NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD JUNE 17, 2020
TO
THE STOCKHOLDERS OF OPES ACQUISITION CORP.:
You
are cordially invited to attend the special meeting (the “special meeting”) of stockholders of Opes Acquisition Corp,
(the “Company,” “Opes,” “we,” “us” or “our”) to be held at 10:00 a.m.
EST on June 17, 2020. Due to the COVID-19 pandemic, the Company will be holding the special meeting via teleconference using the
following dial-in information:
US Toll Free
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International Toll
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Participant Passcode
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The
special meeting will be held for the sole purpose of considering and voting upon the following proposals:
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a
proposal to amend (the “Extension Amendment”) the Company’s amended and restated certificate of incorporation
(the “charter”) to extend the date by which the Company has to consummate a business combination (the “Extension”)
for an additional 90 days, from June 18, 2020 to September 16, 2020 (the “Extended Date”); and
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a
proposal to approve the early winding up of the Company and redemption of 100% of the outstanding public shares as described in
the accompanying proxy statement if the Company’s board of directors determines at any time prior to the Extended Date that
the Company will be unable to consummate an initial business combination by the Extended Date (the “Early Termination Proposal”).
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The
Extension Amendment and the Early Termination Proposal are more fully described in the accompanying proxy statement.
The
purpose of the Extension Amendment is to allow the Company more time to complete an initial business combination. The purpose
of the Early Termination Proposal is to obtain any necessary stockholder approval to wind up the Company’s affairs and redeem
100% of the outstanding public shares if the Company’s board of directors determines in its sole discretion at any time
prior to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended Date.
The
Company’s prospectus for its initial public offering (“IPO”) and its charter provided that the Company had only
until September 16, 2019 to complete a business combination. On September 16, 2019, the Company’s stockholders approved
an amendment to the charter to provide that it would have until November 15, 2019 to complete a business combination. On November
15, 2019, the Company’s stockholders approved a second amendment to the charter to provide that it would have until January
15, 2020 to complete a business combination. On January 15, 2020, the Company’s stockholders approved a third amendment
to the charter to provide that it would have until March 16, 2020 to complete a business combination. On March 16, 2020, the Company’s
stockholders approved a fourth amendment to the charter to provide that it would have until June 18, 2020 to complete a business
combination. There is not sufficient time before June 18, 2020 to allow the Company to consummate an initial business combination.
Accordingly, our board has determined that it is in the best interests of our stockholders to further extend the date that the
Company has to consummate an initial business combination to the Extended Date.
The
Company has agreed that if the Extension Amendment proposal is approved and the Extension is implemented, it will deposit (each
deposit being referred to herein as a “Deposit”) into the trust account established in connection with the IPO (the
“trust account”) $[●] for each public share that is not converted in connection with the stockholder vote to
approve the Extension, for each monthly period, or portion thereof, that is needed by the Company to complete an initial business
combination from June 18, 2020 until the Extended Date. Alternatively, if the Company does not have the funds necessary to make
the Deposit referred to above, certain of the Company’s stockholders have agreed that they and/or any of their affiliates
or designees will contribute to the Company as a loan (each stockholder, affiliate or designee making the loan being referred
to herein as a “Contributor” and each loan being referred to herein as a “Contribution”) $[●] for
each public share that is not converted in connection with the stockholder vote to approve the Extension, for each monthly period,
or portion thereof, that is needed by the Company to complete an initial business combination from June 18, 2020 until the Extended
Date. Accordingly, if the Company takes until the Extended Date to complete an initial business combination, which would represent
[three] monthly periods through the Extended Date, the Company or Contributor(s) would make Deposits or Contributions of approximately
$[●] per month, or an aggregate of approximately $[●] (assuming no public shares were converted). Each Deposit or Contribution
will be placed in the trust account within two business days prior to the beginning of such monthly period (or portion thereof),
other than the first Deposit or Contribution which will be made on the day of the approval and implementation of the Extension
Amendment. Accordingly, if the Extension Amendment is approved and the Extension is implemented and the Company takes the full
time through the Extended Date to complete an initial business combination, the conversion amount per share at the meeting for
such business combination or the Company’s subsequent liquidation will be approximately $[●] per share (without taking
into account any interest), in comparison to the current conversion amount of approximately $[●] per share. No Deposit or
Contribution will be made unless the Extension Amendment is approved and the Extension is completed. The Contribution(s) will
not bear any interest and will be repayable by the Company to the Contributor(s) upon consummation of an initial business combination.
The loans will be forgiven if the Company is unable to consummate an initial business combination except to the extent of any
funds held outside of the trust account. The Company or Contributor(s), as applicable, will have the sole discretion whether to
continue extending for additional monthly periods until the Extended Date and if the Company or Contributor(s), as applicable,
determine not to continue extending for additional monthly periods, the obligation to make additional Deposits or Contributions
will terminate. If this occurs, or if the Company’s board of directors otherwise determines that the Company will not be
able to consummate an initial business combination by the Extended Date and does not wish to seek an additional extension, the
Company would wind up the Company’s affairs and redeem 100% of the outstanding public shares in accordance with the same
procedures set forth below that would be applicable if the Extension Amendment proposal is not approved.
The
holders of shares of common stock issued in the Company’s IPO (the “public shares”) may elect to convert their
public shares into their pro rata portion of the funds held in the trust account (calculated as of two business days prior to
the meeting) if the Extension is implemented (the “Conversion”). Holders of public shares do not need to vote on the
Extension Amendment proposal or be a holder of record on the record date to exercise conversion rights. The per-share pro rata
portion of the trust account on the record date after taking into account taxes owed but not paid by such date (which is expected
to be the same approximate amount two business days prior to the meeting) was approximately $[●]. The closing price of the
Company’s common stock on the record date was $[●]. Accordingly, if the market price were to remain the same until
the date of the meeting, exercising conversion rights would result in a public stockholder receiving approximately $[●] less
than if he sold his stock in the open market. The Company cannot assure stockholders that they will be able to sell their shares
of Company common stock in the open market, even if the market price per share is higher than the conversion price stated above,
as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares.
If
the Extension Amendment proposal is not approved, in accordance with our charter, we will (i) cease all operations except for
the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100%
of the outstanding public shares with the aggregate amount then on deposit in the trust account and (iii) thereafter seek to dissolve
and liquidate as described in more detail in this proxy statement.
If
the Extension Amendment proposal is approved and the Extension is implemented, but the Company’s board of directors subsequently
determines that the Company will not be able to consummate an initial business combination by the Extended Date (and does not
wish to seek an additional extension), approval of the Early Termination Proposal will allow the Company’s board of directors
to follow the same procedures set forth above (as if the Extension Amendment proposal was not approved) without needing any further
stockholder approval.
If
the Extension Amendment is not approved, the Early Termination Proposal will not be presented as we will be forced to dissolve
and liquidate.
The
Company’s board of directors has fixed the close of business on May 26, 2020 as the date for determining the Company’s
stockholders entitled to receive notice of and vote at the special meeting and any adjournment thereof. Only holders of record
of the Company’s common stock on that date are entitled to have their votes counted at the special meeting or any adjournment
thereof. A complete list of stockholders of record entitled to vote at the special meeting will be available for ten days before
the special meeting at the Company’s principal executive offices for inspection by stockholders during ordinary business
hours for any purpose germane to the special meeting.
After
careful consideration of all relevant factors, the Company’s board of directors has determined that (i) the Extension Amendment
proposal is fair to and in the best interests of the Company and its stockholders, has declared it advisable and recommends that
you vote or give instruction to vote “FOR” such proposal; and (ii) recommends that you vote or give instruction to
vote “FOR” the Early Termination Proposal.
