Schultze’s common stock held by affiliates will be voted in favor of the Charter Amendment proposal.
Interests of Schultze’s Directors and Officers
When you consider the
recommendation of the Board, you should keep in mind that Schultze’s executive officers and members of the Board have interests
that may be different from, or in addition to, your interests as a stockholder. These interests include, among other things:
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If the Charter Amendment is not approved and we do not consummate a business combination by September
30, 2020, in accordance with our charter, the 3,250,000 shares of Schultze’s common stock held by Schultze’s officers,
directors and their affiliates, which were acquired prior to the IPO for an aggregate purchase price of approximately $25,000,
will be worthless (as the holders have waived liquidation rights with respect to such shares), as will the 4,150,000 private placement
warrants that were acquired simultaneously with the IPO by our sponsor for an aggregate purchase price of $4,150,000, which will
expire. Such common stock and warrants had an aggregate market value of approximately $[●] based on the last sale price of
Schultze’s common stock and warrants of $[●] and $[●], respectively, on Nasdaq on [●], 2020;
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In connection with the IPO, our sponsor agreed that it will be liable under certain circumstances
to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or vendors or other entities
that are owed money by Schultze for services rendered, contracted for or products sold to Schultze;
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All rights specified in Schultze’s charter relating to the right of officers and directors
to be indemnified by Schultze, and of Schultze’s officers and directors to be exculpated from monetary liability with respect
to prior acts or omissions, will continue after a business combination. If the Business Combination (or another business combination)
is not approved and Schultze liquidates, Schultze will not be able to perform its obligations to its officers and directors under
those provisions;
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None of Schultze’s executive officers or directors has received any cash compensation for
services rendered to Schultze. All of the current members of the Board are expected to continue to serve as directors at least
through the date of the special meeting and may continue to serve following the Business Combination (or any other potential business
combination) and receive compensation thereafter;
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Schultze’s officers, directors, initial stockholders and their affiliates are entitled to
reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Schultze’s behalf, such
as identifying and investigating possible business targets and business combinations. These individuals have negotiated the repayment
of any such expenses upon completion of Schultze’s initial business combination. However, if Schultze fails to obtain the
Extension and consummate a business combination, they will not have any claim against the trust account for reimbursement. Accordingly,
Schultze will most likely not be able to reimburse these expenses if the proposed business combination is not completed; and
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Schultze has entered into an agreement with our sponsor, pursuant to which Schultze pays up to
$10,000 per month for general and administrative services, including office space, utilities and administrative support. Upon the
earlier of completion of a business combination or liquidation, Schultze will cease paying these monthly fees. Accordingly, our
sponsor may receive payments in excess of the 18 payments originally contemplated, if the Charter Amendment is implemented.
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The Board’s Reasons for the Charter Amendment Proposal
and Its Recommendation
As discussed below,
after careful consideration of all relevant factors, the Board has determined that the Charter Amendment proposal is fair to, and
in the best interests of, Schultze and its stockholders. The Board has approved and declared advisable adoption of the Charter
Amendment proposal, and recommends that you vote “FOR” such adoption. The Board expresses no opinion as to whether
you should redeem your public shares.
We are a blank check
company formed pursuant to the laws of the State of Delaware on June 11, 2018 for the purpose of entering into a merger, stock
exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or
more businesses or entities. On December 13, 2018, we consummated the IPO of 13,000,000 units, with each unit consisting of one
share of common stock and one warrant. Each warrant entitles the holder to purchase one share of common stock at a price of $11.50
per share. The units in the IPO were sold at an offering price of $10.00 per unit, generating total gross proceeds of $130,000,000.
Simultaneously with the closing of the IPO, we consummated the private placement to our sponsor of 4,150,000 private placement
warrants at a price of $1.00 per private placement warrant, generating gross proceeds of $4,150,000.
