Item 1. Business
Overview
We are a blank check company whose business
purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination
with one or more businesses (the “Business Combination”). We were incorporated in Delaware on November 19, 2008, as
Leucadia Development Corporation and changed our name to Landcadia Holdings Inc. on September 15, 2015. We are currently in the
process of locating suitable targets for our Business Combination. We intend to use the cash proceeds from our public offering
and private placement of warrants as well as additional issuances, if any, of our capital stock, debt or a combination of cash,
stock and debt to complete the Business Combination. We have neither engaged in any operations nor generated any revenue to date.
Based on our business activities, the Company is a “shell company” as defined under the Exchange Act of 1934 (the “Exchange
Act”) because we have no operations and nominal assets consisting almost entirely of cash.
The Company’s co-Sponsors are
Fertitta Entertainment, Inc. (the “FEI Sponsor”) and Leucadia National Corporation (the “Leucadia Sponsor”
and, together with FEI Sponsor, the “Sponsors”). Tilman J. Fertitta, the Company’s Co-Chairman and Chief Executive
Officer, is the sole stockholder, Chairman and Chief Executive Officer of Fertitta Entertainment, Inc., and Richard Handler, the
Company’s Co-Chairman and President, is the Chief Executive Officer of Leucadia National Corporation and its largest operating
subsidiary, Jefferies Group LLC, a global securities and investment banking firm.
On June 1, 2016, we consummated our
initial public offering (the “public offering”) of 25,000,000 units at a price of $10.00 per unit (the “units”),
generating total proceeds of $250,000,000. Each unit consists of one share of the Company’s Class A common stock, $0.0001
par value (“public shares”) and one redeemable common stock purchase warrant (each, a “public warrant”).
Each public warrant entitles the holder to purchase one-half of one share of Class A common stock at a price of $11.50 per whole
share. Simultaneously with the consummation of the public offering, our Sponsors purchased an aggregate of 14,000,000 warrants,
at a price of $0.50 per warrant, each exercisable to purchase one-half of one share of common stock at a price of $11.50 per share
(the “sponsor warrants”), in a private placement (the “private placement”), generating total proceeds of
$7,000,000. The sponsor warrants are identical to the public warrants sold as part of the units in the public offering except that,
so long as they are held by their initial purchasers or their permitted transferees, (i) they will not be redeemable by us, (ii)
they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions,
be transferred, assigned or sold until 30 days after the completion of our initial Business Combination and (iii) they may be exercised
by the holders on a cashless basis.
Prior to the public offering, in 2008,
the Leucadia Sponsor purchased an aggregate of 1,000 shares of the Company’s common stock (100% of the issued and outstanding
shares) for $1,000. On September 15, 2015, the Company increased the total number of authorized shares of all classes of capital
stock to 221,000,000, of which 200,000,000 shares are Class A shares at par value $0.0001 per share; 20,000,000 shares are Class
F shares at par value $0.0001 per share; and 1,000,000 shares are Preferred stock at par value $0.0001 per share.
On September 15, 2015, the Company reclassified
all of its issued and outstanding shares of common stock to Class F common stock (the “founders shares”), and conducted
a 1:7,187.5 stock split. On September 16, 2015, the Company issued 7,187,500 additional founder shares to the FEI Sponsor for $10,000.
On October 1, 2015, the Company completed a 5:1 reverse stock split of the founder shares. On April 27, 2016, the Company conducted
a 1:3 stock split, and on May 25, 2016, each of the Sponsors returned to the Company, at no cost, 718,750 founders shares (1,437,500
total shares), which were cancelled. The underwriters did not exercise their over-allotment option in connection with the public
offering and as such, the Sponsors forfeited 937,500 founder shares, which were returned to the Company, at no cost, on June 30,
2016. Following these transactions, each of the Sponsors owned 50% of the 6,250,000 issued and outstanding founders shares.
Upon the closing of the public offering
and the private placement, $250,000,000 was placed in a trust account with Continental Stock Transfer & Trust Company acting
as trustee (the “Trust Account”). Except for the withdrawal of interest to pay income taxes and franchise taxes, if
any, our second amended and restated certificate of incorporation (the “Certificate of Incorporation”) provides that
none of the funds held in trust will be released from the Trust Account until the earlier of (i) the completion of the Business
Combination; or (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Certificate
of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of the public shares if the
Company does not complete the Business Combination within 24 months from the closing of the public offering; or (iii) the redemption
of 100% of the public shares if the Company is unable to complete the Business Combination within 24 months from the closing of
the public offering. The proceeds held in the Trust Account may only be invested in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the
Investment Company Act which invest only in direct U.S. government treasury obligations.
After the payment of underwriting discounts
and commissions (excluding the deferred portion of $8,750,000 in underwriting discounts and commissions, which will be payable
upon consummation of our initial Business Combination if consummated) and approximately $655,000 in expenses relating to the public
offering, approximately $1,000,000 of the net proceeds of the public offering and private placement was not deposited into the
Trust Account and was retained by us for working capital purposes. The net proceeds deposited into the Trust Account remain on
deposit in the Trust Account earning interest. As of December 31, 2017, there was $252,054,977 in investments and cash held in
the Trust Account and $571,748 of cash held outside the Trust Account available for working capital purposes. As of December 31,
2017, no funds had been withdrawn from the Trust Account to pay taxes. We have a current tax liability of $448,099 related to trust
earnings offset by losses from operations.
Effecting Our Initial Business Combination
General
We are not presently engaged in, and
we will not engage in, any operations for an indefinite period of time. We intend to effectuate our initial Business Combination
using cash held in the Trust Account, our equity, debt or a combination of these as the consideration. We may seek to complete
our initial Business Combination with a company or business that may be financially unstable or in its early stages of development
or growth, which would subject us to the numerous risks inherent in such companies and businesses.
If our initial Business Combination
is paid for using equity or debt securities, or not all of the funds released from the Trust Account are used for payment of the
consideration in connection with our initial Business Combination or used for redemptions of our Class A common stock, we may apply
the balance of the cash released to us from the Trust Account for general corporate purposes, including for maintenance or expansion
of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing
our initial Business Combination, to fund the purchase of other companies or for working capital.
Selection of a target business
and structuring of our initial Business Combination
While we may pursue an acquisition opportunity
in any business industry or sector, we intend to focus on identifying a Business Combination opportunity in industries or sectors
that complement our management team’s background, and to capitalize on the ability of our management team to identify, acquire
and operate a business, focusing on the dining, hospitality, entertainment and gaming industries in the United States. We believe
our management team is well positioned to take advantage of the growing set of investment opportunities focused in the dining,
hospitality, entertainment and gaming industries, to create value for our stockholders, and that our contacts and sources, ranging
from owners of private and public companies, private equity funds, investment bankers, attorneys, accountants and business brokers
in these sectors will allow us to generate attractive acquisition opportunities. Our Certificate of Incorporation prohibits us
from effectuating a Business Combination with another blank check company or similar company with nominal operations.
Our initial Business Combination must
occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in
the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account)
at the time of the agreement to enter into the initial Business Combination. If our board is not able to independently determine
the fair market value of the target business or businesses, we will obtain an opinion from an independent accounting firm or independent
investment banking firm that is a member of the Financial Industry Regulatory Authority, or FINRA, with respect to the satisfaction
of such criteria. We do not intend to purchase multiple business in unrelated industries in connection with our initial Business
Combination. We anticipate structuring our initial Business Combination so that the post-transaction company in which our public
stockholders own shares will own or acquire substantially all of the equity interests or assets of the target business or businesses.
We may, however, structure our initial Business Combination such that the post-transaction company owns or acquires less than substantially
all of such interests or assets of the target business in order to meet certain objectives of the target management team or stockholders
or for other reasons, but we will only complete such Business Combination if the post-transaction company owns or acquires 50%
or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment
Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our stockholders
prior to the Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations
ascribed to the target and us in the Business Combination transaction. For example, we could pursue a transaction in which we issue
a substantial number of new shares in exchange for all of the outstanding capital stock of a target. In this case, we would acquire
a 100% controlling interest in the target. However, as a result of the issuance of a substantial number of new shares, our stockholders
immediately prior to our initial Business Combination could own less than a majority of our outstanding shares subsequent to our
initial Business Combination. If less than 100% of the equity interests or assets of a target business or businesses are owned
or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will
be valued for purposes of the 80% of net assets test. If the Business Combination involves more than one target business, the 80%
of net assets test will be based on the aggregate value of all of the target businesses even if the acquisitions of the target
businesses are not closed simultaneously.
In evaluating a prospective target business,
we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent ownership, management
and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information which will be made available to us. If we determine to move forward with a particular target, we will proceed
to structure and negotiate the terms of the Business Combination transaction.
The time required to evaluate a target
business and to structure and complete our initial Business Combination, and the costs associated with this process, are not currently
ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of, and negotiation
with, a prospective target business with which our Business Combination is not ultimately completed will result in our incurring
losses and will reduce the funds we can use to complete another Business Combination. We will not pay any finder’s or consulting
fees to our Sponsors, officers or directors, or any of our or their respective affiliates, for services rendered to us prior to
or in connection with the completion of our Business Combination. However, we will not be prohibited from engaging an affiliate
of our Leucadia Sponsor or its affiliates as financial advisors in connection with our initial Business Combination and paying
a customary financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable transactions,
although we are not under any contractual obligation, and have no present intent, to do so.