Enclosed
is the proxy statement containing detailed information concerning the Extension Amendment, the Early Termination Proposal and
the special meeting. Whether or not you plan to attend the special meeting, we urge you to read this material carefully and vote
your shares.
I
look forward to seeing you at the meeting.
June
[●], 2020
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By Order
of the Board of Directors
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Director
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Your
vote is important. Please sign, date and return your proxy card as soon as possible to make sure that your shares are represented
at the special meeting. If you are a stockholder of record, you may also cast your vote in person at the special meeting. If your
shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank how to vote your shares, or you
may cast your vote in person at the special meeting by obtaining a proxy from your brokerage firm or bank. Your failure to vote
or instruct your broker or bank how to vote will have the same effect as voting against each of the proposals.
Important
Notice Regarding the Availability of Proxy Materials for the Special meeting of Stockholders to be held on June 17, 2020: This
notice of meeting and the accompany proxy statement are available at [https://www.cstproxy.com/opesacquisitioncorp/sm2020.]
OPES
ACQUISITION CORP.
4218
NE 2nd Avenue, 2nd Floor
Miami,
FL 33137
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
TO
BE HELD JUNE 17, 2020
PROXY
STATEMENT
Opes
Acquisition Corp, (the “Company,” “Opes,” “we,” “us” or “our”), a
Delaware corporation, is providing this proxy statement in connection with the solicitation by the Board of proxies to be voted
at the special meeting to be held 10:00 a.m. EST on June 17, 2020. Due to the COVID-19 pandemic, the Company will be holding the
special meeting via teleconference using the following dial-in information:
US Toll Free
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[●]
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International Toll
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[●]
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Participant Passcode
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At
the special meeting, the following proposals will be considered and voted upon:
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a
proposal to amend (the “Extension Amendment”) the Company’s amended and restated certificate of incorporation
(the “charter”) to extend the date by which the Company has to consummate a business combination (the “Extension”)
from an additional 90 days, from June 18, 2020 to September 16, 2020 (the “Extended Date”); and
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a
proposal to approve the early winding up of the Company and redemption of 100% of the outstanding public shares as described in
the accompanying proxy statement if the Company’s board of directors determines at any time prior to the Extended Date that
the Company will be unable to consummate an initial business combination by the Extended date (the “Early Termination Proposal”).
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The
purpose of the Extension Amendment is to allow the Company more time to complete an initial business combination. The purpose
of the Early Termination Proposal is to obtain any necessary stockholder approval to wind up the Company’s affairs and redeem
100% of the outstanding public shares if the Company’s board of directors determines in its sole discretion at any time
prior to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended date
and does not wish to seek an additional extension.
The
Company’s prospectus for its initial public offering (“IPO”) and its charter provided that the Company had only
until September 16, 2019 to complete a business combination. On September 16, 2019, the Company’s stockholders approved
an amendment to the charter to provide that it would have until November 15, 2019 to complete a business combination. On November
15, 2019, the Company’s stockholders approved a second amendment to the charter to provide that it would have until January
15, 2020 to complete a business combination. On January 15, 2020, the Company’s stockholders approved a third amendment
to the charter to provide that it would have until March 16, 2020 to complete a business combination. There is not sufficient
time before March 16, 2020 to allow the Company to consummate an initial business combination. Accordingly, our board has determined
that it is in the best interests of our stockholders to further extend the date that the Company has to consummate a business
combination to the Extended Date.
The
holders of shares of common stock issued in the IPO (the “public shares”) may elect to convert their public shares
into their pro rata portion of the funds held in the trust account established at the time of the IPO (the “trust account”)
if the Extension is implemented (the “Conversion”). Holders of public shares do not need to vote on the Extension
Amendment proposal or be a holder of record on the record date to exercise conversion rights.
Approval
of the Extension Amendment is a condition to the implementation of the Extension. In addition, we will not proceed with the Extension
if we do not have at least $5,000,001 of net tangible assets following approval of the Extension Amendment proposal, after taking
into account the Conversion.
If
the Extension Amendment is approved, the amount remaining in the trust account may be only a small fraction of the approximately
$[47.5] million that was in the trust account as of the record date. In such event, the Company may need to obtain additional
funds to complete a proposed business combination and there can be no assurance that such funds will be available on terms acceptable
to the parties or at all.
If
the Extension Amendment is approved, the Company’s warrants will remain outstanding in accordance with their existing terms.
The Company has agreed that if the Extension Amendment proposal is approved and the Extension is implemented, it will deposit
(each deposit being referred to herein as a “Deposit”) into the trust account established in connection with the IPO
(the “trust account”) $[●] for each public share that is not converted in connection with the stockholder vote
to approve the Extension, for each monthly period, or portion thereof, that is needed by the Company to complete an initial business
combination from June 18, 2020 until the Extended Date. Alternatively, if the Company does not have the funds necessary to make
the Deposit referred to above, certain of the Company’s stockholders have agreed that they and/or any of their affiliates
or designees will contribute to the Company as a loan (each stockholder, affiliate or designee making the loan being referred
to herein as a “Contributor” and each loan being referred to herein as a “Contribution”) $[●] for
each public share that is not converted in connection with the stockholder vote to approve the Extension, for each monthly period,
or portion thereof, that is needed by the Company to complete an initial business combination from June 18, 2020 until the Extended
Date. Accordingly, if the Company takes until the Extended Date to complete an initial business combination, which would represent
[three] monthly periods through the Extended Date, the Company or Contributor(s) would make Deposits or Contributions of approximately
$[●] per month, or an aggregate of approximately $[●] (assuming no public shares were converted). Each Deposit or Contribution
will be placed in the trust account within two business days prior to the beginning of such monthly period (or portion thereof),
other than the first Deposit or Contribution which will be made on the day of the approval and implementation of the Extension
Amendment. Accordingly, if the Extension Amendment is approved and the Extension is implemented and the Company takes the full
time through the Extended Date to complete an initial business combination, the conversion amount per share at the meeting for
such business combination or the Company’s subsequent liquidation will be approximately $[●] per share (without taking
into account any interest), in comparison to the current conversion amount of approximately $[●] per share. No Deposit or
Contribution will be made unless the Extension Amendment is approved and the Extension is completed. The Contribution(s) will
not bear any interest and will be repayable by the Company to the Contributor(s) upon consummation of an initial business combination.
The loans will be forgiven if the Company is unable to consummate an initial business combination except to the extent of any
funds held outside of the trust account. The Company or Contributor(s), as applicable, will have the sole discretion whether to
continue extending for additional monthly periods until the Extended Date and if the Company or Contributor(s), as applicable,
determine not to continue extending for additional monthly periods, the obligation to make additional Deposits or Contributions
will terminate. If this occurs, or if the Company’s board of directors otherwise determines that the Company will not be
able to consummate an initial business combination by the Extended Date and does not wish to seek an additional extension, the
Company would wind up the Company’s affairs and redeem 100% of the outstanding public shares in accordance with the same
procedures set forth below that would be applicable if the Extension Amendment proposal is not approved.
If
the Extension Amendment proposal is not approved, in accordance with our charter, we will (i) cease all operations except for
the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100%
of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
trust account, including any interest but 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 the case
of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other
applicable law.
The
holders of shares of common stock issued prior to the IPO (“insider shares”) have waived their rights to participate
in any liquidation distribution with respect to the 2,875,000 insider shares as well as the shares (“private shares”)
included in the 445,000 units (“private placement units”) purchased by them simultaneously with the IPO. As a consequence
of such waivers, a liquidating distribution will be made only with respect to the public shares. There will be no distribution
from the trust account with respect to the Company’s warrants, which will expire worthless in the event we wind up.
