You are cordially invited
to attend the special meeting, which we refer to as the “Special Meeting”, of stockholders of Megalith Financial Acquisition
Corp., which we refer to as “we”, “us”, “our”, “Megalith” or the “Company”,
to be held at [●] a.m. Eastern Time on [●], 2020. The formal meeting notice and proxy statement for the Special Meeting
are attached.
The Special Meeting
will be a completely virtual meeting of stockholders, which will be conducted via live webcast. You will be able to attend the
Special Meeting online, vote and submit your questions during the Special Meeting by visiting [●]. We are pleased to utilize
the virtual shareholder meeting technology to (i) provide ready access and cost savings for our shareholders and the company,
and (ii) to promote social distancing pursuant to guidance provided by the Center for Disease Control and the U.S. Securities
and Exchange Commission due to the novel Coronavirus. The virtual meeting format allows attendance from any location in the world.
Even if you are planning
on attending the Special Meeting online, please promptly submit your proxy vote by telephone, or, if you received a printed form
of proxy in the mail, by completing, dating, signing and returning the enclosed proxy, so your shares will be represented at the
Special Meeting. Instructions on voting your shares are on the proxy materials you received for the Special Meeting. Even
if you plan to attend the Special Meeting in person online, it is strongly recommended you complete and return your proxy card
before the Special Meeting date, to ensure that your shares will be represented at the Special Meeting if you are unable to attend.
The accompanying proxy
statement, which we refer to as the “Proxy Statement”, is dated [●], 2020, and is first being mailed to stockholders
of the Company on or about [●], 2020. The purpose of the Special Meeting is solely to consider and vote upon the following
proposals:
Each of the Proposals
is more fully described in the accompanying Proxy Statement.
The purpose of the
Extension Amendment Proposal and Trust Amendment Proposal is to allow the Company more time to complete its initial business combination.
While we are currently in discussions regarding various business combination opportunities, our board of directors (the “Board”)
currently believes that there will not be sufficient time before May 28, 2020 to complete a business combination. Accordingly,
the Board believes that in order to be able to consummate an initial business combination, we will need to obtain the Extension.
Therefore, the Board has determined that it is in the best interests of our stockholders to extend the date that the Company has
to consummate a business combination to the Extended Date in order that our stockholders have the opportunity to participate in
our future investment. In the event that the Company enters into a definitive agreement for an initial business combination prior
to the Special Meeting, the Company will issue a press release and file a Form 8-K with the Securities and Exchange Commission
announcing the proposed initial business combination.
Holders (“public
stockholders”) of shares of our Class A common stock (“public shares”) issued in our initial public offering
(“IPO”) may elect (the “Election”) to redeem their public shares for a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account
and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, regardless of whether such public shareholder votes “FOR”
or “AGAINST” the Extension Amendment Proposal. If the Extension is approved and consummated, the remaining holders
of public shares will retain their right to redeem their public shares when the proposed initial business combination is submitted
to shareholders, subject to any limitations set forth in our charter. In addition, public stockholders who do not make the Election
would be entitled to have their public shares redeemed for cash if the Company has not completed an initial business combination
by the Extended Date.
Based upon the current
amount in the Trust Account, the Company anticipates that the per-share price at which public shares will be redeemed from cash
held in the Trust Account will be approximately $[●] at the time of the Special Meeting. The closing price of the Company’s
Class A common Stock on [●], 2020 was $[●]. The Company cannot assure stockholders that they will be able to sell their
shares of the Company’s Class A common Stock in the open market, even if the market price per share is higher than the redemption
price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares.
If the Extension is
not approved and we do not consummate an initial business combination by May 28, 2020, in accordance with our charter, we will
cease all operations except for the purpose of winding up and, as promptly as reasonably possible but not more than ten business
days thereafter, redeem all the outstanding public shares with the aggregate amount then on deposit in the Trust Account.
The affirmative vote
of at least 65% of the Company’s outstanding shares of the Company’s Class A common stock and Class B common stock
(collectively, the “Common Stock”), voting as a single class, on the record date will be required to approve the Extension
Amendment Proposal and the Trust Amendment Proposal. Notwithstanding stockholder approval of the Extension Amendment Proposal,
our Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by
our stockholders. The affirmative vote of a plurality of the votes cast by the stockholders present in person online or represented
by proxy at the Special Meeting and entitled to vote on the Director Proposal at the Special Meeting is required to elect each
of the two (2) nominees as Class I directors. The affirmative vote of the majority of the votes cast by stockholders present
in person online or represented by proxy at the Special Meeting and entitled to vote on the Adjournment Proposal at the Special
Meeting is required to approve the Adjournment Proposal.
Our Board has fixed
the close of business on [●], 2020 as the date for determining the Company stockholders entitled to receive notice of and
vote at the Special Meeting and any adjournment thereof. Only holders of record of the Common Stock on that date are entitled to
have their votes counted at the Special Meeting or any adjournment thereof.
Whether or not you
plan to attend the Special Meeting, we urge you to read this material carefully and vote your shares.
PROXY STATEMENT
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON [●], 2020
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 annexes to this Proxy Statement and our Annual Report on Form 10-K
for the year ended December 31, 2019.
Why am I receiving this Proxy Statement?
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This Proxy Statement and the accompanying
materials are being sent to you in connection with the solicitation of proxies by the board of directors (the “Board”)
of Megalith Financial Acquisition Corp. (the “Company”), for use at the special meeting of stockholders (the “Special
Meeting”) to be held virtually on [●], 2020, 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.
We are a blank check company formed in
Delaware on November 13, 2017, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more businesses (“initial business combination”). On August
28, 2018, we consummated our initial public offering of 15,000,000 units (“IPO”), from which we derived gross proceeds
of $150,000,000. Simultaneously with the consummation of the IPO, the Company consummated a private placement of an aggregate of
6,560,000 warrants generating gross proceeds of $6,560,000. On September 21, 2018, the underwriters of the IPO exercised their
over-allotment option in part and purchased an additional 1,928,889 units generating additional gross proceeds of $19,288,890.
On September 21, 2018, in connection with the underwriters’ partial exercise of the over-allotment option, the Company consummated
a private placement of an additional 385,778 private placement warrants generating gross proceeds of $385,778. A total of $170,981,779
was placed in the Trust Account. Like most blank check companies, our amended and restated certificate of incorporation (“charter”)
provides for the return of our IPO proceeds held in trust to the holders (“public stockholders”) of shares of Class
A common stock sold in our IPO (“public shares”) if there is no qualifying business combination(s) consummated on or
before a certain date (in our case within 21 months from the closing of the IPO, which date is May 28, 2020). Our Board believes
that it is in the best interests of the stockholders to continue our existence until the Extended Date in order to allow us more
time to complete our initial business combination. In addition, we are proposing to amend the Investment Management Trust Agreement,
dated August 23, 2018, (the “Trust Agreement”) by and between the Company and Continental Stock Transfer & Trust
Company (the “Transfer Agent” or “Continental”) to extend the date on which the trust account established
in connection with the IPO (the “Trust Account”) must be liquidated if the Company has not completed an initial business
combination by a certain date. Finally, we are proposing the election of two directors to the Board to serve as Class I directors
of the Company.
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What is being voted on?
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You are being asked to vote on:
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● a
proposal to extend the date by which the Company must consummate an initial business combination (the “Extension”)
from within 21 months from the closing of the Company’s IPO, which is May 28, 2020, to August 28, 2020 (or November 30, 2020
if the Company has executed a definitive agreement for a business combination by August 28, 2020) by amending the Company’s
charter in the form set forth in Annex A (the “Extension Amendment Proposal”);
● a proposal
to amend the Trust Agreement to extend the date on which the Trust Account must be liquidated if the Company has not completed
an initial business combination within 21 months of the closing of the Company’s IPO, which is May 28, 2020, to August 28,
2020 (or November 30, 2020 if the Company has executed a definitive agreement for an initial business combination by August 28,
2020) by amending the Trust Agreement in the form set forth in Annex B (the “Trust Amendment Proposal”);
● a proposal
to elect each of Messrs. Raj Date and Eric Frank as Class I directors of the Company (the “Director Proposal”);
and
● a proposal 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 insufficient votes to approve either the Extension Amendment Proposal or the Trust Amendment Proposal (the “Adjournment Proposal” and, together with the Extension Proposal, the Trust Amendment Proposal and the Director Proposal, the “Proposals”).
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The Extension Amendment Proposal and the Trust Amendment Proposal are essential to the overall implementation of our Board’s plan to extend the date that we have to complete a business combination. Approval of the Extension Amendment Proposal and the Trust Amendment Proposal are both a condition to the implementation of the Extension.
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Why is the Company proposing the Extension Amendment Proposal?
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Our charter provides for the return of our IPO proceeds held in the Trust Account to the public stockholders if there is no qualifying business combination(s) consummated with 21 months of the closing of the IPO, which date is May 28, 2020. As explained below, we will not be able to complete an initial business combination by that date and therefore, we are asking for an extension of this timeframe. Accordingly, our charter would be amended in the form attached as Annex A to extend the date by which we must consummate an initial business combination by May 28, 2020, to August 28, 2020 (or November 30, 2020 if the Company has executed a definitive agreement for an initial business combination by August 28, 2020).
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While we are currently in discussions regarding business combination opportunities, we have not yet executed a definitive agreement for an initial business combination. We currently anticipate entering into such an agreement with one of our prospective targets but do not expect to be able to consummate such an initial business combination by May 28, 2020. Because we may not be able to complete an initial business combination within the permitted time period, the Board has determined to seek stockholder approval to extend the date by which we must complete an initial business combination.
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You are not being asked to vote on a
proposed business combination at this time. If the Extension is implemented and you do not elect to redeem your public shares,
provided that you are a stockholder on the record date for a meeting to consider a business combination, you will retain the right
to vote on a proposed business combination when it is submitted to stockholders and the right to redeem your public shares for
cash in the event a business combination is approved and completed or we have not consummated a business combination by the Extended
Date.
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Public stockholders
may elect (the “Election”) to redeem their public shares for a per-share price (“the “Per-Share Redemption
Price”), payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned
on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding public shares, regardless of whether such
public shareholder votes “FOR” or “AGAINST” the Extension Amendment Proposal.
If the Extension Amendment Proposal
is approved and the Extension is completed, we will, pursuant to the Trust Agreement, remove from the Trust Account an amount
(the “Withdrawal Amount”) equal to the number of public shares properly redeemed in connection with the stockholder
vote on the Extension Amendment Proposal multiplied by the Per-Share Redemption Price and retain the remainder of the funds in
the Trust Account for our use in connection with consummating an initial business combination on or before the Extended Date.
We will not proceed with the Extension if redemptions of our public shares cause us to have less than $5,000,001 of net tangible
assets (which would occur if there are redemptions or repurchases of more than 16,450,101 of our public shares) following the
completion of the Extension.
If the Extension 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. We cannot predict the amount that will remain in the Trust Account following
the completion of the Extension and the amount remaining in the Trust Account may be only a small fraction of the approximately
$176,789,033.54 that was in the Trust Account as of April 22, 2020. In such event, we will need to obtain additional funds to complete
an initial business combination, and there can be no assurance that such funds will be available on terms acceptable to the parties
or at all.
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Why should I vote “FOR” the Extension Amendment Proposal?
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Our Board believes stockholders should
have an opportunity to evaluate an initial business combination if the Company is able to successfully negotiate and enter into
a definitive agreement with respect to such a transaction. Given our expenditure of time, effort and money on the potential initial
business combinations with the targets we have identified, we believe circumstances warrant providing those who would like to consider
whether a potential initial business combination with one or more of such targets is an attractive investment with an opportunity
to consider such transaction, inasmuch as we are also affording shareholders who wish to redeem their public shares the opportunity
to do so, as required under our charter.
Accordingly, the Board is proposing the
Extension Amendment Proposal to extend the date by which we must consummate an initial business combination from within 21 months
of the closing of our IPO, which date is May 28, 2020, to August 28, 2020 (or November 30, 2020 if the Company has executed a definitive
agreement for a business combination by August 28, 2020). The Extension would give the Company the opportunity to complete an initial
business combination.
