Item
1. Business
Introduction
We
are a blank check company incorporated on June 5, 2017 as a Cayman Islands exempted company formed for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or
more businesses. On December 28, 2018, we changed our jurisdiction of incorporation from the Cayman Islands to the State of Delaware.
Our management team is led by Andrew Gould, our Chairman, who has more than 41 years’ experience in global energy and related
business, and Krishna Shivram, our Chief Executive Officer, who has 30 years’ experience in the oil and gas business. To
date, our efforts have been limited to organizational activities as well as activities related to the initial public offering
and the identification and evaluation of prospective acquisition targets for a business combination.
CSL
is an energy-focused private equity fund that invests in energy services companies and entrepreneurs with a focus on oilfield
services. Although we may pursue an acquisition opportunity in any business or industry, we intend to capitalize on the ability
of Andrew Gould, Krishna Shivram and other members of our management team and the broader CSL platform to identify, acquire and
operate a business in the energy services and equipment industry that may provide opportunities for attractive risk adjusted returns
and specifically to focus on opportunities in the oil and gas services industry where our Chief Executive Officer’s networks
and experience are suited. Our management believes this area of focus represents a favorable and highly fragmented market opportunity
to consummate a business combination.
We
intend to identify and acquire a business that could benefit from a hands-on owner with extensive operational experience in the
oil and gas services industry and that presents potential for an attractive risk-adjusted return profile under our stewardship.
Even fundamentally sound companies can often underperform their potential due to underinvestment, a temporary period of dislocation
in the markets in which they operate, over-levered capital structures, excessive cost structures, incomplete management teams
and/or inappropriate business strategies. Our management team has extensive experience in identifying and executing such full-potential
acquisitions across the oilfield services, midstream, and downstream sectors of the energy industry. In addition, our team has
significant hands-on experience working with private companies in preparing for and executing an initial public offering and serving
as active owners and directors by working closely with these companies to continue their transformations and help create value
in the public markets.
Objective
and Business Opportunity
Our
acquisition and value creation strategy is to identify, acquire and, after our initial business combination, build a company in
the energy services and equipment industry that complements the experience of our management team and can benefit from its operational
expertise. Our acquisition strategy leverages our team’s network of potential proprietary and public transaction sources
where we believe a combination of our relationships, knowledge and experience in the energy services and equipment industry could
effect a positive transformation or augmentation of existing businesses or properties to improve their overall value proposition.
We
plan to utilize the network and industry experience of our board of directors, Mr. Gould, Mr. Shivram and CSL in seeking an initial
business combination and employing our acquisition strategy. Over the course of their careers, the members of our management team
and their affiliates have developed a broad network of contacts and corporate relationships that we believe will serve as a useful
source of acquisition opportunities. This network has been developed through our management team’s extensive experience
in both investing in and operating in the energy industry. We will additionally leverage CSL’s considerable experience investing
in the energy industry; since 2008, CSL has committed approximately $1.5 billion to more than 20 portfolio companies. We expect
these networks will provide our management team with a robust flow of acquisition opportunities. In addition, we anticipate that
target business candidates will be brought to our attention from various unaffiliated sources, which may include investment market
participants, private equity groups, investment banking firms, consultants, accounting firms and large business enterprises.
Effecting
our initial business combination
General
We
are not presently engaged in, and we will not engage in, any operations for an indefinite period of time. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering and the private placement of the
private placement warrants and the Co-Investment Securities, our capital stock, debt or a combination of these as the consideration
to be paid in our initial business combination. We may seek to complete our initial business combination with a company or business
that may be financially unstable or in its early stages of development or growth, which would subject us to the numerous risks
inherent in such companies and businesses.
If
the entire purchase price of our initial business combination is paid for using stock or debt securities, or if not all of the
funds released from the trust account are used for payment of the consideration in connection with our business combination or
used for redemptions of purchases of our common stock, we may apply the balance of the cash released to us from the trust account
for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment
of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of
other companies, or for working capital.
Although
our management will assess the risks inherent in a particular target business with which we may combine, we cannot assure you
that this assessment will result in our identifying all risks that a target business may encounter. Furthermore, some of those
risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely
affect a target business.
We
may need to obtain additional financing to complete our initial business combination, either because the transaction requires
more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant
number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur
debt in connection with such business combination. There are no prohibitions on our ability to issue securities or incur debt
in connection with our initial business combination. We are not currently a party to any arrangement or understanding with any
third party with respect to raising any additional funds through the sale of securities, the incurrence of debt or otherwise.
Selection
of a target business and structuring of our initial business combination
Our
initial business combination must occur with one or more target businesses that together have an aggregate fair market value of
at least 80% of our assets held in the trust account (excluding the deferred underwriting discounts and commissions and taxes
payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination.
The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally
accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses. If our board is
not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from
an independent investment banking firm that is a member of FINRA or from an independent accounting firm with respect to the satisfaction
of such criteria. We do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business
combination. Subject to this requirement, our management has virtually unrestricted flexibility in identifying and selecting one
or more prospective target businesses, although we are not permitted to effectuate our initial business combination with another
blank check company or a similar company with nominal operations.
In
any case, we will only complete an initial business combination in which we own or acquire 50% or more of the outstanding voting
securities of the target or otherwise acquire an interest in the target sufficient for the post-transaction company not to be
required to register as an investment company under the Investment Company Act. If we own or acquire less than 100% of the equity
interests or assets of a target business or businesses, the portion of such business or businesses that are owned or acquired
by the post-transaction company is what will be valued for purposes of Nasdaq’s 80% of net assets test.
To
the extent we effect our business combination with a company or business that may be financially unstable or in its early stages
of development or growth, we may be affected by numerous risks inherent in such company or business. Although our management will
endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain
or assess all significant risk factors.
In
evaluating a prospective target business, we expect to conduct a thorough due diligence review, which may encompass, among other
things, meetings with incumbent management and employees, document reviews, interviews of customers and suppliers, inspection
of facilities, as applicable, as well as a review of financial, operational, legal and other information which will be made available
to us. If we determine to move forward with a particular target, we will proceed to structure and negotiate the terms of the business
combination transaction.
The
time required to select and evaluate a target business and to structure and complete our initial business combination, and the
costs associated with this process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect
to the identification and evaluation of, and negotiation with, a prospective target business with which our business combination
is not ultimately completed will result in our incurring losses and will reduce the funds we can use to complete another business
combination. The company will not pay any consulting fees to members of our management team, or any of their respective affiliates,
for services rendered to or in connection with our initial business combination.
Stockholders
may not have the ability to approve our initial business combination
We
may conduct redemptions without a stockholder vote pursuant to the tender offer rules of the U.S. Securities and Exchange Commission
(the “SEC”). However, we will seek stockholder approval if it is required by law or applicable stock exchange rule,
or we may decide to seek stockholder approval for business or other legal reasons.
Under
Nasdaq’s listing rules, stockholder approval would be required for our initial business combination if, for example:
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we
issue shares of Class A common stock that will be equal to or in excess of 20% of the
number of our shares of Class A common stock then outstanding (other than in a public
offering);
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any
of our directors, officers or substantial stockholders (as defined by Nasdaq rules) has
a 5% or greater interest (or such persons collectively have a 10% or greater interest),
directly or indirectly, in the target business or assets to be acquired or otherwise
and the present or potential issuance of shares of Class A common stock could result
in an increase in outstanding shares of Class A common stock or voting power by 5% or
more; or
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the
issuance or potential issuance of shares of Class A common stock will result in our undergoing
a change of control.
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Permitted
purchases of our securities
In
the event we seek stockholder approval of our business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our initial stockholders, sponsor, directors, officers, advisors or their affiliates
may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following
the completion of our initial business combination. There is no limit on the number of shares our initial stockholders, directors,
officers, advisors or their affiliates may purchase in such transactions, subject to compliance with applicable law and the rules
of Nasdaq. However, they have no current commitments, plans or intentions to engage in such transactions and have not formulated
any terms or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public
warrants in such transactions. If they engage in such transactions, they will not make any such purchases when they are in possession
of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation M under the
Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder
of our shares is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights.
In
the event that our initial stockholders, sponsor, directors, officers, advisors or their affiliates purchase shares in privately
negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders
would be required to revoke their prior elections to redeem their shares. We do not currently anticipate that such purchases,
if any, would constitute a tender offer subject to the tender offer rules under the Exchange Act or a going-private transaction
subject to the going-private rules under the Exchange Act; however, if the purchasers determine at the time of any such purchases
that the purchases are subject to such rules, the purchasers will comply with such rules.
The
purpose of any such purchases of shares could be to (i) vote such shares in favor of the business combination and thereby increase
the likelihood of obtaining stockholder approval of the business combination or (ii) to satisfy a closing condition in an agreement
with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our business combination,
where it appears that such requirement would otherwise not be met. The purpose of any such purchases of public warrants could
be to reduce the number of public warrants outstanding or to vote such warrants on any matters submitted to the warrantholders
for approval in connection with our initial business combination. Any such purchases of our securities may result in the completion
of our business combination that may not otherwise have been possible.
In
addition, if such purchases are made, the public “float” of our common stock or public warrants may be reduced and
the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain or obtain the quotation,
listing or trading of our securities on a national securities exchange.
Our
initial stockholders, sponsor, officers, directors and/or their affiliates anticipate that they may identify the stockholders
with whom our initial stockholders, sponsor, officers, directors or their affiliates may pursue privately negotiated purchases
by either the stockholders contacting us directly or by our receipt of redemption requests submitted by stockholders (relating
to shares of Class A common stock) following our mailing of proxy materials in connection with our initial business combination.
To the extent that our Sponsor, officers, directors, advisors or their affiliates enter into a private purchase, they would identify
and contact only potential selling stockholders who have expressed their election to redeem their shares for a pro rata share
of the trust account or vote against our initial business combination, whether or not such stockholder has already submitted a
proxy with respect to our initial business combination but only if such shares have not already been voted at the stockholder
meeting related to our initial business combination. Our Sponsor, officers, directors, advisors or any of their affiliates will
select which stockholders to purchase shares from based on the negotiated price and number of shares and any other factors that
they may deem relevant, and will only purchase shares if such purchases comply with Regulation M under the Exchange Act and the
other federal securities laws.
Any
purchases by our Sponsor, officers, directors and/or their affiliates who are affiliated purchasers under Rule 10b-18 under the
Exchange Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe
harbor from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain technical
requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our Sponsor, officers,
directors and/or their affiliates will not make purchases of common stock if the purchases would violate Section 9(a)(2) or Rule
10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the
extent such purchasers are subject to such reporting requirements.
Redemption
rights for public stockholders upon completion of our initial business combination
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on
deposit in the trust account calculated as of two business days prior to the consummation of the initial business combination
including interest earned on the funds held in the trust account and not previously released to us to pay income taxes, if any,
divided by the number of then outstanding public shares, subject to the limitations described herein. As of December 31, 2018,
the Company had approximately $350.0 million in the trust account, and the conversion amount per share in any subsequent business
combination or liquidation would have been approximately $10.14 per public share. The per-share amount we will distribute to investors
who properly redeem their shares will not be reduced by the deferred underwriting discounts and commissions we will pay to the
underwriters of our initial public offering. Our Sponsor, officers and directors have entered into a letter agreement with us,
pursuant to which they have agreed to waive their redemption rights with respect to any founder shares held by them and any public
shares held by them in connection with the completion of our business combination.