If
the Extension Amendment proposal is not approved and the Company liquidates, Axis Capital Management, our sponsor (the “Sponsor”),
has agreed that it will be 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, reduces the amount of
funds in the trust account to below $10.10 per public share, except as to any claims by a third party who executed a waiver of
any and all rights to seek access to the trust account and except as to any claims under our indemnity of the underwriters of
our IPO against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed
to be unenforceable against a third party, the Sponsor will not be responsible for such third party claims. Furthermore, it will
not be liable to our public stockholders and instead will only have liability to us. There is no assurance, however, that it will
be able to satisfy those obligations to us. Based on the cash available to the Company outside of its trust account for working
capital and the Company’s outstanding expenses owed to all creditors (both those that have signed trust fund waivers and
those that have not), it is not anticipated that the Sponsor will have any indemnification obligations. Accordingly, regardless
of whether an indemnification obligation exists, the per share liquidation price for the public shares is currently anticipated
to be approximately $[●], plus interest. Nevertheless, the Company cannot assure you that the per share distribution from
the trust account, if the Company liquidates, will not be less than approximately $[●], plus interest, due to unforeseen
claims of creditors.
Under
the Delaware General Corporation Law (the “DGCL”), stockholders may be held liable for claims by third parties against
a corporation to the extent of distributions received by them in a dissolution. If the corporation complies with certain procedures
set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including
a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which
the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are
made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such
stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder
would be barred after the third anniversary of the dissolution. However, because the Company will not be complying with Section
280 of the DGCL, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such time that will provide
for our payment of all existing and pending claims or claims that may be potentially brought against us within the subsequent
ten years. Because we are a blank check company, rather than an operating company, and our operations have been and will continue
to be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses.
If
the Extension Amendment proposal is approved and the Extension is implemented, the Company will (i) remove from the trust account
an amount (the “Withdrawal Amount”) equal to the pro rata portion of funds available in the trust account relating
to the converted public shares and (ii) deliver to the holders of such converted public shares their pro rata portion of the Withdrawal
Amount. The remainder of such funds, plus the Deposits or Contributions, shall remain in the trust account and be available for
use by the Company to complete a business combination on or before the Extended Date. Holders of public shares who do not convert
their public shares now will retain their conversion rights and their ability to vote on a business combination through the Extended
Date if the Extension Amendment is approved and the Extension is implemented.
If
the Extension Amendment proposal is approved and the Extension is implemented, but the Company’s board of directors subsequently
determines that the Company will not be able to consummate an initial business combination by the Extended Date (and does not
wish to seek an additional extension), approval of the Early Termination Proposal will allow the Company’s board of directors
to follow the same procedures set forth above (as if the Extension Amendment proposal was not approved) without needing any further
stockholder approval.
The
record date for the special meeting is May 26, 2020. Record holders of shares of the Company’s common stock at the close
of business on the record date are entitled to vote or have their votes cast at the special meeting. On the record date, there
were [7,863,069] outstanding shares of Company common stock, including [4,543,069] outstanding public shares. The Company’s
warrants do not have voting rights.
This
proxy statement contains important information about the special meeting and the proposals. Please read it carefully and vote
your shares.
This
proxy statement is dated June [●], 2020 and is first being mailed to stockholders on or about that date.
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
These
Questions and Answers are only summaries of the matters they discuss. They do not contain all of the information that may be important
to you. You should read carefully the entire document, including the annexes to this proxy statement.
Q. Why am I receiving this proxy statement?
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A. The Company is a blank
check company formed in July 2017 for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase,
recapitalization, reorganization or other similar business combination with one or more businesses or entities. In March 2018,
the Company consummated its IPO from which it derived gross proceeds of $115,000,000 (including $15,000,000 from the exercise of
the underwriters’ over-allotment option). Like most blank check companies, our charter provides for the return of the IPO
proceeds held in the trust account to the holders of public shares if there is no qualifying business combination(s) consummated
on or before a certain date (in our case, September 16, 2019).
The Company was unable
to complete a qualifying business combination by such date and on September 16, 2019, the Company’s stockholders approved
an amendment to the charter to provide that it would have until November 15, 2019 to complete a business combination. In connection
with this vote, the holders of 2,282,753 shares of common stock properly exercised their right to convert their shares into cash
at a conversion price of approximately $10.33 per share, for an aggregate conversion amount of approximately $23.6 million. Thereafter,
the Company was unable to complete a qualifying business combination by November 15, 2019 and the Company’s stockholders
approved a second amendment to the charter to provide that it would have until January 15, 2020 to complete a business combination.
In connection with this vote, the holders of 228,001 shares of common stock properly exercised their right to convert their shares
into cash at a conversion price of approximately $10.43 per share, for an aggregate conversion amount of approximately $2.4 million.
The Company was again
unable to complete a qualifying business combination by January 15, 2020 and the Company’s stockholders approved a third
amendment to the charter to provide that it would have until March 16, 2020 to complete a business combination. In connection with
this vote, the holders of 18,133 shares of common stock properly exercised their right to convert their shares into cash at a conversion
price of approximately $10.52 per share, for an aggregate conversion amount of approximately $190,800. The Company was again unable
to complete a qualifying business combination by March 16, 2020 and the Company’s stockholders approved a fourth amendment
to the charter to provide that it would have until June 18, 2020 to complete a business combination. In connection with this vote,
the holders of 4,428,044 shares of common stock properly exercised their right to convert their shares into cash at a conversion
price of approximately $10.61 per share, for an aggregate conversion amount of approximately $47.0 million. As of the record date,
the Company had approximately [$47.5] million of cash in the trust account.
The board of directors
believes that it is in the best interests of the stockholders to continue the Company’s existence until the Extended Date
in order to allow the Company more time to complete an initial business combination and is therefore holding this special meeting.
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Q. What is being voted on?
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A. You are being asked to vote on:
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● a proposal to amend the Company’s charter to extend the date by which the Company has to consummate a business combination to the Extended Date; and
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● a proposal to approve the early winding up of the Company and redemption of 100% of the outstanding public shares as herein if the Company’s board of directors determines at any time prior to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended date.
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Approval of the Extension Amendment is a condition to the implementation of the Extension.
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If the Extension is implemented, the Company will remove the Withdrawal Amount from the trust account, deliver to the holders of converted public shares the pro rata portion of the Withdrawal Amount and retain the remainder of the funds in the trust account, plus the Deposits or Contributions, for the Company’s use in connection with consummating a business combination on or before the Extended Date.
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We
will not proceed if we do not have at least $5,000,001 of net tangible assets following approval of the Extension Amendment
proposal, after taking into account the Conversion.
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If the Extension Amendment
proposal is approved and the Extension is implemented, the removal of the Withdrawal Amount from the trust account will reduce
the Company’s net asset value. The Company cannot predict the amount that will remain in the trust account if the Extension
Amendment proposal is approved and the amount remaining in the trust account may be only a small fraction of the approximately
$[47.5] million that was in the trust account as of the record date. In such event, the Company may need to obtain additional
funds to complete its business combination and there can be no assurance that such funds will be available on terms acceptable
to the parties or at all.
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If the Extension Amendment
proposal is not approved, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but 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 the case of (ii) and (iii) above) to our obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law.
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If the Extension Amendment
proposal is not approved, the Early Termination Proposal will not be submitted to stockholders for a vote as we will be dissolving
and liquidating promptly after the special meeting.