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In connection with the stockholder vote on the Extension Amendment Proposal, public stockholders may elect to redeem all of their public shares for the Per-Share Redemption Price, subject to the limitations set forth in our charter, regardless of whether such public shareholder votes “FOR” or “AGAINST” the Extension Amendment Proposal. If the Extension is approved and consummated, the remaining holders of public shares will retain their right to redeem their public shares when the proposed initial business combination is submitted to shareholders, subject to any limitations set forth in our charter. In addition, public stockholders who do not make the Election would be entitled to have their public shares redeemed for cash if the Company has not completed an initial business combination by the Extended Date.
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Our Board recommends that you vote “FOR” the Extension Amendment Proposal.
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Why is the Company proposing the Trust Amendment Proposal?
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The Trust Agreement provides the Trust
Account must be liquidated if the Company has not completed an initial business combination within 21 months of the closing of
the IPO, which date is May 28, 2020. Pursuant to the Trust Amendment Proposal, the Trust Agreement would be amended in the form
set forth in Annex B to extend the date by which the Company must liquidate the Trust Account from May 28, 2020, to August
28, 2020 (or November 30, 2020 if the Company has executed a definitive agreement for an initial business combination by August
28, 2020). The approval of the Trust Amendment Proposal is a condition to the completion of the Extension.
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Why should I vote “FOR” the Trust Amendment Proposal?
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As discussed above, our Board believes
that, given our expenditure of time, effort and money on the potential business combinations with the targets we have identified,
circumstances warrant providing those who would like to consider whether a potential initial business combination with one or more
of such targets is an attractive investment with an opportunity to consider such transaction. The implementation of such Extension
requires the approval of the Extension Amendment Proposal and the Trust Amendment Proposal.
Liquidation of the Trust Account is a fundamental
obligation of the Company to the public stockholders and we are not proposing and will not propose to change that obligation. If
holders of public shares do not elect to redeem their public shares in connection with the Extension Amendment Proposal, such holders
will retain redemption rights in connection with any initial business combination we propose. Assuming the Extension Amendment
Proposal and the Trust Amendment Proposal are approved and the Extension is completed, we will have until the Extended Date to
complete an initial business combination.
Our Board recommends that you vote “FOR”
the Trust Amendment Proposal.
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What are the conditions to completing the Extension?
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In order to
complete the Extension, both the Extension Amendment Proposal and the Trust Amendment Proposal must be approved by the
stockholders of the Company. In addition, we will not proceed with the Extension if redemptions of our public
shares cause us to have less than $5,000,001 of net tangible assets (which would occur if there are redemptions or
repurchases of more than 16,450,101 of our public shares) following the completion of the Extension.
Notwithstanding shareholder approval of the Extension Amendment Proposal and the Trust Amendment Proposal, our
Board may decide to abandon the Extension before it is implemented and without any further action by our
stockholders.
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How does the Board recommend that I vote on the Director Proposal?
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The Board recommends that you vote “FOR” each of Messrs. Raj Date and Eric Frank as Class I directors of the Company.
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Why should I vote “FOR” the Adjournment Proposal?
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In order to complete the Extension, shareholders must approve the Extension Amendment Proposal and the Trust Amendment Proposal. The Adjournment Proposal, if adopted by shareholders, will enable the Company to adjourn the Special Meeting to a later date or dates to permit further solicitation of stockholders to approve the Extension Amendment Proposal and the Trust Amendment Proposal to enable the Company to complete the Extension.
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What vote is required to adopt the Extension Amendment Proposal?
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Pursuant to our charter, approval of the Extension Amendment Proposal will require the affirmative vote of at least 65% of the Company’s outstanding shares of the Company’s Class A common stock and Class B common stock (collectively, the “Common Stock”), voting as a single class, on the record date. Notwithstanding stockholder approval of the Extension Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment at any time without any further action by our stockholders.
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What vote is required to adopt the Trust Amendment Proposal?
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Pursuant to our charter, approval of the Extension Amendment Proposal requires the affirmative vote of at least 65% of the Company’s outstanding shares of the Common Stock, voting as a single class, on the record date.
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What vote is required to adopt the Director Proposal?
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Pursuant to our charter and bylaws, the affirmative vote of a plurality of the votes cast by the stockholders present in person online or represented by proxy at the Special Meeting and entitled to vote on the Director Proposal at the Special Meeting is required to elect each of the two (2) nominees as Class I directors.
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What vote is required to adopt the Adjournment Proposal?
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Pursuant to our bylaws, approval of the Adjournment Proposal requires the affirmative vote of the majority of the votes cast by stockholders present in person online or represented by proxy at the Special Meeting and entitled to vote on the Adjournment Proposal at the Special Meeting.
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How do the Company insiders intend to vote their shares?
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All of MFA
Investor Holdings LLC (our “Sponsor”), directors, officers and their respective affiliates are expected to vote any
Common Stock over which they have voting control (including any public shares owned by them) in favor of the Extension Amendment
Proposal, the Trust Amendment Proposal and the Adjournment Proposal and in favor of each nominee for Class I director. Currently,
our Sponsor, directors, and officers own approximately 20% of our issued and outstanding shares of Common Stock, including all
of the Class B common Stock (the “Founder Shares”). Our Sponsor, directors, officers and their affiliates may choose
to buy, or have already purchased, public shares in the open market and/or through privately negotiated purchases. In
the event that purchases do occur, the purchasers may seek to purchase shares from stockholders who would otherwise have voted
against the Extension Amendment Proposal or the Trust Amendment Proposal. Any public shares held by or subsequently
purchased by affiliates may be voted in favor of the Extension Amendment Proposal and the Trust Amendment Proposal.
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What happens if the Extension Amendment Proposal or the Trust Amendment Proposal is not approved?
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Unless the Extension Amendment Proposal
and the Trust Amendment Proposal are approved, the Extension will not be completed.
Our charter provides that we will have
until May 28, 2020 to complete our initial business combination. If we are unable to complete our initial business combination
within such 21-month period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem the public shares, payable in cash, equal to the Per-Share Redemption
Price; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with
respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the 21-month
time period.
Our Sponsor, directors and officers have
entered into a letter agreement with us, dated August 28, 2018, pursuant to which they have waived their rights to liquidating
distributions from the Trust Account with respect to any Founder Shares held by them if we fail to complete our initial business
combination before May 28, 2020. However, if our Sponsor, directors or officers acquire public shares in our IPO, they will be
entitled to liquidating distributions from the Trust Account with respect to such public shares if we fail to complete our initial
business combination within the allotted 21-month time period.
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If the Extension Amendment Proposal and the Trust Amendment Proposal are approved, what happens next?
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If the Extension Amendment Proposal and
the Trust Amendment Proposal are approved and the Extension is completed, the Company will have until the Extended Date to complete
its initial business combination.
If the Extension Amendment Proposal and
the Trust Amendment Proposal are approved, we will, pursuant to the Trust Agreement, remove the Withdrawal Amount from the Trust
Account, deliver to the holders that have made the Election their portions of the Withdrawal Amount and retain the remainder of
the funds in the Trust Account for our use in connection with consummating an initial business combination on or before the Extended
Date. We will not implement the Extension if we would not have at least $5,000,001 of net tangible assets following approval of
the Extension Amendment Proposal, after taking into account the Election.
If the Extension Amendment Proposal and the Trust Amendment
Proposal are 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, which will also increase the percentage
interest in the Company’s Common Stock held by the Company’s Sponsor, directors and officers and their respective affiliates.
We cannot predict the amount that will remain in the Trust Account if the Extension Amendment Proposal is approved and the amount
remaining in the Trust Account may be only a small fraction of the approximately $176,789,033.54 that was in the Trust Account
as of April 22, 2020. In such event, we may need to obtain additional funds to complete an initial business combination, and there
can be no assurance that such funds will be available on terms acceptable to the parties or at all.
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Notwithstanding stockholder approval of the Extension Amendment Proposal and the Trust Amendment Proposal, our Board will retain the right to abandon and not implement the Extension Amendment and the Trust Amendment at any time without any further action by our stockholders.
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What happens to the Company warrants if the Extension Amendment Proposal and the Trust Amendment Proposal are approved?
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If the Extension Amendment Proposal and the Trust Amendment Proposal are approved and the Extension is completed, we will continue to attempt to consummate an initial business combination until the Extended Date. The public warrants will remain outstanding in accordance with their terms.
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Who can vote at the Special Meeting?
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Only holders of
record of our Common Stock at the close of business on [●], 2020 (the “record date”), are entitled to have
their vote counted at the Special Meeting and any adjournments or postponements thereof. On this record date, [●]
shares of our Common Stock were outstanding and entitled to vote.
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Stockholder of Record: Shares Registered
in Your Name. If your shares are registered directly in your name with our transfer agent, Continental Stock Transfer
& Trust Company, then you are a stockholder of record and these proxy materials, including a proxy card, were sent to you directly
by the Company. As a stockholder of record, you may vote in person online at the Special Meeting or vote by proxy. Whether or not
you plan to attend the Special Meeting in person online, we urge you to fill out and return the enclosed proxy card to ensure your
vote is counted.
Beneficial Owner: Shares Registered
in the Name of a Broker or Bank. If your shares are held in an account at a brokerage firm, bank, broker-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. The organization holding your account is considered the stockholder of record
for purposes of voting at the Special Meeting. As a beneficial owner, you have the right to direct your broker or other agent on
how to vote the shares in your account. Those instructions are contained in a “voting instruction form.” You are also
invited to attend the Special Meeting virtually. However, since you are not the shareholder 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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What
is a quorum requirement?
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A
quorum is necessary to hold a valid meeting of stockholders. The presence, in person
or by proxy, at the Special Meeting by holders of shares of outstanding capital stock
of the Company representing a majority of the voting power of all outstanding shares
of capital stock of the Company entitled to vote at this Special Meeting constitutes
a quorum for the transaction of business at the Special Meeting.
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 online at the Special Meeting. Abstentions will be counted towards
the quorum requirement. In the absence of a quorum, the chairman of the Special Meeting has power to adjourn the Special
Meeting in accordance with our Bylaws. As of the record date for the Special Meeting, [●] shares of our Common
Stock would be required to achieve a quorum.
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How
do I vote?
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Stockholder
of Record: If you are a stockholder of record, there are two ways to vote:
● In
person online: You may vote in person online at the Special Meeting. The Company will provide instructions during the Special
Meeting.
● By
Mail: You may vote by proxy by filling out the proxy card and sending it back in the envelope provided.
Beneficial
Owner: If you are a beneficial owner of shares held in “street name,” there are two ways to vote:
● In
person online: If you are a beneficial owner of shares held in street name and you wish to vote in person online at the Special
Meeting, you must obtain a legal proxy from the brokerage firm, bank, broker-dealer or other similar organization that holds your
shares. The Company will provide instructions during the Special Meeting.
● By
Mail: You may vote by proxy by filling out the voting instruction form and sending it back in the envelope provided by your
brokerage firm, bank, broker-dealer or other similar organization that holds your shares.
Whether
or not you plan to attend the Special Meeting online, we urge you to vote by proxy to ensure your vote is counted.
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What is the proxy?
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The vote by proxy card enables you to appoint each of Samvir S. Sidhu, our Chief Executive Officer and a director, and A.J. Dunklau, our President, as your representatives at the Special Meeting. By voting by completing and returning the proxy card, you are authorizing these persons to vote your shares at the Special Meeting in accordance with your instructions. This way your shares will be voted whether or not you attend the Special Meeting. Even if you plan to attend the Special Meeting, it is strongly recommended you complete and return your proxy card before the Special Meeting date just in case your plans change.
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How do I change or revoke my vote?
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You may revoke your proxy and change your
vote at any time before the final vote on each Proposal at the Special Meeting. You may vote again on a later date by signing and
returning a new proxy card or voting instruction form with a letter date, or by attending the Special Meeting and voting online
if you are a stockholder of record. However, your attendance at the Special Meeting will not automatically revoke your proxy unless
you vote again at the Special Meeting or specifically request that your prior proxy be revoked by delivering to the Company’s
Secretary at Megalith Financial Acquisition Corp., 535 5th Avenue, 29th Floor, New York, New York 10017 a
written notice of revocation so that it is received by our Secretary prior to the Special Meeting.
Please note, however, that if your shares
are held of record by a brokerage firm, bank or other nominee, you must instruct your broker, bank or other nominee that you wish
to change your vote by following the procedures on the voting instruction form provided to you by the broker, bank or other nominee.