Redemption rights for holders
of public shares upon consummation of our initial Business Combination
We will provide our stockholders with
the opportunity to redeem all or a portion of their public shares upon the completion of our initial Business Combination at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two business
days prior to the consummation of our initial Business Combination, including interest, less income taxes payable, divided by the
number of then outstanding public shares, subject to the limitations described herein. There will be no redemption rights upon
the completion of our initial Business Combination with respect to our warrants. Our initial stockholders have entered into letter
agreements with us, pursuant to which they have agreed to waive their redemption rights with respect to their founder shares and
any public shares they may hold in connection with the completion of our initial Business Combination.
Conduct of redemptions pursuant
to tender offer rules
If we conduct redemptions pursuant to
the tender offer rules of the U.S. Securities and Exchange Commission (the “SEC”), we will, pursuant to our Certificate
of Incorporation: (a) conduct the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which regulate issuer
tender offers; and (b) file tender offer documents with the SEC prior to completing our initial Business Combination which contain
substantially the same financial and other information about the initial Business Combination and the redemption rights as is required
under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.
Submission of our initial Business
Combination to a stockholder vote
In the event that we seek stockholder
approval of our initial Business Combination, we will distribute proxy materials and, in connection therewith, provide our public
stockholders with the redemption rights described above upon completion of the initial Business Combination.
If we seek stockholder approval, we
will complete our initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in
favor of the Business Combination. In such case, our initial stockholders have agreed to vote their founder shares and any public
shares purchased during or after the initial public offering in favor of our initial Business Combination. Each public stockholder
may elect to redeem their public shares irrespective of whether they vote for or against the proposed transaction. In addition,
our initial stockholders have agreed to waive their redemption rights with respect to their founder shares, and any public shares
they may hold in connection with the consummation of the Business Combination.
If we seek stockholder approval of our
initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our initial stockholders, directors, executive officers, advisors or their affiliates may purchase shares
or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our
initial Business Combination. However, other than as expressly stated herein, they have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds held
in the Trust Account will be used to purchase shares or public warrants in such transactions. If they engage in such transactions,
they will not make any such purchases when they are in possession of any material nonpublic information not disclosed to the seller
or if such purchases are prohibited by Regulation M under the Exchange Act. We do not currently anticipate that such purchases,
if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases
that the purchases are subject to such rules, the purchasers will comply with such rules.
The purpose of any such purchases of
shares could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder
approval of the Business Combination or to satisfy a closing condition in an agreement with a target that requires us to have a
minimum net worth or a certain amount of cash at the closing of our Business Combination, where it appears that such requirement
would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants
outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial
Business Combination. Any such purchases of our securities may result in the completion of our Business Combination that may not
otherwise have been possible. In addition, if such purchases are made, the public “float” of our Class A common stock
or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to
maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
Limitation on redemption rights
upon completion of our initial Business Combination if we seek stockholder approval
Notwithstanding the foregoing redemption
rights, if we seek stockholder approval of our initial Business Combination and we do not conduct redemptions in connection with
our Business Combination pursuant to the tender offer rules, our Certificate of Incorporation provides that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares sold in the initial public offering. We believe the restriction described above will discourage stockholders
from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability to redeem their shares as
a means to force us or our management to purchase their shares at a significant premium to the then-current market price or on
other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the shares sold in
the initial public offering could threaten to exercise its redemption rights against a Business Combination if such holder’s
shares are not purchased by us or our management at a premium to the then-current market price or on other undesirable terms. By
limiting our stockholders’ ability to redeem to no more than 15% of the shares sold in the initial public offering, we believe
we will limit the ability of a small group of stockholders to unreasonably attempt to block our ability to complete our Business
Combination, particularly in connection with a Business Combination with a target that requires as a closing condition that we
have a minimum net worth or a certain amount of cash. However, we would not be restricting our stockholders’ ability to vote
all of their shares (including all shares held by those stockholders that hold more than 15% of the shares sold in the initial
public offering) for or against our Business Combination.
Redemption of public shares and
liquidation if no initial Business Combination
The Sponsors, our executive officers
and directors have agreed that we will have until June 1, 2018 to complete our initial Business Combination. If we are unable to
complete our initial Business Combination by June 1, 2018, 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 a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $50,000
of interest to pay dissolution expenses and net of taxes payable), divided by the number of then outstanding public shares, which
redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of our remaining stockholders and 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 by June 1, 2018.
Competition
In identifying, evaluating and selecting
a target business for our Business Combination, we may encounter intense competition from other entities having a business objective
similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating businesses
seeking strategic acquisitions. Many of these entities are well established and have extensive experience identifying and effecting
Business Combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical,
human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, our obligation
to pay cash in connection with our public stockholders who exercise their redemption rights may reduce the resources available
to us for our initial Business Combination and our outstanding warrants, and the future dilution they potentially represent, may
not be viewed favorably by certain target businesses. Either of these factors may place us at a competitive disadvantage in successfully
negotiating an initial Business Combination.
Facilities
We currently maintain our executive
offices at 1510 West Loop South, Houston, Texas 77027. The cost for this space is included in the $10,000 per month fee that we
pay our FEI Sponsor for office space, utilities and secretarial and administrative services. We consider our current office space
adequate for our current operations.
Employees
We currently have five executive officers.
Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote
as much of their time as they deem necessary to our affairs until we have completed our initial Business Combination. The amount
of time that Messrs. Fertitta, Handler or any of our other executive officers or directors will devote in any time period will
vary based on whether a target business has been identified for our initial Business Combination and the stage of the Business
Combination process we are in. We do not intend to have any full time employees prior to the completion of our initial Business
Combination.
Available Information
We are required to file Annual Reports
on Form 10-K and Quarterly Reports on Form 10-Q with the U.S. Securities and Exchange Commission (the “SEC”) on a regular
basis, and are required to disclose certain material events in a Current Report on Form 8-K. The public may read and copy any materials
we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain
information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet
website that contains reports, proxy and information statements and other information regarding issuers that file electronically
with the SEC. The SEC’s Internet website is located at http://www.sec.gov.
Item 1A. Risk Factors
An investment in our securities involves
a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained
in this 10-K, before making a decision to invest in our units. If any of the following events occur, our business, financial condition
and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and
you could lose all or part of your investment.
Forward-looking statements are based
on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance
that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number
of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these forward-looking statements. Our forward-looking statements
include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions
or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations
of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward-looking statements,
but the absence of these words does not mean that a statement is not forward-looking. Factors that might cause or contribute to
such forward-looking statements include, but are not limited to, those set forth herein and should be read in conjunction with
our financial statements and related notes thereto included elsewhere in this report.
We are an emerging growth company
with no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are an emerging growth company with
no operating results since our formation in 2008, and we will not commence operations until completing a Business Combination.
Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of
completing our initial Business Combination with one or more target businesses. We have no plans, arrangements or understandings
with any prospective target business concerning a Business Combination and may be unable to complete our Business Combination.
If we fail to complete our Business Combination, we will never generate any operating revenues.
Our public stockholders may not
be afforded an opportunity to vote on our proposed Business Combination, which means we may complete our initial Business Combination
even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder vote to
approve our initial Business Combination unless the Business Combination would require stockholder approval under applicable state
law or the rules of Nasdaq or if we decide to hold a stockholder vote for business or other reasons. For instance, Nasdaq rules
currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain stockholder
approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration in any Business
Combination. Therefore, if we were structuring a Business Combination that required us to issue more than 20% of our outstanding
shares, we would seek stockholder approval of such Business Combination. However, except as required by law, the decision as to
whether we will seek stockholder approval of a proposed Business Combination or will allow stockholders to sell their shares to
us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors, such as the timing
of the transaction and whether the terms of the transaction would otherwise require us to seek stockholder approval. Accordingly,
we may consummate our initial Business Combination even if holders of a majority of the outstanding shares of our common stock
do not approve of the Business Combination we consummate.
If we seek stockholder approval
of our initial Business Combination, our Sponsors and our officers and directors have agreed, pursuant to written agreements with
us, to vote any public shares purchased during or after the offering in favor of our initial Business Combination, regardless of
how our public stockholders vote.
Unlike many other blank check companies
in which the Sponsors agree to vote its founder shares in accordance with the majority of the votes cast by the public stockholders
in connection with an initial Business Combination, our Sponsors have agreed, pursuant to written agreements with us, to vote their
founder shares, as well as any public shares purchased in or after our public offering, in favor of our initial Business Combination.
In addition, our officers and directors have also agreed, pursuant to written agreements with us, to vote any public shares purchased
in or after our public offering in favor of our initial Business Combination. Accordingly, if we seek stockholder approval of our
initial Business Combination, it is more likely that the necessary stockholder approval will be received than would be the case
if our Sponsors, officers and directors agreed to vote their founder shares and public shares, as applicable, in accordance with
the majority of the votes cast by our public stockholders. As of December 31, 2017 our Sponsors collectively owned 6,250,000 founder
shares and 638,561 public shares.
The only opportunity our public
stockholders have to affect the investment decision regarding a potential Business Combination will be limited to the exercise
of their right to redeem their shares from us for cash, unless we seek stockholder approval of the Business Combination.
Since our board of directors may complete
a Business Combination without seeking stockholder approval, public stockholders may not have the right or opportunity to vote
on the Business Combination, unless we seek such stockholder vote. Accordingly, the only opportunity our public stockholders have
to affect the investment decision regarding a potential Business Combination may be limited to exercising their redemption rights
within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
stockholders in which we describe our initial Business Combination.
The ability of our public stockholders
to redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which
may make it difficult for us to enter into a Business Combination with a target.
