This Annual Report
on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the Securities
Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. The statements contained in this report
that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to,
statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future.
In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include, for example,
statements about our:
The forward-looking
statements contained in this report are based on our current expectations and beliefs concerning future developments and their
potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk
Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as may be required under applicable securities laws and/or if and when management knows or has a reasonable basis on which to conclude
that previously disclosed projections are no longer reasonably attainable.
Introduction
Orisun Acquisition Corp. (the “Company”)
was incorporated in Delaware on October 22, 2018 as a blank check company for the purpose of entering into a merger, share exchange,
asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, with one or more target
businesses. Although our efforts to identify a prospective target business will not be limited to any particular industry or geographic
location, the Company intends to focus its search on companies in and around the high-tech industry. We have not selected any target
business for our initial business combination.
We believe that our management team is
well positioned to identify attractive risk-adjusted returns in the marketplace and that our contacts and transaction sources,
ranging from industry executives, private owners, private equity funds, and investment bankers, in addition to the geographical
reach of our affiliates, will enable us to pursue a broad range of opportunities. Our management team has significant experience
in engaging in cross-border business in Asia and the U.S., and understands the cultural, business and economic differences and
opportunities that will allow us to negotiate a transaction.
All activity for the period from October 22, 2018 (inception) through December 31, 2019 relates
to the Company’s formation, the initial public offering (“Initial Public Offering” or “IPO”), which
is described below, identifying a target company for a Business Combination. The Company will not generate any operating revenues
until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form
of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s
Initial Public Offering was declared effective on August 2, 2019. On August 6, 2019, the Company consummated the Initial Public
Offering of 4,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold,
the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $40,000,000.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 220,000 units (the “Private Units”) at a price of $10.00
per Private Unit in a private placement to Everstone Investments, LLC (the “Sponsor”) and Chardan Capital Markets LLC
(and their designees) (“Chardan”), generating gross proceeds of $2,200,000 (“Private Placement”). In addition,
the Company sold to Chardan (and its designees), for $100, an option to purchase 300,000 Units exercisable at $11.50 per Unit (or
an aggregate exercise price of $3,450,000) commencing upon the consummation of a Business Combination.
Following the closing of the Initial Public
Offering on August 6, 2019, an amount of $40,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial
Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), located in the
United States which has been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market
fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until
the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below.
On August 28, 2019, in connection with
the underwriters’ election to partially exercise their over-allotment option, the Company consummated the sale of an additional
440,024 Units at a price of $10.00 per Unit and the sale of an additional 13,201 Private Units at a price of at $10.00 per unit,
generating total gross proceeds of $4,532,250. Following the closing, an additional $4,400,240 of net proceeds ($10.00 per Unit)
was placed in the Trust Account, resulting in $44,400,240 ($10.00 per Unit) held in the Trust Account. In connection with the underwriters
election to partially exercise their over-allotment option on August 28, 2019, the Company issued an additional 33,002 unit purchase
options to Chardan and its designees. The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s
option, and expires on August 2, 2024.
Since our IPO, our sole business activity
has been identifying and evaluating suitable acquisition transaction candidates.
Competitive strengths
We believe our specific competitive strengths
to be the following:
Status as a public company
We believe our structure will make us an
attractive business combination partner to target businesses. As an existing public company, we offer a target business an alternative
to the traditional initial public offering through a merger or other business combination. In this situation, the owners of the
target business would exchange their shares of stock in the target business for our common stock or for a combination of our common
stock and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses might
find this method a more certain and cost effective method to become a public company than the typical initial public offering.
In a typical initial public offering, there are additional expenses incurred in marketing, roadshow and public reporting efforts
that will likely not be present to the same extent in connection with a business combination with us. Furthermore, once the business
combination is consummated, the target business will have effectively become public, whereas an initial public offering is always
subject to the underwriters’ ability to complete the offering, as well as general market conditions that could prevent the
offering from occurring. Once public, we believe the target business would then have greater access to capital and an additional
means of providing management incentives consistent with stockholders’ interests than it would have as a privately-held company.
It can offer further benefits by augmenting a company’s profile among potential new customers and vendors and aid in attracting
talented employees.
While we believe that our status as a public
company will make us an attractive business partner, some potential target businesses may view the inherent limitations in our
status as a blank check company, such as our lack of an operating history and our requirements to seek stockholder approval of
any proposed initial business combination and provide holders of public shares the opportunity to convert their shares into cash
from the trust account, as a deterrent, and may prefer to effect a business combination with a more established entity or with
a private company.