If your shares are held in street name, and you wish to attend the Special Meeting and vote at the Special Meeting, you must have
available at the Special Meeting a legal proxy from the broker, bank or other nominee holding your shares, confirming your beneficial
ownership of the shares and giving you the right to vote your shares.
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How
are votes counted?
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You
may vote “FOR,” “AGAINST,” or “ABSTAIN” on the Extension
Amendment Proposal, the Trust Amendment Proposal, and the Adjournment Proposal. You may
vote “FOR,” “FOR ALL EXECPT,” or “WITHHOLD AUHTHORITY”
on the Director Proposal with respect to the Class I director nominees. If you provide
specific instructions with regard to the Proposals, your shares will be voted as your
instruct on such Proposals.
If
you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may constitute
“broker non-votes.” Broker non-votes occur when brokers or others hold shares in street
name for a beneficial owner that has not provided instructions on how to vote on a particular matter. Matters on which
a broker is not permitted to vote without instructions from the beneficial owner and instructions are not given are referred
to as “non-routine” matters. Each of the Proposals is “non-routine.” In tabulating
the voting result for the Proposals, shares that constitute broker non-votes and abstentions are not considered
votes cast.
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How
do I exercise my redemption rights?
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If
the Extension is implemented, public stockholders may seek to redeem their public shares
for the “Per-Share Redemption Price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds held in
the Trust Account and not previously released to us to pay our franchise and income taxes
(less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding public shares, regardless of whether such public shareholder votes
“FOR” or “AGAINST” the Extension Amendment Proposal.
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To
exercise your redemption rights, you must demand that the Company redeem your public shares. In connection with tendering your shares for redemption, you
must elect either to physically tender your share certificates to Continental, at Continental Stock Transfer & Trust Company,
One State Street Plaza, 30th Floor, New York, New York 10004-1561, Attn: Mark Zimkind, 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.
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 shareholder tenders its shares and decides that it does not
want to redeem its public shares, such shareholder may withdraw the tender. If you delivered your public shares for redemption
to Continental and decide prior to the Special Meeting not to redeem your public 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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Does the Board recommend voting for the approval of the
Extension Amendment Proposal, the Trust Amendment Proposal, the Director Proposal, and the Adjournment Proposal?
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Yes. After careful consideration of the terms and conditions of these proposals, our Board has determined that the Extension Amendment, the Trust Amendment Proposal, the Director Proposal, and, if presented, the Adjournment Proposal are in the best interests of the Company and its stockholders. The Board recommends that our stockholders vote “FOR” the Extension Amendment Proposal, the Trust Amendment Proposal, the Director Proposal, and the Adjournment Proposal.
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What interests do the Company’s Sponsor, directors and officers have in the approval of the proposals?
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Our Sponsor, 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 (i) 4,232,222 Founder Shares (the initial 4,312,500 Founder Shares were purchased for $25,000; however, 80,278 Founder Shares were forfeited by our Sponsor in connection with the partial exercise of the underwriters’ over-allotment option in the IPO), (ii) 5,810,000 Placement Warrants (purchased for approximately $5.8 million), and (iii) 385,778 additional warrants purchased by our Sponsor in connection with the underwriters’ partial exercise of over-allotment option in the IPO, all of which would expire worthless if a business combination is not consummated. See the sections entitled “The Extension Amendment Proposal— Interests of our Sponsor, Directors and Officers” and “The Trust Amendment Proposal — Interests of our Sponsor, Directors and Officers.”
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Do I have appraisal rights if I object to any Proposal?
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Our stockholders do not have appraisal rights in connection with the Extension Amendment Proposal, the Trust Amendment Proposal, or the Director Proposal under the DGCL.
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What do I need to do now?
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We urge you to read carefully and consider the information contained in this Proxy Statement, including the annexes, our Annual Report on Form 10-K for the year ended December 31, 2019, and to consider how the proposals will affect you as our 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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What should I do if I receive more than one set of voting materials?
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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 Company shares.
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Who is paying for this proxy solicitation?
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We will pay for the entire cost of soliciting proxies from our working capital. We have engaged [●] to assist in the solicitation of proxies for the Special Meeting. We have agreed to pay [●] a fee of $[●]. We will also reimburse [●] for reasonable out-of-pocket expenses and will indemnify [●] and its affiliates against certain claims, liabilities, losses, damages and expenses. 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. While the payment of these expenses will reduce the cash available to us to consummate an initial business combination if the Extension is approved, we do not expect such payments to have a material effect on our ability to consummate an initial business combination.
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Who can help answer my questions?
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If you have questions about the proposals or if you need additional copies of the Proxy Statement or the enclosed proxy card you should contact our proxy solicitor, [●], at [●] (toll free) or by email at [●].
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You may also contact us at:
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Megalith Financial Acquisition Corp.
535 5th Ave, 29th
Floor
New York, New York 10017
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You may also obtain additional information about the Company 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
We believe that some
of the information in this Proxy Statement constitutes forward-looking statements. You can identify these statements by forward-looking
words such as “may”, “expect”, “anticipate”, “contemplate”, “believe”,
“estimate”, “intends”, and “continue” or similar words. You should read statements that contain
these words carefully because they:
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discuss future expectations;
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contain projections of future results of operations or financial condition; or
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state other “forward-looking” information.
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We believe it is important
to communicate our expectations to our stockholders. However, there may be events in the future that we are not able to predict
accurately or over which we have no control. The cautionary language discussed in this Proxy Statement provides examples of risks,
uncertainties and events that may cause actual results to differ materially from the expectations described by us in such forward-looking
statements, including, among other things, claims by third parties against the Trust Account, unanticipated delays in the distribution
of the funds from the Trust Account and our ability to finance and consummate a business combination. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of the date of this Proxy Statement.
All forward-looking
statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations,
we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future
events or otherwise.
BACKGROUND
We are a blank check
company incorporated as a Delaware corporation on November 13, 2017 and formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which
we refer to throughout this Proxy Statement as our initial business combination. We have generated no operating revenues to date
and we will not generate operating revenues until we consummate our initial business combination.
Since our IPO, we have
concentrated our search on companies in the financial services industry or businesses providing technological services to the financial
industry, commonly known as fintech businesses. We have employed a pro-active acquisition strategy focused on identifying potential
business combination targets within both the fintech and financial services industries that are fundamentally sound, but where
we believe we can be a catalyst to accelerating growth. Our acquisition strategy seeks to capitalize on the significant financial
services, financial technology, banking, M&A, operational expertise, and contacts of both our management team and our board.
Our management team’s ability to add value from both an operating and a financing perspective has been a key driver of past
performance and we believe will continue to be central to its differentiated acquisition strategy. We believe that the long track
record of our Executive Chairman in leading publicly traded companies, as well as the track records of the other members of our
management team, is a key differentiator for potential combination targets. We also believe that the past experiences of our management
team and board in successfully building and scaling multiple businesses that grew into multi-billion dollar companies is another
key differentiator that will be viewed favorably by potential business combination targets. We believe that our management team
is a unique combination of investors and executive operators that are well positioned to identify acquisition opportunities through
their relationships in the fintech, financial services, and banking industries, with private equity and venture capital firms,
with management teams in the fintech, financial services, and banking industries, and with investment bankers who we believe are
likely to provide us with potential combination targets.
We believe the financial
services industry has experienced significant amount of changes over the last several years as new companies providing technology,
software, and digital platforms have entered the market. According to a report by KPMG, there was over $135 billion invested in
global fintech companies in 2019 alone. Fintech companies exist across many industries within financial services, including
banking technology, payment and financial transaction processing, capital markets, wealth management, insurance, and financial
management systems.
We believe that fintech
companies have proven to be successful with multiple business models and strategic objectives. The objective of fintech companies
can range from improving the efficiency of traditional financial services companies, to introducing new products and creating new
markets, to those focused on disrupting traditional financial services companies with competitive products.
Our management team
believes the financial services industry is evolving at a rapid pace due to the entrance of technology focused service providers,
and we believe that there are attractive opportunities to acquire and merge with either rapidly growing fintech companies, or traditional
financial services companies that are at a strategic inflection point. Among the fintech businesses, we are intent on identifying
companies with disruptive technology that has allowed them to grow quickly and that we believe are positioned to sustain a robust
growth trajectory through the addition of new capital, access to public markets, operational or strategic expertise. Among the
traditional financial services companies, we are seeking combination targets that have new or evolving opportunities to respond
to changes in the market place through the addition of new capital, access to public markets, operational or strategic expertise.
There are currently
21,161,111 shares of Common Stock issued and outstanding, consisting of 16,928,889 shares of Class A common stock and 4,232,222
Class B commons stock, or Founders Shares. Each Founder Share is convertible into one share of Class A common stock. We also issued
warrants to purchase 16,928,889 shares of our Class A common stock as part of the units issued in our IPO. Such warrants are exercisable
for one share of Class A common stock at $11.50 per share and become exercisable 30 days after the completion of an initial business
combination. Such warrants are redeemable at any time after they become exercisable and prior to their expiration, at a price of
$0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $24.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30
trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption and provided
certain other conditions are met. Such warrants will expire five years after the completion of an initial business combination
or earlier upon redemption or liquidation.
Simultaneously
with the consummation of the IPO, our Sponsor and the representative of the underwriters in the IPO, Chardan Capital Markets, LLC
(“Chardan”), purchased an aggregate of 6,560,000 private placement warrants at a price of $1.00 per warrant in a private
placement. 5,810,000 private placement warrants were purchased by our Sponsor and 750,000 private placement warrants were purchased
by Chardan. In connection with the underwriters’ partial exercise of over-allotment option, our Sponsor purchased an additional
385,778 warrants. Each Private Placement Warrant entitles its holder to purchase one share of our Class A common stock at an exercise
price of $11.50 per share. If we do not complete a business combination within the applicable time period, the Placement Warrants
will expire worthless. The Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by
the Sponsor or its permitted transferees. In addition, for as long as the Placement Warrants are held by Chardan or its designees
or affiliates, they may not be exercised after five years from the effective date of the registration statement for the IPO. The
Sponsor, Chardan and the Company’s officers and directors have agreed, subject to limited exceptions, not to transfer, assign
or sell any of their Placement Warrants until 30 days after the completion of an initial business combination.
A total of $170,981,779,
(or $10.10 per unit sold in our IPO) comprised of $164,036,001 of the proceeds from the IPO (including the over-allotment units)
and $6,945,778 of the proceeds of the sale of the Placement Warrants, was placed in the Trust Account maintained by Continental,
invested in U.S. “government securities”, within the meaning of Section 2(a)(16) of the Investment Company Act of 1940,
which we refer to as the “1940 Act”, with a maturity of 180 days or less or in any open ended investment company that
holds itself out as a money market fund selected by us meeting the conditions of Rule 2a-7 of the 1940 Act, until the earlier of:
(i) the consummation of a business combination or (ii) the distribution of the proceeds in the Trust Account as described below.
The amount of cash
held outside the Trust Account was approximately $482,665 at December 31, 2019. In addition, interest income on the funds held
in the Trust Account may be released to us to pay our franchise and income tax obligations. As of April 22, 2020, approximately
$176,789,033.54 was in the Trust Account. The mailing address of the Company’s principal executive office is 535 5th
Ave, 29th Floor, New York, New York 10017.
We are currently in
discussions to complete a business combination that will qualify as an initial business combination under our charter. In the event
that the Company enters into a definitive agreement for a business combination prior to the Special Meeting, we will issue a press
release and file a Form 8-K with the Securities and Exchange Commission announcing the proposed business combination.
You are not being
asked to vote on a proposed business combination at this time. If the Extension is implemented and you do not elect to redeem your
public shares, provided that you are a stockholder on the record date for a meeting to consider a business combination, you will
retain the right to vote on a proposed business combination when it is submitted to stockholders and the right to redeem your public
shares for cash in the event a business combination is approved and completed or we have not consummated a business combination
by the Extended Date.
THE SPECIAL MEETING
We are furnishing this Proxy Statement to
you, as a shareholder of Megalith Acquisition Corp., as part of our solicitation of proxies by our Board for use at our Special
Meeting to be held virtually on [●], 2020, or any adjournment(s) or postponement(s) thereof.