We may seek to enter into a Business
Combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth
or a certain amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such
closing condition and, as a result, would not be able to proceed with the Business Combination. Furthermore, in no event will we
redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 (so that we are not subject
to the SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained
in the agreement relating to our initial Business Combination. In connection with a proposed Business Combination, the determination
of whether we satisfy such net tangible asset or cash requirement would take into account payment in full of the deferred underwriting
commissions upon consummation of such Business Combination. If accepting all properly submitted redemption requests would cause
our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described
above, we would not proceed with such redemption and the related Business Combination and may instead search for an alternate Business
Combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business Combination
transaction with us.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business
Combination or optimize our capital structure.
At the time we enter into an agreement
for our initial Business Combination, we will not know how many stockholders may exercise their redemption rights, and therefore
will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
If our Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price,
or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account
to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account
or arrange for third party financing. Raising additional third party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable
Business Combination available to us or optimize our capital structure.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business
Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our Business Combination agreement
requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial Business Combination would be unsuccessful is increased. If our initial Business
Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account.
If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock
may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your stock in the open market.
The requirement that we complete
our initial Business Combination within 24 months after the closing of the public offering may give potential target businesses
leverage over us in negotiating a Business Combination and may decrease our ability to conduct due diligence on potential Business
Combination targets as we approach our dissolution deadline. This could undermine our ability to complete our Business Combination
on terms that would produce value for our stockholders.
Any potential target business with which
we enter into negotiations concerning a Business Combination will be aware that we must complete our initial Business Combination
within 24 months from the closing of the public offering, or by June 1, 2018. Consequently, such target business may obtain leverage
over us in negotiating a Business Combination, knowing that if we do not complete our initial Business Combination with that particular
target business, we may be unable to complete our initial Business Combination with any target business. This risk will increase
as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter
into our initial Business Combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete
our initial Business Combination within 24 months after the closing of the public offering, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate.
We may not be able to find a suitable
target business and complete our initial Business Combination by June 1, 2018. If we have not completed our initial Business Combination
within such time 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, at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including interest (less taxes payable and up to $50,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject
to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
stockholders and 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.
We are a newly formed alliance
between our Sponsors and there is no basis upon which to evaluate our ability to achieve our business objectives.
Neither of our Sponsors has prior experience
with emerging growth companies similar to ours. In addition, our FEI Sponsor and our Leucadia Sponsor have not previously cooperated
with one another on a blank check company and may be considered a first-time alliance between Sponsors. As a result, there is no
basis upon which to evaluate our ability to work together. There may be increased risk if unanticipated disagreements between our
Sponsors develop. In that case, we may be unable to complete our initial Business Combination for reasons, including, but not limited
to, an inability to agree on: an appropriate target, terms suitable to the target’s controlling investors, the composition
of the management team, or appropriate financing strategies to accomplish the initial Business Combination.
If we seek stockholder approval
of our initial Business Combination, our Sponsors, directors, executive officers, advisors and their affiliates may elect to purchase
shares or warrants from public stockholders or public warrantholders, which may influence a vote on a proposed Business Combination
and reduce the public “float” of our common stock or public warrants.
If we seek stockholder approval of our
initial Business Combination and we do not conduct redemptions in connection with our Business Combination pursuant to the tender
offer rules, our Sponsors, directors, executive officers, advisors or their affiliates may purchase shares or warrants in privately
negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination,
although they are under no obligation to do so. Such a purchase of shares may include a contractual acknowledgement that such stockholder,
although still the record holder of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its
redemption rights. In the event that our Sponsors, directors, executive officers, advisors or their affiliates purchase shares
in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such
selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases
of shares could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder
approval of the Business Combination or to satisfy a closing condition in an agreement with a target that requires us to have a
minimum net worth or a certain amount of cash at the closing of our Business Combination, where it appears that such requirement
would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants
outstanding or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial
Business Combination. Any such purchases of our securities may result in the completion of our Business Combination that may not
otherwise have been possible.
In addition, if such purchases are made,
the public “float” of our common stock or warrants and the number of beneficial holders of our securities may be reduced,
possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities
exchange.
If a stockholder fails to receive
notice of our offer to redeem our public shares in connection with our Business Combination, or fails to comply with the procedures
for tendering its shares, such shares may not be redeemed.
We will comply with the proxy rules
or tender offer rules, as applicable, when conducting redemptions in connection with our Business Combination. Despite our compliance
with these rules, if a stockholder fails to receive our proxy or tender offer materials, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, the proxy documents or tender offer materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial Business Combination will describe the various
procedures that must be complied with in order to validly redeem or tender public shares. In the event that a stockholder fails
to comply with these procedures, its shares may not be redeemed.
Our public stockholders do not
have any rights or interests in funds from the Trust Account, except under certain limited circumstances. Therefore, to liquidate
their investment, our public stockholders may be forced to sell their public shares or warrants, potentially at a loss.
Our public stockholders are entitled
to receive funds from the Trust Account only upon the earlier to occur of: (i) our completion of an initial Business Combination,
and then only in connection with those shares of our common stock that such stockholder properly elected to redeem, subject to
certain limitations, (ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend
our Certificate of Incorporation to modify the substance or timing of our obligation to redeem 100% of our public shares if we
do not complete our initial Business Combination within 24 months from the closing of the public offering, or (iii) the redemption
of our public shares if we are unable to complete an initial Business Combination within 24 months from the closing of the public
offering, subject to applicable law and as further described herein. In addition, if our plan to redeem our public shares if we
are unable to complete an initial Business Combination within 24 months from the closing of the public offering is not completed
for any reason, compliance with Delaware law may require that we submit a plan of dissolution to our then-existing stockholders
for approval prior to the distribution of the proceeds held in our Trust Account. In that case, public stockholders may be forced
to wait beyond 24 months from the closing of the public offering before they receive funds from our Trust Account. In no other
circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate
their investment, our public stockholders may be forced to sell their public shares or warrants, potentially at a loss.
Nasdaq may delist our securities
from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us
to additional trading restrictions.
We cannot assure you that our securities
will continue to be listed on Nasdaq in the future or prior to our initial Business Combination. In order to continue listing our
securities on Nasdaq prior to our initial Business Combination, we must maintain certain financial, distribution and stock price
levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number
of holders of our securities (generally 300 public holders). Additionally, in connection with our initial Business Combination,
we will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s
continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock
price would generally be required to be at least $4.00 per share and our stockholders’ equity would generally be required
to be at least $5.0 million. We cannot assure you that we will be able to meet those initial listing requirements at that time.
On January 2, 2018, we received
a letter from the staff of Nasdaq’s Listing Qualifications Department notifying us that we no longer complied with
Nasdaq Listing Rule 5620(a) for continued listing due to our failure to hold an annual meeting of stockholders within twelve
months of the end of our fiscal year ended December 31, 2016. On February 12, 2018, we submitted our plan to regain
compliance pursuant to the procedures set forth in the Nasdaq listing rules. On February 23, 2018, Nasdaq granted us an
exception of up to 180 calendar days from the fiscal year end, or until June 29, 2018, to regain compliance. In the event we
do not satisfy the terms of the extension, Nasdaq will notify us that our securities will be delisted. At that time, we will
have the opportunity to appeal the determination to a Hearings Panel. If we timely appeal, our securities would remain listed
pending such decision. There can be no assurance that, if we do appeal, such appeal would be successful.
If Nasdaq delists our securities from
trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities
could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences,
including:
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a limited availability of market quotations
for our securities;
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reduced liquidity for our securities;
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a determination that our Class A common
stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent
rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a limited amount of news and analyst coverage;
and
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a decreased ability to issue additional
securities or obtain additional financing in the future.
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The National Securities Markets Improvement
Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which
are referred to as “covered securities”, which includes our Class A common stock and warrants. Although the states
are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if
there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale
of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict
the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view
blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not be covered securities
and we would be subject to regulation in each state in which we offer our securities.
Our public stockholders will not
be entitled to protections normally afforded to investors of many other blank check companies.
Since the net proceeds of our public
offering and the sale of the Sponsor Warrants are intended to be used to complete an initial Business Combination with a target
business that has not been selected, we may be deemed to be a “blank check” company under the United States securities
laws. However, because we have net tangible assets in excess of $5,000,000 and have filed a Current Report on Form 8-K, including
an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors in blank
check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among
other things, this means we will have a longer period of time to complete our Business Combination than do companies subject to
Rule 419. Moreover, if the Public offering had been subject to Rule 419, that rule would have prohibited the release of any interest
earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection
with the completion of an initial Business Combination.
If we seek stockholder approval
of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of stockholders are deemed to hold in excess of 15% of our Class A common stock, you will lose the ability to redeem all such shares
in excess of 15% of our Class A common stock.
If we seek stockholder approval of our
initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to
the tender offer rules, our Certificate of Incorporation provides that a public stockholder, together with any affiliate of such
stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section
13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the
shares sold in the public offering, which we refer to as the “Excess Shares.” However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our Business Combination.
Your inability to redeem the Excess Shares will reduce our public stockholders’ influence over our ability to complete our
Business Combination and our public stockholders could suffer a material loss on their investment in us if they sell Excess Shares
in open market transactions. Additionally, our public stockholders will not receive redemption distributions with respect to the
Excess Shares if we complete our Business Combination. And as a result, our public stockholders will continue to hold that number
of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your stock in open market transactions,
potentially at a loss.
Because of our limited resources
and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial
Business Combination. If we are unable to complete our initial Business Combination, our public stockholders may receive only approximately
$10.00 per share on our liquidation, and our warrants will expire worthless.