Transaction flexibility
We offer a target business a variety of
options, such as providing the owners of a target business with shares in a public company and a public means to sell such shares,
providing cash for stock, and providing capital for the potential growth and expansion of its operations or strengthening its balance
sheet by reducing its debt ratio. Because we are able to consummate our initial business combination using our cash, debt or equity
securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us
to tailor the consideration to be paid to the target business to fit its needs and desires. However, since we have no specific
business combination under consideration, we have not taken any steps to secure third party financing and it may not be available
to us.
Management Experience
We believe the experience and contacts
of our management team will give us distinct advantages in sourcing, structuring and consummating business combinations. We have
a management team with extensive experience in mergers and acquisitions, including cross-border transactions, target sourcing,
financial due diligence, deal structuring and negotiation, as well as finance and investment in the United States and Asia, and
understands the cultural, business and economic differences and opportunities that will allow us to negotiate a transaction. We
believe we can source attractive deals and find good investment opportunities from private and public sources to create value for
stockholders. We believe that the network of contacts and relationships of our management team will provide us with an important
source of investment opportunities.
Competitive Weaknesses
We believe our competitive weaknesses to
be the following:
Limited Financial Resources
Our financial reserves will be relatively
limited when contrasted with those of venture capital firms, leveraged buyout firms and operating businesses competing for acquisitions.
In addition, our financial resources could be reduced because of our obligation to convert shares held by our public stockholders
as well as any tender offer we conduct.
Lack of experience with blank check
companies
Our management team is not experienced
in pursuing business combinations on behalf of blank check companies. Other blank check companies may be sponsored and managed
by individuals with prior experience in completing business combinations between blank check companies and target businesses. Our
managements’ lack of experience may not be viewed favorably by target businesses.
Limited technical and human resources
As a blank check company, we have limited
technical and human resources. Many venture capital funds, leveraged buyout firms and operating businesses possess greater technical
and human resources than we do and thus we may be at a disadvantage when competing with them for target businesses.
Delay associated with stockholder approval
or tender offer
We may be required to seek stockholder
approval of our initial business combination. If we are not required to obtain stockholder approval of an initial business combination,
we will allow our stockholders to sell their shares to us pursuant to a tender offer. Both seeking stockholder approval and conducting
a tender offer will delay the consummation of our initial business combination. Other companies competing with us for acquisition
opportunities may not be subject to similar requirement, or may be able to satisfy such requirements more quickly than we can.
As a result, we may be at a disadvantage in competing for these opportunities.
Effecting an Acquisition Transaction
General
We are not presently engaged in, and we
will not engage in, any substantive commercial business until we complete a business combination. We intend to utilize cash derived
from the proceeds of the IPO and the Private Placements, our capital stock, debt or a combination of these in effecting our initial
business combination. Although substantially all of the net proceeds of the IPO and the Private Placements are intended to be applied
generally toward effecting a business combination, the proceeds are not otherwise being designated for any more specific purposes.
Accordingly, investors in the IPO were investing without first having an opportunity to evaluate the specific merits or risks of
any one or more business combinations. Our initial business combination may involve the acquisition of, or merger with, a company
which does not need substantial additional capital but which desires to establish a public trading market for its shares. In the
alternative, we may seek to consummate a business combination with a company that may be financially unstable or in its early stages
of development or growth. While we may seek to effect simultaneous business combinations with more than one target business, we
will probably have the ability, as a result of our limited resources, to effect only a single business combination.
The outbreak of the COVID-19 coronavirus has resulted in a widespread health crisis that has adversely affected the economies
and financial markets worldwide, and potential target companies may defer or end discussions for a potential business combination
with us whether or not COVID-19 affects their business operations. The extent to which COVID-19 impacts our search for a business
combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information
which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the
ability to have meetings with potential investors or the target company’s personnel, vendors and services providers
are unavailable to negotiate and consummate a transaction in a timely manner.