Date, Time, Place and Purpose of the
Special Meeting
The Special Meeting
of the Company’s stockholders will be held at [●] a.m. Eastern Time on [●], 2020 as a virtual meeting. You will
be able to attend, vote your shares, and submit question during the Special Meeting via a live webcast available at [●].
You are cordially invited to attend the Special Meeting, at which shareholders will be asked to consider and vote upon the following
proposals, which are more fully described in this Proxy Statement:
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1.
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The Extension Amendment Proposal;
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2.
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The Trust Amendment Proposal;
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3.
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The Director Election Proposal; and
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4.
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The Adjournment Proposal.
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Record Date, Voting and Quorum
You will be entitled
to vote or direct votes to be cast at the Special Meeting, if you owned Common Stock at the close of business on [●], 2020,
the record date for the Special Meeting.
There are currently
21,161,111 shares of Common Stock issued and outstanding, consisting of 16,928,889 shares of Class A common stock and 4,232,222
Class B commons stock, or Founders Shares. Each Founder Share is convertible into one share of Class A common stock. You will have
one vote per proposal for each share of Common Stock you owned at that time. The Company warrants do not carry voting rights.
The presence, in person
or by proxy, at the Special Meeting by holders of shares of outstanding capital stock of the Company representing a majority of
the voting power of all outstanding shares of capital stock of the Company entitled to vote at this Special Meeting constitutes
a quorum for the transaction of business at the Special Meeting.
Votes Required
Approval of each of
the Extension Amendment Proposal and the Trust Amendment Proposal requires the affirmative vote of at least 65% of the outstanding
shares of Common Stock, voting as a single class, on the record date. Abstentions and “broker non-votes” will have
the same effect as voting “AGAINST” each of the Extension Amendment Proposal and the Trust Amendment Proposal.
You will be entitled to redeem your public shares for cash and
elect to redeem your public shares for a pro rata portion of the funds available in the Trust Account in connection with the Extension
Amendment Proposal.
The affirmative vote
of a plurality of the votes cast by the stockholders present in person online or represented by proxy at the Special Meeting and
entitled to vote on the Director Proposal at the Special Meeting is required to elect each of the two (2) nominees as Class I
directors.
The affirmative vote
of the majority of the votes cast by stockholders present in person online or represented by proxy at the Special Meeting and entitled
to vote on the Adjournment Proposal at the Special Meeting is required to approve the Adjournment Proposal.
Voting
You can vote your shares
at the Special Meeting in person online or by proxy.
You can vote by proxy by having one or more individuals who
will be at the Special Meeting vote your shares for you. These individuals are called “proxies” and using them to cast
your ballot at the Special Meeting is called voting “by proxy.” If you wish to vote by proxy, you must complete the
enclosed form, called a “proxy card,” and mail it in the envelope provided.
If you do the above, you will designate each of Samvir
S. Sidhu, our Chief Executive Officer and a director, and A.J. Dunklau, our President to act as your proxies at the Special
Meeting. One of them will then vote your shares at the Special Meeting in accordance with the instructions you have given them
on the proxy card with respect to the Proposals. Proxies will extend to, and be voted at, any adjournment(s) or postponement(s)
of the Special Meeting.
Alternatively,
you can vote your shares in person online at the Special Meeting. You will be given instructions during the Special Meeting.
A special note for those who plan to attend the Special Meeting
and vote in person online: if your shares are held in the name of a broker, bank or other nominee, you must have available a
statement from your brokerage account or a letter from the person or entity in whose name the shares are registered indicating
that you are the beneficial owner of those shares as of the Record Date. In addition, you will not be able to vote at the Special
Meeting unless you obtain a legal proxy from the record holder of your shares.
Our
Board is asking for your proxy. Giving the Board your proxy means you authorize it to vote your shares at the Special Meeting
in the manner you direct. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on the Extension
Amendment Proposal, the Trust Amendment Proposal, and the Adjournment Proposal. You may vote “FOR,” “FOR ALL
EXECPT,” or “WITHHOLD AUHTHORITY” on the Director Proposal with respect to the Class I director nominees. All
valid proxies received prior to the Special Meeting will be voted. All shares represented by a proxy will be voted, and where
a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in
accordance with the specification so made. If no choice is indicated on the proxy, the shares will be voted “FOR”
the election of each nominee for Class I director, “FOR” the Extension Amendment Proposal, “FOR” the Trust
Amendment Proposal and “FOR” the Adjournment Proposal.
Stockholders
who have questions or need assistance in completing or submitting their proxy cards should contact [●].
Stockholders
who hold their shares in “street name,” meaning the name of a broker or other nominee who is the record holder, must
either direct the record holder of their shares to vote their shares or obtain a proxy or voting instruction form from the record
holder to vote their shares at the Special Meeting.
Revocability of Proxies
Any proxy may be revoked by the person giving it at any time
before the polls close at the Special Meeting. A proxy may be revoked by filing with [●] ([●]) either (i) a written
notice of revocation bearing a date later than the date of such proxy or (ii) a subsequent proxy relating to the same shares,
or (iii) by attending the Special Meeting virtually and voting online.
Simply attending
the Special Meeting will not constitute revocation of your proxy. If your shares are held in the name of a broker or other
nominee who is the record holder, you must follow the instruction of your broker or other nominee to revoke a previously given
proxy.
Solicitation of Proxies; Expenses.
The cost of preparing, assembling, printing and mailing Proxy
Statement and the accompanying form of proxy, and the cost of soliciting proxies relating to the Special Meeting, will be borne
by the Company. Some banks and brokers have customers who beneficially own Common Stock listed of record in the names of nominees. We
intend to request banks and brokers to solicit such customers and will reimburse them for their reasonable out-of-pocket expenses
for such solicitations. The solicitation of proxies by mail may be supplemented by telephone, email and personal solicitation by
officers, directors and regular employees of the Company, but no additional compensation will be paid to such individuals. We have
retained [●] (“[●]”) to assist us in soliciting proxies. If you have questions about how to vote or direct
a vote in respect of your shares, you may contact [●] at [●] (toll free) or by email at [●]. The Company has
agreed to pay [●] a fee of $[●] and expenses, for its services in connection with the Special Meeting.
PROPOSALS TO BE
VOTED ON BY STOCKHOLDERS
THE EXTENSION
AMENDMENT PROPOSAL
The Company is proposing to extend the date by which the Company
must consummate an initial business combination from within 21 months from the closing of the IPO, which is May 28, 2020, to August
28, 2020 (or November 30, 2020 if the Company has executed a definitive agreement for a business combination by August 28, 2020)
by amending the Company’s charter.
The Extension Amendment
Proposal is essential to the overall implementation of the Board’s plan to allow the Company more time to complete a business
combination. Approval of the Extension Amendment Proposal and the Trust Amendment Proposal, which is discussed below, are both
a condition to the implementation of the Extension.
If the Extension Amendment
Proposal is not approved and we have not consummated a business combination by May 28, 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
the public shares at the Per-Share Redemption Price, which redemption will completely extinguish rights of the public stockholders
(including the right to receive further liquidation distributions, if any) and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve
and liquidate, subject in the case of clauses (ii) and (iii) above, to the Company’s obligations under Delaware law to provide
for claims of creditors and other requirements of 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 is attached to this Proxy Statement in Annex A.
Reasons for the Extension Amendment
Proposal
The Company’s
IPO prospectus and the charter provide that the Company must consummate an initial business combination within 21 months of the
Company’s IPO, which date is May 28, 2020. While we are currently in discussions regarding business combination opportunities,
our Board currently believes that there will not be sufficient time before May 28, 2020 to complete an initial business combination.
The Company’s IPO prospectus and charter provide that the affirmative vote of at least 65% of the outstanding shares of
Common Stock, voting as a single class, on the record date is required to extend our corporate existence, except in connection
with, and effective upon, consummation of a business combination. Additionally, our IPO prospectus and charter provide for all
public stockholders to have an opportunity to redeem their public shares in the case our corporate existence is extended as described
above. Because we continue to believe that an initial business combination would be in the best interests of our stockholders,
and because we will not be able to conclude a business combination within the permitted time period, the Board has determined
to seek stockholder approval to extend the date by which we have to complete a business combination beyond May 28, 2020 to the
Extended Date. We intend to hold another stockholder meeting prior to the Extended Date in order to seek stockholder approval
of a proposed initial business combination.
We believe that the
foregoing charter provision was included to protect Company stockholders from having to sustain their investments for an unreasonably
long period if the Company failed to find a suitable business combination in the timeframe contemplated by the charter. We also
believe, however, that given the Company’s expenditure of time, effort and money on finding a business combination, circumstances
warrant providing public stockholders an opportunity to consider a business combination.
If the Extension Amendment Proposal is Not Approved
The approval of both
the Extension Amendment Proposal and the Trust Amendment Proposal, which is discussed below, are essential to the implementation
of our Board’s plan to extend the date by which we must consummate our initial business combination. Therefore, our Board
will abandon and not implement the Extension unless our stockholders approve the Extension Amendment Proposal and the Trust Amendment
Proposal.
If the Extension in
not completed and we have not consummated a business combination by May 28, 2020, we will automatically wind up, dissolve and
liquidate starting on May 28, 2020.
There will be no distribution
from the Trust Account with respect to the Company’s warrants, which will expire worthless in the event we wind up. In the
event of a liquidation, our Sponsor will not receive any monies held in the Trust Account as a result of its ownership of the
Founder Shares or the Placement Warrants.
If the Extension Amendment Proposal Is Approved
If the Extension Amendment
Proposal is approved, the Company will file an amendment to the charter with the Secretary of State of the State of Delaware in
the form set forth in Annex A hereto to extend the time it has to complete a business combination until the Extended
Date. The Company will remain a reporting company under the Exchange Act and its units, Class A common stock, and public warrants
will remain publicly traded. The Company will then continue to work to consummate a business combination by the Extended Date.
Notwithstanding stockholder
approval of the Extension Amendment Proposal and the Trust Amendment Proposal, our Board will retain the right to abandon and
not implement the Extension at any time without any further action by our stockholders.
Approval of the Extension Amendment Proposal will constitute
consent for the Company to (i) remove from the Trust Account the Withdrawal Amount and (ii) deliver to the holders of the redeemed
public shares the their portion of the Withdrawal Amount. The removal of the Withdrawal Amount from the Trust Account will reduce
the amount held in the Trust Account. The Company cannot predict the amount that will remain in the Trust Account if the Extension
Amendment Proposal is approved, and the amount remaining in the Trust Account may be only a small fraction of the approximately
$176,789,033.54 that was in the Trust Account as of April 22, 2020. We will not proceed with the Extension if redemptions or repurchases
of our public shares cause us to have less than $5,000,001 of net tangible assets (which would occur if there are redemptions or
repurchases of more than 16,450,101 of our public shares) following approval of the Extension Amendment Proposal.
If the Extension Amendment
Proposal is approved and the Extension is completed but the Company does not consummate an initial business combination, we will
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter redeem the public shares at the Per-Share Redemption Price, which redemption will completely extinguish rights
of the public stockholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance
with applicable law, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above, to the Company’s obligations
under Delaware law to provide for claims of creditors and other requirements of 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.
You are not being
asked to vote on a proposed initial 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 a proposed initial business combination when it is submitted to
stockholders and the right to redeem your public shares for cash in the event an initial business combination is approved and
completed or we have not consummated an initial business combination by the Extended Date.
The Board’s Reasons for the Extension
Amendment Proposal
Our IPO prospectus
and charter provide that the Company has until May 28, 2020 to complete the purposes of the Company including, but not limited
to, effecting a business combination under its terms. While we are currently in discussions regarding business combination opportunities,
our Board currently believes that there will not be sufficient time before May 28, 2020 to complete a business combination. We
believe that, given the Company’s expenditure of time, effort and money on the potential business combination, circumstances
warrant providing public stockholders an opportunity to consider a business combination. Because we continue to believe that a
business combination would be in the best interests of our stockholders and because we will not be able to conclude a business
combination within the permitted time period, the Board has determined to seek stockholder approval to extend the date by which
we have to complete a business combination beyond May 28, 2020 to the Extended Date.