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The holders of the
insider shares and private shares have waived their rights to participate in any liquidation distribution with respect to
such shares. There will be no distribution from the trust account with respect to our warrants, which will expire worthless
in the event we wind up. The Company will pay the costs of liquidation from its remaining assets outside of the trust account.
If such funds are insufficient, the Sponsor has agreed to advance it the funds necessary to complete such liquidation (currently
anticipated to be no more than approximately $15,000) and has agreed not to seek repayment of such expenses.
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Q. Why is the Company proposing the Extension Amendment proposal?
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A. The Company’s
charter provided for the return of the IPO proceeds held in the trust account to the holders of public shares if there is
no qualifying business combination(s) consummated on or before September 16, 2019.
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The Company was unable
to complete a qualifying business combination by such date and on September 16, 2019, the Company’s stockholders approved
an amendment to the charter to provide that it would have until November 15, 2019 to complete a business combination. The
Company was thereafter unable to complete a qualifying business combination by such date and on November 15, 2019, the Company’s
stockholders approved an amendment to the charter to provide that it would have until January 15, 2020 to complete a business
combination. The Company was then again unable to complete a qualifying business combination by such date and on January 15,
2020, the Company’s stockholders approved an amendment to the charter to provide that it would have until March 16,
2020 to complete a business combination. The Company was then again unable to complete a qualifying business combination by
such date and on March 16, 2020, the Company’s stockholders approved an amendment to the charter to provide that it
would have until June 18, 2020 to complete a business combination.
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The Company will not
be able to consummate an initial business combination by June 18, 2020. Accordingly, the Company has determined to seek stockholder
approval to further extend the date by which the Company has to complete a business combination.
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The Company believes
that given the Company’s expenditure of time, effort and money on searching for potential business combination opportunities,
circumstances warrant providing public stockholders an opportunity to consider a proposed business combination. Accordingly, the
Company’s board of directors is proposing the Extension Amendment to extend the Company’s corporate existence until
the Extended Date.
You are not
being asked to vote on any proposed business combination at this time. If the Extension is implemented and you do not elect to
convert your public shares now, you will retain the right to vote on any proposed business combination when and if one is submitted
to stockholders and the right to convert your public shares into a pro rata portion of the trust account in the event a proposed
business combination is approved and completed or the Company has not consummated a business combination by the Extended Date.
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Q. Why should I vote for the Extension Amendment?
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A. The
Company’s board of directors believes stockholders will benefit from the Company consummating an initial business
combination and is proposing the Extension Amendment to extend the date by which the Company has to complete a business
combination until the Extended Date and to allow for the Conversion. The Extension would give the Company additional time to
complete a business combination.
Given
the Company’s expenditure of time, effort and money on searching for potential business combination opportunities, circumstances
warrant providing public stockholders an opportunity to consider a proposed business combination, inasmuch as the Company is also
affording stockholders who wish to convert their public shares as originally contemplated, the opportunity to do so as well. Accordingly,
we believe that the Extension is consistent with the spirit in which the Company offered its securities to the public.
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Q. Why is the Company proposing the Early Termination Proposal?
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A. The purpose
of the Early Termination Proposal is to obtain any necessary stockholder approval to wind up the Company’s affairs and redeem
100% of the outstanding public shares if the Company’s board of directors determines in its sole discretion at any time prior
to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended Date and does
not wish to seek an additional extension.
Accordingly,
if the Extension Amendment proposal is approved and the Extension is consummated, but the Company’s board of directors subsequently
determines that the Company will not be able to consummate an initial business combination by the Extended Date (and does not
wish to seek an additional extension), the Company’s board of directors will be able to determine in its sole discretion
whether to cease efforts to consummate an initial business combination and to instead proceed to redeem 100% of the outstanding
public shares and liquidate and dissolve the Company.
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Q. How do the Company’s executive officers, directors and affiliates intend to vote their shares?
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A. All of the
Company’s directors, executive officers and their respective affiliates, as well as the Sponsor, are expected to vote any
common stock over which they have voting control (including any public shares owned by them) in favor of the Extension Amendment
proposal and in favor of the Early Termination Proposal.
The holders of
the insider shares and private shares are not entitled to convert such shares in connection with the Extension Amendment. On the
record date, the 2,875,000 insider shares and 445,000 private shares represented approximately [●]% of the Company’s
issued and outstanding common stock.
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Neither
the Company’s Sponsor, directors or executive officers nor any of their respective affiliates beneficially owned any
public shares as of the record date. However, they may choose to buy public shares in the open market and/or through negotiated
private purchases after the date of this proxy statement. In the event that purchases do occur, the purchasers may seek to
purchase shares from stockholders who would otherwise have voted against the Extension Amendment and/or elected to convert
their shares. Any public shares so purchased will be voted in favor of the Extension Amendment proposal and the Early Termination
Proposal.
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Q. What vote is required to adopt each proposal?
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A.
Extension Amendment. Approval of the Extension Amendment will require the affirmative
vote of holders of a majority of the issued and outstanding shares of the Company’s
common stock as of the record date.
Early
Termination Proposal. Approval of the Early Termination Proposal will require the affirmative
vote of the holders of a majority of the issued and outstanding shares of the Company’s
common stock represented in person or by proxy at the meeting and entitled to vote thereon.
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Q. What if I don’t
want to vote for the Extension Amendment proposal or the Early Termination Proposal?
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A.
If you do not want the Extension Amendment to be approved, you must abstain, not vote, or vote against the proposal. If the Extension
Amendment is approved, and the Extension is implemented, then the Withdrawal Amount will be withdrawn from the trust account and
paid to the converting or non-voting holders.
If you do not want the Early Termination Proposal to be approved, you must abstain, not vote or vote against the proposal.
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Q. Will you seek any further extensions to liquidate the trust account?
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A. Other than the extension
until the Extended Date as described in this proxy statement, the Company does not currently anticipate seeking any further extension
to consummate a business combination, although it may determine to do so in the future.
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Q. What happens if the Extension Amendment is not approved?
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A. If the Extension Amendment is not approved, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but 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 the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The holders of the insider shares and private shares waived their rights to participate in any liquidation distribution with respect to such shares. There will be no distribution from the trust account with respect to our warrants which will expire worthless in the event we wind up. The Company will pay the costs of liquidation from its remaining assets outside of the trust account, which it believes are sufficient for such purposes. If such funds are insufficient, the Sponsor has agreed to advance the Company the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to seek repayment of such expenses.
If the Extension Amendment proposal is not approved, the Early Termination Proposal will not be submitted to stockholders for a vote as we will be dissolving and liquidating promptly after the special meeting.
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Q. If the Extension Amendment proposal is approved, what happens next?
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A. If the Extension Amendment
is approved, the Company will continue to attempt to consummate an initial business combination until the Extended Date or the
earlier date on which the Company’s board of directors otherwise determines in its sole discretion that it will not be able
to consummate an initial business combination by the Extended Date and does not wish to seek an additional extension.
The Company will remain
a reporting company under the Securities Exchange Act of 1934 and its units, common stock and warrants will remain publicly traded
until the Extended Date.
If the Extension Amendment
proposal is approved, the removal of the Withdrawal Amount from the trust account will reduce the amount remaining in the trust
account and increase the percentage interest of Company shares held by the Company’s officers, directors and their affiliates.
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Q. Would I still be able to exercise my conversion rights if I vote against any subsequently proposed business combination?