Sources of Target Businesses
We believe based on our management’s
business knowledge and past experience that there are numerous business combination candidates. We anticipate that target business
candidates will be brought to our attention from our Sponsor or from various unaffiliated sources, including investment bankers,
venture capital funds, private equity funds, leveraged buyout funds, management buyout funds and other members of the financial
community. Target businesses may be brought to our attention by such unaffiliated sources as a result of being solicited by us
through calls or mailings. These sources may also introduce us to target businesses in which they think we may be interested in
an unsolicited basis, since many of these sources will have known what types of businesses we are targeting. Our officers and directors,
as well as their affiliates, may also bring to our attention target business candidates that they become aware of through their
business contacts as a result of formal or informal inquiries or discussions they may have, as well as attending trade shows or
conventions. We may engage professional firms or other individuals that specialize in business acquisitions or mergers in the future,
in which event we may pay a finder’s fee, consulting fee or other compensation to be determined in an arm’s length
negotiation based on the terms of the transaction. In no event, however, will our insiders or any of the members of our management
team be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to
effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is). If we decide
to enter into a business combination with a target business that is affiliated with our officers, directors or initial stockholders,
we will do so only if we have obtained an opinion from an independent investment banking firm that the business combination is
fair to our unaffiliated stockholders from a financial point of view. As of the date of this report, there are no affiliated entities
that we would consider as a business combination target.
Selection of a Target Business and Structuring of Our Initial
Business Combination
Subject to our management team’s
fiduciary duties and the limitation that one or more target businesses have an aggregate fair market value of at least 80% of the
value of the trust account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the trust
account) at the time of the execution of a definitive agreement for our initial business combination, as described below in more
detail, our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business.
Additionally, there is no limitation on our ability to raise funds privately or through loans in connection with our initial business
combination. We have not established any specific attributes or criteria (financial or otherwise) for prospective target businesses.
Accordingly, there is no basis for investors
to evaluate the possible merits or risks of the target business with which we may ultimately complete a business combination. To
the extent we effect our initial business combination with a financially unstable company or an entity in its early stage of development
or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in
the business and operations of financially unstable and early stage or potential emerging growth companies. Although our management
will endeavor to evaluate the risks inherent in a particular target business, we may not properly ascertain or assess all significant
risk factors. In evaluating a prospective target business, our management may consider a variety of factors, including one or more
of the following:
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financial condition and results of operation;
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growth potential;
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brand recognition and potential;
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return on equity or invested capital;
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market capitalization or enterprise value;
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experience and skill of management and availability of additional personnel;
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capital requirements;
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competitive position;
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barriers to entry;
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stage of development of the products, processes or services;
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existing distribution and potential for expansion;
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degree of current or potential market acceptance of the products, processes or services;
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proprietary aspects of products and the extent of intellectual property or other protection for products or formulas;
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impact of regulation on the business;
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regulatory environment of the industry;
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costs associated with effecting the business combination;
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industry leadership, sustainability of market share and attractiveness of market industries in which a target business participates; and
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macro competitive dynamics in the industry within which the company competes.
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These criteria are not intended to be exhaustive.
Our management may not consider any of the above criteria in evaluating a prospective target business. The retention of our officers
and directors following the completion of any business combination will not be a material consideration in our evaluation of a
prospective target business.
Any evaluation relating to the merits of
a particular business combination will be based, to the extent relevant, on the above factors as well as other considerations deemed
relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective
target business, we will conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent
management and inspection of facilities, as well as review of financial and other information which is made available to us. This
due diligence review will be conducted either by our management or by unaffiliated third parties we may engage, although we have
no current intention to engage any such third parties.
The time and costs required to select and
evaluate a target business and to structure and complete our initial business combination remain to be determined. Any costs incurred
with respect to the identification and evaluation of a prospective target business with which a business combination is not ultimately
completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination.
Fair Market Value of Target Business
Pursuant to Nasdaq listing rules, our initial
business combination must occur with one or more target businesses having an aggregate fair market value equal to at least 80%
of the value of the funds in the trust account (excluding any deferred underwriter’s fees and taxes payable on the income
earned on the trust account), which we refer to as the 80% test, at the time of the execution of a definitive agreement for our
initial business combination, although we may structure a business combination with one or more target businesses whose fair market
value significantly exceeds 80% of the trust account balance. If we are no longer listed on Nasdaq, we will not be required to
satisfy the 80% test.