Schultze’s charter
provides that Schultze has until September 30, 2020 to consummate a business combination. The proposed Business Combination with
Clever Leaves qualifies as an initial business combination under Schultze’s charter, but Schultze believes it may not be
able to complete the Business Combination by September 30, 2020, including as a result of delays due to the coronavirus (COVID-19)
pandemic. The Charter Amendment is essential to allowing Schultze more time to obtain approval for the Business Combination at
a special meeting of its stockholders and consummate the Business Combination prior to the Extended Date. Approval of the Charter
Amendment is a condition to the implementation of the Extension. Schultze believes that, given Schultze’s expenditure of
time, effort and money on the proposed Business Combination with Clever Leaves, circumstances warrant providing public stockholders
an opportunity to consider the proposed Business Combination. The affirmative vote of the holders of at least sixty-five percent
(65%) of all then outstanding shares of Schultze’s common stock is required to extend Schultze’s corporate existence,
except in connection with, and effective upon consummation of, a business combination. Additionally, Schultze’s IPO prospectus
and charter provide for all public stockholders to have an opportunity to redeem their public shares in the case that Schultze’s
corporate existence is extended as described above. Because Schultze continues to believe that a business combination would be
in the best interests of Schultze’s stockholders, and because Schultze believes it may not be able to conclude a business
combination within the permitted time period, Schultze has determined to seek stockholder approval to extend the date by which
Schultze has to complete a business combination beyond September 30, 2020 to the Extended Date.
Schultze is not asking
you to vote on the Business Combination or any other business combination at this time. If the Extension is implemented and you
do not elect to redeem your public shares, you will retain the right to vote on the Business Combination (or any other proposed
business combination) when it is submitted to stockholders and the right to redeem your public shares for a pro rata portion
of the trust account in the event such business combination is approved and completed or Schultze has not consummated a business
combination by the Extended Date.
The affirmative vote
of the holders of at least sixty-five percent (65%) of all then outstanding shares of Schultze’s common stock is required
to effect an amendment to Schultze’s charter that would extend its corporate existence beyond September 30, 2020, except
in connection with, and effective upon consummation of, a business combination. Additionally, Schultze’s charter requires
that all public stockholders have an opportunity to redeem their public shares in the case that Schultze’s corporate existence
is extended as described above. We believe that these charter provisions were included to protect Schultze stockholders from having
to sustain their investments for an unreasonably long period if Schultze does not consummate a suitable business combination in
the timeframe contemplated by the charter. We also believe, however, that given Schultze’s expenditure of time, effort and
money on the potential Business Combination with Clever Leaves, circumstances warrant providing those who would like to consider
whether the proposed Business Combination is an attractive investment with an opportunity to consider such transaction, inasmuch
as Schultze is also affording stockholders who wish to redeem their public shares the opportunity to do so, as required under its
charter. Accordingly, the Extension is consistent with Schultze’s charter and IPO prospectus.
After careful consideration
of all relevant factors, the Board determined that the Charter Amendment is fair to and in the best interests of Schultze and its
stockholders.
Recommendation of the Board
The Board recommends
that you vote “FOR” the Charter Amendment proposal. The Board expresses no opinion as to whether you should redeem
your public shares.
THE
ADJOURNMENT PROPOSAL
The Adjournment Proposal,
if adopted, will request the chairman of the special meeting (who has agreed to act accordingly) to adjourn the special meeting
to a later date or dates to permit further solicitation of proxies. The Adjournment Proposal will only be presented to our stockholders
in the event, based on the tabulated votes, there are not sufficient votes at the time of the special meeting to approve the Charter
Amendment proposal. If the Adjournment Proposal is not approved by our stockholders, the chairman of the special meeting will not
exercise his or her ability to adjourn the special meeting to a later date (which he or she would otherwise have under the charter)
in the event, based on the tabulated votes, there are not sufficient votes at the time of the special meeting to approve the Charter
Amendment proposal.
Required Vote
If
a majority of the shares of Schultze’s common stock entitled to vote thereon and voted (in person or by proxy) at the special
meeting vote for the Adjournment Proposal, the chairman of the special meeting will exercise his or her power to adjourn the special
meeting as set out above.
All
of Schultze’s directors, executive officers and their affiliates are expected to vote any shares owned by them in favor of
the Adjournment Proposal. On the record date, directors and executive officers of Schultze and their affiliates beneficially owned
and were entitled to vote 3,250,000 shares of Schultze’s common stock representing approximately 20% of Schultze’s
issued and outstanding shares of common stock.
Recommendation of the Board
The Board recommends
that you vote “FOR” the Adjournment Proposal.