Manner
of Conducting Redemptions
We
will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A common stock upon
the completion of our initial business combination either (i) in connection with a stockholder meeting called to approve the business
combination or (ii) by means of a tender offer. The decision as to whether we will seek stockholder approval of a proposed business
combination or conduct a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors
such as the timing of the transaction and whether the terms of the transaction would require us to seek stockholder approval under
applicable law or stock exchange listing requirement. Asset acquisitions and stock purchases would not typically require stockholder
approval while direct mergers with our company where we do not survive and any transactions where we issue more than 20% of our
outstanding Class A common stock or seek to amend our certificate of incorporation (the “Charter”) would require stockholder
approval. If we structure a business combination transaction with a target business in a manner that requires stockholder approval,
we will not have discretion as to whether to seek a stockholder vote to approve the proposed business combination. We currently
intend to conduct redemptions in connection with a stockholder vote unless stockholder approval is not required by applicable
law or stock exchange listing requirement and we choose to conduct redemptions pursuant to the tender offer rules of the SEC for
business or other legal reasons.
If
we seek stockholder approval, we will complete our initial business combination only if a majority, or such higher threshold as
may be required by law, of the outstanding common stock is voted in favor of the business combination. A quorum for such meeting
will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company representing a
majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting. Our initial
stockholders will count toward this quorum and have agreed to vote their founder shares and any public shares purchased during
or after our initial public offering in favor of our initial business combination. For purposes of seeking approval of the majority
of our outstanding common stock voted, non-votes will have no effect on the approval of our initial business combination once
a quorum is obtained. As a result, in addition to our initial stockholders’ founder shares, we would need 12,937,500, or
37.5%, of the outstanding 34,500,000 public shares to be voted in favor of a transaction (assuming all outstanding shares are
voted) in order to have our initial business combination approved, subject to any higher consent threshold as is required by Delaware
or other applicable law. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written
notice of any such meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum
and voting thresholds, and the voting agreements of our initial stockholders, may make it more likely that we will consummate
our initial business combination. Each public stockholder may elect to redeem its public shares irrespective of whether it votes
for or against the proposed transaction. In addition, our Sponsor, officers and directors have entered into a letter agreement
with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and any public
shares held by them in connection with the completion of a business combination.
If
we conduct redemptions pursuant to the tender offer rules of the SEC, we will, pursuant to our Charter:
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conduct
the redemptions pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, which
regulate issuer tender offers, and
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file
tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about the initial
business combination and the redemption rights as is required under Regulation 14A of
the Exchange Act, which regulates the solicitation of proxies. Although we are not required
to do so, we currently intend to comply with the substantive and procedural requirements
of Regulation 14A in connection with any stockholder vote even if we are not able to
maintain our Nasdaq listing or Exchange Act registration.
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Upon
the public announcement of our business combination, we or our Sponsor will terminate any plan established in accordance with
Rule 10b5-1 to purchase shares of our Class A common stock in the open market if we elect to redeem our public shares through
a tender offer, to comply with Rule 14e-5 under the Exchange Act.
In
the event we conduct redemptions pursuant to the tender offer rules, our offer to redeem will remain open for at least 20 business
days, in accordance with Rule 14e-1(a) under the Exchange Act, and we will not be permitted to complete our initial business combination
until the expiration of the tender offer period. In addition, the tender offer will be conditioned on public stockholders not
tendering more than the number of public shares we are permitted to redeem. If public stockholders tender more shares than we
have offered to purchase, we will withdraw the tender offer and not complete the initial business combination.
Limitation
on redemption upon completion of our initial business combination if we seek stockholder approval
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our Charter provides that a public stockholder, together with any affiliate of
such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under
Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20%
of the shares sold in our initial public offering, which we refer to as the “Excess Shares.” We believe this restriction
will discourage stockholders from accumulating large blocks of shares, and subsequent attempts by such holders to use their ability
to exercise their redemption rights against a proposed business combination as a means to force us or our management to purchase
their shares at a significant premium to the then-current market price or on other undesirable terms. Absent this provision, a
public stockholder holding more than an aggregate of 20% of the shares sold in our initial public offering could threaten to exercise
its redemption rights if such holder’s shares are not purchased by us, our Sponsor or our management at a premium to the
then-current market price or on other undesirable terms. By limiting our stockholders’ ability to redeem no more than 20%
of the shares sold in our initial public offering without our prior consent, we believe we will limit the ability of a small group
of stockholders to unreasonably attempt to block our ability to complete our business combination, particularly in connection
with a business combination with a target that requires as a closing condition that we have a minimum net worth or a certain amount
of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our business combination.
Redemption
of public shares and liquidation if no initial business combination
Our
Sponsor, executive officers and directors have agreed to complete our initial business combination by November 7, 2019. If we
are unable to complete our business combination by November 7, 2019, we will: (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned
on the funds held in the trust account and not previously released to us to pay income taxes, if any (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish
public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any),
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 clauses (ii) and (iii),
to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will
be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete
our business combination by November 7, 2019.
Competition
In
identifying, evaluating and selecting a target business for our business combination, we may encounter intense competition from
other entities having a business objective similar to ours, including other blank check companies, private equity groups and leveraged
buyout funds, and operating businesses seeking strategic acquisitions. Many of these entities are well established and have extensive
experience identifying and effecting business combinations directly or through affiliates. Moreover, many of these competitors
possess greater financial, technical, human and other resources than we do. Our ability to acquire larger target businesses will
be limited by our available financial resources. This inherent limitation gives others an advantage in pursuing the acquisition
of a target business. Furthermore, our obligation to pay cash in connection with our public stockholders who exercise their redemption
rights may reduce the resources available to us for our initial business combination and our outstanding warrants, and the future
dilution they potentially represent, may not be viewed favorably by certain target businesses. Either of these factors may place
us at a competitive disadvantage in successfully negotiating an initial business combination.
Employees
We
currently have three officers. These individuals are not obligated to devote any specific number of hours to our matters but they
intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial business combination.
The amount of time that they will devote in any time period will vary based on whether a target business has been selected for
our initial business combination and the stage of the business combination process we are in.
Available
Information
We
are required to file Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q with the SEC on a regular basis, and are required
to disclose certain material events (e.g., changes in corporate control, acquisitions or dispositions of a significant amount
of assets other than in the ordinary course of business and bankruptcy) in a Current Report on Form 8-K. The SEC maintains an
Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically
with the SEC. The SEC’s Internet website is located at
http://www.sec.gov
. In addition, the Company will provide
copies of these documents without charge upon request in writing at 700 Louisiana Street, Suite 2700, Houston, Texas 77002 or
by telephone at (281) 407-0686.
Recent
Events
On
October 18, 2018, the Company entered into a transaction agreement and plan of merger (the “Transaction Agreement”)
with Strike Capital, LLC (“Strike”), OEP Secondary Fund (Strike), LLC, One Equity Partners Secondary Fund, L.P., the
other equityholders of Strike party thereto, OEP-Strike Seller Representative, LLC and SES Blocker Merger Sub, LLC, relating to
the proposed acquisition by the Company of a majority of the equity interests of Strike. On February 12, 2019, the Company and
Strike entered into a termination agreement (the “Termination Agreement”), pursuant to which the parties agreed to
mutually terminate the Transaction Agreement. The termination of the Transaction Agreement was effective as of February 12, 2019.
As
a result of the termination of the Transaction Agreement, each of (i) the purchase and contribution agreement, dated as of October
18, 2018 (the “Contribution Agreement”), by and among the Company, Strike, LLC, a wholly owned subsidiary of Strike,
CSL Energy Holdings III Corp, LLC and Invacor Pipeline and Process Solutions, LLC, (ii) the subscription agreements, dated as
of October 18, 2018, between the Company and each of CSL Capital Management, L.P. and certain funds and accounts managed by Fidelity
Management & Research Company, and (iii) the Voting and Support Agreement, dated as of October 18, 2018, by and among the
Company, the Sponsor and certain shareholders of the Company party thereto, which the Company entered into in connection with
the proposed acquisition, was automatically terminated in accordance with its terms.
Pursuant
to the Termination Agreement, all costs and expenses (including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party and its affiliates) incurred by a party or on its behalf in connection with or related to the
authorization, preparation, negotiation, execution and performance of the Transaction Agreement, the Contribution Agreement or
the Termination Agreement and the transactions contemplated thereby (the “Expenses”) are to be paid by the party incurring
such Expenses.
Item 1A.
Risk Factors
You
should carefully consider all of the following risk factors and all the other information contained in this Annual Report, including
the financial statements. If any of the following risks occur, our business, financial condition or results of operations may
be materially and adversely affected. The risk factors described below are not necessarily exhaustive and you are encouraged to
perform your own investigation with respect to us and our business.
The
report of our independent registered public accounting firm expresses substantial doubt about our ability to continue as a going
concern.
We
believe conditions exist that raise substantial doubt about our ability to continue as a going concern because if we do not complete
a business combination by November 7, 2019 then we will have to cease all operations except for the purpose of winding down and
liquidating. A “going concern” opinion could impair our ability to finance our initial business combination through
the sale of equity, incurring debt, or other financing alternatives. There can be no assurance that we will be able to consummate
an initial business combination by November 7, 2019.
We
have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We
have no operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing
our initial business combination with one or more target businesses. We may be unable to complete our business combination. If
we fail to complete our business combination, we will never generate any operating revenues.
In
evaluating a prospective target business for our initial business combination, our management may consider the availability of
funds from the sale of Co-Investment Securities, which may be used as part of the consideration to the sellers in the initial
business combination. If the CSL Funds decide not to exercise their right to purchase all or some of the Co-Investment Securities,
we may lack sufficient funds to consummate our initial business combination.
We
entered into an Option Agreement with the CSL Funds pursuant to which the CSL Funds have the right to subscribe for an aggregate
of up to 10,000,000 units, consisting of one share of Class A common stock and one-third of one warrant to purchase one share
of Class A common stock, for $10.00 per unit, or an aggregate maximum amount of $100,000,000, in connection with our initial business
combination. The funds from the sale of the Co-Investment Securities are expected to be used as part of the consideration to the
sellers in our initial business combination, and to pay expenses in connection with our initial business combination and may be
used for working capital in the post-transaction company.
If
the CSL Funds or any Co-Investment Transferee do not exercise their right to purchase all or some of the Co-Investment Securities,
we may lack sufficient funds to consummate our initial business combination. We expect that factors to be considered by the CSL
Funds in determining whether to exercise this right, and if so to what extent, will include the amount of capital then available
to the CSL Funds, whether the target investment is consistent with the investment mandate or objectives of the CSL Funds, and
legal, tax or other considerations. Accordingly, if we pursue an acquisition target that is outside of the CSL Funds’s investment
objectives or that is not reasonably acceptable to the CSL Funds, the CSL Funds may choose not to exercise their right to purchase
any Co-Investment Securities, and we may need to seek alternative financing.
Our
public stockholders may not be afforded an opportunity to vote on our proposed business combination, which means we may complete
our initial business combination even if a majority of our public stockholders do not support such a combination.
We
may not hold a stockholder vote to approve our initial business combination unless the business combination would require stockholder
approval under applicable state law or the Nasdaq rules or if we decide to hold a stockholder vote for business or other reasons.
For instance, the Nasdaq rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still
require us to obtain stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business
as consideration in any business combination. Therefore, if we were structuring a business combination that required us to issue
more than 20% of our outstanding shares, we would seek stockholder approval of such business combination. However, except for
as required by law or the Nasdaq rules, the decision as to whether we will seek stockholder approval of a proposed business combination
or will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will
be based on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise
require us to seek stockholder approval. Accordingly, we may consummate our initial business combination even if holders of a
majority of our common stock do not approve of the business combination we consummate.
If
we seek stockholder approval of our initial business combination, after approval of our board, our initial stockholders, and management
team have agreed to vote any public shares purchased during or after our initial public offering in favor of our initial business
combination, regardless of how our public stockholders vote.