We expect to encounter intense competition
from other entities having a business objective similar to ours, including private investors (which may be individuals or investment
partnerships), other blank check companies and other entities, domestic and international, competing for the types of businesses
we intend to acquire. Many of these individuals and entities are well-established and have extensive experience in identifying
and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many
of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial
resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous
target businesses we could potentially acquire, our ability to compete with respect to the acquisition of certain target businesses
that are sizable will be limited by our available financial resources. This inherent competitive limitation gives others an advantage
in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public shares the
right to redeem their shares for cash at the time of our initial Business Combination in conjunction with a stockholder vote or
via a tender offer. Target companies will be aware that this may reduce the resources available to us for our initial Business
Combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination.
If we are unable to complete our initial Business Combination, our public stockholders may receive approximately $10.00 per share
on our liquidation, and our warrants will expire worthless.
Our Sponsors, and their affiliates,
have no obligation to provide us with potential investment opportunities or to devote any specified amount of time or support to
our company’s business.
Although we expect to benefit from our
Sponsors’ network of relationships and processes for evaluating and allocating investment opportunities among itself, us,
and other parties, our Sponsors have no legal or contractual obligation to seek on our behalf or to present to us investment opportunities
that might be suitable for our business. Our Sponsors may allocate potential investments at their discretion to any of their affiliates,
us, or other parties. We have no investment management, advisory, consulting or other agreement in place with our Sponsors that
obligate them to undertake efforts on our behalf or that govern the manner in which they will allocate investment opportunities.
Even if our Sponsors refer an opportunity to us, no assurance can be given that such opportunity will result in an acquisition
agreement or an initial Business Combination.
If the funds available to us outside
of the Trust Account are insufficient to allow us to operate at least until June 1, 2018, we may be unable to complete our initial
Business Combination.
The funds available to us outside of
the Trust Account may not be sufficient to allow us to operate at least until June 1, 2018, assuming that our initial Business
Combination is not completed during that time. We believe that the funds available to us outside of the Trust Account will be sufficient
to allow us to operate at least until June 1, 2018; however, we cannot assure you that our estimate is accurate. We will use or
have used a portion of the funds available to us to pay fees to consultants to assist us with our search for a target business.
We could also use a portion of the funds as a down payment or to fund a “no-shop” provision (a provision in letters
of intent designed to keep target businesses from “shopping” around for transactions with other companies on terms
more favorable to such target businesses) with respect to a particular proposed Business Combination, although we do not have any
current intention to do so. If we entered into a letter of intent where we paid for the right to receive exclusivity from a target
business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have
sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If we are unable to complete
our initial Business Combination, our public stockholders may only receive approximately $10.00 per share on our liquidation, and
our warrants will expire worthless.
If the funds available to us outside
of the Trust Account are insufficient, it could limit the amount available to fund our search for a target business or businesses
and complete our initial Business Combination, and we will depend on loans from our Sponsors or management team to fund our search,
to pay our franchise and income taxes and to complete our Business Combination.
On December 31, 2017 the funds available
to us outside of the Trust Account were $571,748, which will be used to fund our working capital requirements. If we are required
to seek additional capital, we would need to borrow funds from our Sponsors, management team or other third parties to operate
or may be forced to liquidate. None of our Sponsors, members of our management team or any of their affiliates is under any obligation
to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account
or from funds released to us upon completion of our initial Business Combination. If we are unable to complete our initial Business
Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust
Account. Consequently, our public stockholders may only receive approximately $10.00 per share on our liquidation of our public
shares, and our warrants will expire worthless.
Subsequent to our completion of
our initial Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges
that could have a significant negative effect on our financial condition, results of operations and our stock price, which could
cause you to lose some or all of your investment.
Even if we conduct due diligence on
a target business with which we combine, we cannot assure you that this diligence will surface all material issues that may be
present inside a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of
these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who choose to remain
stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely
to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach
by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring
a private claim under securities laws that the tender offer materials or proxy statement relating to the Business Combination contained
an actionable material misstatement or material omission.
If third parties bring claims
against us, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders
may be less than $10.00 per public share.
Our placing of funds in the Trust Account
may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service providers (other
than our independent accountants), prospective target businesses or other entities with which we do business execute agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of
our public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be
prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary
responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to
gain advantage with respect to a claim against our assets, including the funds held in the Trust Account. If any third party refuses
to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of
the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management
believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
Examples of possible instances where
we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular
expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute
a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no
guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason. Upon redemption
of our public shares, if we are unable to complete our Business Combination within the prescribed timeframe, or upon the exercise
of a redemption right in connection with our Business Combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption
amount received by public stockholders could be less than the $10.00 per public share initially held in the Trust Account, due
to claims of such creditors. Our Sponsors have agreed that they will be jointly and severally liable to us if and to the extent
any claims by a vendor for services rendered or products sold to us, or a prospective target business with which we have discussed
entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share
and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, in
each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver
of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriters of
the public offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an
executed waiver is deemed to be unenforceable against a third party, our Sponsors will not be responsible to the extent of any
liability for such third party claims. However, we have not asked our Sponsors to reserve for such indemnification obligations,
nor have we independently verified whether our Sponsors have sufficient funds to satisfy their indemnity obligations. Therefore,
we cannot assure you that our Sponsors would be able to satisfy those obligations. None of our officers or directors will indemnify
us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Our directors may decide not to
enforce the indemnification obligations of our Sponsors, resulting in a reduction in the amount of funds in the Trust Account available
for distribution to our public stockholders.
In the event that the proceeds in the
Trust Account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual amount per share held in the Trust
Account as of the date of the liquidation of the Trust Account, in each case net of the interest which may be withdrawn to pay
taxes, and one of our Sponsors asserts that it is unable to satisfy its obligations or that it has no indemnification obligations
related to a particular claim, our independent directors would determine whether to take legal action against such Sponsor to enforce
its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf
against our Sponsors to enforce their indemnification obligations to us, it is possible that our independent directors in exercising
their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If our independent
directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution
to our public stockholders may be reduced below $10.00 per public share.
If, after we distribute the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, a bankruptcy court may seek to recover such proceeds directly from our stockholders, and the members
of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members
of our board of directors and us to claims of punitive damages.
If, after we distribute the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy
laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages,
by paying public stockholders from the Trust Account prior to addressing the claims of creditors.
If, before distributing the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and
the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing the proceeds
in the Trust Account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against
us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent
any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection
with our liquidation may be reduced.
If we are deemed to be an investment
company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities
may be restricted, which may make it difficult for us to complete our Business Combination.
If we are deemed to be an investment
company under the Investment Company Act, our activities may be restricted, including:
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restrictions on the nature of our investments;
and
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restrictions on the issuance of securities,
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each of which may make it difficult
for us to complete our Business Combination. In addition, we may have imposed upon us burdensome requirements, including:
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registration as an investment company;
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adoption of a specific form of corporate
structure; and
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reporting, record keeping, voting, proxy
and disclosure requirements and other rules and regulations.
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In order not to be regulated as an investment
company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged primarily
in a business other than investing, reinvesting or trading of securities and that our activities do not include investing, reinvesting,
owning, holding or trading “investment securities” constituting more than 40% of our assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis. Our business will be to identify and complete a Business Combination and
thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or assets with
a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our anticipated
principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the Trust Account may only
be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company
Act having a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the
trustee is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments,
and by having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling
businesses in the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company”
within the meaning of the Investment Company Act. The Trust Account is intended as a holding place for funds pending the earlier
to occur of either: (i) the completion of our primary business objective, which is a Business Combination; or (ii) absent a Business
Combination, our return of the funds held in the Trust Account to our public stockholders as part of our redemption of the public
shares. If we do not invest the proceeds as discussed above, we may be deemed to be subject to the Investment Company Act. If we
were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional
expenses for which we have not allotted funds and may hinder our ability to complete a Business Combination. If we are unable to
complete our initial Business Combination, our public stockholders may only receive approximately $10.00 per share on our liquidation,
and our warrants will expire worthless.
Changes in laws or regulations,
or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
We are subject to laws and regulations
enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal
requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations and their interpretation and application may also change from time to time and those changes could have
a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable
laws or regulations, as interpreted and applied, could have a material adverse effect on our business and results of operations.
If we are unable to consummate
our initial Business Combination, our public stockholders may be forced to wait beyond 24 months from the closing of our public
offering before the redemption proceeds from our Trust Account become available to them.
If we are unable to consummate our initial
Business Combination within 24 months from the closing of the public offering, the proceeds then on deposit in the Trust Account,
including interest (less taxes payable and up to $50,000 of interest to pay dissolution expenses), will be used to fund the redemption
of our public shares. Any redemption by public stockholders from the Trust Account shall be effected automatically by function
of our Certificate of Incorporation prior to any voluntary winding up. If we are required to wind-up, liquidate the Trust Account
and distribute such amount therein, pro rata, to our public stockholders, as part of any liquidation process, such winding up,
liquidation and distribution must comply with the applicable provisions under Delaware law. In that case, investors may be forced
to wait beyond 24 months from the closing of our public offering before the redemption proceeds of our Trust Account become available
to them, and they receive the return of their pro rata portion of the proceeds from our Trust Account. We have no obligation to
return funds to investors prior to the date of our redemption or liquidation unless we consummate our initial Business Combination
prior thereto and only then in cases where investors have sought to redeem their shares of Class A common stock. Only upon our
redemption or any liquidation will public stockholders be entitled to distributions if we are unable to complete our initial Business
Combination.