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A. Unless you elect to convert your shares, you will be able to vote on any subsequently proposed business combination when it is submitted to stockholders. If you disagree with the business combination, you will retain your right to vote against it and/or convert your public shares upon consummation of the business combination in connection with the stockholder vote to approve such business combination, subject to any limitations set forth in the charter.
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Q. How do I change my vote?
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A. If you have submitted a proxy to vote your shares and wish to change your vote, you may do so by delivering a later-dated, signed proxy card to the Company’s secretary prior to the date of the special meeting or by voting in person at the special meeting. Attendance at the special meeting alone will not change your vote. You also may revoke your proxy by sending a notice of revocation to the Company located at 4218 NE 2nd Avenue, 2nd Floor, Miami, FL 33137.
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Q. How are votes counted?
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A. Votes will be counted
by the inspector of election appointed for the meeting, who will separately count “FOR” and “AGAINST” votes,
abstentions and broker non-votes. The Extension Amendment proposal must be approved by the affirmative vote of a majority of the
issued and outstanding shares of common stock as of the record date. The Early Termination proposal must be approved by the affirmative
vote of a majority of the issued and outstanding shares of the Company’s common stock represented in person or by proxy at
the meeting and entitled to vote thereon.
With
respect to the Extension Amendment proposal, abstentions and broker non-votes will have the same effect as “AGAINST”
votes. Abstentions and broker non-votes will not have any effect on the Early Termination proposal. If your shares are held by
your broker as your nominee (that is, in “street name”), you may need to obtain a proxy form from the institution
that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares.
If you do not give instructions to your broker, your broker can vote your shares with respect to “discretionary” items,
but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the
rules of the New York Stock Exchange applicable to member brokerage firms. These rules provide that for routine matters your broker
has the discretion to vote shares held in street name in the absence of your voting instructions. On non-discretionary items for
which you do not give your broker instructions, the shares will be treated as broker non-votes.
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Q. If my shares are held in “street name,” will my broker automatically vote them for me?
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A. No. Your broker can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares. Your broker can tell you how to provide these instructions.
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Q. What is a quorum requirement?
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A. A quorum of stockholders
is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares of common stock
on the record date are represented by stockholders present at the meeting or by proxy.
Your shares will be counted
towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee)
or if you vote in person at the special meeting. Abstentions and broker non-votes will be counted towards the quorum requirement.
If there is no quorum, a majority of the votes present at the special meeting may adjourn the special meeting to another date.
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Q. Who can vote at the
special meeting?
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A. Only holders of record
of the Company’s common stock at the close of business on May 26, 2020 are entitled to have their vote counted at the special
meeting and any adjournments or postponements thereof. On the record date, [7,863,069] shares of common stock were outstanding
and entitled to vote.
Stockholder of Record:
Shares Registered in Your Name. If on the record date your shares were registered directly in your name with the Company’s
transfer agent, Continental Stock Transfer & Trust Company, then you are a stockholder of record. As a stockholder of record,
you may vote in person at the special meeting or vote by proxy. Whether or not you plan to attend the special meeting in person,
we urge you to fill out and return the enclosed proxy card to ensure your vote is counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank. If on the record date your shares were held, not in your name, but
rather in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares
held in “street name” and these proxy materials are being forwarded to you by that organization. As a beneficial owner,
you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend
the special meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the special
meeting unless you request and obtain a valid proxy from your broker or other agent.
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Q. Does the board recommend voting for the approval of the Extension Amendment and the Early Termination Proposal?
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A.
Yes. After careful consideration of the terms and conditions of these proposals, the board of directors of the Company has determined
that the Extension Amendment proposal is fair to and in the best interests of the Company and its stockholders. The board of directors
recommends that the Company’s stockholders vote “FOR” the Extension Amendment proposal and the Early Termination
Proposal.
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Q. What interests do the Company’s directors and officers have in the approval of the proposals?
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A. The Company’s directors, officers and their affiliates have interests in the proposals that may be different from, or in addition to, your interests as a stockholder. These interests include, but are not limited to, beneficial ownership of insider shares and private shares and warrants that will become worthless if the Extension Amendment is not approved, loans by them that will not be repaid in the event of our winding up and the possibility of future compensatory arrangements. See the section entitled “The Special Meeting — Interests of the Company’s Directors and Officers.”
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Q. What if I object to the Extension Amendment? Do I have appraisal rights?
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A.
Company stockholders do not have appraisal rights in connection with the Extension Amendment under the DGCL.
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Q. What happens to the Company’s warrants if the Extension Amendment is not approved?
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A.
If the Extension Amendment is not approved by June 18, 2020, we will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding
public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including
any interest but 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 the case of (ii) and (iii) above)
to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In such
event, your warrants will become worthless.
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Q. What happens to the Company’s warrants if the Extension Amendment proposal and Early Termination Proposal is approved?
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A.
If the Extension Amendment proposal and Early Termination Proposal are approved, the Company will continue to attempt to consummate
a business combination until the Extended Date or an earlier date if the Company’s board of directors determines in its
sole discretion that it will not be able to consummate an initial business combination by the Extended Date and does not wish
to seek an additional extension. The warrants will remain outstanding in accordance with their terms during any extension period.
The warrants will still become exercisable commencing on the consummation of any business combination.
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Q. What do I need to do now?
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A.
The Company urges you to read carefully and consider the information contained in this proxy statement, including the annexes,
and to consider how the proposals will affect you as a Company stockholder. You should then vote as soon as possible in accordance
with the instructions provided in this proxy statement and on the enclosed proxy card.
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Q. How do I vote?
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A.
If you are a holder of record of Company common stock, you may vote in person at the
special meeting or by submitting a proxy for the special meeting. Whether or not you
plan to attend the special meeting in person, we urge you to vote by proxy to ensure
your vote is counted. You may submit your proxy by completing, signing, dating and returning
the enclosed proxy card in the accompanying pre-addressed postage paid envelope. You
may still attend the special meeting and vote in person if you have already voted by
proxy.
If
your shares of Company common stock are held in “street name” by a broker or other agent, you have the right
to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the special
meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the special meeting
unless you request and obtain a valid proxy from your broker or other agent.
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Q. How do I convert my shares of Company common stock?
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A.
If the Extension is implemented, each public stockholder may seek to convert his public shares for a pro rata portion of the funds
available in the trust account, less any taxes we anticipate will be owed on such funds but have not yet been paid. Holders of
public shares do not need to vote on the Extension Amendment proposal or be a holder of record on the record date to exercise
conversion rights.
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To
demand conversion, you must either physically tender your stock certificates to Continental Stock Transfer & Trust Company,
the Company’s transfer agent, at Continental Stock Transfer & Trust Company, 1 State Street, New York, New York
10004, Attn: Mark Zimkind, mzimkind@continentalstock.com, no later than two business days prior to the vote for the Extension
Amendment or deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal
At Custodian) System, which election would likely be determined based on the manner in which you hold your shares. You will
only be entitled to receive cash in connection with a conversion of these shares if you continue to hold them until the effective
date of the Extension.
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Q. What should I do if I receive more than one set of voting materials?
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A.
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy
cards or voting instruction cards, if your shares are registered in more than one name or are registered in different accounts.
For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card
for each brokerage account in which you hold shares. Please complete, sign, date and return each proxy card and voting instruction
card that you receive in order to cast a vote with respect to all of your Company shares.
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Q. Who is paying for this proxy solicitation?
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A.
The Company will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors
and officers may also solicit proxies in person, by telephone or by other means of communication. These parties will not be
paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for
the cost of forwarding proxy materials to beneficial owners.
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Q. Who can help answer my questions?
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A.