Our
initial stockholders own 20% of our outstanding common stock. Our initial stockholders and management team also may from time
to time purchase shares of our Class A common stock prior to our initial business combination. Our Charter provides that, if we
seek stockholder approval of an initial business combination, such initial business combination will be approved only if we receive
the affirmative vote of a majority of the outstanding shares of common stock, including the founder shares. As a result, in addition
to our initial stockholders’ founder shares, we would need 12,937,500, or 37.5%, of the 34,500,000 public shares sold in
our initial public offering to be voted in favor of an initial business combination in order to have our initial business combination
approved (assuming all outstanding shares are voted), subject to any higher consent threshold as is required by Delaware or other
applicable law. Accordingly, if we seek stockholder approval of our initial business combination, the agreement by our initial
stockholders and management team to vote in favor of our initial business combination will increase the likelihood that we will
receive the requisite stockholder approval for such initial business combination.
Your
only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of
your right to redeem your shares from us for cash.
You
may not be provided with an opportunity to evaluate the specific merits or risks of one or more target businesses. Since our board
of directors may complete a business combination without seeking stockholder approval (unless stockholder approval is required
by law or Nasdaq rules, or if we decide to obtain stockholder approval for business or other legal reasons), public stockholders
may not have the right or opportunity to vote on the business combination, unless we seek such stockholder vote. Accordingly,
if we do not seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business
combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business
days) set forth in our tender offer documents mailed to our public stockholders in which we describe our initial business combination.
The
ability of our public stockholders to redeem their shares for cash may make our financial condition unattractive to potential
business combination targets, which may make it difficult for us to enter into a business combination with a target.
We
may seek to enter into a business combination transaction agreement with a prospective target that requires as a closing condition
that we have a minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights,
we would not be able to meet such closing condition and, as a result, would not be able to proceed with the business combination.
Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than
$5,000,001 upon the consummation of our initial business combination and after payment of underwriters’ fees and commissions
(so that we are not subject to the SEC’s “penny stock” rules). Consequently, if accepting all properly submitted
redemption requests would cause our net tangible assets to be less than $5,000,001 upon the consummation of our initial business
combination and after payment of underwriters’ fees and commissions or such greater amount necessary to satisfy a closing
condition as described above, we would not proceed with such redemption and the related business combination and may instead search
for an alternate business combination. Prospective targets will be aware of these risks and, thus, may be reluctant to enter into
a business combination transaction with us.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares may not allow us
to complete the most desirable business combination or optimize our capital structure.
At
the time we enter into an agreement for our initial business combination, we will not know how many stockholders may exercise
their redemption rights, and therefore will need to structure the transaction based on our expectations as to the number of shares
that will be submitted for redemption. If our business combination agreement requires us to use a portion of the cash in the trust
account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion
of the cash in the trust account to meet such requirements, or arrange for third party financing. In addition, if a larger number
of shares are submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater
portion of the cash in the trust account or arrange for third party financing. Raising additional third party financing may involve
dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels. The above considerations may limit
our ability to complete the most desirable business combination available to us or optimize our capital structure. The amount
of the deferred underwriting discounts and commissions payable to the underwriters will not be adjusted for any shares that are
redeemed in connection with a business combination. The per-share amount we will distribute to stockholders who properly exercise
their redemption rights will not be reduced by the deferred underwriting discounts and commissions and after such redemptions,
the amount held in trust will continue to reflect our obligation to pay the entire deferred underwriting discounts and commissions.
The
ability of our public stockholders to exercise redemption rights with respect to a large number of our shares could increase the
probability that our initial business combination would be unsuccessful and that you would have to wait for liquidation in order
to redeem your shares.
If
our business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or
requires us to have a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful
is increased. If our initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account
until we liquidate the trust account. If you are in need of immediate liquidity, you could attempt to sell your shares in the
open market; however, at such time our shares may trade at a discount to the pro rata amount per share in the trust account. In
either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our
redemption until we liquidate or you are able to sell your shares in the open market.
The
requirement that we complete our initial business combination by November 7, 2019 may give potential target businesses leverage
over us in negotiating a business combination and may limit the time we have to conduct due diligence on potential business combination
targets as we approach our dissolution deadline, which could undermine our ability to complete our business combination on terms
that would produce value for our stockholders.
Any
potential target business with which we enter into negotiations concerning a business combination will be aware that we must complete
our initial business combination by November 7, 2019. Consequently, such target business may obtain leverage over us in negotiating
a business combination, knowing that if we do not complete our initial business combination with that particular target business,
we may be unable to complete our initial business combination with any target business. This risk will increase as we get closer
to the timeframe described above. In addition, we may have limited time to conduct due diligence and may enter into our initial
business combination on terms that we would have rejected upon a more comprehensive investigation.
We
may not be able to complete our initial business combination by November 7, 2019, in which case we would cease all operations
except for the purpose of winding up and we would redeem our public shares and liquidate.
We
may not be able to find a suitable target business and complete our initial business combination by November 7, 2019. Our ability
to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital
and debt markets and the other risks described herein. If we have not completed our initial business combination within such time
period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously
released to us to pay income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any), 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 clauses (ii) and (iii), to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. In such case, our public stockholders may only receive $10.00 per share,
and our warrants will expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share
on the redemption of their shares.
If
we seek stockholder approval of our initial business combination, our initial stockholders, sponsor, directors, officers, advisors
and their affiliates may elect to purchase shares or public warrants from public stockholders or public warrantholders, which
may influence a vote on a proposed business combination and reduce the public “float” of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our initial stockholders, sponsor, directors, officers, advisors or their affiliates
may purchase shares or public warrants or a combination thereof in privately negotiated transactions or in the open market either
prior to or following the completion of our initial business combination, although they are under no obligation to do so. There
is no limit on the number of shares our initial stockholders, directors, officers, advisors or their affiliates may purchase in
such transactions, subject to compliance with applicable law and the rules of Nasdaq. However, other than as expressly stated
herein, they have no current commitments, plans or intentions to engage in such transactions and have not formulated any terms
or conditions for any such transactions. None of the funds in the trust account will be used to purchase shares or public warrants
in such transactions.
In
the event that our initial stockholders, sponsor, directors, officers, advisors or their affiliates purchase shares in privately
negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders
would be required to revoke their prior elections to redeem their shares. The purpose of any such purchases of shares could be
to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval
of the business combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum
net worth or a certain amount of cash at the closing of our business combination, where it appears that such requirement would
otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding
or to vote such warrants on any matters submitted to the warrantholders for approval in connection with our initial business combination.
Any such purchases of our securities may result in the completion of our business combination that may not otherwise have been
possible. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent the purchasers
are subject to such reporting requirements.
In
addition, if such purchases are made, the public “float” of our Class A common stock or public warrants and the number
of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing
or trading of our securities on a national securities exchange.
If
a stockholder fails to receive notice of our offer to redeem our public shares in connection with our business combination, or
fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
We
will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our business
combination. Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as
applicable, such stockholder may not become aware of the opportunity to redeem its shares. In addition, the tender offer documents
or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial business
combination will describe the various procedures that must be complied with in order to validly redeem or tender public shares.
For example, we may require our public stockholders seeking to exercise their redemption rights, whether they are record holders
or hold their shares in “street name,” to either tender their certificates to our transfer agent prior to the date
set forth in the proxy solicitation or tender offer materials mailed to such holders, or up to two business days prior to the
vote on the proposal to approve the business combination in the event we distribute proxy materials, or to deliver their shares
to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other procedures, its
shares may not be redeemed.
You
will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore,
to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our
public stockholders will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) the redemption
of any public shares properly submitted in connection with our completion of an initial business combination (including the release
of funds to pay any amounts due to any public stockholders who properly exercise their redemption rights in connection therewith),
(ii) the redemption of any public shares properly submitted in connection with a stockholder vote to approve an amendment to our
Charter that would modify the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated
an initial business combination by November 7, 2019, or (iii) the redemption of our public shares if we are unable to complete
an initial business combination by November 7, 2019, subject to applicable law and as further described herein. In no other circumstances
will a public stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right
to the proceeds held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be
forced to sell your public shares or warrants, potentially at a loss.
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our
securities and subject us to additional trading restrictions.
Our
Class A common stock, warrants and units are listed on Nasdaq. We cannot assure you that our securities will be, or will continue
to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities
on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels.
Generally, we must maintain a minimum amount in stockholders’ equity and a minimum number of holders of our securities.
Additionally,
in connection with our initial business combination, we will be required to demonstrate compliance with Nasdaq’s initial
listing requirements, or the initial listing requirements of another exchange, which are, or may be more rigorous than Nasdaq’s
continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock
price would generally be required to be at least $4.00 per share and our stockholders’ equity would generally be required
to be at least $2.5 million. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If
Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant
material adverse consequences, including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our Class A common stock is a “penny stock,” which will
require brokers trading in our Class A common stock to adhere to more stringent rules
and possibly result in a reduced level of trading activity in the secondary trading market
for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the
future.
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The
National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as “covered securities.” Because our units, Class A common stock
and warrants are listed on Nasdaq, our units, Class A common stock and warrants are as covered securities under the statute. Although
the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate
companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or
bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit
or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators
view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities
of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as
covered securities under the statute and we would be subject to regulation in each state in which we offer our securities.
You
are not entitled to protections normally afforded to investors of many other blank check companies.
Since
the net proceeds of our initial public offering and the sale of the private placement warrants are intended to be used to complete
an initial business combination with a target business, we may be deemed to be a “blank check” company under the United
States securities laws. However, because we have net tangible assets in excess of $5,000,000 and timely filed a Current Report
on Form 8-K after the closing of our initial public offering, including an audited balance sheet demonstrating this fact, we are
exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors
are not afforded the benefits or protections of those rules. Among other things, this means that we will have a longer period
of time to complete our business combination than do companies subject to Rule 419. Moreover, if we were subject to Rule 419,
that rule would prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds
in the trust account were released to us in connection with our completion of an initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer
rules, and if you or a “group” of stockholders are deemed to hold in excess of 20% of our Class A common stock, you
will lose the ability to redeem all such shares in excess of 20% of our Class A common stock.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our Charter provides that a public stockholder, together with any affiliate
of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined
under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 20% of the shares sold in our initial public offering without our prior consent, which we refer to as the “Excess Shares.”
However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for
or against our business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to
complete our business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open
market transactions. Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete
our business combination. And as a result, you will continue to hold that number of shares exceeding 20% and, in order to dispose
of such shares, would be required to sell your stock in open market transactions, potentially at a loss.
Because
of our limited resources and the significant competition for business combination opportunities, it may be more difficult for
us to complete our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may receive only their pro rata portion of the funds in the trust account that are available for distribution to public stockholders,
and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international,
competing for the types of businesses we intend to acquire. Many of these individuals and entities are well-established and have
extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing
services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry
knowledge than we do and our financial resources are relatively limited when contrasted with those of many of these competitors.
While we believe there are numerous target businesses we could potentially acquire with the net proceeds of our initial public
offering and the sale of the private placement warrants, our ability to compete with respect to the acquisition of certain target
businesses that are sizable is limited by our available financial resources. This inherent competitive limitation gives others
an advantage in pursuing the acquisition of certain target businesses. Furthermore, we are obligated to offer holders of our public
shares the right to redeem their shares for cash at the time of our initial business combination, in conjunction with a stockholder
vote or via a tender offer. Target businesses will be aware that this may reduce the resources available to us for our initial
business combination. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business
combination. If we are unable to complete our initial business combination, our public stockholders may receive only their pro
rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants will
expire worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If
the net proceeds of our initial public offering not being held in the trust account are insufficient to allow us to operate until
November 7, 2019, we may be unable to complete our initial business combination in which case our public stockholders may only
receive $10.00 per share, or less than such amount in certain circumstances, and our warrants will expire worthless.