Our stockholders may be held liable
for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the Delaware General Corporation
Law, or DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions
received by them in a dissolution. The pro rata portion of our Trust Account distributed to our public stockholders upon the redemption
of our public shares in the event we do not complete our initial Business Combination within 24 months from the closing of the
public offering may be considered a liquidation distribution under Delaware law. If a corporation complies with certain procedures
set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including
a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which
the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution. However, it is our intention to redeem our public shares as soon
as reasonably possible following the 24th month from the closing of the public offering in the event we do not complete our Business
Combination and, therefore, we do not intend to comply with those procedures.
Because we will not be complying with
Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide
for our payment of all existing and pending claims or claims that may be potentially brought against us within the 10 years following
our dissolution. Because we are a blank check company, rather than an operating company, and our operations are limited to searching
for prospective target businesses to acquire, the only likely claims to arise would be from our vendors (such as lawyers, investment
bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of the DGCL, any liability
of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share
of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the
third anniversary of the dissolution.
We cannot assure you that we will properly
assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims
to the extent of distributions received by them (but no more) and any liability of our stockholders may extend beyond the third
anniversary of such date. Furthermore, if the pro rata portion of our Trust Account distributed to our public stockholders upon
the redemption of our public shares in the event we do not complete our initial Business Combination within 24 months from the
closing of the public offering is not considered a liquidation distribution under Delaware law and such redemption distribution
is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then
be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.
We may not hold an annual meeting
of stockholders until after the consummation of our initial Business Combination. In addition, our public stockholders will not
have the right to elect directors prior to the consummation of our initial Business Combination.
In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following
our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for
the purposes of electing directors in accordance with our amended and restated bylaws unless such election is made by written consent
in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of
our initial Business Combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual
meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial Business Combination,
they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section
211(c) of the DGCL. Until we hold an annual meeting of stockholders, public stockholders may not be afforded the opportunity to
discuss company affairs with management. In addition, as holders of our Class A common stock, our public stockholders will not
have the right to vote on the election of directors prior to consummation of our initial Business Combination.
We have not registered the shares
of Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time,
and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being
able to exercise its warrants and causing such warrants to expire worthless.
We have not registered the shares of
Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities laws at this time.
However, under the terms of the warrant agreement, we have agreed to use our best efforts to file a registration statement under
the Securities Act covering such shares and maintain a current prospectus relating to the Class A common stock issuable upon exercise
of the warrants. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent
a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained
or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise
of the warrants are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on
a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue
any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or
qualified under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the
above, if our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our
option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect
a registration statement or register or qualify the shares under blue sky laws, and in the event we do not so elect, we will use
our best efforts to register or qualify the shares under the blue sky laws of the state of residence in those states in which the
warrants were initially offered by us in the public offering. In no event will we be required to net cash settle any warrant, or
issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the
shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon
exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant
shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders
who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of
Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our redemption right
even if the issuance of shares of Class A common stock upon exercise of the warrants is not exempt from registration or qualification
under applicable state blue sky laws and we are unable to effect such registration or qualification, subject to our obligation
in such case to use our best efforts to register or qualify the shares of Class A common stock under the blue sky laws of the state
of residence in those states in which the warrants were initially offered by us in the public offering.
The grant of registration rights
to our initial stockholders and holders of our Sponsor Warrants may make it more difficult to complete our initial Business Combination,
and the future exercise of such rights may adversely affect the market price of our Class A common stock.
Pursuant to the registration rights
agreement, our initial stockholders and their permitted transferees can demand that we register the founder shares after those
shares convert to shares of our Class A common stock at the time of our initial Business Combination. In addition, holders of our
Sponsor Warrants and their permitted transferees can demand that we register the Sponsor Warrants and the shares of Class A common
stock issuable upon exercise of the Sponsor Warrants and holders of warrants that may be issued upon conversion of working capital
loans may demand that we register such warrants or the Class A common stock issuable upon conversion of such warrants. The registration
rights will be exercisable with respect to the founder shares and the Sponsor Warrants and the shares of Class A common stock issuable
upon exercise of such Sponsor Warrants. We will bear the cost of registering these securities. The registration and availability
of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our
Class A common stock. In addition, the existence of the registration rights may make our initial Business Combination more costly
or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek in the
combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A common stock
that is expected when the securities owned by our initial stockholders, holders of our Sponsor Warrants or their respective permitted
transferees are registered.
Because we are not limited to
a particular industry sector or any specific target businesses with which to pursue our initial Business Combination, our public
stockholders will be unable to ascertain the merits or risks of any particular target business’s operations.
We will seek to complete a Business
Combination with an operating company in the dining, hospitality, entertainment and gaming industries in the United States but
may also pursue acquisition opportunities in other industries or geographic regions, except that we are not, under our Certificate
of Incorporation, permitted to effectuate our Business Combination with another blank check company or similar company with nominal
operations. Because we have not yet selected any specific target business with respect to a Business Combination, there is no basis
to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows,
liquidity, financial condition or prospects. To the extent we complete our Business Combination, we may be affected by numerous
risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business
or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations
of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks
inherent in a particular target business, we cannot be certain that we will properly ascertain or assess all of the significant
risk factors or that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our
control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We also cannot be certain that an investment in our stock will ultimately prove to be more favorable to investors than a direct
investment, if such opportunity were available, in a potential Business Combination target. Accordingly, any stockholders who choose
to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due
to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the tender offer materials or proxy statement relating to the Business Combination
contained an actionable material misstatement or material omission.
We may seek investment opportunities
outside of the dining, hospitality, entertainment and gaming industries in the United States, which may be in industries in which
our management may not have expertise.
Although we intend to focus on identifying
Business Combination candidates in the dining, hospitality, entertainment and gaming industries in the United States and we will
not initially actively seek to identify Business Combination candidates in other industries or regions, we will consider a Business
Combination candidate outside of the dining, hospitality, entertainment and gaming industries in the United States if we determine
that such candidate offers an attractive opportunity for our company or we are unable to identify a suitable candidate in the dining,
hospitality, entertainment and gaming industries in the United States industries after having expended a reasonable amount of time
and effort in an attempt to do so. Although our management will endeavor to evaluate the risks inherent in any particular Business
Combination candidate, we cannot assure you that we will adequately ascertain or assess all of the significant risk factors. In
the event we elect to pursue an investment outside of the dining, hospitality, entertainment and gaming industries in the United
States, our management’s expertise may not be directly applicable to its evaluation or operation, and the information contained
herein regarding the dining, hospitality, entertainment and gaming industries in the United States would not be relevant to an
understanding of the business that we elect to acquire.
Although we have identified general
criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial
Business Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which
we enter into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general
criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial Business Combination will not have all of these positive attributes. If we complete our initial Business Combination
with a target that does not meet some or all of these guidelines, such combination may not be as successful as a combination with
a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective Business Combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum
net worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by law, or we decide
to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder approval
of our initial Business Combination if the target business does not meet our general criteria and guidelines. If we are unable
to complete our initial Business Combination, our public stockholders may only receive approximately $10.00 per share on our liquidation,
and our warrants will expire worthless.
We may seek investment opportunities
with a financially unstable business or an entity lacking an established record of sales or earnings.
To the extent we complete our initial
Business Combination with a financially unstable business or an entity lacking an established record of sales or earnings, we may
be affected by numerous risks inherent in the operations of the business with which we combine. These risks include volatile revenues
or earnings and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk
factors and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control
and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain
an opinion from an independent investment banking or accounting firm, and consequently, you may have no assurance from an independent
source that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we complete our Business Combination
with an affiliated entity, we are not required to obtain an opinion from an independent investment banking firm that is a member
of FINRA that the price we are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders
will be relying on the judgment of our board of directors, who will determine fair market value based on standards generally accepted
by the financial community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,
as applicable, related to our initial Business Combination.
We may issue additional shares
of Class A common stock or preferred stock to complete our initial Business Combination or under an employee incentive plan after
completion of our initial Business Combination. We may also issue shares of Class A common stock upon the conversion of the Class
F common stock at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the anti-dilution
provisions contained therein. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our Certificate of Incorporation authorizes
the issuance of up to 200,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class F common
stock, par value $0.0001 per share and 1,000,000 shares of undesignated preferred stock, par value $0.0001 per share. As of December
31, 2017, there were 155,500,000 and 13,750,000 authorized but unissued shares of Class A common stock and Class F common stock,
respectively, available for issuance and, which amount takes into account shares reserved for issuance upon exercise of outstanding
warrants but not upon the conversion of the Class F common stock. Shares of Class F common stock are automatically convertible
into shares of our Class A common stock at the time of our initial Business Combination, initially at a one-for-one ratio but subject
to adjustment. As of December 31, 2017, there were no shares of preferred stock issued and outstanding.
We may issue a substantial number of
additional shares of Class A common or preferred stock to complete our initial Business Combination or under an employee incentive
plan after completion of our initial Business Combination. We may also issue shares of Class A common stock upon conversion of
the Class F common stock at a ratio greater than one-to-one at the time of our initial Business Combination as a result of the
anti-dilution provisions contained therein. However, our Certificate of Incorporation provides, among other things, that prior
to our initial Business Combination, we may not issue additional shares of capital stock that would entitle the holders thereof
to (i) receive funds from the Trust Account or (ii) vote on any initial Business Combination. These provisions of our Certificate
of Incorporation, like all provisions of our Certificate of Incorporation, may be amended with a stockholder vote. The issuance
of additional shares of common or preferred stock:
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may significantly dilute the equity interest
of investors;
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may subordinate the rights of holders
of shares of common stock if shares of preferred stock are issued with rights senior to those afforded our shares of common stock;
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could cause a change in control if a substantial
number of shares of common stock are issued, which may affect, among other things, our ability to use our net operating loss carry
forwards, if any, and could result in the resignation or removal of our present officers and directors; and
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may adversely affect prevailing market
prices for our units, common stock and/or warrants.