If you have questions about the proposals or if you need additional copies of the proxy
statement or the enclosed proxy card you should contact:
Opes
Acquisition Corp.
4218
NE 2nd Avenue, 2nd Floor
Miami,
FL 33137
Attn:
David Brain
E-mail:
[●]
or
Advantage
Proxy, Inc.
P.O.
Box 13581
Des
Moines, WA 98198
Toll
Free Telephone: (877) 870-8565
Main
Telephone: (206) 870-8565
E-mail:
ksmith@advantageproxy.com
You
may also obtain additional information about the Company from documents filed with the SEC by following the instructions in the
section entitled “Where You Can Find More Information.”
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FORWARD-LOOKING
STATEMENTS
We
believe that some of the information in this proxy statement constitutes forward-looking statements. You can identify these statements
by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,”
“believe,” “estimate,” “intends,” and “continue” or similar words. You should
read statements that contain these words carefully because they:
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discuss
future expectations;
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contain
projections of future results of operations or financial condition; or
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state
other “forward-looking” information.
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We
believe it is important to communicate our expectations to our stockholders. However, there may be events in the future that we
are not able to predict accurately or over which we have no control. The cautionary language discussed in this proxy statement
provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described
by us in such forward-looking statements, including, among other things, claims by third parties against the trust account, unanticipated
delays in the distribution of the funds from the trust account and the Company’s ability to finance and consummate a business
combination following the distribution of funds from the trust account. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this proxy statement.
All
forward-looking statements included herein attributable to the Company or any person acting on the Company’s behalf are
expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent
required by applicable laws and regulations, the Company undertakes no obligation to update these forward-looking statements to
reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events.
BACKGROUND
The
Company
We
are a Delaware company incorporated on July 24, 2017 for the purpose of entering into a merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.
In
March 2018, we consummated our IPO of 11,500,000 units, including 1,500,000 units that were subject to the underwriters’
over-allotment option, with each unit consisting of one share of common stock and one redeemable warrant, with each warrant to
purchase one share of common stock. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of
$115,000,000.
Prior
to our IPO, we issued an aggregate of 2,875,000 insider shares for an aggregate purchase price of $25,000.
Simultaneous
with the consummation of the IPO, we consummated the private placement of an aggregate of 445,000 private placement units at a
price of $10.00 per private placement unit, generating total proceeds of $4,450,000.
The
prospectus for our IPO and our charter originally provided that we had only until September 16, 2019 to complete a business combination.
We were not able to consummate an initial business combination by such date and on September 16, 2019, our stockholders approved
an amendment to the charter to provide that we would have until November 15, 2019 to complete a business combination. In connection
with this vote, the holders of 2,282,753 shares of common stock properly exercised their right to convert their shares into cash
at a conversion price of approximately $10.33 per share, for an aggregate conversion amount of approximately $23.6 million. We
were again not able to consummate an initial business combination by such date and on November 15, 2, 0 , our stockholders approved
a second amendment to the charter to provide that we would have until January 15, 2020 to complete a business combination. In
connection with this vote, the holders of 228,001 shares of common stock properly exercised their right to convert their shares
into cash at a conversion price of approximately $10.43 per share, for an aggregate conversion amount of approximately $2.4 million.
The Company was again unable to complete a qualifying business combination by January 15, 2020 and the Company’s stockholders
approved a third amendment to the charter to provide that it would have until March 16, 2020 to complete a business combination.
In connection with this vote, the holders of 18,133 shares of common stock properly exercised their right to convert their shares
into cash at a conversion price of approximately $10.52 per share, for an aggregate conversion amount of approximately $190,800.
The Company was again unable to complete a qualifying business combination by March 16, 2020 and the Company’s stockholders
approved a fourth amendment to the charter to provide that it would have until June 18, 2020 to complete a business combination.
In connection with this vote, the holders of 4,428,044 shares of common stock properly exercised their right to convert their
shares into cash at a conversion price of approximately $10.61 per share, for an aggregate conversion amount of approximately
$47.0 million. As of the record date, the Company had approximately [$47.5] million of cash in the trust account.
The
Company’s principal executive office is located at 4218 NE 2nd Avenue, 2nd Floor, Miami, FL 33137.
THE
EXTENSION AMENDMENT PROPOSAL AND EARLY TERMINATION PROPOSAL
The
Extension Amendment Proposal
The
Company is proposing to amend its charter to extend the date by which the Company has to consummate a business combination to
the Extended Date. The Extension Amendment is essential to the overall implementation of the board of directors’ plan to
allow the Company more time to complete an initial business combination. Approval of the Extension Amendment is a condition to
the implementation of the Extension. A copy of the proposed amendment to the charter of the Company is attached to this proxy
statement as Annex A.
All
holders of the Company’s public shares, whether they vote for or against the Extension Amendment or do not vote at all,
will be permitted to convert all or a portion of their public shares into their pro rata portion of the trust account, provided
that the Extension is implemented. Holders of public shares do not need to be a holder of record on the record date in order to
exercise conversion rights. We will not proceed with the Extension if we do not have at least $5,000,001 of net tangible assets
following approval of the Extension Amendment proposal, after taking into account the Conversion.
The
per-share pro rata portion of the trust account on the record date after taking into account taxes owed but not paid by such date
(which is expected to be the same approximate amount two business days prior to the meeting) was approximately $[●]. The
closing price of the Company’s common stock on the record date was $[●]. Accordingly, if the market price were to remain
the same until the date of the meeting, exercising conversion rights would result in a public stockholder receiving approximately
$[●] less than if he sold his stock in the open market. The Company cannot assure stockholders that they will be able to
sell their shares of Company common stock in the open market, even if the market price per share is higher than the conversion
price stated above, as there may not be sufficient liquidity in its securities when such stockholders wish to sell their shares.
The
Company has agreed that if the Extension Amendment proposal is approved and the Extension is implemented, it will make the Deposit
of $[●] for each public share that is not converted in connection with the stockholder vote to approve the Extension, for
each monthly period, or portion thereof, that is needed by the Company to complete an initial business combination from June 18,
2020 until the Extended Date. Alternatively, if the Company does not have the funds necessary to make the Deposit referred to
above, the Contributor(s) have agreed that they will make the Contribution of $[●] for each public share that is not converted
in connection with the stockholder vote to approve the Extension, for each monthly period, or portion thereof, that is needed
by the Company to complete an initial business combination from June 18, 2020 until the Extended Date. Accordingly, if the Company
takes until the Extended Date to complete an initial business combination, which would represent [three] monthly periods through
the Extended Date, the Company or Contributor(s) would make Deposits or Contributions of approximately $[●] per month, or
an aggregate of approximately $[●] (assuming no public shares were converted). Each Deposit or Contribution will be placed
in the trust account within two business days prior to the beginning of such monthly period (or portion thereof), other than the
first Deposit or Contribution which will be made on the day of the approval and implementation of the Extension Amendment. Accordingly,
if the Extension Amendment is approved and the Extension is implemented and the Company takes the full time through the Extended
Date to complete an initial business combination, the conversion amount per share at the meeting for such business combination
or the Company’s subsequent liquidation will be approximately $[●] per share (without taking into account any interest),
in comparison to the current conversion amount of approximately $[●] per share. No Deposit or Contribution will be made unless
the Extension Amendment is approved and the Extension is implemented. The Contributions will not bear any interest and will be
repayable by the Company to the Contributor(s) upon consummation of an initial business combination. The loans will be forgiven
if the Company is unable to consummate an initial business combination except to the extent of any funds held outside of the trust
account. The Company or Contributor(s), as applicable, will have the sole discretion whether to continue extending for additional
monthly periods until the Extended Date and if the Company or Contributor(s), as applicable, determine not to continue extending
for additional monthly periods, their obligation to make additional Deposits or Contributions will terminate. If this occurs,
or if the Company’s board of directors otherwise determines that the Company will not be able to consummate an initial business
combination by the Extended Date and does not wish to seek an additional extension, the Company would wind up the Company’s
affairs and redeem 100% of the outstanding public shares in accordance with the same procedures set forth below that would be
applicable if the Extension Amendment proposal is not approved.