The
funds available to us outside of the trust account may not be sufficient to allow us to operate until November 7, 2019, assuming
that our initial business combination is not completed during that time. We believe that the funds available to us outside of
the trust account will be sufficient to allow us to operate until November 7, 2019; however, we cannot assure you that our estimate
is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants to assist
us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping”
around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed
business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger
agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit
such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or
conduct due diligence with respect to, a target business. If we are unable to complete our initial business combination, our public
stockholders may receive, only approximately $10.00 per share on the liquidation of our trust account and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.00 per share upon our liquidation.
If
the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account
are insufficient to allow us to operate until November 7, 2019, it could limit the amount available to fund our search for a target
business or businesses and complete our initial business combination and we will depend on loans from our Sponsor or management
team to fund our search for a business combination, to pay income taxes, if any, and to complete our initial business combination.
If we are unable to obtain these loans, we may be unable to complete our initial business combination.
Of
the net proceeds of our initial public offering and the sale of the private placement warrants, only approximately $146,000 is
available to us, as of December 31, 2018, outside the trust account to fund our working capital requirements. If we are required
to seek additional capital, we would need to borrow funds from our Sponsor, management team or other third parties to operate
or may be forced to liquidate. None of our Sponsor, members of our management team nor any of their affiliates is under any obligation
to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the trust account
or from funds released to us upon completion of our initial business combination. On March 1, 2019, we issued a convertible promissory
note in the amount of up to $1,500,000 to our Sponsor, which is convertible into warrants of the post-business combination
entity to purchase shares at a price of $1.50 per warrant at the option of the lender. Such warrants are identical to the private
placement warrants. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other
than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide
a waiver against any and all rights to seek access to funds in our trust account. If we are unable to complete our initial business
combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust
account. Consequently, our public stockholders may only receive an estimated $10.00 per share, or possibly less, on our redemption
of our public shares, and our warrants will expire worthless.
CSL’s
financial position could change, negatively impacting its role in helping us complete our initial business combination.
CSL’s
financial position could be negatively impacted due to a variety of factors, including investor redemptions, lower management
fees and/or performance fees and higher operating expenses. From time to time, CSL is party to lawsuits, which if resolved in
an unfavorable manner for CSL, could have a material impact on CSL’s financial position. To the extent CSL’s financial
position is less stable, it may have difficulty retaining certain key investment professionals, which could negatively impact
CSL’s ability to help us complete our initial business combination. In addition, if CSL’s financial position is less
stable, the CSL Funds may choose not to exercise their right to purchase the Co-Investment Securities, and we may need to seek
alternative financing in order to complete our initial business combination.
Subsequent
to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and
impairment or other charges that could have a significant negative effect on our financial condition, results of operations and
our stock price, which could cause you to lose some or all of your investment
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
surface all material issues in relation to a particular target business, that it would be possible to uncover all material issues
through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not
later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations,
or incur impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies
certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary
risk analysis. Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that
we report charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges
of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing
debt held by a target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders who
choose to remain stockholders following the business combination could suffer a reduction in the value of their shares. Such stockholders
are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due
to the breach by our executive officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able
to successfully bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable,
relating to the business combination contained an actionable material misstatement or material omission.
If
third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.00 per share.
Our
placing of funds in the trust account may not protect those funds from third-party claims against us. Although we will seek to
have all vendors, service providers (other than our independent registered public accounting firm), prospective target businesses
and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind
in or to any monies held in the trust account for the benefit of our public stockholders, such parties may not execute such agreements,
or even if they execute such agreements, they may not be prevented from bringing claims against the trust account, including,
but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging
the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including
the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an
agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would
be significantly more beneficial to us than any alternative.
Examples
of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party
consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants
that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver.
In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of,
or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for
any reason. Upon redemption of our public shares, if we are unable to complete our business combination within the prescribed
timeframe, or upon the exercise of a redemption right in connection with our business combination, we will be required to provide
for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per public share initially
held in the trust account, due to claims of such stockholders. Pursuant to the letter, our Sponsor has agreed that it will be
liable to us if and to the extent any claims by a third party (other than our independent public accountants) for services rendered
or products sold to us, or a prospective target business with which we have entered into a written letter of intent, confidentiality
or other similar agreement or business combination agreement, reduce the amount of funds in the trust account to below the lesser
of (i) $10.00 per public share and (ii) the actual amount per public share held in the trust account as of the date of the liquidation
of the trust account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the
interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver
is enforceable) nor will it apply to any claims under our indemnity of the underwriters of our initial public offering against
certain liabilities, including liabilities under the Securities Act. We have not independently verified whether our Sponsor has
sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company.
Our Sponsor may not have sufficient funds available to satisfy those obligations. We have not asked our Sponsor to reserve for
such indemnification obligations, nor have we independently verified whether our Sponsor has sufficient funds to satisfy its indemnity
obligations. Therefore, we cannot assure you that our Sponsor would be able to satisfy those obligations. As a result, if any
such claims were successfully made against the trust account, the funds available for our initial business combination and redemptions
could be reduced to less than $10.00 per public share. In such event, we may not be able to complete our initial business combination,
and you would receive such lesser amount per share in connection with any redemption of your public shares. None of our officers
or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target
businesses.
Our
directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of
funds in the trust account available for distribution to our public stockholders.
In
the event that the proceeds in the trust account are reduced below the lesser of (i) $10.00 per public share and (ii) the actual
amount per public share held in the trust account as of the date of the liquidation of the trust account, if less than $10.00
per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes,
and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to
a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its
indemnification obligations.
While
we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification
obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary
duties may choose not to do so in any particular instance. If our independent directors choose not to enforce these indemnification
obligations, the amount of funds in the trust account available for distribution to our public stockholders may be reduced below
$10.00 per share.
We
may not have sufficient funds to satisfy indemnification claims of our directors and officers.
We
have agreed to indemnify our officers and directors to the fullest extent permitted by law. However, our officers and directors
have agreed to waive any right, title, interest or claim of any kind in or to any monies in the trust account and to not seek
recourse against the trust account for any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied
by us only if (i) we have sufficient funds outside of the trust account or (ii) we consummate an initial business combination.
Our obligation to indemnify our officers and directors may discourage stockholders from bringing a lawsuit against our officers
or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative
litigation against our officers and directors, even though such an action, if successful, might otherwise benefit us and our stockholders.
Furthermore, a stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage
awards against our officers and directors pursuant to these indemnification provisions.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a winding up petition or a winding up
petition is filed against us that is not dismissed, a liquidator may seek to recover such proceeds, and the members of our board
of directors may be viewed as having breached their fiduciary duties to our creditors, thereby potentially exposing the members
of our board of directors and us to claims of punitive damages.
If,
after we distribute the proceeds in the trust account to our public stockholders, we file a winding up petition or a winding up
petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable
debtor/creditor and/or insolvency laws as a “voidable preference”. As a result, a liquidator could seek to challenge
the transaction and recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed
as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims
of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a winding up petition or a winding up
petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims
of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation
may be reduced.
If,
before distributing the proceeds in the trust account to our public stockholders, we file a winding up petition or an involuntary
winding up petition is filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable
insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the
claims of our stockholders. To the extent any liquidation claims deplete the trust account, the per-share amount that would otherwise
be received by our stockholders in connection with our liquidation may be reduced.
If
we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance
requirements and our activities may be restricted, which may make it difficult for us to complete our business combination.
If
we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities, each of which may make it difficult for us to complete
our business combination.
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In
addition, we may have imposed upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
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In
order not to be regulated as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we
must ensure that we are engaged primarily in a business other than investing, reinvesting or trading of securities and that our
activities do not include investing, reinvesting, owning, holding or trading “investment securities” constituting
more than 40% of our assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Our business
will be to identify and complete a business combination and thereafter to operate the post-transaction business or assets for
the long term. We do not plan to buy businesses or assets with a view to resale or profit from their resale. We do not plan to
buy unrelated businesses or assets or to be a passive investor.
We
do not believe that our anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds
held in the trust account may only be invested in United States “government securities” within the meaning of Section
2(a)(16) of the Investment Company Act having a maturity of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Pursuant to the trust agreement, the trustee is not permitted to invest in other securities or assets. By restricting the investment
of the proceeds to these instruments, and by having a business plan targeted at acquiring and growing businesses for the long
term (rather than on buying and selling businesses in the manner of a merchant bank or private equity fund), we intend to avoid
being deemed an “investment company” within the meaning of the Investment Company Act. The trust account is intended
as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination; (ii) the
redemption of any public shares properly submitted in connection with a stockholder vote to approve an amendment to our Charter
that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not consummated an
initial business combination by November 7, 2019; or (iii) the redemption of our public shares if we are unable to complete our
business combination by November 7, 2019, subject to applicable law. If we do not invest the proceeds as discussed above, we may
be deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance
with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder
our ability to complete a business combination, or may result in our liquidation. If we are unable to complete our initial business
combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available
for distribution to public stockholders, and our warrants will expire worthless.
Changes
in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our
ability to negotiate and complete our initial business combination, and results of operations.
We
are subject to laws and regulations enacted by national, regional and local governments. In particular, we will be required to
comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may
be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from
time to time and those changes could have a material adverse effect on our business, investments and results of operations. In
addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect
on our business, including our ability to negotiate and complete our initial business combination, and results of operations.
If
we are unable to consummate our initial business combination by November 7, 2019, our public stockholders may be forced to wait
beyond such date before redemption from our trust account.
If
we are unable to consummate our initial business combination by November 7, 2019, we will distribute the aggregate amount then
on deposit in the trust account (less up to $100,000 of interest to pay dissolution expenses), pro rata to our public stockholders
by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein.
Any redemption of public stockholders from the trust account shall be effected automatically by function of our Charter prior
to any voluntary winding up. If we are required to windup, liquidate the trust account and distribute such amount therein, pro
rata, to our public stockholders, as part of any liquidation process, such winding up, liquidation and distribution must comply
with the applicable provisions of the DGCL. In that case, investors may be forced to wait beyond November 7, 2019 before the redemption
proceeds of our trust account become available to them and they receive the return of their pro rata portion of the proceeds from
our trust account. We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless
we consummate our initial business combination prior thereto and only then in cases where investors have sought to redeem their
common stock. Only upon our redemption or any liquidation will public stockholders be entitled to distributions if we are unable
to complete our initial business combination.
Our
stockholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption
of their shares.
If
we are forced to enter into an insolvent liquidation, any distributions received by stockholders could be viewed as an unlawful
payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts
as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover some or all amounts received
by our stockholders. Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors
and/or may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public stockholders from
the trust account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us
for these reasons. We may not hold an annual meeting of stockholders until after the consummation of our initial business combination,
which could delay the opportunity for our stockholders to elect directors.
We
may not hold an annual meeting of stockholders until after the consummation of our initial business combination, which could delay
the opportunity for our stockholders to elect directors.
In
accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting until no later than one
year after our first fiscal year end following our listing on Nasdaq. There is no requirement under the DGCL for us to hold annual
or general meetings to elect directors. Until we hold an annual meeting of stockholders, public stockholders may not be afforded
the opportunity to elect directors and to discuss company affairs with management. Our board of directors is divided into three
classes with only one class of directors being elected in each year and each class (except for those directors appointed prior
to our first annual meeting of stockholders) serving a three-year term.