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Resources could be wasted in researching
acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial Business Combination, our public stockholders may only receive
approximately $10.00 per share on our liquidation, and our warrants will expire worthless.
We anticipate that the investigation
of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial Business Combination for any number of reasons including those beyond our control. Any such event will result in a
loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial Business Combination, our public stockholders may only receive
approximately $10.00 per share on our liquidation, and our warrants will expire worthless.
We are dependent upon our executive
officers and directors and their departure could adversely affect our ability to operate.
Our operations are dependent upon a
relatively small group of individuals and, in particular, our executive officers and directors. We believe that our success depends
on the continued service of our officers and directors, at least until we have completed our Business Combination. In addition,
our executive officers and directors are not required to commit any specified amount of time to our affairs and, accordingly, will
have conflicts of interest in allocating management time among various business activities, including identifying potential Business
Combinations and monitoring the related due diligence. We do not have an employment agreement with or key man insurance on the
life of any of our executive officers or directors. The unexpected loss of the services of one or more of our directors or executive
officers could have a detrimental effect on us.
Our ability to successfully effect
our initial Business Combination and to be successful thereafter will be totally dependent upon the efforts of our key personnel,
some of whom may join us following our initial Business Combination. The loss of key personnel or the hiring or retention of ineffective
personnel after the initial Business Combination could negatively impact the operations and profitability of our post-combination
business.
Our ability to successfully effect our
Business Combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target business,
however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior management
or advisory positions following our Business Combination, it is likely that some or all of the management of the target business
will remain in place. While we intend to closely scrutinize any individuals we engage after our Business Combination, we cannot
assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the requirements
of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar
with such requirements and take time away from oversight of our operations.
Our key personnel may negotiate
employment or consulting agreements with a target business in connection with a particular Business Combination. These agreements
may provide for them to receive compensation following our Business Combination and as a result, may cause them to have conflicts
of interest in determining whether a particular Business Combination is the most advantageous.
Our key personnel may be able to remain
with the company after the completion of our Business Combination only if they are able to negotiate employment or consulting agreements
in connection with the Business Combination. Such negotiations would take place simultaneously with the negotiation of the Business
Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for
services they would render to us after the completion of the Business Combination. The personal and financial interests of such
individuals may influence their motivation in identifying and selecting a target business. However, we believe the ability of such
individuals to remain with us after the completion of our Business Combination will not be the determining factor in our decision
as to whether or not we will proceed with any potential Business Combination. There is no certainty, however, that any of our key
personnel will remain with us after the completion of our Business Combination. We cannot assure you that any of our key personnel
will remain in senior management or advisory positions with us. The determination as to whether any of our key personnel will remain
with us will be made at the time of our initial Business Combination.
We may have a limited ability
to assess the management of a prospective target business and, as a result, may effect our initial Business Combination with a
target business whose management may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of
effecting our initial Business Combination with a prospective target business, our ability to assess the target business’s
management may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s
management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company,
the operations and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders who
choose to remain stockholders following the Business Combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due
to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the tender offer materials or proxy statement relating to the Business Combination
contained an actionable material misstatement or material omission.
The officers and directors of
an acquisition candidate may resign upon completion of our initial Business Combination. The departure of a potential Business
Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
The role of an acquisition candidate’s
key personnel upon the completion of our initial Business Combination cannot be ascertained at this time. Although we contemplate
that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate
following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not
wish to remain in place.
Our executive officers and directors
will allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to
devote to our affairs. This conflict of interest could have a negative impact on our ability to complete our initial Business Combination.
Our executive officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating
their time between our operations and our search for a Business Combination and their other businesses. Our executive officers
and directors intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial
Business Combination. The amount of time that Messrs. Fertitta, Handler or any of our other executive officers or directors devote
in any time period will vary based on whether a target business has been selected for our initial Business Combination and the
current stage of the Business Combination process. We do not intend to have any full-time employees prior to the completion of
our Business Combination. Each of our executive officers is engaged in several other business endeavors for which he may be entitled
to substantial compensation, and our executive officers are not obligated to contribute any specific number of hours per week to
our affairs. Our directors also serve as officers and board members for other entities. If our executive officers’ and directors’
other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment
levels, it could limit their ability to devote time to our affairs which may have a negative impact on our ability to complete
our initial Business Combination.
Certain of our executive officers
and directors are now, and all of them will likely in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by us and, accordingly, will likely have conflicts of interest in determining to which
entity a particular business opportunity should be presented.
Although none of our executive officers
or directors are currently associated with other blank check companies, certain of them are now, and all of them will likely in
the future become, affiliated with entities, including, among others, blank check companies or public and private companies, private
equity funds, venture capital funds, hedge funds and other investment vehicles and capital pools, which may be engaged in business
activities similar to those intended to be conducted by us. Our executive officers and directors may become aware of business opportunities
which may be appropriate for presentation to us and other entities to which they then owe fiduciary duties or contractual obligations.
Accordingly, they will likely have conflicts of interest in determining to which entity a particular business opportunity should
be presented. We cannot assure you that these conflicts will be resolved in our favor. As a result, a potential target business
may be presented to another entity prior to its presentation to us, which could have a negative impact on our ability to successfully
complete our initial Business Combination. Our Certificate of Incorporation provides that we renounce our interest in any corporate
opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her
capacity as a director or officer of our company and such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue.
Members of our management team directly
and indirectly own our common stock and warrants, and, accordingly, may have a conflict of interest in determining whether a particular
target business is an appropriate business with which to effectuate our initial Business Combination. Further, each of our officers
and directors may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or
resignation of any such officers and directors was included by a target business as a condition to any agreement with respect to
our initial Business Combination.
Our executive officers, directors,
security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy that expressly
prohibits our directors, executive officers, security holders or affiliates from having a direct or indirect pecuniary or financial
interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
In fact, we may enter into a Business Combination with a target business that is affiliated with our Sponsors, our directors or
executive officers, although we do not intend to do so. Nor do we have a policy that expressly prohibits any such persons from
engaging for their own account in business activities of the types conducted by us. Accordingly, such persons or entities may have
a conflict between their interests and ours.
The personal and financial interests
of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing
a Business Combination. Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable
target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular
Business Combination are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach
of their fiduciary duties to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals
for infringing on our stockholders’ rights.
We may engage in a Business Combination
with one or more target businesses that have relationships with entities that may be affiliated with our executive officers, directors
or Sponsors which may raise potential conflicts of interest.
In light of the involvement of our Sponsors,
executive officers and directors with other entities, we may decide to acquire one or more businesses affiliated with our Sponsors,
executive officers and directors. Our directors also serve as officers and board members for other entities. Such entities may
compete with us for Business Combination opportunities. Our Sponsors, officers and directors are not currently aware of any specific
opportunities for us to complete our Business Combination with any entities with which they are affiliated, and there have been
no preliminary discussions concerning a Business Combination with any such entity or entities. Although we will not be specifically
focusing on, or targeting, any transaction with any affiliated entities, we would pursue such a transaction if we determined that
such affiliated entity met our criteria for a Business Combination and such transaction was approved by a majority of our disinterested
directors. Despite our agreement to obtain an opinion from an investment banking firm that is a member of FINRA regarding the fairness
to our company from a financial point of view of a Business Combination with one or more domestic or international businesses affiliated
with our executive officers, directors or existing holders, potential conflicts of interest still may exist and, as a result, the
terms of the Business Combination may not be as advantageous to our public stockholders as they would be absent any conflicts of
interest.
Since our Sponsors, executive
officers and directors will lose their entire investment in us if our Business Combination is not completed, a conflict of interest
may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.
Our Sponsors, directors and executive
officers collectively own 6,250,000 founder shares and 638,561 public shares. The founder shares will be worthless if we do not
complete an initial Business Combination.
In addition, our Sponsors purchased
an aggregate of 14,000,000 Sponsor Warrants at a price of $0.50 per warrant (a purchase price of $7,000,000) in a private placement.
The personal and financial interests
of our executive officers and directors may influence their motivation in identifying and selecting a target Business Combination,
completing an initial Business Combination and influencing the operation of the business following the initial Business Combination.
This risk may become more acute as the 24- month anniversary of the closing of the public offering nears, which is the deadline
for our completion of an initial Business Combination.
Since our Sponsors, executive
officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if our Business Combination is not
completed, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for
our initial Business Combination.
At the closing of our initial Business
Combination, our Sponsors, executive officers and directors, or any of their respective affiliates, will be reimbursed for any
out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and
performing due diligence on suitable Business Combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses
incurred in connection with activities on our behalf. These financial interests of our Sponsors, executive officers and directors
may influence their motivation in identifying and selecting a target Business Combination and completing an initial Business Combination.
We may issue notes or other debt
securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and
financial condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments to issue
any notes or other debt securities, or to otherwise incur outstanding debt, we may choose to incur substantial debt to complete
our Business Combination. We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver
of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt
will affect the per-share amount available for redemption from the Trust Account. Nevertheless, the incurrence of debt could have
a variety of negative effects, including:
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default and foreclosure on our assets
if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
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acceleration of our obligations to repay
the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance
of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
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our immediate payment of all principal
and accrued interest, if any, if the debt security is payable on demand;
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our inability to obtain necessary additional
financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
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our inability to pay dividends on our
common stock;
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using a substantial portion of our cash
flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared,
expenses, capital expenditures, acquisitions and other general corporate purposes;
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limitations on our flexibility in planning
for and reacting to changes in our business and in the industry in which we operate;
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increased vulnerability to adverse changes
in general economic, industry and competitive conditions and adverse changes in government regulation; and
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limitations on our ability to borrow additional
amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes
and other disadvantages compared to our competitors who have less debt.