The
Early Termination Proposal
The
Company is proposing the Early Termination Proposal to obtain any necessary stockholder approval to wind up the Company’s
affairs and redeem 100% of the outstanding public shares if the Company’s board of directors determines in its sole discretion
at any time prior to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended
Date and does not wish to seek an additional extension. Accordingly, if the Extension Amendment proposal is approved and the Extension
is consummated, but the Company’s board of directors subsequently determines that the Company will not be able to consummate
an initial business combination by the Extended Date (and does not wish to seek an additional extension), the Company’s
board of directors will be able to determine in its sole discretion whether to cease efforts to consummate an initial business
combination and to instead proceed to redeem 100% of the outstanding public shares and liquidate and dissolve the Company.
Reasons
for the Proposals
The
Company’s IPO prospectus and charter provided that the Company had until September 16, 2019 to complete a business combination.
On September 16, 2019, the Company’s stockholders approved an amendment to the charter to provide that it would have until
November 15, 2019 to complete a business combination. On November 15, 2019, the Company’s stockholders approved a second
amendment to the charter to provide that it would have until January 15, 2020 to complete a business combination. On January 15,
2020, the Company’s stockholders approved a third amendment to the charter to provide that it would have until March 16,
2020 to complete a business combination. On March 16, 2020, the Company’s stockholders approved a fourth amendment to the
charter to provide that it would have until June 18, 2020 to complete a business combination.
The
Company believes that given the Company’s expenditure of time, effort and money on searching for potential business combination
opportunities, circumstances warrant providing public stockholders an opportunity to consider a proposed business combination.
Accordingly, since the Company will not be able to complete an initial business combination by June 18, 2020, the Company has
determined to seek stockholder approval to further extend the time for closing a business combination beyond June 18, 2020 to
the Extended Date. The Company and its officers and directors agreed that it would not seek to amend the Company’s charter
to allow for a longer period of time to complete a business combination unless it provided holders of public shares with the right
to seek conversion of their public shares in connection therewith.
The
purpose of the Early Termination Proposal is to obtain any necessary stockholder approval to wind up the Company’s affairs
and redeem 100% of the outstanding public shares if the Company’s board of directors determines in its sole discretion at
any time prior to the Extended Date that the Company will be unable to consummate an initial business combination by the Extended
date and does not wish to seek an additional extension.
If
the Extension Amendment Proposal Is Not Approved
If
the Extension Amendment is not approved, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including any interest but 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 the case of (ii) and (iii) above) to our obligations under Delaware
law to provide for claims of creditors and the requirements of other applicable law.
If
the Extension Amendment is not approved, the Company or Contributor(s), as applicable, will not make the Deposit or Contribution,
as applicable, and the Early Termination Proposal will not be presented to stockholders.
The
holders of the insider shares and private shares have waived their rights to participate in any liquidation distribution with
respect to such shares. There will be no distribution from the trust account with respect to the Company’s warrants which
will expire worthless in the event the Extension Amendment is not approved. The Company will pay the costs of liquidation from
its remaining assets outside of the trust account. If such funds are insufficient, the Sponsor has agreed to advance it the funds
necessary to complete such liquidation (currently anticipated to be no more than approximately $15,000) and has agreed not to
seek repayment of such expenses.
If
the Extension Amendment proposal and Early Termination Proposal are Approved
If
the Extension Amendment proposal and Early Termination Proposal are approved, the Company will file an amendment to the charter
with the Secretary of State of the State of Delaware in the form of Annex A hereto to extend the time it has to complete a business
combination until the Extended Date. The Company will then continue to attempt to consummate a business combination until the
Extended Date or until the Company’s board of directors determines in its sole discretion that it will not be able to consummate
an initial business combination by the Extended Date as described below and does not wish to seek an additional extension. The
Company will remain a reporting company under the Securities Exchange Act of 1934 and its units, common stock and warrants will
remain publicly traded during the extension period. The warrants will continue in existence in accordance with their terms.
You
are not being asked to vote on any business combination at this time. If the Extension is implemented and you do not elect to
convert your public shares now, you will retain the right to vote on any proposed business combination when and if it is submitted
to stockholders and the right to convert your public shares into a pro rata portion of the trust account in the event the proposed
business combination is approved and completed or if the Company has not consummated a business combination by the Extended Date.
If
the Extension Amendment proposal is approved, and the Extension is implemented, the removal of the Withdrawal Amount from the
trust account will reduce the Company ’ s net asset value. The Company cannot predict the amount that will remain in the
trust account if the Extension Amendment proposal is approved, and the amount remaining in the trust account may be only a small
fraction of the approximately $94.5 million that was in the trust account as of the record date. However, we will not proceed
if we do not have at least $5,000,001 of net tangible assets following approval of the Extension Amendment proposal (after taking
into account the conversion of public shares).
Conversion
Rights
If
the Extension Amendment proposal is approved, and the Extension is implemented, each public stockholder may seek to convert his
public shares for a pro rata portion of the funds available in the trust account, less any taxes we anticipate will be owed on
such funds but have not yet been paid, calculated as of two business days prior to the meeting. Holders of public shares do not
need to vote on the Extension Amendment proposal or be a holder of record on the record date to exercise conversion rights.
TO
DEMAND CONVERSION, YOU MUST EITHER PHYSICALLY TENDER YOUR STOCK CERTIFICATES TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
THE COMPANY’S TRANSFER AGENT, AT CONTINENTAL STOCK TRANSFER & TRUST COMPANY, 1 STATE STREET, NEW YORK, NEW YORK 10004,
ATTN: MARK ZIMKIND, MZIMKIND@CONTINENTALSTOCK.COM, NO LATER THAN TWO BUSINESS DAYS PRIOR TO THE VOTE FOR THE EXTENSION AMENDMENT
OR DELIVER YOUR SHARES TO THE TRANSFER AGENT ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DWAC (DEPOSIT/WITHDRAWAL
AT CUSTODIAN) SYSTEM. You will only be entitled to receive cash in connection with a conversion of these shares if you continue
to hold them until the effective date of the Extension Amendment and Conversion. The requirement for physical or electronic delivery
prior to the vote at the special meeting ensures that a converting holder’s election is irrevocable once the Extension Amendment
is approved. In furtherance of such irrevocable election, stockholders making the election will not be able to tender their shares
after the vote at the special meeting.
The
electronic delivery process through the DWAC system can be accomplished by the stockholder, whether or not it is a record holder
or its shares are held in “street name,” by contacting the transfer agent or its broker and requesting delivery of
its shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical
stock certificate, a stockholder’s broker and/or clearing broker, DTC, and the Company’s transfer agent will need
to act together to facilitate this request. There is a nominal cost associated with the above -referenced tendering process and
the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering
broker a nominal amount and the broker would determine whether or not to pass this cost on to the redeeming holder. It is the
Company’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from
the transfer agent. The Company does not have any control over this process or over the brokers or DTC, and it may take longer
than two weeks to obtain a physical stock certificate. Such stockholders will have less time to make their investment decision
than those stockholders that deliver their shares through the DWAC system. Stockholders who request physical stock certificates
and wish to convert may be unable to meet the deadline for tendering their shares before exercising their conversion rights and
thus will be unable to convert their shares.