We
have not registered the Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time, and such registration may not be in place when an investor desires to exercise warrants, thus precluding such
investor from being able to exercise its warrants except on a cashless basis and potentially causing such warrants to expire worthless.
We
have not registered the Class A common stock issuable upon exercise of the warrants under the Securities Act or any state securities
laws at this time. However, under the terms of the warrant agreement, we have agreed to use our best efforts to file a registration
statement under the Securities Act covering such shares and maintain a current prospectus relating to the Class A common stock
issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant
agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental
change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated
by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants
are not registered under the Securities Act, we will be required to permit holders to exercise their warrants on a cashless basis.
However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders
seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the
securities laws of the state of the exercising holder, or an exemption from registration is available. Notwithstanding the above,
if our Class A common stock are at the time of any exercise of a warrant not listed on a national securities exchange such that
it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option,
require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section
3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration
statement, but we will be required to use our best efforts to register or qualify the shares under applicable blue sky laws to
the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities
or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying
the warrants under the Securities Act or applicable state securities laws, and there is no exemption available. If the issuance
of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the
holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless.
In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the Class A common stock included in the units. If and when the warrants become redeemable by us, we may exercise our
redemption right even if we are unable to register or qualify the underlying Class A common stock for sale under all applicable
state securities laws.
The
grant of registration rights to our initial stockholders and holders of our Co-Investment Securities may make it more difficult
to complete our initial business combination, and the future exercise of such rights may adversely affect the market price of
our Class A common stock.
Pursuant
to an agreement entered into concurrently with the issuance and sale of the securities in our initial public offering, our initial
stockholders and their permitted transferees can demand that we register the Class A common stock into which founder shares are
convertible, holders of our private placement warrants and their permitted transferees can demand that we register the private
placement warrants and the Class A common stock issuable upon exercise of the private placement warrants and holders of warrants
that may be issued upon conversion of working capital loans may demand that we register such warrants or the Class A common stock
issuable upon exercise of such warrants. Pursuant to the Option Agreement, we will agree that we will use our commercially reasonable
efforts to file within 30 days after the closing of the initial business combination a registration statement with the SEC for
a secondary offering of the Co-Investment Shares and the Co-Investment Warrants (and the underlying Class A common stock) and
to cause such registration statement to be declared effective as soon as practicable after it is filed. Assuming the founder shares
convert on a one for one basis and no warrants are issued upon conversion of working capital loans, an aggregate of up to 14,558,333
shares of Class A common stock and up to 5,933,333 private placement warrants are subject to registration under these agreements.
We will bear the cost of registering these securities. The registration and availability of such a significant number of securities
for trading in the public market may have an adverse effect on the market price of our Class A common stock. In addition, the
existence of the registration rights may make our initial business combination more costly or difficult to conclude. This is because
the stockholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration
to offset the negative impact on the market price of our Class A common stock that is expected when the securities owned by our
initial stockholders, holders of our private placement warrants, holders of our Co-Investment Securities, holders of working capital
loans or their respective permitted transferees are registered.
Because
we are not limited to a particular industry, sector or any specific target businesses with which to pursue our initial business
combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
Although
we expect to focus our search for a target business in the energy industry, we may complete a business combination with an operating
company in any industry or sector. However, we will not, under our Charter, be permitted to effectuate our business combination
with another blank check company or similar company with nominal operations. To the extent we complete our business combination,
we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we combine with
a financially unstable business or an entity lacking an established record of revenues or earnings, we may be affected by the
risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers and
directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore,
some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks
will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be
more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to
them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer
materials (as applicable) relating to the business combination contained an actionable material misstatement or material omission.
Because
we intend to seek a business combination with a target business or businesses in the energy industry, we expect our future operations
to be subject to risks associated with this industry.
We
intend to focus our search for a target business in the energy industry. CSL has historically invested in companies in the energy
services industry, with an emphasis on oil and gas services. Accordingly, we may pursue a target business in these sectors or
any other sector within the energy industry, including the oil and gas exploration and production sector. In addition, the CSL
Funds’ willingness to exercise their option to purchase Co-Investment Securities will depend on, among other things, whether
we complete an initial business combination with a company engaged in a business that is within the investment objectives of the
CSL Funds. This may make it more likely that we will pursue a target in the energy industry and be subject to the risks associated
with this industry. Risks inherent in investments in the energy industry include, but are not limited to, the following:
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Volatility
of oil and natural gas prices;
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The
supply of and demand for oilfield services and equipment in the United States and internationally;
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Price
and availability of alternative fuels, such as solar, coal, nuclear and wind energy;
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Significant
federal, state and local regulation, taxation and regulatory approval processes as well as changes in applicable laws and regulations;
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The
speculative nature of and high degree of risk involved in investments in the upstream, midstream and oilfield services sectors,
including relying on estimates of oil and gas reserves and the impacts of regulatory and tax changes;
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Drilling,
exploration and development risks, including encountering unexpected formations or pressures, premature declines of reservoirs,
blow-outs, equipment failures and other accidents, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well
fluids, adverse weather conditions, pollution, fires, spills and other environmental risks, any of which could lead to environmental
damage, injury and loss of life or the destruction of property;
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Proximity
and capacity of oil, natural gas and other transportation and support infrastructure to production facilities;
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Availability
of key inputs, such as strategic consumables, raw materials and drilling and processing equipment;
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Available
pipeline, storage and other transportation capacity;
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Changes
in global supply and demand and prices for commodities;
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Competitive
pressures in the utility industry, primarily in wholesale markets, as a result of consumer demand, technological advances, greater
availability of natural gas and other factors;
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Impact
of energy conservation efforts;
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Technological
advances affecting energy production and consumption;
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Overall
domestic and global economic conditions;
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Availability
of, and potential disputes with, independent contractors;
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Natural
disasters, terrorist acts and similar dislocations;
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Federal,
state and local regulation of oilfield service activities, as well as exploration and production activities, including public
pressure on governmental bodies and regulatory agencies to regulate the energy industry; and
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Value
of U.S. dollar relative to the currencies of other countries
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The
past performance of CSL, Mr. Gould, Mr. Shivram and other members of our management team may not be indicative of future performance
of an investment in the Company.
Information
regarding performance by, or businesses associated with, CSL and its affiliates, Mr. Gould, and Mr. Shivram is presented for informational
purposes only. Past performance by CSL, Mr. Gould, Mr. Shivram and other members of our management team is not a guarantee either
(i) of success with respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate
for our initial business combination. You should not rely on the historical record of CSL’s or, Mr. Gould’s, Mr. Shivram’s
or other members of our management team’s performance as indicative of our future performance of an investment in the company
or the returns the company will, or is likely to, generate going forward. None of our officers or directors have had experience
with blank check companies or special purpose acquisition companies in the past.
We
may seek acquisition opportunities in industries or sectors outside of the energy industry (which industries may or may not be
outside of our management’s areas of expertise).
Although
we intend to focus on identifying business combination candidates in the energy services and equipment industry, we will consider
a business combination outside of the energy industry if a business combination candidate is presented to us and we determine
that such candidate offers an attractive acquisition opportunity for our company or we are unable to identify a suitable candidate
in the energy industry after having expended a reasonable amount of time and effort in an attempt to do so. Although our management
will endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will
adequately ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units
will not ultimately prove to be less favorable to investors in our initial public offering than a direct investment, if an opportunity
were available, in a business combination candidate. In the event we elect to pursue an acquisition outside of the energy industry,
our management’s expertise may not be directly applicable to its evaluation or operation would not be relevant to an understanding
of the business that we elect to acquire. As a result, our management may not be able to adequately ascertain or assess all of
the significant risk factors. Accordingly, any stockholders who choose to remain stockholders following our business combination
could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value.
Although
we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses,
we may enter into our initial business combination with a target that does not meet such criteria and guidelines, and as a result,
the target business with which we enter into our initial business combination may not have attributes entirely consistent with
our general criteria and guidelines.
Although
we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target
business with which we enter into our initial business combination will not have all of these positive attributes. If we complete
our initial business combination with a target that does not meet some or all of these guidelines, such combination may not be
as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition, if we announce
a prospective business combination with a target that does not meet our general criteria and guidelines, a greater number of stockholders
may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business
that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval of the transaction
is required by law, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult
for us to attain stockholder approval of our initial business combination if the target business does not meet our general criteria
and guidelines. If we are unable to complete our initial business combination, our public stockholders may only receive their
pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants
will expire worthless.
We
may seek business combination opportunities with a financially unstable business or an entity lacking an established record of
revenue or earnings, which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To
the extent we complete our initial business combination with a financially unstable business or an entity lacking an established
record of revenues, cash flows or earnings, we may be affected by numerous risks inherent in the operations of the business with
which we combine. These risks include volatile revenues, cash flows or earnings and difficulties in obtaining and retaining key
personnel. Although our officers and directors will endeavor to evaluate the risks inherent in a particular target business, we
may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete
due diligence. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce
the chances that those risks will adversely impact a target business.
We
are not required to obtain an opinion from an independent investment banking firm or from an independent accounting firm, and
consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our
company from a financial point of view.
Unless
we complete our business combination with an affiliated entity or our board cannot independently determine the fair market value
of the target business or businesses, we are not required to obtain an opinion from an independent investment banking firm that
is a member of FINRA or from an independent accounting firm that the price we are paying is fair to our company from a financial
point of view. If no opinion is obtained, our stockholders will be relying on the judgment of our board of directors, who will
determine fair market value based on standards generally accepted by the financial community. Such standards used will be disclosed
in our proxy solicitation or tender offer materials, as applicable, related to our initial business combination. If our board
of directors is not able to independently determine the fair market value of our initial business combination, we will obtain
an opinion from an independent investment banking firm. However, our stockholders may not be provided with a copy of such opinion,
nor will they be able to rely on such opinion.
We
may issue additional common stock or preferred stock to complete our initial business combination or under an employee incentive
plan after completion of our initial business combination. We may also issue shares of Class A common stock upon the conversion
of the shares of Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a
result of the anti-dilution provisions contained in our Charter. Any such issuances would dilute the interest of our stockholders
and likely present other risks.
Our
Charter authorizes the issuance of up to 200,000,000 shares of Class A common stock, 20,000,000 Class B common stock and 1,000,000
preferred stock, par value $0.0001 per share. There are currently 165,500,000 and 11,375,000 authorized but unissued shares of
Class A and Class B common stock available, respectively, for issuance, which amount takes into account shares reserved for issuance
upon exercise of outstanding warrants but not upon the conversion of the Class B common stock. Class B common stock is automatically
convertible into Class A common stock at the time of our initial business combination, initially at a one-for-one ration but subject
to adjustment.
We
may issue a substantial number of additional common stock or preferred stock to complete our initial business combination or under
an employee incentive plan after completion of our initial business combination. For example, we may issue up to an aggregate
of 10,000,000 Co-Investment Shares and 3,333,333 Co-Investment Warrants if the CSL Funds choose to exercise their right to purchase
Co-Investment Securities pursuant to the Option Agreement. We may also issue shares of Class A common stock upon conversion of
the shares of Class B common stock at a ratio greater than one-to-one at the time of our initial business combination as a result
of the anti-dilution provisions contained in our Charter. However, our Charter provides, among other things, that prior to our
initial business combination, we may not issue additional shares in our capital that would entitle the holders thereof to (i)
receive funds from the trust account or (ii) vote on any initial business combination. These provisions of our Charter, like all
provisions of our Charter, may be amended with a stockholder vote. The issuance of additional shares of common stock or preferred
stock:
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may
significantly dilute the equity interest of investors in our initial public offering;
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may
subordinate the rights of holders of common stock if preferred stock are issued with
rights senior to those afforded our common stock;
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could
cause a change in control if a substantial number of common stock are issued, which may
affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
and
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may
adversely affect prevailing market prices for our units, Class A common stock and/or
warrants.