Interests of our Sponsor, Directors and Officers
When you consider
the recommendation of our Board, you should keep in mind that our Sponsor, executive officers and members of our 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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(i) 4,232,222 Founder
Shares (the initial 4,312,500 Founder Shares were purchased for $25,000; however, 80,278 Founder Shares were forfeited by
our Sponsor in connection with the partial exercise of the underwriters’ over-allotment option in the IPO), (ii) 5,810,000
Placement Warrants (purchased for approximately $5.8 million), and (iii) 385,778 additional warrants purchased by our Sponsor
in connection with the underwriters’ partial exercise of over-allotment option in the IPO.
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In order to finance transaction
costs in connection with an initial business combination, our Sponsor or an affiliate of our Sponsor, or the Company’s
directors or officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon
consummation of an initial business combination without interest or, at the lender’s discretion, up to $1,500,000
of notes may be redeemed upon consummation of an initial business combination into private placement-equivalent warrants
at a price of $1.00 per warrant. In the event that a business combination does not close, the Company may use a portion
of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account
would be used to repay the Working Capital Loans.
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The fact that, if
the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the
required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced
below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the Trust Account on the
liquidation date if less than $10.10 per public share is then held in the Trust Account due to reductions in the value of
the trust assets, less interest earned on the Trust Account and withdrawn to pay taxes, by the claims of prospective target
businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or
products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to
seek access to the Trust Account; and
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The fact that none
of our officers or directors has received any cash compensation for services rendered to the Company, and all of the current
members of our Board are expected to continue to serve as directors at least through the date of the Special Meeting to vote
on a proposed initial business combination and may even continue to serve following any potential initial business combination
and receive compensation thereafter.
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Redemption Rights
If the Extension Amendment
Proposal is approved, and the Extension is implemented, the Company will provide public stockholders making the Election the opportunity
to receive, at the time the Extension becomes effective, and in exchange for the surrender of their public 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 and not
previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses).
You will be able to redeem your public shares in connection with any shareholder vote to approve a proposed initial business combination
or if the Company has not consummated an initial business combination by the Extended Date.
TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST SUBMIT A REQUEST
IN WRITING THAT WE REDEEM YOUR PUBLIC SHARES FOR CASH TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY AT THE ADDRESS BELOW, AND,
AT THE SAME TIME, ENSURE YOUR BANK OR BROKER COMPLIES WITH THE REQUIREMENTS IDENTIFIED ELSEWHERE HEREIN, INCLUDING DELIVERING YOUR
SHARES TO THE TRANSFER AGENT PRIOR TO THE VOTE ON THE EXTENSION AMENDMENT PROPOSAL.
In connection with tendering your shares for redemption, prior
to [●] p.m. Eastern time on [●], 2020 (two business days before the Special Meeting), you must elect either to physically
tender your stock certificates to Continental, at Continental Stock Transfer & Trust Company, 1 State Street Plaza, 30th
Floor, New York, New York 10004, Attn: Mark Zimkind, mzimkind@continentalstock.com, or to deliver your public shares to Continental
electronically using DTC’s DWAC 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 [●] p.m. Eastern Time on [●], 2020 (two business
days before the Special Meeting) ensures that a redeeming holder’s election is irrevocable once the Extension Amendment Proposal
and the Trust Amendment Proposal are 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 Continental 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 the Company’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.
Continental will typically charge the tendering broker $[●] and the broker would determine whether or not to pass this cost
on to the redeeming holder. It is the Company’s understanding that stockholders should generally allot at least two weeks
to obtain physical certificates from the transfer agent. The Company 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 [●] p.m. Eastern time on [●], 2020 (two business
days before the Special Meeting) will not be redeemed for cash held in the Trust Account on the redemption date. 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 public 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 Extension Amendment Proposal and the Trust Amendment Proposal are
not approved, 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 Extension Amendment Proposal and the Trust Amendment Proposal will not
be approved. The Company anticipates that a public stockholder who tenders shares for redemption in connection with the vote to
approve the Extension Amendment Proposal and the Trust Amendment Proposal would receive payment of the redemption price for such
shares soon after the completion of the Extension 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, the Company will redeem each public share
for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
not previously released to the Company to pay its franchise and income taxes (less up to $100,000 of such net interest to pay dissolution
expenses), divided by the number of then outstanding public shares. Based upon the current amount in the Trust Account, the Company
anticipates that the per-share price at which public shares will be redeemed from cash held in the Trust Account will be approximately
$[●] at the time of the Special Meeting. The closing price of the Company’s Class A common Stock on [●], 2020
was $[●].
If you exercise your
redemption rights, you will be exchanging your shares of the Company’s Class A 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 the Company’s transfer agent prior to [●] p.m. Eastern time on [●], 2020 (two business days
before the Special Meeting). The Company anticipates that a public stockholder who tenders shares for redemption in connection
with the vote to approve the Extension Amendment Proposal would receive payment of the redemption price for such shares soon after
the completion of the Extension.
United States Federal Income Tax Considerations
with Respect to Redemption
The following discussion is a summary of certain United States
federal income tax considerations for holders of our Class A common stock with respect to the exercise of redemption rights in
connection with the approval of the Extension Amendment Proposal. This summary is based upon the Internal Revenue Code of 1986,
as amended, which we refer to as the “Code”, the regulations promulgated by the U.S. Treasury Department, current administrative
interpretations and practices of the Internal Revenue Service, which we refer to as the “IRS”, and judicial decisions,
all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect.
No assurance can be given that the IRS would not assert, or that a court would not sustain a position contrary to any of the tax
considerations described below. This summary does not discuss all aspects of United States federal income taxation that may be
important to particular investors in light of their individual circumstances, such as investors subject to special tax rules (e.g.,
financial institutions, insurance companies, mutual funds, pension plans, S corporations, broker-dealers, traders in securities
that elect mark-to-market treatment, regulated investment companies, real estate investment trusts, trusts and estates, partnerships
and their partners, and tax-exempt organizations (including private foundations)) and investors that will hold Class A common stock
as part of a “straddle,” “hedge,” “conversion,” “synthetic security,” “constructive
ownership transaction,” “constructive sale,” or other integrated transaction for United States federal income
tax purposes, investors subject to the alternative minimum tax provisions of the Code, U.S. Holders (as defined below) that have
a functional currency other than the United States dollar, U.S. expatriates, investors that actually or constructively own 5 percent
or more of the common stock of the Company, and Non-U.S. Holders (as defined below, and except as otherwise discussed below), all
of whom may be subject to tax rules that differ materially from those summarized below. In addition, this summary does not discuss
any state, local, or non-United States tax considerations, any non-income tax (such as gift or estate tax) considerations, alternative
minimum tax or the Medicare tax. In addition, this summary is limited to investors that hold our Class A common stock as “capital
assets” (generally, property held for investment) under the Code.
If a partnership (including an entity or arrangement treated
as a partnership for United States federal income tax purposes) holds our Class A common stock, the tax treatment of a partner
in such partnership will generally depend upon the status of the partner, the activities of the partnership and certain determinations
made at the partner level. If you are a partner of a partnership holding our Class A common stock, you are urged to consult your
tax advisor regarding the tax consequences of a redemption.
WE URGE
HOLDERS OF OUR CLASS A COMMON STOCK CONTEMPLATING EXERCISE OF THEIR REDEMPTION RIGHTS TO CONSULT THEIR OWN TAX ADVISORS
CONCERNING THE UNITED STATES FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX CONSEQUENCES THEREOF.
U.S. Federal Income Tax Considerations to U.S. Holders
This section is addressed to U.S. Holders of our Class A common
stock that elect to have their Class A common stock of the Company redeemed for cash. For purposes of this discussion, a “U.S.
Holder” is a beneficial owner that so redeems its common stock of the Company and is:
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an individual who
is a United States citizen or resident of the United States;
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a corporation (including
an entity treated as a corporation for United States federal income tax purposes) created or organized in or under the laws
of the United States, any state thereof or the District of Columbia;
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an estate the income
of which is includible in gross income for United States federal income tax purposes regardless of its source; or
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a trust (A) the
administration of which is subject to the primary supervision of a United States court and which has one or more United States
persons (within the meaning of the Code) who have the authority to control all substantial decisions of the trust or (B) that
has in effect a valid election under applicable Treasury regulations to be treated as a United States person.
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Redemption of Class A Common Stock
In the event that
a U.S. Holder’s Class A common stock of the Company is redeemed, the treatment of the transaction for U.S. federal income
tax purposes will depend on whether the redemption qualifies as a sale of the common stock under Section 302 of the Code. Whether
the redemption qualifies for sale treatment will depend largely on the total number of shares of our stock treated as held by
the U.S. Holder (including any stock constructively owned by the U.S. Holder as a result of owning warrants) relative to all of
our shares both before and after the redemption. The redemption of common stock generally will be treated as a sale of the common
stock (rather than as a distribution) if the redemption (i) is “substantially disproportionate” with respect to the
U.S. Holder, (ii) results in a “complete termination” of the U.S. Holder’s interest in us or (iii) is “not
essentially equivalent to a dividend” with respect to the U.S. Holder. These tests are explained more fully below.
In determining whether any of the foregoing tests are satisfied,
a U.S. Holder takes into account not only stock actually owned by the U.S. Holder, but also shares of our stock that are constructively
owned by it. A U.S. Holder may constructively own, in addition to stock owned directly, stock owned by certain related individuals
and entities in which the U.S. Holder has an interest or that have an interest in such U.S. Holder, as well as any stock the U.S.
Holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant
to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage of our outstanding voting
stock actually and constructively owned by the U.S. Holder immediately following the redemption of Class A common stock must, among
other requirements, be less than 80% of our outstanding voting stock actually and constructively owned by the U.S. Holder immediately
before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of the shares of
our stock actually and constructively owned by the U.S. Holder are redeemed or (ii) all of the shares of our stock actually owned
by the U.S. Holder are redeemed and the U.S. Holder is eligible to waive, and effectively waives in accordance with specific rules,
the attribution of stock owned by certain family members and the U.S. Holder does not constructively own any other stock. The redemption
of the Class A common stock will not be essentially equivalent to a dividend if a U.S. Holder’s conversion results in a “meaningful
reduction” of the U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction
in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has
indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a
publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”
If none of the foregoing
tests are satisfied, then the redemption will be treated as a distribution and the tax effects will be as described below under
“U.S. Federal Income Tax Considerations to U.S. Holders — Taxation of Distributions.”
U.S. Holders of our Class A common stock considering exercising
their redemption rights should consult their own tax advisors as to whether the redemption of their common stock of the Company
will be treated as a sale or as a distribution under the Code.
Gain or Loss on a Redemption of Class
A Common Stock Treated as a Sale
If the redemption
qualifies as a sale of common stock, a U.S. Holder must treat any gain or loss recognized as capital gain or loss. Any such capital
gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the common stock so disposed
of exceeds one year. Generally, a U.S. Holder will recognize gain or loss in an amount equal to the difference between (i) the
amount of cash received in such redemption (or, if the common stock is held as part of a unit at the time of the disposition,
the portion of the amount realized on such disposition that is allocated to the common stock based upon the then fair market values
of the common stock and the warrant included in the unit) and (ii) the U.S. Holder’s adjusted tax basis in its common stock
so redeemed. A U.S. Holder’s adjusted tax basis in its common stock generally will equal the U.S. Holder’s acquisition
cost (that is, the portion of the purchase price of a unit allocated to a share of common stock or the U.S. Holder’s initial
basis for common stock received upon exercise of a warrant) less any prior distributions treated as a return of capital. Long-term
capital gain realized by a non-corporate U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses
is subject to limitations.
Taxation of Distributions
If the redemption
does not qualify as a sale of common stock, the U.S. Holder will be treated as receiving a distribution. In general, any distributions
to U.S. Holders generally will constitute dividends for United States federal income tax purposes to the extent paid from our
current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in
excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce
(but not below zero) the U.S. Holder’s adjusted tax basis in our common stock. Any remaining excess will be treated as gain
realized on the sale or other disposition of the common stock and will be treated as described under “U.S. Federal Income
Tax Considerations to U.S. Holders — Gain or Loss on a Redemption of Common Stock Treated as a Sale”. Dividends
we pay to a U.S. Holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite
holding period is satisfied. With certain exceptions, and provided certain holding period requirements are met, dividends we pay
to a non-corporate U.S. Holder generally will constitute “qualified dividends” that will be taxable at a reduced rate.