Certificates
that have not been tendered in accordance with these procedures prior to the vote for the Extension Amendment will not be converted
into a pro rata portion of the funds held in the trust account. In the event that a public stockholder tenders its shares and
decides prior to the vote at the special meeting that it does not want to convert its shares, the stockholder may withdraw the
tender. If you delivered your shares for conversion to our transfer agent and decide prior to the vote at the special meeting
not to convert your shares, you may request that our transfer agent return the shares (physically or electronically). You may
make such request by contacting our transfer agent at address listed above. In the event that a public stockholder tenders shares
and the Extension Amendment is not approved or is abandoned, these shares will be redeemed in accordance with the terms of the
charter promptly following the meeting, as described elsewhere herein. The Company anticipates that a public stockholder who tenders
shares for conversion in connection with the vote to approve the Extension Amendment would receive payment of the conversion price
for such shares soon after the completion of the Extension Amendment. The transfer agent will hold the certificates of public
stockholders that make the election until such shares are converted for cash or redeemed in connection with our winding up.
If
properly demanded, the Company will convert each public share for a pro rata portion of the funds available in the trust account,
less any taxes we anticipate will be owed on such funds but have not yet been paid, calculated as of two business days prior to
the meeting. As of the record date, after taking into account taxes owed but not paid by such date, this would amount to approximately
$[●] per share (which is expected to be the same approximate amount as of two business days prior to the meeting). The closing
price of the Company’s common stock on the record date was $[●]. Accordingly, if the market price were to remain the
same until the date of the meeting, exercising conversion rights would result in a public stockholder receiving approximately
$[●] less than if he sold his stock in the open market. Additionally, if the Extension Amendment is approved and the Company
or the Contributors(s) make the Deposit or Contribution, the conversion price for any subsequent business combination or liquidation
will be approximately $[●], or approximately $0.[●] per share more than the current conversion price.
If
you exercise your conversion rights, you will be exchanging your shares of the Company’s common stock for cash and will
no longer own the shares. You will be entitled to receive cash for these shares only if you properly demand conversion by tendering
your stock certificate(s) to the Company’s transfer agent prior to the vote for the Extension Amendment. If the Extension
Amendment is not approved or if it is abandoned, these shares will be redeemed in accordance with the terms of the charter promptly
following the meeting as described elsewhere herein.
The
Special Meeting
Date,
Time and Place. The special meeting of the Company’s stockholders will be held at 10:00 a.m., EST on June 17, 2020
via teleconference using the following dial-in information:
US Toll Free
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International Toll
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Participant Passcode
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Voting
Power; Record Date. You will be entitled to vote or direct votes to be cast at the special meeting, if you owned Company
common stock at the close of business on May 26, 2020, the record date for the special meeting. At the close of business on the
record date, there were [7,863,069] outstanding shares of Company common stock each of which entitles its holder to cast one vote
per proposal. Company warrants do not carry voting rights.
Proxies;
Board Solicitation. Your proxy is being solicited by the Company’s board of directors on the proposals being presented
to stockholders at the special meeting. No recommendation is being made as to whether you should elect to convert your shares.
Proxies may be solicited in person or by telephone. If you grant a proxy, you may still revoke your proxy and vote your shares
in person at the special meeting. Advantage Proxy, Inc. is assisting the Company in the proxy solicitation process for this special
meeting. The Company will pay that firm a [$5,500] fee plus disbursements for such services at the closing of any proposed business
combination.
Required
Vote
The
affirmative vote by holders of a majority of the Company’s issued and outstanding common stock is required to approve the
Extension Amendment. Abstentions and broker non-votes will have the same effect as “AGAINST” votes with respect to
the Extension Amendment. All of the Company’s directors, executive officers and their affiliates are expected to vote any
common stock owned by them in favor of the Extension Amendment. On the record date, the initial stockholders beneficially owned
and were entitled to vote 2,875,000 insider shares and 445,000 private shares, representing approximately [●]% of the Company’s
issued and outstanding common stock.
In
addition, the Sponsor and the Company’s directors, executive officers and their respective affiliates may choose to buy
public shares in the open market and/or through negotiated private purchases. In the event that purchases do occur, the purchasers
may seek to purchase shares from stockholders who would otherwise have voted against the Extension Amendment proposal and elected
to convert their shares into a portion of the trust account. Any public shares purchased by affiliates will be voted in favor
of the Extension Amendment proposal and the Early Termination Proposal.
The
affirmative vote of a majority of the Company’s issued and outstanding shares of the Company’s common stock represented
in person or by proxy at the meeting and entitled to vote thereon, is required to approve the Early Termination Proposal. Abstentions
and broker non-votes will not have any effect on this proposal.
Interests
of the Company’s Directors and Officers
When
you consider the recommendation of the Company’s board of directors, you should keep in mind that the Company’s executive
officers and members of the Company’s board of directors have interests that may be different from, or in addition to, your
interests as a stockholder. These interests include, among other things:
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If
the Extension Amendment is not approved and we do not consummate a business combination by June 18, 2020, the 2,875,000 insider
shares which were acquired for an aggregate purchase price of $25,000 will be worthless (as the holders have waived liquidation
rights with respect to such shares), as will the 445,000 private placement units that were acquired simultaneously with the IPO
for an aggregate purchase price of $4,450,000. Such common stock and units had an aggregate market value of approximately $[35,012,650]
based on the last sale price of $[●] and $[●] of the common stock and units, respectively, on Nasdaq on May [●],
2020;
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In
connection with the IPO, the Sponsor has agreed that if the Extension Amendment is not
approved and the Company liquidates, it will be liable under certain circumstances to
ensure that the proceeds in the trust account are not reduced by certain claims of target
businesses or vendors or other entities that are owed money by the Company for services
rendered, contracted for or products sold to the Company;
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All
rights specified in the Company’s charter relating to the right of officers and
directors to be indemnified by the Company, and of the Company’s officers and directors
to be exculpated from monetary liability with respect to prior acts or omissions, will
continue after a business combination. If the Extension Amendment is not approved and
the Company liquidates, the Company will not be able to perform its obligations to its
officers and directors under those provisions;
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If
the Company is unable to complete a business combination within the required time period,
it will pay the costs of any subsequent liquidation from its remaining assets outside
of the trust account. If such funds are insufficient, the Sponsor has agreed to pay the
funds necessary to complete such liquidation (currently anticipated to be no more than
approximately $15,000) and has agreed not to seek repayment for such expenses;
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The
Company’s officers and directors and their affiliates have loaned the Company an
aggregate of approximately $[614,000] as of the record date. If the Extension Amendment
is not approved and a business combination is not consummated, these loans will not be
repaid;
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The
Company’s officers, directors and their affiliates are entitled to reimbursement
of out-of-pocket expenses incurred by them in connection with certain activities on the
Company’s behalf, such as identifying and investigating possible business targets
and business combinations. If the Extension Amendment is not approved and a business
combination is not consummated, these out-of-pocket expenses will not be repaid.
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Additionally,
if the Extension Amendment is approved and the Company consummates an initial business combination, the officers and directors
may have additional interests that would be described in the proxy statement for such transaction.
Board
Recommendation
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE EXTENSION AMENDMENT PROPOSAL AND EARLY TERMINATION
PROPOSAL. THE BOARD OF DIRECTORS EXPRESSES NO OPINION AS TO WHETHER YOU SHOULD CONVERT YOUR PUBLIC SHARES.