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Unlike
some other similarly structured blank check companies, our initial stockholders will receive additional Class A common stock if
we issue shares to consummate an initial business combination.
The
founder shares will automatically convert into Class A common stock at the time of our initial business combination on a one-for-one
basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like and subject to
further adjustment as provided herein. In the case that additional shares of Class A common stock or shares of equity-linked securities
convertible or exercisable for shares of Class A common stock are issued or deemed issued in excess of the amounts sold in our
initial public offering and related to the closing of our initial business combination (other than the Co-Investment Securities),
the number of shares of Class A common stock issuable upon conversion of all founder shares equals, in the aggregate 20% of the
sum of our common stock outstanding plus the number of shares of Class A common stock and equity-linked securities issued or deemed
issued in connection with our initial business combination, excluding the Co-Investment Securities and any shares or equity-linked
securities issued, or to be issued, to any seller in our initial business combination.
Resources
could be wasted in researching business combinations that are not completed, which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business. If we are unable to complete our initial business combination,
our public stockholders may only receive their pro rata portion of the funds in the trust account that are available for distribution
to public stockholders, and our warrants will expire worthless.
We
anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements,
disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants,
attorneys, consultants and others. If we decide not to complete a specific initial business combination, the costs incurred up
to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to
a specific target business, we may fail to complete our initial business combination for any number of reasons including those
beyond our control. Any such event will result in a loss to us of the related costs incurred which could materially adversely
affect subsequent attempts to locate and acquire or merge with another business. If we are unable to complete our initial business
combination, our public stockholders may only receive their pro rata portion of the funds in the trust account that are available
for distribution to public stockholders, and our warrants will expire worthless.
We
are dependent upon our officers and directors, and their loss could adversely affect our ability to operate.
Our
operations are dependent upon a relatively small group of individuals and, in particular, our officers and directors. We believe
that our success depends on the continued service of our officers and directors, at least until we have completed our initial
business combination. In addition, our officers and directors are not required to commit any specified amount of time to our affairs
and, accordingly, may have conflicts of interest in allocating their time among various business activities, including identifying
potential business combinations and monitoring the related due diligence. We do not have an employment agreement with, or key-man
insurance on the life of, any of our directors or officers. The unexpected loss of the services of one or more of our directors
or officers could have a detrimental effect on us.
Our
ability to successfully effect our initial business combination and to be successful thereafter will be totally dependent upon
the efforts of our key personnel, some of whom may join us following our initial business combination. The loss of key personnel
could negatively impact the operations and profitability of our post-combination business.
Our
ability to successfully effect our business combination is dependent upon the efforts of our key personnel. The role of our key
personnel in the target business, however, cannot presently be ascertained. Although some of our key personnel may remain with
the target business in senior management or advisory positions following our business combination, it is likely that some or all
of the management of the target business will remain in place. While we intend to closely scrutinize any individuals we engage
after our initial business combination, we cannot assure you that our assessment of these individuals will prove to be correct.
These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to
have to expend time and resources helping them become familiar with such requirements.
In
addition, the officers and directors of an acquisition candidate may resign upon completion of our initial business combination.
The departure of a business combination target’s key personnel could negatively impact the operations and profitability
of our post-combination business. The role of an acquisition candidate’s key personnel upon the completion of our initial
business combination cannot be ascertained at this time. Although we contemplate that certain members of an acquisition candidate’s
management team will remain associated with the acquisition candidate following our initial business combination, it is possible
that members of the management of an acquisition candidate will not wish to remain in place. The loss of key personnel could negatively
impact the operations and profitability of our post-combination business.
Our
key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business
combination, and a particular business combination may be conditioned on the retention or resignation of such key personnel. These
agreements may provide for them to receive compensation following our business combination and as a result, may cause them to
have conflicts of interest in determining whether a particular business combination is the most advantageous.
Our
key personnel may be able to remain with our company after the completion of our business combination only if they are able to
negotiate employment or consulting agreements in connection with the business combination. Such negotiations would take place
simultaneously with the negotiation of the business combination and could provide for such individuals to receive compensation
in the form of cash payments and/or our securities for services they would render to us after the completion of the business combination.
Such negotiations also could make such key personnel’s retention or resignation a condition to any such agreement. The personal
and financial interests of such individuals may influence their motivation in identifying and selecting a target business.
We
may have a limited ability to assess the management of a prospective target business and, as a result, may affect our initial
business combination with a target business whose management may not have the skills, qualifications or abilities to manage a
public company, which could, in turn, negatively impact the value of our stockholders’ investment in us.
When
evaluating the desirability of effecting our initial business combination with a prospective target business, our ability to assess
the target business’s management may be limited due to a lack of time, resources or information. Our assessment of the capabilities
of the target business’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications
or abilities we suspected. Should the target business’s management not possess the skills, qualifications or abilities necessary
to manage a public company, the operations and profitability of the post-combination business may be negatively impacted. Accordingly,
any stockholders who choose to remain stockholders following the business combination could suffer a reduction in the value of
their securities. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully
claim that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to
them, or if they are able to successfully bring a private claim under securities laws that the proxy solicitation or tender offer
materials (as applicable) relating to the business combination contained an actionable material misstatement or material omission.
The
officers and directors of an acquisition candidate may resign upon completion of our initial business combination. The loss of
a business combination target’s key personnel could negatively impact the operations and profitability of our post-combination
business.
The
role of an acquisition candidate’s key personnel upon the completion of our initial business combination cannot be ascertained
at this time. Although we contemplate that certain members of an acquisition candidate’s management team will remain associated
with the acquisition candidate following our initial business combination, it is possible that members of the management of an
acquisition candidate will not wish to remain in place.
Our
officers and directors will allocate their time to other businesses thereby causing conflicts of interest in their determination
as to how much time to devote to our affairs. This conflict of interest could have a negative impact on our ability to complete
our initial business combination.
Our
officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict
of interest in allocating their time between our operations and our search for a business combination and their other businesses.
We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our officers
is engaged in several other business endeavors for which he may be entitled to substantial compensation, and our officers are
not obligated to contribute any specific number of hours per week to our affairs. In particular, certain of our officers and directors
are employed by CSL, which is a private equity firm in the energy services industry, may make investments in companies that we
may target for our initial business combination. Our independent directors may also serve as officers or board members for other
entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time
to such affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which
may have a negative impact on our ability to complete our initial business combination.
Certain
of our officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business
activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in allocating their
time and determining to which entity a particular business opportunity should be presented.
Until
we consummate our initial business combination, we intend to engage in the business of identifying and combining with one or more
businesses. Our Sponsor and officers and directors are, and may in the future become, affiliated with entities that are engaged
in a similar business.
Our
officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the
other entities to which they owe certain fiduciary or contractual duties.
Accordingly,
they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These
conflicts may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation
to us, subject to their fiduciary duties under Delaware law.
Our
officers, directors, security holders and their respective affiliates may have competitive pecuniary interests that conflict with
our interests.
We
have not adopted a policy that expressly prohibits our directors, officers, security holders or affiliates from having a direct
or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which
we are a party or have an interest. In fact, we may enter into a business combination with a target business that is affiliated
with our Sponsor, our directors or officers, although we do not intend to do so, or we may acquire a target business through an
Affiliated Joint Acquisition with one or more affiliates of CSL and/or one or more investors in CSL’s investment vehicles.
We do not have a policy that expressly prohibits any such persons from engaging for their own account in business activities of
the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and ours.
In
particular, CSL and its affiliates also are focused on investments in the energy industry, including in the oil and gas services
sector. As a result, there may be substantial overlap between companies that would be a suitable business combination for us and
companies that would make an attractive target for such other affiliates. The personal and financial interests of our directors
and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.
Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may
result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination
are appropriate and in our stockholders’ best interest. If this were the case, it would be a breach of their fiduciary duties
to us as a matter of Delaware law and we or our stockholders might have a claim against such individuals for infringing on our
stockholders’ rights.
We
may engage in a business combination with one or more target businesses that have relationships with entities that may be affiliated
with our Sponsor, officers, directors or existing holders which may raise potential conflicts of interest.
In
light of the involvement of our Sponsor, officers and directors with other entities, we may decide to acquire one or more businesses
affiliated with our Sponsor, officers, directors or existing holders. Our directors also serve as officers and board members for
other entities. Such entities may compete with us for business combination opportunities. Our Sponsor, officers and directors
are not currently aware of any specific opportunities for us to complete our business combination with any entities with which
they are affiliated, and there have been no preliminary discussions concerning a business combination with any such entity or
entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would
pursue such a transaction if we determined that such affiliated entity met our criteria for a business combination and such transaction
was approved by a majority of our independent and disinterested directors. Despite our obligation to obtain an opinion from an
independent investment banking firm that is a member of FINRA or from an independent accounting firm regarding the fairness to
our company from a financial point of view of a business combination with one or more domestic or international businesses affiliated
with our Sponsor, officers or directors, potential conflicts of interest still may exist and, as a result, the terms of the business
combination may not be as advantageous to our public stockholders as they would be absent any conflicts of interest.
Moreover,
we may pursue an Affiliated Joint Acquisition opportunity with an entity affiliated with CSL and/or one or more investors in CSL’s
investment vehicles. Any such parties may co-invest with us in the target business at the time of our initial business combination,
or we could raise additional proceeds to complete the business combination by issuing to such parties a class of equity or equity-linked
securities. Accordingly, such persons or entities may have a conflict between their interests and ours.
Since
our Sponsor, officers and directors will lose their entire investment in us if our business combination is not completed, a conflict
of interest may arise in determining whether a particular business combination target is appropriate for our initial business
combination.
In
June 2017, our Sponsor purchased an aggregate of 14,375,000 founder shares for an aggregate purchase price of $25,000,
or approximately $0.002 per share. In August 2017, the Sponsor surrendered 5,750,000 shares of its Class B common stock for
no consideration, resulting in the Sponsor holding an aggregate of 8,625,000 shares of Class B common stock. Prior to
the initial investment in the company of $25,000 by our Sponsor, the company had no assets, tangible or intangible. The per
share price of the founder shares was determined by dividing the amount contributed to the company by the number of founder
shares issued. The Sponsor transferred 37,500 founder shares to Marc Zenner in October 2017 and, in January 2018, to Jon
Marshall, two of our independent directors, at the original purchase price. The founder shares will be worthless if we do not
complete an initial business combination. In addition, our Sponsor owns an aggregate of 5,933,333 private placement warrants,
each exercisable for one share of Class A common stock at $11.50 per share, that will also be worthless if we do not complete
a business combination. The founder shares are identical to the Class A common stock, except that they are shares of Class
B common stock that automatically convert into our Class A common stock at the time of our initial business combination on
a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights, as described herein. However, the
holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem
any founder shares in connection with a stockholder vote to approve a proposed initial business combination. In addition, we
may obtain loans from our Sponsor, affiliates of our Sponsor or an officer or director. The personal and financial interests
of our officers and directors may influence their motivation in identifying and selecting a target business combination,
completing an initial business combination and influencing the operation of the business following our initial business
combination.
We
may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely
affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us.