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We may only be able to complete
one Business Combination with the proceeds of the public offering and the private placement, which will cause us to be solely dependent
on a single business which may have a limited number of products or services. This lack of diversification may negatively impact
our operations and profitability.
The net proceeds from the public offering
and the private placement provided us with $250,000,000 that we may use to complete our initial Business Combination (including
$8,750,000 of deferred underwriting commissions being held in the Trust Account).
We may effectuate our Business Combination
with a single target business or multiple target businesses simultaneously or within a short period of time. However, we may not
be able to effectuate our Business Combination with more than one target business because of various factors, including the existence
of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present
operating results and the financial condition of several target businesses as if they had been operated on a combined basis. By
completing our initial Business Combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations
in different industries or different areas of a single industry. Accordingly, the prospects for our success may be:
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solely dependent upon the performance
of a single business, property or asset, or
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dependent upon the development or market
acceptance of a single or limited number of products, processes or services.
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This lack of diversification may subject
us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our Business Combination.
We may attempt to simultaneously
complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our Business Combination
and give rise to increased costs and risks that could negatively impact our operations and profitability.
Although we do not intend to purchase
multiple businesses in unrelated industries, if we determine to simultaneously acquire several businesses that are owned by different
sellers, we will need for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings
of the other Business Combinations, which may make it more difficult for us, and delay our ability, to complete our initial Business
Combination. With multiple Business Combinations, we could also face additional risks, including additional burdens and costs with
respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks
associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating
business. If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
We may attempt to complete our
initial Business Combination with a private company about which little information is available, which may result in a Business
Combination with a company that is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy,
we may seek to effectuate our initial Business Combination with a privately held company. By definition, very little public information
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial Business
Combination on the basis of limited information, which may result in a Business Combination with a company that is not as profitable
as we suspected, if at all.
Our management may not be able
to maintain control of a target business after our initial Business Combination. We cannot provide assurance that, upon loss of
control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
We may structure a Business Combination
so that the post-transaction company in which our public stockholders own shares will own less than 100% of the equity interests
or assets of a target business, but we will only complete such Business Combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for us not to be required to register as an investment company under the Investment Company Act. We will not consider any transaction
that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to the Business Combination may collectively own a minority interest in the post Business Combination company,
depending on valuations ascribed to the target and us in the Business Combination transaction. For example, we could pursue a transaction
in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a
target. In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number
of new shares of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding
shares of common stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their
holdings resulting in a single person or group obtaining a larger share of the company’s stock than we initially acquired.
Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
We do not have a specified maximum
redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a Business Combination
with which a substantial majority of our stockholders do not agree.
Our Certificate of Incorporation does
not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that
would cause our net tangible assets to be less than $5,000,001 (such that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial Business
Combination. As a result, we may be able to complete our Business Combination even though a substantial majority of our public
stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial
Business Combination and do not conduct redemptions in connection with our Business Combination pursuant to the tender offer rules,
have entered into privately negotiated agreements to sell their shares to our Sponsors, officers, directors, advisors or their
affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination
exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, all shares
of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Business
Combination.
In order to effectuate an initial
Business Combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing
instruments. We cannot assure you that we will not seek to amend our Certificate of Incorporation or governing instruments in a
manner that will make it easier for us to complete our initial Business Combination that our stockholders may not support.
In order to effectuate a Business Combination,
blank check companies have, in the recent past, amended various provisions of their charters and governing instruments. For example,
blank check companies have amended the definition of Business Combination, increased redemption thresholds and changed industry
focus. Amending our Certificate of Incorporation will require stockholder approval, and amending our warrant agreement will require
a vote of holders of at least 65% of the public warrants. We cannot assure you that we will not seek to amend our charter or governing
instruments in order to effectuate our initial Business Combination.
The provisions of our Certificate
of Incorporation that relate to our pre-Business Combination activity (and corresponding provisions of the agreement governing
the release of funds from our Trust Account) may be amended with the approval of holders of 65% of our common stock, which is a
lower amendment threshold than that of some other blank check companies. It may be easier for us, therefore, to amend our Certificate
of Incorporation to facilitate the completion of an initial Business Combination that some of our stockholders may not support.
Some other blank check companies have
a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s
pre-Business Combination activity, without approval by a certain percentage of the company’s stockholders. In those companies,
amendment of these provisions requires approval by between 90% and 100% of the company’s public stockholders. Our Certificate
of Incorporation provides that any of its provisions related to pre-Business Combination activity (including the requirement to
deposit proceeds of the public offering and the sale of Sponsor Warrants into the Trust Account and not release such amounts except
in specified circumstances, and to provide redemption rights to public stockholders as described herein) may be amended if approved
by holders of 65% of our common stock, and corresponding provisions of the trust agreement governing the release of funds from
our Trust Account may be amended if approved by holders of 65% of our common stock. Our initial stockholders will participate in
any vote to amend our Certificate of Incorporation and/or trust agreement and will have the discretion to vote in any manner they
choose. As a result, we may be able to amend the provisions of our Certificate of Incorporation which govern our pre-Business Combination
behavior more easily than some other blank check companies, and this may increase our ability to complete a Business Combination
with which you do not agree. Our stockholders may pursue remedies against us for any breach of our Certificate of Incorporation.
Our Sponsors, executive officers and
directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our Certificate of
Incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete
our initial Business Combination within 24 months from the closing of the public offering, unless we provide our public stockholders
with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of
taxes payable) divided by the number of then outstanding public shares. These agreements are contained in letter agreements that
we have entered into with our Sponsors, executive officers and directors. Our stockholders are not parties to, or third-party beneficiaries
of, these agreements and, as a result, will not have the ability to pursue remedies against our Sponsors, executive officers or
directors for any breach of these agreements. As a result, in the event of a breach, our public stockholders would need to pursue
a stockholder derivative action, subject to applicable law.
Our letter agreements with our
Sponsors, directors and officers may be amended without stockholder approval.
Our letter agreements with our Sponsors,
directors and officers contain provisions relating to transfer restrictions of our founder shares and Sponsor Warrants, indemnification
of the Trust Account, waiver of redemption rights and participation in liquidation distributions from the Trust Account. These
letter agreements may be amended without stockholder approval. While we do not expect our board to approve any amendment to these
agreements prior to our initial Business Combination, it may be possible that our board, in exercising its business judgment and
subject to its fiduciary duties, chooses to approve one or more amendments to these agreements. Any such amendments to the letter
agreements would not require approval from our stockholders and may have an adverse effect on the value of an investment in our
securities.
We may be unable to obtain additional
financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel
us to restructure or abandon a particular Business Combination. If we are unable to complete our initial Business Combination,
our public stockholders may only receive approximately $10.00 per share on our liquidation, and our warrants will expire worthless.
Although we believe that the net proceeds
from the public offering and the private placement will be sufficient to allow us to complete our initial Business Combination,
because we have not yet selected any prospective target business we cannot ascertain the capital requirements for any particular
transaction. If the net proceeds of the public offering and the private placement prove to be insufficient, either because of the
size of our initial Business Combination, the depletion of the available net proceeds in search of a target business, the obligation
to repurchase for cash a significant number of shares from stockholders who elect redemption in connection with our initial Business
Combination or the terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we
may be required to seek additional financing or to abandon the proposed Business Combination. We cannot assure you that such financing
will be available on acceptable terms, if at all. The current economic environment has made it especially difficult for companies
to obtain acquisition financing. To the extent that additional financing proves to be unavailable when needed to complete our initial
Business Combination, we would be compelled to either restructure the transaction or abandon that particular Business Combination
and seek an alternative target business candidate. If we are unable to complete our Business Combination, our public stockholders
may only receive approximately $10.00 per share on our liquidation, and our warrants will expire worthless. In addition, even if
we do not need additional financing to complete our Business Combination, we may require such financing to fund the operations
or growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued
development or growth of the target business. None of our officers, directors or stockholders is required to provide any financing
to us in connection with or after our Business Combination.
Our initial stockholders will
control the election of our board of directors until consummation of our initial Business Combination and will hold a substantial
interest in us. As a result, they will elect all of our directors and may exert a substantial influence on actions requiring a
stockholder vote, potentially in a manner that you do not support.
The founder shares, all of which are
held by our initial stockholders, will entitle the holders to elect all of our directors prior to our initial Business Combination.
Holders of our public shares will have no right to vote on the election of directors during such time. These provisions of our
Certificate of Incorporation may only be amended by a vote of the majority of at least 90% of our common stock voting at a meeting.
As a result, you will not have any influence over the election of directors prior to our initial Business Combination. Accordingly,
our initial stockholders may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner that
you do not support, including amendments to our Certificate of Incorporation.
If our initial stockholders purchase
any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control.
Jefferies, an affiliate of Leucadia Sponsor owns 638,561 shares of Class A common stock.
In addition, our board of directors,
whose members were elected by our Sponsors, is and will be divided into three classes, each of which will generally serve for a
term of three years with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders
to elect new directors prior to the completion of our Business Combination, in which case all of the current directors will continue
in office until at least the completion of the Business Combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because
of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will
continue to exert control at least until the completion of our Business Combination.