U.S. Federal Income Tax Considerations
to Non-U.S. Holders
This section is
addressed to Non-U.S. Holders of our Class A common stock that elect to have their Class A common stock of the Company
redeemed for cash. For purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner (other than a
partnership) that so redeems its common stock of the Company and is not a U.S. Holder.
Redemption of Class A Common Stock
The characterization
for United States federal income tax purposes of the redemption of a Non-U.S. Holder’s common stock generally will correspond
to the United States federal income tax characterization of such a redemption of a U.S. Holder’s common stock, as described
under “U.S. Federal Income Tax Considerations to U.S. Holders”.
Non-U.S. Holders
of our Class A common stock considering exercising their redemption rights should consult their own tax advisors as to
whether the redemption of their common stock of the Company will be treated as a sale or as a distribution under the
Code.
Gain or Loss on a Redemption of Class A Common Stock Treated
as a Sale
If the redemption
qualifies as a sale of common stock, a Non-U.S. Holder generally will not be subject to United States federal income or withholding
tax in respect of gain recognized on a sale of its common stock of the Company, unless:
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the gain is effectively
connected with the conduct of a trade or business by the Non-U.S. Holder within the United States (and, under certain income
tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. Holder),
in which case the Non-U.S. Holder will generally be subject to the same treatment as a U.S. Holder with respect to the redemption,
and a corporate Non-U.S. Holder may be subject to the branch profits tax at a 30% rate (or lower rate as may be specified
by an applicable income tax treaty);
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the Non-U.S. Holder
is an individual who is present in the United States for 183 days or more in the taxable year in which the redemption takes
place and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the individual’s
net capital gain for the year; or
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we are or have been a “U.S. real property holding corporation”
for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition
or the period that the Non-U.S. Holder held our Class A common stock, and, in the case where shares of our Class A common stock
are regularly traded on an established securities market, the Non-U.S. Holder has owned, directly or constructively, more than
5% of our common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. Holder’s
holding period for the shares of our common stock. We do not believe we are or have been a U.S. real property holding corporation.
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Taxation of Distributions
If the redemption does not qualify as a sale of common stock,
the U.S. Holder will be treated as receiving a distribution. In general, any distributions we make to a Non-U.S. Holder of shares
of our Class A common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under United
States federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends
are not effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States, we will
be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for
a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for
such reduced rate. Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S.
Holder’s adjusted tax basis in its shares of our Class A common stock and, to the extent such distribution exceeds the Non-U.S.
Holder’s adjusted tax basis, as gain realized from the sale or other disposition of the common stock, which will be treated
as described under “U.S. Federal Income Tax Considerations to Non-U.S. Holders — Gain on Sale, Taxable Exchange
or Other Taxable Disposition of Common Stock”. Dividends we pay to a Non-U.S. Holder that are effectively connected with
such Non-U.S. Holder’s conduct of a trade or business within the United States generally will not be subject to United States
withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements. Instead, such dividends
generally will be subject to United States federal income tax, net of certain deductions, at the same graduated individual or corporate
rates applicable to U.S. Holders (subject to an exemption or reduction in such tax as may be provided by an applicable income tax
treaty). If the Non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch
profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).
Taxation of Class A Common Stock Held Through Foreign Accounts
A 30% withholding tax applies with respect to certain payments
on, and gross proceeds from a sale or disposition of, our Class A common stock in each case if paid to a foreign financial institution
or a non-financial foreign entity (including, in some cases, when such foreign financial institution or entity is acting as an
intermediary), unless (i) in the case of a foreign financial institution, such institution enters into an agreement with the U.S.
government to withhold on certain payments, and to collect and provide to the U.S. tax authorities substantial information regarding
U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain
account holders that are foreign entities with U.S. owners), (ii) in the case of a non-financial foreign entity, such entity certifies
that it does not have any substantial U.S. owners or provides the withholding agent with a certification identifying the direct
and indirect substantial U.S. owners of the entity, or (iii) the foreign financial institution or non-financial foreign entity
otherwise qualifies for an exemption from these rules. Under certain circumstances, a holder might be eligible for refunds or credits
of such taxes. An intergovernmental agreement between the United States and an applicable foreign country or future Treasury Regulations
may modify these requirements.
Non-U.S. Holders are
encouraged to consult their tax advisors regarding the possible implications of such withholding tax.
As previously noted
above, the foregoing discussion of certain material U.S. federal income tax consequences is included for general information purposes
only and is not intended to be, and should not be construed as, legal or tax advice to any stockholder. We once again urge you
to consult with your own tax adviser to determine the particular tax consequences to you (including the application and effect
of any U.S. federal, state, local or foreign income or other tax laws) of the receipt of cash in exchange for shares in connection
with the Extension Amendment Proposal.
Required Vote
Approval of the Extension
Amendment Proposal requires the affirmative vote of at least 65% of the outstanding shares of Common Stock, voting as a single
class, on the record date. Abstentions and “broker non-votes” will have the same effect as voting “AGAINST”
the Extension Amendment Proposal.
Our Sponsor and
all of our directors, officers and their affiliates are expected to vote any Common Stock owned by them in favor of the
Extension Amendment Proposal. On the record date, our Sponsor, directors and executive officers of the Company and their
affiliates beneficially owned and were entitled to vote an aggregate of [●] shares of Common Stock, representing
approximately [●]% of the Company’s issued and outstanding shares of Common Stock.
In addition, the Company’s
Sponsor, directors, officers and their affiliates may choose to buy units or Class A common stock in the open market and/or through
negotiated private transactions. In the event that purchases do occur, the purchasers may seek to purchase shares from shareholders
who would otherwise have voted against the Extension Amendment Proposal and elected to redeem their shares of Class A common stock
for a pro rata portion of the Trust Account.
Recommendation of the Board
The Board unanimously
recommends that our stockholders vote “FOR” the approval of the Extension Amendment Proposal. The Board expresses
no opinion as to whether you should redeem your public shares.
THE TRUST AMENDMENT PROPOSAL
The purpose of the
Trust Amendment is to amend the Trust Agreement to extend the date on which Continental must liquidate the Trust Account if the
Company has not completed a business combination, from May 28, 2020 to August 28, 2020 (or November 30, 2020 if the Company has
executed a definitive agreement for an initial business combination by August 28, 2020), and to permit the withdrawal of funds
from the Trust Account to pay stockholders who properly exercise their redemption rights in connection with the Extension Amendment
Proposal. A copy of the proposed amendment to the Trust Agreement is attached to this Proxy Statement in Annex B,
and which has been previously approved by both the Company and Continental.
Reasons for the Trust Amendment Proposal
Our IPO prospectus
and the charter provide that the Company must consummate an initial business combination within 21 months of the Company’s
IPO, which date is May 28, 2020. While we are currently in discussions regarding business combination opportunities, our Board
currently believes that there will not be sufficient time before May 28, 2020 to complete an initial business combination. Our
IPO prospectus and charter provide that the affirmative vote of at least 65% of the outstanding shares of Common Stock, voting
as a single class, on the record date is required to extend our corporate existence, except in connection with, and effective
upon, consummation of a business combination. Additionally, our IPO prospectus and charter provide for all public stockholders
to have an opportunity to redeem their public shares in the case our corporate existence is extended as described above. Because
we continue to believe that an initial business combination would be in the best interests of our stockholders, and because we
will not be able to conclude a business combination within the permitted time period, the Board has determined to seek stockholder
approval to extend the date by which we have to complete a business combination beyond May 28, 2020 to the Extended Date. We intend
to hold another stockholder meeting prior to the Extended Date in order to seek stockholder approval of a proposed initial business
combination.
We believe that the
foregoing charter provision was included to protect Company stockholders from having to sustain their investments for an unreasonably
long period if the Company failed to find a suitable business combination in the timeframe contemplated by the charter. We also
believe, however, that given the Company’s expenditure of time, effort and money on finding a business combination, circumstances
warrant providing public stockholders an opportunity to consider a business combination.
If the Trust Amendment Proposal is Not Approved
The approval of both
the Trust Amendment Proposal and the Extension Amendment Proposal, which is discussed above, are essential to the implementation
of our Board’s plan to extend the date by which we must consummate our initial business combination. Therefore, our Board
will abandon and not implement the Trust Amendment Proposal unless our stockholders approve the Trust Amendment Proposal and the
Extension Amendment Proposal.
If the Extension in
not completed and we have not consummated a business combination by May 28, 2020, we will automatically wind up, dissolve and
liquidate starting on May 28, 2020.
There will be no distribution
from the Trust Account with respect to the Company’s warrants, which will expire worthless in the event we wind up. In the
event of a liquidation, our Sponsor will not receive any monies held in the Trust Account as a result of its ownership of the
Founder Shares or the Placement Warrants.
If the Trust Amendment Proposal Is Approved
If the Trust Amendment
Proposal is approved, the Company will amend the Trust Agreement in the form set forth in Annex B hereto. The
Company will remain a reporting company under the Exchange Act and its units, Class A common stock, and public warrants will remain
publicly traded. The Company will then continue to work to consummate a business combination by the Extended Date.
Notwithstanding stockholder
approval of the Trust Amendment Proposal and the Extension Amendment Proposal, our Board will retain the right to abandon and
not implement the Extension at any time without any further action by our stockholders.
Approval of the Trust
Amendment Proposal will constitute consent for the Company to (i) remove from the Trust Account the Withdrawal Amount and (ii)
deliver to the holders of the redeemed public shares the their portion of the Withdrawal Amount. The removal of the Withdrawal
Amount from the Trust Account will reduce the amount held in the Trust Account. The Company cannot predict the amount that will
remain in the Trust Account if the Extension Amendment Proposal is approved, and the amount remaining in the Trust Account may
be only a small fraction of the approximately $176,789,033.54 that was in the Trust Account as of April 22, 2020. We will not
proceed with the Extension if redemptions or repurchases of our public shares cause us to have less than $5,000,001 of net tangible
assets (which would occur if there are redemptions or repurchases of more than 16,450,101 of our public shares) following approval
of the Extension Amendment Proposal.
Under the Trust Amendment
Proposal, the Company will amend the Trust Agreement to (i) permit the withdrawal of the Withdrawal Amount from the Trust Account
and (ii) extend the date on which to liquidate the Trust Account to the Extended Date.
If the Trust Amendment
Proposal is approved and the Extension is completed but the Company does not consummate an initial business combination, we will
(i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business
days thereafter redeem the public shares at the Per-Share Redemption Price, which redemption will completely extinguish rights
of the public stockholders (including the right to receive further liquidation distributions, if any) and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance
with applicable law, dissolve and liquidate, subject in the case of clauses (ii) and (iii) above, to the Company’s obligations
under Delaware law to provide for claims of creditors and other requirements of 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.
You are not being
asked to vote on a proposed initial 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 a proposed initial business combination when it is submitted to
stockholders and the right to redeem your public shares for cash in the event an initial business combination is approved and
completed or we have not consummated an initial business combination by the Extended Date.
The Board’s Reasons for the Trust
Amendment Proposal
Our IPO prospectus
and charter provide that the Company has until May 28, 2020 to complete the purposes of the Company including, but not limited
to, effecting a business combination under its terms. While we are currently in discussions regarding business combination opportunities,
our Board currently believes that there will not be sufficient time before May 28, 2020 to complete a business combination. We
believe that, given the Company’s expenditure of time, effort and money on the potential business combination, circumstances
warrant providing public stockholders an opportunity to consider a business combination. Because we continue to believe that a
business combination would be in the best interests of our stockholders and because we will not be able to conclude a business
combination within the permitted time period, the Board has determined to seek stockholder approval to extend the date by which
we have to complete a business combination beyond May 28, 2020 to the Extended Date.
Interests of our Sponsor, Directors and Officers
When you consider
the recommendation of our Board, you should keep in mind that our Sponsor, executive officers and members of our 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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(i) 4,232,222 Founder
Shares (the initial 4,312,500 Founder Shares were purchased for $25,000; however, 80,278 Founder Shares were forfeited by
our Sponsor in connection with the partial exercise of the underwriters’ over-allotment option in the IPO), (ii) 5,810,000
Placement Warrants (purchased for approximately $5.8 million), and (iii) 385,778 additional warrants purchased by our Sponsor
in connection with the underwriters’ partial exercise of over-allotment option in the IPO.