On
March 1, 2019, we issued a convertible promissory note in the amount of up to $1,500,000 to our Sponsor, which is
convertible into warrants of the post-business combination entity to purchase shares at a price of $1.50 per warrant at the
option of the lender. Such warrants are identical to the private placement warrants. Although we have no other commitments as
of the date of this Annual Report to issue any notes or other debt securities, or to otherwise incur outstanding debt, we may
choose to incur additional debt to complete our business combination. We and our officers have agreed that we will not incur
any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to
the monies held in the trust account. As such, no issuance of debt will affect the per share amount available for redemption
from the trust account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest
payments when due if we breach certain covenants that require the maintenance of certain
financial ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security
is payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants
restricting our ability to obtain such financing while the debt security is outstanding;
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our
inability to pay dividends on our common stock;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which
will reduce the funds available for dividends on our common stock if declared, to pay
expenses, make capital expenditures and acquisitions and fund other general corporate
purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the
industry in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation;
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; and
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other
disadvantages compared to our competitors who have less debt.
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We
may only be able to complete one business combination with the proceeds of our initial public offering and the sale of the private
placement warrants and the Co-Investment Securities (to the extent subscribed for by the CSL Funds), which will cause us to be
solely dependent on a single business which may have a limited number of products or services. This lack of diversification may
negatively impact our operations and profitability.
Of
the net proceeds from our initial public offering and the sale of the private placement warrants and the Co-Investment Securities
up to $446.0 million are available to complete our business combination and pay related fees and expenses (which includes approximately
$12.1 million of deferred underwriting commissions). If the CSL Funds do not exercise their option to purchase Co-Investment Securities,
up to $350.0 million of the net proceeds from our initial public offering and the sale of the private placement warrants are available
to complete our business combination and pay related fees and expenses (which includes approximately $12.1 million of deferred
underwriting commissions). Of the net proceeds of our initial public offering and the sale of the private placement warrants,
only approximately $146,000 is available to us, as of December 31, 2018, outside the trust account to fund our working capital
requirements.
We
may effectuate our business combination with a single target business or multiple target businesses simultaneously or within a
short period of time. However, we may not be able to effectuate our business combination with more than one target business because
of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma
financial statements with the SEC that present operating results and the financial condition of several target businesses as if
they had been operated on a combined basis. By completing our initial business combination with only a single entity, our lack
of diversification may subject us to numerous economic, competitive and regulatory developments. Further, we would not be able
to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which
may have the resources to complete several business combinations in different industries or different areas of a single industry.
In addition, we intend to focus our search for an initial business combination in a single industry. Accordingly, the prospects
for our success may be:
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solely
dependent upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products,
processes or services.
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This
lack of diversification may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a
substantial adverse impact upon the particular industry in which we may operate subsequent to our business combination.
We
may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to
complete our business combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
If
we determine to simultaneously acquire several businesses that are owned by different sellers, we will need for each of such sellers
to agree that our purchase of its business is contingent on the simultaneous closings of the other business combinations, which
may make it more difficult for us, and delay our ability, to complete our initial business combination. With multiple business
combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations
and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation
of the operations and services or products of the acquired companies in a single operating business. If we are unable to adequately
address these risks, it could negatively impact our profitability and results of operations.
We
may attempt to complete our initial business combination with a private company about which little information is available, which
may result in a business combination with a company that is not as profitable as we suspected, if at all.
In
pursuing our business combination strategy, we may seek to effectuate our initial business combination with a privately held company.
By definition, very little public information generally exists about private companies, and we could be required to make our decision
on whether to pursue a potential initial business combination on the basis of limited information, which may result in a business
combination with a company that is not as profitable as we suspected, if at all.
Our
management may not be able to maintain control of a target business after our initial business combination. We cannot provide
assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities
necessary to profitably operate such business.
We
may structure a business combination so that the post-transaction company in which our public stockholders own shares will own
less than 100% of the equity interests or assets of a target business, but we will only complete such business combination if
the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target sufficient for the post-transaction company not to be required to register as an investment company
under the Investment Company Act. We will not consider any transaction that does not meet such criteria. Even if the post-transaction
company owns 50% or more of the voting securities of the target, our stockholders prior to the business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in the
business combination transaction. For example, we could pursue a transaction in which we issue a substantial number of new shares
in exchange for all of the outstanding capital stock of a target. In this case, we would acquire a 100% interest in the target.
However, as a result of the issuance of a substantial number of new shares, our stockholders immediately prior to such transaction
could own less than a majority of our outstanding common stock subsequent to such transaction. In addition, other minority stockholders
may subsequently combine their holdings resulting in a single person or group obtaining a larger share of the company’s
stock than we initially acquired. Accordingly, this may make it more likely that our management will not be able to maintain control
of the target business.
We
do not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to
complete a business combination with which a substantial majority of our stockholders do not agree.
Our
Charter does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in
an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (such that we are not subject to the SEC’s “penny stock”
rules). As a result, we may be able to complete our business combination even though a substantial majority of our public stockholders
do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination
and do not conduct redemptions in connection with our business combination pursuant to the tender offer rules, have entered into
privately negotiated agreements to sell their shares to our Sponsor, officers, directors, advisors or any of their affiliates.
In the event the aggregate cash consideration we would be required to pay for all shares of Class A common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares
of Class A common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate
business combination.
In
order to effectuate an initial business combination, blank check companies have, in the recent past, amended various provisions
of their charters and other governing instruments, including their warrant agreements. We cannot assure you that we will not seek
to amend our Charter or governing instruments in a manner that will make it easier for us to complete our initial business combination
that our stockholders may not support.
In
order to effectuate a business combination, blank check companies have, in the recent past, amended various provisions of their
charters and governing instruments, including their warrant agreements. For example, blank check companies have amended the definition
of business combination, increased redemption thresholds, changed industry focus and, with respect to their warrants, amended
their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our Charter requires
the approval of holders of not less than two-thirds of our common stock entitled to vote on such amendment, and amending our warrant
agreement will require a vote of holders of at least 50% of the public warrants. In addition, our Charter requires us to provide
our public stockholders with the opportunity to redeem their public shares for cash if we propose an amendment to our Charter
that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete an initial
business combination by November 7, 2019.
The
provisions of our Charter that relate to our pre-business combination activity (and corresponding provisions of the agreement
governing the release of funds from our trust account) may be amended with the approval of holders of at least two thirds of our
common stock entitled to vote on such amendment, which is a lower amendment threshold than that of some other blank check companies.
It may be easier for us, therefore, to amend our Charter and the trust agreement to facilitate the completion of an initial business
combination that some of our stockholders may not support.
Some
other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including
those which relate to a company’s pre-business combination activity, without approval by a certain percentage of the company’s
stockholders. In those companies, amendment of these provisions requires approval by between 90% and 100% of the company’s
public stockholders. Our Charter provides that any of its provisions related to pre-business combination activity (including the
requirement to deposit proceeds of our initial public offering and the private placement of warrants into the trust account and
not release such amounts except in specified circumstances, and to provide redemption rights to public stockholders as described
herein), but excluding the provisions of the Charter relating to the election of directors prior to our initial business combination
(which requires the approval of at least 90% of our common stock entitled to vote thereon), may be amended if approved by holders
of at least two-thirds of our common stock entitled to vote on such amendment, and corresponding provisions of the trust agreement
governing the release of funds from our trust account may be amended if approved by holders of at least two-thirds of our common
stock entitled to vote on such amendment. Our initial stockholders, who collectively beneficially own up to 20% of our common
stock, will participate in any vote to amend our Charter and/or trust agreement and will have the discretion to vote in any manner
they choose. As a result, we may be able to amend the provisions of our Charter that govern our pre-business combination behavior
more easily than some other blank check companies, and this may increase our ability to complete a business combination with which
you do not agree. Our stockholders may pursue remedies against us for any breach of our Charter.
Our
Sponsor, officers and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment
to our Charter that would affect the substance or timing of our obligation to redeem 100% of our public shares if we have not
consummated an initial business combination by November 7, 2019, unless we provide our public stockholders with the opportunity
to redeem their Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest (net of taxes payable), divided by the number of then outstanding
public shares. Our other stockholders are not parties to, or third-party beneficiaries of, these agreements and, as a result,
will not have the ability to pursue remedies against our Sponsor, officers and directors for any breach of these agreements. As
a result, in the event of a breach, our stockholders would need to pursue a shareholder derivative action, subject to applicable
law.
We
may be unable to obtain additional financing to complete our initial business combination or to fund the operations and growth
of a target business, which could compel us to restructure or abandon a particular business combination. If we are unable to complete
our initial business combination, our public stockholders may only receive their pro rata portion of the funds in the trust account
that are available for distribution to public stockholders, and our warrants will expire worthless.
Although
we believe that the net proceeds of our initial public offering and the sale of the private placement warrants and the Co-Investment
Securities (to the extent subscribed for by the CSL Funds) will be sufficient to allow us to complete our initial business combination.
If the net proceeds of our initial public offering and the sale of the private placement warrants and the Co-Investment Securities
(to the extent subscribed for by the CSL Funds) prove to be insufficient, either because of the size of our initial business combination,
the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number
of shares from stockholders who elect redemption in connection with our initial business combination or the terms of negotiated
transactions to purchase shares in connection with our initial business combination, we may be required to seek additional financing
or to abandon the proposed business combination. We cannot assure you that such financing will be available on acceptable terms,
if at all. To the extent that additional financing proves to be unavailable when needed to complete our initial business combination,
we would be compelled to either restructure the transaction or abandon that particular business combination and seek an alternative
target business candidate. If we are unable to complete our initial business combination, our public stockholders may only receive
their pro rata portion of the funds in the trust account that are available for distribution to public stockholders, and our warrants
will expire worthless. In addition, even if we do not need additional financing to complete our business combination, we may require
such financing to fund the operations or growth of the target business. The failure to secure additional financing could have
a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders
is required to provide any financing to us in connection with or after our business combination.
Our
initial stockholders control a substantial interest in us and thus may exert a substantial influence on actions requiring a stockholder
vote, potentially in a manner that you do not support.
Our
initial stockholders own shares representing 20% of our issued and outstanding common stock. In addition, the founder shares,
all of which are held by our initial stockholders, will entitle the holders to elect all of our directors prior to our initial
business combination. Holders of our public shares will have no right to vote on the election of directors during such time. This
provision of our Charter may only be amended by a resolution passed by a majority of at least two-thirds of our common stock entitled
to vote on such amendment. As a result, you will not have any influence over the election of directors prior to our initial business
combination. Accordingly, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner
that you do not support, including amendments to our Charter and approval of major corporate transactions. If our initial stockholders
purchase any additional common stock in the aftermarket or in privately negotiated transactions, this would increase their control.
Neither our initial stockholders nor, to our knowledge, any of our officers or directors have any current intention to purchase
additional securities. Factors that would be considered in making such additional purchases would include consideration of the
current trading price of our Class A common stock. In addition, our board of directors, whose members were elected by our initial
stockholders, is and will be divided into three classes, each of which will generally serve for a term of three years with only
one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors prior
to the completion of our business combination, in which case all of the current directors will continue in office until at least
the completion of the business combination. If there is an annual meeting, as a consequence of our “staggered” board
of directors, only a minority of the board of directors will be considered for election and our initial stockholders, because
of their ownership position, will have considerable influence regarding the outcome. Accordingly, our initial stockholders will
continue to exert control at least until the completion of our business combination. The Co-Investment Shares will only be issued
in connection with our initial business combination and, accordingly, will not be included in any stockholder vote until the closing
of our initial business combination.
We
may amend the terms of the warrants in a manner that may be adverse to holders of public warrants with the approval by the holders
of at least 50% of the then outstanding public warrants. As a result, the exercise price of your warrants could be increased,
the exercise period could be shortened and the number of our Class A common stock purchasable upon exercise of a warrant could
be decreased, all without your approval.