You may experience dilution of
our Class A common stock at the time of our initial Business Combination.
Dilution may occur as a result of the
anti-dilution provisions of the Class F common stock resulting in the issuance of Class A shares on a greater than one to-one basis
upon conversion of the Class F common stock at the time of our initial Business Combination and would become exacerbated to the
extent that public stockholders seek redemptions from the trust. In addition, because of the anti-dilution protection in the founder
shares, any equity or equity-linked securities issued in connection with our initial Business Combination would be disproportionately
dilutive to our Class A common stock.
We may amend the terms of the
warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then outstanding public
warrants.
Our warrants have been issued in registered
form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of at least 65% of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the warrants in a manner
adverse to a holder if holders of at least 65% of the then outstanding public warrants approve of such amendment. Although our
ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding public warrants is unlimited,
examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert the
warrants into cash, shorten the exercise period or decrease the number of shares of our common stock purchasable upon exercise
of a warrant.
We may redeem your unexpired warrants
prior to their exercise at a time that is disadvantageous to our public stockholders, thereby making their warrants worthless.
We have the ability to redeem outstanding
warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that
the closing price of our Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day
period ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption.
If and when the warrants become redeemable by us, we may exercise our redemption right even if the issuance of shares of Class
A common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws
and we are unable to effect such registration or qualification, subject to our obligation in such case to use our best efforts
to register or qualify the shares of Class A common stock under the blue sky laws of the state of residence in those states in
which the warrants were initially offered by us in the public offering. Redemption of the outstanding warrants could force our
public stockholders (i) to exercise their warrants and pay the exercise price therefor at a time when it may be disadvantageous
for them to do so, (ii) to sell their warrants at the then-current market price when they might otherwise wish to hold their warrants
or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely
to be substantially less than the market value of their warrants. None of the Sponsor Warrants will be redeemable by us so long
as they are held by their initial purchasers or their permitted transferees.
Our warrants may have an adverse
effect on the market price of our Class A common stock and make it more difficult to effectuate our Business Combination.
We issued 25,000,000 warrants as part
of the units offered in the public offering as well as issued 14,000,000 Sponsor Warrants in a private placement that occurred
simultaneously with the closing of the public offering. Each warrant will be exercisable to purchase one-half of one share of Class
A common stock at $5.75 per one-half share. In addition, if any of our Sponsors make any working capital loans, it may convert
those loans into up to an additional 3,000,000 Sponsor Warrants, at the price of $0.50 per warrant. Warrants may be exercised only
for a whole number of shares of Class A common stock. To the extent we issue shares of Class A common stock to effectuate a business
transaction, the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise
of these warrants could make us a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will
increase the number of issued and outstanding shares of our Class A common stock and reduce the value of the shares of Class A
common stock issued to complete the business transaction. Therefore, our warrants may make it more difficult to effectuate a business
transaction or increase the cost of acquiring the target business.
The Sponsor Warrants are identical to
the warrants sold as part of the units except that, so long as they are held by their initial purchasers or their permitted transferees,
(i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants)
may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsors until 30 days after the completion
of our initial Business Combination and (iii) they may be exercised by the holders on a cashless basis.
Future issuances of our securities
by us, and the availability for resale of securities held by our existing investors, may cause the market price of our securities
to decline.
The sale of a substantial amount of
our securities in the public market, or the perception that such sales could occur, could cause the prevailing market price of
our securities to decline. All of the securities sold in the public offering are freely tradable in the public markets, unless
held by our affiliates. The founder shares held by our initial stockholders will be available for resale in the public market following
the expiration or earlier waiver or termination of the lock-up periods described below. The market price of our securities could
decline if the holders of these shares sell them or are perceived by the market as intending to sell them.
Our Sponsors, directors and officers
signed lock-up agreements with us, that subject to certain customary exceptions, restrict the sale of our founder shares held by
them for one year after the date of our initial Business Combination without our consent, subject to earlier release if, subsequent
to our initial Business Combination, (i) the last sale price of our Class A common stock equals or exceeds $12.00 per share (as
adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading day period commencing at least 150 days after our initial Business Combination or (ii) we consummate a subsequent liquidation,
merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their
shares of common stock for cash, securities or other property.
As restrictions on resale end, or if
we and, as applicable, Jefferies LLC and Deutsche Bank Securities Inc., were to waive the applicable lock-up periods, the market
price of our securities could drop significantly if the holders of these restricted shares immediately sell them or are perceived
by the market as intending to sell them.
Because each warrant is exercisable
for only one-half of one share of our Class A common stock, the units may be worth less than units of other blank check companies.
Each warrant is exercisable for one-half
of one share of Class A common stock. Warrants may be exercised only for a whole number of shares of Class A common stock. No fractional
shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive a
fractional interest in a share, we will, upon exercise, round down to the nearest whole number the number of shares of Class A
common stock to be issued to the warrant holder. As a result, warrant holders not purchasing an even number of warrants must sell
any odd number of warrants in order to obtain full value from the fractional interest that will not be issued. This is different
from other offerings similar to ours whose units include one share of Class A common stock and one warrant to purchase one whole
share. We have established the components of the units in this way in order to reduce the dilutive effect of the warrants upon
completion of a Business Combination since the warrants will be exercisable in the aggregate for half of the number of shares compared
to units that each contain a warrant to purchase one whole share, thus making us, we believe, a more attractive merger partner
for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if it included a warrant to
purchase one whole share.
Because we must furnish our stockholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination
with some prospective target businesses.
The federal proxy rules require
that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include
historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement
disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles
generally accepted in the United States of America, or GAAP, or international financing reporting standards as promulgated by
the IASB, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in
accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial
statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to
provide such statements in time for us to disclose such statements in accordance with federal proxy rules and complete our
initial Business Combination within the prescribed time frame.
We are an emerging growth company
within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available
to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare
our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not
limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley
Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions
from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute
payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier,
including but not limited to, if the market value of our common stock held by non-affiliates exceeds $700 million as of any June
30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot
predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors
find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be
lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our
securities may be more volatile.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of
securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The
JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended
transition period which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new
or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible
because of the potential differences in accounting standards used.
Compliance obligations under the
Sarbanes-Oxley Act may make it more difficult for us to effectuate our Business Combination, require substantial financial and
management resources, and increase the time and costs of completing an acquisition.
Section 404 of the Sarbanes-Oxley Act
requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K for the year
ending December 31, 2017. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will we be required
to comply with the independent registered public accounting firm attestation requirement on our internal control over financial
reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are
a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared
to other public companies because a target company with which we seek to complete our Business Combination may not be in compliance
with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control
of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any
such acquisition.
Provisions in our Certificate
of Incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in
the future for our Class A common stock and could entrench management.
Our Certificate of Incorporation contains
provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. These
provisions include a staggered board of directors and the ability of the board of directors to designate the terms of and issue
new series of preferred shares, which may make more difficult the removal of management and may discourage transactions that otherwise
could involve payment of a premium over prevailing market prices for our securities.
We are also subject to anti-takeover
provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult
the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market
prices for our securities.
We may reincorporate in another
jurisdiction in connection with our initial Business Combination and such reincorporation may result in taxes imposed on our stockholders.
We may, in connection with our initial
Business Combination and subject to requisite stockholder approval under the DGCL reincorporate in the jurisdiction in which the
target company or business is located. The transaction may require a stockholder to recognize taxable income in the jurisdiction
in which the stockholder is a tax resident or in which its members are resident if it is a tax transparent entity. We do not intend
to make any cash distributions to stockholders to pay such taxes. Stockholders may be subject to withholding taxes or other taxes
with respect to their ownership of us after the reincorporation.
We may reincorporate in another
jurisdiction in connection with our initial Business Combination, and the laws of such jurisdiction may govern some or all of our
future material agreements and we may not be able to enforce our legal rights.
In connection with our initial Business
Combination, we may relocate the home jurisdiction of our business from the United States to another jurisdiction. If we determine
to do this, the laws of such jurisdiction may govern some or all of our future material agreements. The system of laws and the
enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as in the United States.
The inability to enforce or obtain a remedy under any of our future agreements could result in a significant loss of business,
business opportunities or capital.
Provisions in our Certificate
of Incorporation may inhibit lawsuits against our officers and directors.
Our Certificate of Incorporation requires,
to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees
for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and,
if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such
stockholder’s counsel. These provisions may have the effect of discouraging lawsuits against our directors and officers.
If we effect our initial Business
Combination with a company located outside the United States, or with operations located outside the United States, we would be
subject to a variety of additional risks that may negatively impact our operations.
If we effect our initial Business Combination
with a company located outside the United States, or with operations or opportunities outside of the United States, we would be
subject to any special considerations or risks associated with companies operating in an international setting, including any of
the following:
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costs and difficulties inherent in managing
cross-border business operations;
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rules and regulations regarding currency
redemption;
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complex corporate withholding taxes on
individuals;
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·
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laws governing the manner in which future
Business Combinations may be effected;
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·
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tariffs and trade barriers;
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·
|
regulations related to customs and import/export
matters;
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·
|
tax issues, such as tax law changes and
variations in tax laws as compared to the United States;
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·
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currency fluctuations and exchange controls;
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·
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challenges in collecting accounts receivable;
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cultural and language differences;
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employment regulations;
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crime, strikes, riots, civil disturbances,
terrorist attacks and wars; and
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deterioration of political relations with
the United States.
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We may not be able to adequately address
these additional risks. If we were unable to do so, our operations might suffer, which may adversely impact our results of operations
and financial condition.