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In order to finance transaction
costs in connection with an initial business combination, our Sponsor or an affiliate of our Sponsor, or the Company’s
directors or officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon
consummation of an initial business combination without interest or, at the lender’s discretion, up to $1,500,000
of notes may be redeemed upon consummation of an initial business combination into private placement-equivalent warrants
at a price of $1.00 per warrant. In the event that a business combination does not close, the Company may use a portion
of the proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account
would be used to repay the Working Capital Loans.
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The fact that, if
the Trust Account is liquidated, including in the event we are unable to complete an initial business combination within the
required time period, the Sponsor has agreed to indemnify us to ensure that the proceeds in the Trust Account are not reduced
below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held in the Trust Account on the
liquidation date if less than $10.10 per public share is then held in the Trust Account due to reductions in the value of
the trust assets, less interest earned on the Trust Account and withdrawn to pay taxes, by the claims of prospective target
businesses with which we have entered into an acquisition agreement or claims of any third party for services rendered or
products sold to us, but only if such a third party or target business has not executed a waiver of any and all rights to
seek access to the Trust Account; and
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The fact that none
of our officers or directors has received any cash compensation for services rendered to the Company, and all of the current
members of our Board are expected to continue to serve as directors at least through the date of the Special Meeting to vote
on a proposed initial business combination and may even continue to serve following any potential initial business combination
and receive compensation thereafter.
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Required Vote
Approval of the Trust
Amendment Proposal requires the affirmative vote of at least 65% of the outstanding shares of Common Stock, voting as a single
class, on the record date. Abstentions and “broker non-votes” will have the same effect as voting “AGAINST”
the Trust Amendment Proposal.
Our Sponsor and
all of our directors, officers and their affiliates are expected to vote any Common Stock owned by them in favor of the Trust
Amendment Proposal. On the record date, our Sponsor, directors and executive officers of the Company and their affiliates
beneficially owned and were entitled to vote an aggregate of [●] shares of Common Stock, representing approximately
[●]% of the Company’s issued and outstanding shares of Common Stock.
In addition, the Company’s
Sponsor, directors, officers and their affiliates may choose to buy units or Class A common stock in the open market and/or through
negotiated private transactions. In the event that purchases do occur, the purchasers may seek to purchase shares from shareholders
who would otherwise have voted against the Extension Amendment Proposal and elected to redeem their shares of Class A common stock
for a pro rata portion of the Trust Account.
Recommendation of the Board
The Board unanimously
recommends that our stockholders vote “FOR” the approval of the Trust Amendment Proposal. The Board expresses no opinion
as to whether you should redeem your public shares.
THE DIRECTOR PROPOSAL
At the Special Meeting,
stockholders are being asked to elect two (2) directors to the Board to each serve as Class I directors of the Company.
Prior to our IPO,
the Board was divided into three classes: the Class I directors; the Class II directors; and the Class III directors. The original
Class I directors hold their office for a term expiring at the first annual meeting, the original Class II directors hold their
office for a term expiring at the Company’s second annual meeting, and the original Class III directors hold their office
for a term expiring at the Company’s third annual meeting. Commencing at the first annual meeting, and then at each following
annual meeting, directors elected to succeed those directors whose terms expire are elected for a term of office to expire after
three years or until the election and qualification of their respective successors in office, subject to their earlier death,
resignation or removal.
As the Special Meeting
is in lieu of the Company’s 2020 annual meeting (being the Company’s first annual meeting since its IPO), the terms
of the Current Class I directors, Raj Date and Eric Frank will expire at the Special Meeting. The Board has nominated Raj Date
and Eric Frank, each a current Class I director, for election as Class I directors, to hold office for a three-year term
following this special meeting, or until the election and qualification of their respective successors in office, subject to their
earlier death, resignation or removal.
Unless you indicate
otherwise, shares represented by executed proxies in the form enclosed will be voted to elect each of Raj Date and Eric Frank
unless one is unavailable, in which case such shares will be voted for a substitute nominee designated by the Board. We have no
reason to believe that any nominee will be unavailable or, if elected, will decline to serve.
For a biography of
Raj Date and Eric Frank, please see the section entitled “Management.”
Required Vote
The affirmative vote
of a plurality of the votes cast by the stockholders present in person online or represented by proxy at the Special Meeting and
entitled to vote on the Director Proposal at the Special Meeting is required to elect each of the two (2) nominees as Class I
directors. Abstentions and “broker non-votes” will have no effect on the outcome of the election of Class I directors.
Recommendation of the Board
Our Board unanimously
recommends that our stockholders vote “FOR” each nominee to serve as Class I director.
THE ADJOURNMENT PROPOSAL
Overview
In the event that
the number of shares of Common Stock present in person online or represented by proxy at the Special Meeting and voting “FOR”
the Extension Amendment Proposal or the Trust Amendment Proposal are insufficient to approve the Extension or the Trust Amendment,
as applicable, the Company may move to adjourn the Special Meeting in order to enable the Board to solicit additional proxies
in favor of the Extension Amendment Proposal and the Trust Amendment Proposal. In that event, the Company will ask its stockholders
to vote only upon the Adjournment Proposal and not on the other Proposals discussed in this Proxy Statement.
Consequences if the Adjournment Proposal
is Not Approved
If the Adjournment
Proposal is not approved by our stockholders, our Board may not be able to adjourn the Special Meeting to a later date in the
event that there are insufficient votes for the approval of the Extension Amendment Proposal or the Trust Amendment Proposal.
Required Vote
The affirmative vote
of the majority of the votes cast by stockholders present in person online or represented by proxy at the Special Meeting and
entitled to vote on the Adjournment Proposal at the Special Meeting is required to approve the Adjournment Proposal.
Recommendation of the Board
Our Board unanimously
recommends that our stockholders vote “FOR” the approval of the Adjournment Proposal.
MANAGEMENT
Directors and Executive Officers
As of the date of this Proxy Statement,
our directors and officers are as follows:
Name
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Age
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Position
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Jay S. Sidhu
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68
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Executive Chairman of the
Board
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Samvir S. Sidhu
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36
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Chief Executive Officer and Director
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A.J. Dunklau
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37
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President
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Philip Watkins
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35
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Chief Financial Officer
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Chad Hurley
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43
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Director
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Raj Date
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49
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Director
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Eric Frank
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55
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Director
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Bhanu Choudhrie
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41
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Director
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Kuldeep Malkani
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44
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Director
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Jay S. Sidhu
has been the Executive Chairman of our Board of Directors commencing since August 2018. Mr. Sidhu is one of the managing
members of our sponsor. He has been the Chief Executive Officer and Chairman of the Board of Customers Bancorp, Inc. (NYSE:CUBI)
since 2010. He is also the Executive Chairman of Customers Bank and served as its Chief Executive Officer from 2009 until February
2020. Mr. Sidhu is also the Executive Chairman of BankMobile and BankMobile Technologies, each of which is an affiliate of Customers
Bancorp. He was the Chief Executive Officer of Sovereign Bancorp Inc. (NYSE: SOV) from 1989 until 2006. He served as the Chairman
of Santander Holdings USA, Inc., from 2002 to 2006. Mr. Sidhu also served as a Director of Banco Santander, S.A. in 2006. From
2010, Mr. Sidhu was a director of Atlantic Coast Financial Corporation (NASDAQ: ACFC), the holding company for Atlantic Coast
Bank, a federal savings bank, and served as its Non-Executive Chairman of the board of directors from 2011 to 2012. He served
as the Vice Chairman of Atlantic Coast Financial Corporation from 2016 until its merger with Ameris Bank in May 2018. He was the
Chairman and Chief Executive Officer of Sidhu Advisors, LLC, a Florida based private equity and financial services consulting
firm, from 2007 to the first quarter of 2009. He served as a Director of Old Guard Group, Inc. (NASDAQ: OGGI), a property and
casualty insurance company from 1999 to 2001. Mr. Sidhu has received Financial World’s Chief Executive Officer of the year
award, and has also been named Turnaround Entrepreneur of the Year. In 2016, he was named Financial Technology Entrepreneur of
the year by Ernst & Young LLP. He holds a BBA from Banaras University (India) and an M.B.A. from Wilkes University. Mr. Sidhu
is a Graduate of the Harvard University Business School’s Chief Executive Officer Leadership Course. Mr. Sidhu helped to
establish the Jay Sidhu School of Business and Leadership, at his alma mater, Wilkes University. Mr. Sidhu is the father of Mr.
Samvir S. Sidhu, our Chief Executive Officer. We believe Mr. Jay Sidhu is well-qualified to serve as a member of the board due
to his extensive experience in the financial services industry, financial technology industry, public company experience and business
leadership.
Samvir S. Sidhu
has served as a Director and as our Chief Executive Officer since inception. He became Vice Chairman and Chief Operating
Officer at Customers Bank and Head of Corporate Development at Customers Bancorp in February of 2020 and has served as a member
of the Board of Directors of Customers Bank since 2012. He is also the Chief Executive Officer of Megalith Capital Management,
which he founded in 2010. Prior to founding Megalith Capital, Mr. Sidhu worked in private equity at Providence Equity Partners
from 2007 to 2009 and from 2011 to 2012, and worked as an investment banker in the Technology, Media, and Telcom group at Goldman
Sachs Group Inc. (NYSE: GS) from 2005 to 2007. Mr. Sidhu received his Bachelors of Science in Finance from the Wharton School
at the University of Pennsylvania and an MBA from the Harvard Business School. Mr. Sidhu is the son of Mr. Jay S. Sidhu, our Executive
Chairman. We believe Mr. Sam Sidhu is well-qualified to serve as a member of the board due to his experience in the financial
services industry, business leadership, and extensive investing experience.
A.J. Dunklau
has served as our President since inception. From 2011 through 2017, Mr. Dunklau was an executive at AGDATA, LP, a provider
of payment facilitation, information services, and software, which was sold to Vista Equity Partners in 2014. From 2016 to 2017
Mr. Dunklau served as AGDATA’s Chief Strategy Officer and from 2014 to 2016 he served as its Head of Product Management.
From 2012 to 2014, Mr. Dunklau served as AGDATA’s Executive Vice President and General Manager of Industry Platforms, and
prior to that served as Director of Business Development. From 2005 to 2011, he worked as a management consultant at A.T. Kearney,
where he consulted on global projects across a range of industries, including financial services. Mr. Dunklau received his Bachelors
of Science in Business Administration from Washington University in St. Louis and an MBA from the Harvard Business School.
Philip Watkins
has served as our Chief Financial Officer since inception. He has been a Principal of Megalith Capital Management since
2013 and serves as a member of the investment committee. In January 2020 he joined Customers Bank as Banking Group Head, Commercial
Real Estate. Prior to joining Megalith Capital, from 2011 to 2013 Mr. Watkins worked at Morgan Stanley Real Estate Investing where
he was responsible for underwriting, structuring, and closing investments across a wide range of asset classes and throughout
the capital structure. From 2007 to 2009 he worked at Forman Capital, a structured finance lending firm, and from 2006 to 2007
he worked at Kolter Group, a real estate investment and development firm. Mr. Watkins received his Bachelors of Science in Business
Administration, cum laude, from the University of Florida and an MBA from the Harvard Business School.
Chad Hurley has
served as a director since August 2018. Mr. Hurley is an entrepreneur and technology executive. He is the co-founder and former
Chief Executive Officer of YouTube, one of the world’s largest and most popular video sharing sites. In October 2006, less
than two years after the service launched, Mr. Hurley and his partner sold YouTube to Google, Inc. (NASDAQ: GOOGL) for $1.65 billion.
After the acquisition, Mr. Hurley stayed with the company and continued to serve as its Chief Executive Officer until 2011. He
remains an advisor to the company. Prior to founding YouTube, Mr. Hurley served in a variety of roles with PayPal from 1999 to
2005. Mr. Hurley is an active investor and part–owner of the NBA’s Golden State Warriors and the MLS Los Angeles Football
Club. He received his B.A. from Indiana University of Pennsylvania. We believe Mr. Hurley is well-qualified to serve as a member
of the board due to his extensive experience in the technology and payments industry.