Our
warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant
agent, and us. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder
to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 50% of the then
outstanding public warrants to make any change that adversely affects the interests of the registered holders of public warrants.
Accordingly, we may amend the terms of the public warrants in a manner adverse to a holder if holders of at least 50% of the then
outstanding public warrants approve of such amendment. Although our ability to amend the terms of the public warrants with the
consent of at least 50% of the then outstanding public warrants is unlimited, examples of such amendments could be amendments
to, among other things, increase the exercise price of the warrants, convert the warrants into cash, shorten the exercise period
or decrease the number of shares of our Class A common stock purchasable upon exercise of a warrant.
We
may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants
worthless.
We
have the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a
price of $0.01 per warrant, provided that the last reported sales price of our Class A common stock equals or exceeds $18.00 per
share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days
within a 30 trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption
and provided certain other conditions are met. If and when the warrants become redeemable by us, we may exercise our redemption
right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price therefor at a
time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might
otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants
are called for redemption, is likely to be substantially less than the market value of your warrants. The private placement warrants
are not redeemable by us so long as they are held by the Sponsor or its permitted transferees.
Our
ability to require holders of our warrants to exercise such warrants on a cashless basis after we call the warrants for redemption
or if there is no effective registration statement covering the Class A common stock issuable upon exercise of these warrants
will cause holders to receive fewer shares of Class A common stock upon their exercise of the warrants than they would have received
had they been able to pay the exercise price of their warrants in cash.
If
our Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that our
Class A common stock satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act,
we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless basis”
in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain
in effect a registration statement, but we will be required to use our best efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. “Cashless exercise” means the warrant holder pays the exercise
price by giving up some of the shares for which the warrant is being exercised, with those shares valued at the then current market
price. Accordingly, each holder would pay the exercise price by surrendering the warrants for that number of Class A common stock
equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants,
multiplied by the difference between the exercise price of the warrants and the “fair market value” by (y) the fair
market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock
for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders
of warrants.
In
addition, if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrant is not
effective within a specified period following the consummation of our initial business transaction, warrant holders may, until
such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective
registration statement, exercise warrants on a cashless basis. For purposes of calculating the number of shares issuable upon
such cashless exercise, the “fair market value” of warrants shall be calculated using the volume weighted average
sale price of the Class A common stock for the 10 trading days ending on the trading day prior to the date on which notice of
exercise is received by the warrant agent.
If
we choose to require holders to exercise their warrants on a cashless basis or if holders elect to do so when there is no effective
registration statement, the number of shares of Class A common stock received by a holder upon exercise will be fewer than it
would have been had such holder exercised his or her warrant for cash. For example, if the holder is exercising 875 public warrants
at $11.50 per share through a cashless exercise when the Class A common stock has a fair market value per share of $17.50 per
share, then upon the cashless exercise, the holder will receive 300 shares of Class A common stock. The holder would have received
875 shares of Class A common stock if the exercise price was paid in cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company because the warrantholder will hold a smaller number of shares
of Class A common stock upon a cashless exercise of the warrants they hold.
Our
warrants and founder shares may have an adverse effect on the market price of our shares of Class A common stock and make it more
difficult to effectuate our business combination.
As
part of our initial public offering, we issued warrants to purchase 11,500,000 shares of Class A common stock and issued an aggregate
of 5,933,333 private placement warrants in a private placement, each exercisable to purchase one share of Class A common stock
at $11.50 per share. In addition, we may also issue 10,000,000 shares of Class A common stock and warrants to purchase up to 3,333,333
shares of Class A common stock in connection with our initial business combination pursuant to the Option Agreement. The founder
shares are convertible into shares of Class A common stock on a one-for-one basis, subject to adjustment for share splits, share
dividends, reorganizations, recapitalizations and the like and subject to further adjustment as set forth herein. In addition,
if our Sponsor makes any working capital loans, it may convert those loans into up to an additional 1,000,000 private placement
warrants, at the price of $1.50 per warrant. To the extent we issue shares of Class A common stock to effectuate a business combination,
the potential for the issuance of a substantial number of additional shares of Class A common stock upon exercise of these warrants
and conversion rights could make us a less attractive acquisition vehicle to a target business. Any such issuance will increase
the number of issued and outstanding shares of Class A common stock and reduce the value of the shares of Class A common stock
issued to complete the business combination. Therefore, our warrants and founder shares may make it more difficult to effectuate
a business transaction or increase the cost of acquiring the target business.
A
market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
The
price of our securities may vary significantly due to one or more potential business combinations and general market or economic
conditions. Furthermore, an active trading market for our securities may never develop or, if developed, it may not be sustained.
You may be unable to sell your securities unless a market can be established and sustained.
Because
we must furnish our stockholders with target business financial statements, we may lose the ability to complete an otherwise advantageous
initial business combination with some prospective target businesses.
The
federal proxy rules require that a proxy statement with respect to a vote on a business combination meeting certain financial
significance tests include target historical and/or pro forma financial statement disclosure. We will include the same financial
statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
These financial statements may be required to be prepared in accordance with, or be reconciled to, GAAP or IFRS, depending on
the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the
PCAOB. These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets
may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal
proxy rules and complete our initial business combination within the prescribed time frame.
We
are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure
requirements available to emerging growth companies, this could make our securities less attractive to investors and may make
it more difficult to compare our performance with other public companies.
We
are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may
take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are
not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements
of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports
and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and
stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access
to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances
could cause us to lose that status earlier, including if the market value of our Class A common stock held by non-affiliates exceeds
$700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following
December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our
securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading
prices of our securities may be more volatile.
Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised
financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and
comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We
have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has
different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard
at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another
public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended
transition period difficult or impossible because of the potential differences in accountant standards used.
Compliance
obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate our business combination, require substantial
financial and management resources, and increase the time and costs of completing our initial business combination.
Section
404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual
Report on Form 10-K for the year ending December 31, 2018. Only in the event we are deemed to be a large accelerated filer or
an accelerated filer will we be required to comply with the independent registered public accounting firm attestation requirement
on our internal control over financial reporting. Further, for as long as we remain an emerging growth company, we will not be
required to comply with the independent registered public accounting firm attestation requirement on our internal control over
financial reporting. The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act
particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our
business combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal
controls. The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase
the time and costs necessary to complete any such acquisition.
Provisions
in our Charter may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our
Class A common stock and could entrench management.
Our
Charter contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best
interests. These provisions include a staggered board of directors and the ability of the board of directors to designate the
terms of and issue new series of preferred stock, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
Cyber
incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial
loss.
We
depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those
of third parties with which we may deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure,
or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary
information and sensitive or confidential data. As an early stage company without significant investments in data security protection,
we may not be sufficiently protected against such occurrences. We may not have sufficient resources to adequately protect against,
or to investigate and remediate any vulnerability to, cyber incidents. It is possible that any of these occurrences, or a combination
of them, could have adverse consequences on our business and lead to financial loss.
If
we pursue a target business with operations or opportunities outside of the United States for our initial business combination,
we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination,
and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact
our operations.
If
we pursue a target company with operations or opportunities outside of the United States for our initial business combination,
we would be subject to risks associated with cross-border business combinations, including in connection with investigating, agreeing
to and completing our initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction
approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange
rates.
If
we effect our initial business combination with such a company, we would be subject to any special considerations or risks associated
with companies operating in an international setting, including any of the following:
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higher
costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets;
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rules
and regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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exchange
listing and/or delisting requirements;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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local
or regional economic policies and market conditions;
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unexpected
changes in regulatory requirements;
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tax
issues, such as tax law changes and variations in tax laws as compared to the United
States;
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currency
fluctuations and exchange controls;
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challenges
in collecting accounts receivable;
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cultural
and language differences;
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employment
regulations;
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underdeveloped
or unpredictable legal or regulatory systems;
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protection
of intellectual property;
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social
unrest, crime, strikes, riots and civil disturbances;
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regime
changes and political upheaval;
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terrorist
attacks and wars; and
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deterioration
of political relations with the United States.
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We
may not be able to adequately address these additional risks. If we were unable to do so, we may be unable to complete such initial
business combination, or, if we complete such combination, our operations might suffer, either of which may adversely impact our
business, financial condition and results of operations.
If
our management following our initial business combination is unfamiliar with United States securities laws, they may have to expend
time and resources becoming familiar with such laws, which could lead to various regulatory issues.
Following
our initial business combination, our management may resign from their positions as officers or directors of the company and the
management of the target business at the time of the business combination will remain in place. Management of the target business
may not be familiar with United States securities laws. If new management is unfamiliar with United States securities laws, they
may have to expend time and resources becoming familiar with such laws. This could be expensive and time-consuming and could lead
to various regulatory issues which may adversely affect our operations.
After
our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of
our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be
subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in
which we operate.
The
economic, political and social conditions, as well as government policies, of the country in which our operations are located
could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such
growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a
slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain
industries could materially and adversely affect our ability to find an attractive target business with which to consummate our
initial business combination and if we effect our initial business combination, the ability of that target business to become
profitable.
Exchange
rate fluctuations and currency policies may cause a target business’ ability to succeed in the international markets to
be diminished.
In
the event we acquire a non-U.S. target, all revenues and income would likely be received in a foreign currency, and the dollar
equivalent of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.
The value of the currencies in non-U.S. regions fluctuates and is affected by, among other things, changes in political and economic
conditions. Any change in the relative value of such currency against our reporting currency may affect the attractiveness of
any target business or, following consummation of our initial business combination, our financial condition and results of operations.
Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination,
the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate
such transaction.
If
we acquire a non-U.S. target, our results of operations may be negatively impacted because of the costs and difficulties inherent
in managing cross-border business operations.
We
may pursue a target company with operations or opportunities outside of the United States for our initial business combination.
Managing a business, operations, personnel or assets in another country is challenging and costly. Any management that we may
have (whether based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant
differences in accounting rules, legal regimes and labor practices. Even with a seasoned and experienced management team, the
costs and difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much
higher than in a purely domestic business) and may negatively impact our financial and operational performance.
If
social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, or policy changes or enactments
occur in a country in which we may operate after we effect our initial business combination, it may result in a negative impact
on our business.
In
the event we acquire a non-U.S. target, political events in another country may significantly affect our business, assets or operations.
Social unrest, acts of terrorism, regime changes, changes in laws and regulations, political upheaval, and policy changes or enactments
could negatively impact our business in a particular country.
Many
countries have difficult and unpredictable legal systems and underdeveloped laws and regulations that are unclear and subject
to corruption and inexperience, which may adversely impact our results of operations and financial condition.
In
the event we acquire a non-U.S. target, our ability to seek and enforce legal protections, including with respect to intellectual
property and other property rights, or to defend ourselves with regard to legal actions taken against us in a given country, may
be difficult or impossible, which could adversely impact our operations, assets or financial condition.
Rules
and regulations in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies
at the municipal, state, regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult
to predict and inconsistent.
Delay
with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and
labor, could cause serious disruption to operations abroad and negatively impact our results.
Because
foreign law could govern almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction
or elsewhere, which could result in a significant loss of business, business opportunities or capital.
In
the event we acquire a non-U.S. target, foreign law could govern almost all of our material agreements. The target business may
not be able to enforce any of its material agreements or enforce remedies for breaches of those agreements outside of such foreign
jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such jurisdiction
may be uncertain in implementation and interpretation. As a result, the inability to enforce or obtain a remedy under any of our
future agreements could result in a significant loss of business and business opportunities.