Raj Date
has served as a director since August 2018. Mr. Date has had a long and varied career in and around US financial institutions
as a fintech investor, senior policy maker, commercial bank executive and investment banker. Since 2013, he has served as Managing
Partner of Fenway Summer LLC, a hybrid advisory and venture investment firm focused on financial services and financial technology.
In 2012, Mr. Date became the first-ever Deputy Director of the United States Consumer Financial Protection Bureau (“CFPB”).
As the Bureau’s second-ranking official, he helped steward the CFPB’s strategy, its operations, and its policy agenda.
Mr. Date also served on the senior staff committee of the Financial Stability Oversight Council and as a statutory deputy to the
FDIC Board. Before being appointed Deputy Director of the CFPB, Mr. Date acted as the interim leader of the new agency, serving
as the Special Advisor to the Secretary of the Treasury. He led the CFPB for most of the first six months after its launch in
2011. From 2009 to 2010, he founded and served as the Chairman and Executive Director of the Cambridge Winter Center for Financial
Institutions Policy, a private, non-profit research and policy organization that supported reform of the U.S. financial system.
Prior to his government service, Mr. Date was a Managing Director in the Financial Institutions Group at Deutsche Bank Securities
from 2007 to 2009. Before that, from 2002 to 2007, he was Senior Vice President for Corporate Strategy and Development at Capital
One Financial. From 1996 to 2001, he worked in the financial institutions practice of the consulting firm McKinsey & Company.
He has also served as an attorney in both private practice and government service. Mr. Date has served on the Board of GreenDot
Corporation (NYSE:GDOT), a bank holding and financial technology company since 2016. He also currently serves as a director for
a number of private companies including Prosper, a marketplace lender, and Circle, a digital currency firm, both since 2013. Mr.
Date received a B.S. from the College of Engineering at the University of California at Berkeley (highest honors) and a J.D. from
Harvard Law School (magna cum laude). We believe Mr. Date is well-qualified to serve as a member of the board due to his extensive
experience in strategy, finance and regulatory issues.
Eric Frank
has served as a director since August 2018. Mr. Frank has served as a senior executive and advisor to many data and analytics
companies in the financial, commercial real estate and agriculture sectors. Mr. Frank has built and sold companies and has served
as an operational leader in multi-billion-dollar revenue businesses. In March 2018, Mr. Frank was named Chief Executive Officer
of Lightbox, LLC, a holding company funded by Silver Lake and Battery Ventures that acquired EDR, a provider of data and workflow
tools to help commercial real estate clients manage that data in all aspects of property due diligence and compliance. From 2014
until 2017, Mr. Frank served as Managing Director of DMGI/DMGT PLC, overseeing their portfolio of US commercial real estate information
companies. Since 2012, Mr. Frank has served as the President of Internet Technology Acceleration LLC, a consulting firm, which
acts as an executive advisor to private companies and private equity sponsors, specifically in the B2B information space. From
2012 to 2014, he served as a director at AGDATA, LP. a provider of payment facilitation, information services, and software. Mr.
Frank was at Thomson Reuters, a news and information company, from 2006 through 2012, most recently as President, managing a $2.3
billion investment advisory division that was a combination of Thomson Financial and Reuters. Mr. Frank began his career at Morgan
Guaranty, helping create the award winning ADR.com portal, which he later sold to Thomson Financial. He also currently serves
on the board of directors of Issuer Direct (NYSE American: ISDR), a compliance management company since October 2017; Social Market
Analytics, a data aggregation company since 2015; and RANE (Risk Assistance Network & Exchange), a risk management company
since 2016. Mr. Frank received a Bachelor of General Studies from the University of Michigan. We believe Mr. Frank is well-qualified
to serve as a member of the board due to his extensive experience in technology, analytics and finance.
Bhanu Choudhrie
has served as a director since August 2018. Mr. Choudhrie is one of the managing members of our sponsor. Mr. Choudhrie
is a private equity investor with investments in the United States, United Kingdom, Europe and Asia. He has served as a Director
of Customers Bank since July 2009, and was an original member of Customers Bancorp’s Board (NYSE:CUBI). On January 30, 2013,
Customers Bancorp’s Board of Directors re-appointed Mr. Choudhrie to a vacant Board seat and he has served as a Director
of Customers Bancorp since then. Mr. Choudhrie was a Director of Atlantic Coast Financial Corporation from July 2010 and a Director
of Atlantic Coast Bank (a subsidiary of Atlantic Coast Financial Corporation (NASDAQ:ACFC) with main offices in Jacksonville,
Florida) from February 2016 until the merger of Atlantic Coast Financial Corporation into Ameris Bank in May 2018. Mr. Choudhrie
has also been a Director of C&C Alpha Group Limited since November 2006 through February 2014 and then reappointed in August
2014. C&C Alpha Group Limited is a London based family private equity group, which was founded in 2002 and has established
offices in several countries. He is also a Director of C&C Alpha Group Investments Ltd, a Dubai entity. Mr. Choudhrie serves
as a Director or officer of various investment or operating entities formed and/or doing business in the United States, United
Kingdom, Europe and Asia. He also currently serves as a Trustee of Path to Success, a United Kingdom registered charity, and as
a Director and President of the Choudhrie Family Foundation, a U.S. foundation. Mr. Choudhrie completed the Harvard Business School
Owner/President Management Program. We believe Mr. Choudhrie is well-qualified to serve as a member of the board due to his extensive
experience in private equity and banking.
Kuldeep Malkani
has served as a director since August 2018. Mr. Malkani was formerly a Portfolio Manager at Seneca Capital, an event-driven
hedge fund, from 2001 through 2015. While at Seneca Capital, he managed an equity portfolio which included financial services
companies and special purpose acquisition companies. Mr. Malkani was responsible for identifying, analyzing and sizing positions
while also managing macro risks in individual countries utilizing derivatives to hedge equity futures and currencies. Since 2016,
Mr. Malkani has served as the co-Chairman of the Sohn India Investment Conference, which brings together global hedge fund managers
to raise money for pediatric cancer research. Prior to Seneca Capital, Mr. Malkani was an Analyst at JP Morgan in the Technology,
Media and Telecom group advising on M&A transactions as well as equity capital placements. Mr. Malkani received his BBA from
the Stephen Ross School of Business at the University of Michigan in 1997. We believe Mr. Malkani is well-qualified to serve as
a member of the board due to his extensive experience in identifying and analyzing investment opportunities in public and private
companies, specifically those in the financial services sector.
Number and Terms of Office of Officers and Directors
We currently have seven
directors. Our Board is divided into three classes with only one class of directors being elected in each year and each class
(except for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. In accordance
with NYSE corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal
year end following our listing on NYSE. The term of office of Class I directors, consisting of Messrs. Date and Frank, will expire
at this Special Meeting. The term of office of the Class II directors, consisting of Messrs. Hurley and Malkani, will expire at
the second annual meeting of stockholders. The term of office of the Class III, consisting of Messrs. Choudhurie, Sidhu and Sidhu,
will expire at the third annual meeting of stockholders.
Our officers are appointed
by the Board and serve at the discretion of the Board, rather than for specific terms of office. Our Board is authorized to appoint
persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our officers may consist of Chief
Executive Officer, a Chief Financial Officer, a Secretary and such other officers (including without limitation, a Chairman of
the Board, Presidents, Vice Presidents, Partners, Managing Directors, Senior Managing Directors, Assistant Secretaries and a Treasurer)
as the Board from time to time may determine.
Director Independence
NYSE listing standards
require that a majority of Board be independent. An “independent director” is defined generally as a person other
than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion
of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying
out the responsibilities of a director. We have four “independent directors”, as defined in the NYSE listing standards
and applicable SEC rules to serve on our board of directors, namely, Messrs. Date, Frank, Hurley and Malkani. Our independent
directors have regularly scheduled meetings at which only independent directors are present.
Committees of the Board of Directors
Our Board has three
standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. Subject
to phase-in rules and a limited exception, NYSE rules and Rule 10A-3 of the Securities Exchange Act of 1934, as amended, require
that the audit committee of a listed company be comprised solely of independent directors, and NYSE rules require that the compensation
committee and nominating and corporate governance committee of a listed company each be comprised solely of independent directors.
Audit Committee
We have established
an audit committee of the Board. Messrs. Date, Frank and Malkani serve as members of our audit committee, and Mr. Date chairs
the audit committee. Under the NYSE listing standards and applicable SEC rules, we are required to have at least three members
of the audit committee, all of whom must be independent. Each of Messrs. Date, Frank and Malkani meet the independent director
standard under NYSE listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.
Each member of the
audit committee is financially literate and our board of directors has determined that Mr. Date qualifies as an “audit committee
financial expert” as defined in applicable SEC rules.
We have adopted an
audit committee charter, which details the principal functions of the audit committee, including:
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the appointment,
compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged
by us;
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pre-approving all
audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us,
and establishing pre-approval policies and procedures;
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setting clear hiring
policies for employees or former employees of the independent registered public accounting firm, including but not limited
to, as required by applicable laws and regulations;
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setting clear policies
for audit partner rotation in compliance with applicable laws and regulations;
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obtaining and reviewing
a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered
public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal
quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps
taken to deal with such issues and (iii) all relationships between the independent registered public accounting firm and us
to assess the independent registered public accounting firm’s independence;
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reviewing and approving
any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior
to us entering into such transaction; and
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reviewing with management,
the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance
matters, including any correspondence with regulators or government agencies and any employee complaints or published reports
that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting
standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
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Compensation Committee
We have established
a compensation committee of the Board. Messrs. Hurley and Malkani serve as members of our compensation committee. Under the NYSE
listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of
whom must be independent. Messrs. Hurley and Malkani are independent and Mr. Malkani chairs the compensation committee.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
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reviewing and approving
on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any
is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining
and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
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reviewing and approving
on an annual basis the compensation, if any is paid by us, of all of our other officers;
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reviewing on an
annual basis our executive compensation policies and plans;
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implementing and
administering our incentive compensation equity-based remuneration plans;
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assisting management
in complying with our proxy statement and annual report disclosure requirements;
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approving all special
perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
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if required, producing
a report on executive compensation to be included in our annual proxy statement; and
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reviewing, evaluating
and recommending changes, if appropriate, to the remuneration for directors.
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Notwithstanding the
foregoing, as indicated above, other than the payment to an entity affiliated with our sponsor of $2,000 per month, for up to
21 months, for office space, utilities and secretarial and administrative support and reimbursement of expenses, and payments
to an entity affiliated with our President a fee of approximately $16,667 per month following the consummation of our initial
public offering until the earlier of the consummation of our initial business combination or our liquidation as well as a bonus
of $78,000 paid at the closing of our initial public offering, no compensation of any kind, including finders, consulting or other
similar fees, will be paid to any of our existing stockholders, officers, directors or any of their respective affiliates, prior
to, or for any services they render in order to effectuate the consummation of an initial business combination. Accordingly, it
is likely that prior to the consummation of an initial business combination, the compensation committee will only be responsible
for the review and recommendation of any compensation arrangements to be entered into in connection with such initial business
combination.
The charter also provides
that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel
or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.
However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the
compensation committee will consider the independence of each such adviser, including the factors required by the NYSE and the
SEC.
Nominating and Corporate Governance Committee
We have established
a nominating and corporate governance committee of the Board. The members of our nominating and corporate governance are Messrs.
Date and Frank. Mr. Frank serves as chair of the nominating and corporate governance committee.
The primary purposes
of our nominating and corporate governance committee is to assist the Board in:
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identifying, screening
and reviewing individuals qualified to serve as directors and recommending to the board of directors candidates for nomination
for election at the annual meeting of stockholders or to fill vacancies on the board of directors;
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developing, recommending
to the board of directors and overseeing implementation of our corporate governance guidelines;
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coordinating and
overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the
governance of the company; and
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reviewing on a regular
basis our overall corporate governance and recommending improvements as and when necessary.
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The nominating and
corporate governance committee is governed by a charter that complies with the rules of the NYSE.
Director Nominations
Our nominating and
corporate governance committee recommends to the Board candidates for nomination for election at the annual meeting of the stockholders.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors
to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background,
diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and
the ability to represent the best interests of our stockholders.