We currently anticipate structuring a business
combination to acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure
a business combination where we merge directly with the target business or where we acquire less than 100% of such interests or
assets of the target business in order to meet certain objectives of the target management team or stockholders or for other reasons,
but we will only complete such business combination if the post-transaction company owns 50% or more of the outstanding voting
securities of the target or otherwise owns a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. 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-transaction
company, depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue
a transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial
number of new shares, our stockholders immediately prior to our initial business combination could own less than a majority of
our outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or assets of a
target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses
that is owned or acquired is what will be valued for purposes of the 80% test. In order to consummate such an acquisition, we may
issue a significant amount of our debt or equity securities to the sellers of such businesses and/or seek to raise additional funds
through a private offering of debt or equity securities. Since we have no specific business combination under consideration, we
have not entered into any such fund raising arrangement and have no current intention of doing so. The fair market value of the
target will be determined by our board of directors based upon one or more standards generally accepted by the financial community
(such as actual and potential sales, earnings, cash flow and/or book value). If our board is not able to independently determine
that the target business has a sufficient fair market value, we will obtain an opinion from an unaffiliated, independent investment
banking firm, or another independent entity that commonly renders valuation opinions on the type of target business we are seeking
to acquire, with respect to the satisfaction of such criteria. We will not be required to obtain an opinion from an independent
investment banking firm, or another independent entity that commonly renders valuation opinions on the type of target business
we are seeking to acquire, as to the fair market value if our board of directors independently determines that the target business
complies with the 80% threshold. However, if we seek to consummate an initial business combination with an entity that is affiliated
with any of our officers, directors or insiders and are therefore required to obtain an opinion from an independent investment
banking firm that the business combination is fair to our unaffiliated stockholders from a financial point of view, we may ask
that banking firm to opine on whether the target business met the 80% fair market value test. Nevertheless, we are not required
to do so and could determine not to do so without consent of our stockholders.
Lack of Business Diversification
We expect to complete only a single business
combination, although this process may entail simultaneous business combinations with several operating businesses. Therefore,
at least initially, the prospects for our success may be entirely dependent upon the future performance of a single business operation.
Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple
industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses. By consummating our initial business combination with
only a single entity, our lack of diversification may:
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subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial business combination, and
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result in our dependency upon the performance of a single operating business or the development or market acceptance of a single or limited number of products, processes or services.
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If we determine to simultaneously consummate
our initial business combination with several businesses and such businesses 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 combinations,
which may make it more difficult for us, and delay our ability, to complete the business combination. With a business combination
with several businesses, we could also face additional risks, including additional burdens and costs with respect to possible multiple
negotiations and due diligence investigations and the additional risks associated with the subsequent assimilation of the operations
and services or products of the target companies in a single operating business.
Limited Ability to Evaluate the Target Business’ Management
Team
Although we intend to scrutinize the management
team of a prospective target business when evaluating the desirability of effecting our initial business combination, our assessment
of the target business’ management team may not prove to be correct. In addition, the future management team may not have
the necessary skills, qualifications or abilities to manage a public company. Furthermore, the future role of our officers and
directors, if any, in the target business following our initial business combination remains to be determined. While it is possible
that some of our key personnel will remain associated in senior management or advisory positions with us following our initial
business combination, it is unlikely that they will devote their full time efforts to our affairs subsequent to our initial business
combination. Moreover, they would only be able to remain with the company after the consummation of our initial business combination
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 them to receive compensation
in the form of cash payments and/or our securities for services they would render to the company after the consummation of the
business combination. While the personal and financial interests of our key personnel may influence their motivation in identifying
and selecting a target business, their ability to remain with the company after the consummation of our initial business combination
will not be the determining factor in our decision as to whether or not we will proceed with any potential business combination.
Additionally, our officers and directors may not have significant experience or knowledge relating to the operations of the particular
target business.
Following our initial business combination,
we may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability
to recruit additional managers, or that any such additional managers we do recruit will have the requisite skills, knowledge or
experience necessary to enhance the incumbent management.
Stockholder Approval of Business Combination
In connection with any proposed initial
business combination, we will either (1) seek stockholder approval of such initial business combination at a meeting called for
such purpose at which public stockholders may seek to convert their public shares, regardless of whether they vote for or against
the proposed business combination, into their pro rata share of the aggregate amount then on deposit in the trust account (net
of taxes payable) or (2) provide our public stockholders with the opportunity to sell their public shares to us by means of a tender
offer (and thereby avoid the need for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then
on deposit in the trust account (net of taxes payable), in each case subject to the limitations described herein. Notwithstanding
the foregoing, our initial stockholders have agreed, pursuant to written letter agreements with us, not to convert any public shares
held by them into their pro rata share of the aggregate amount then on deposit in the trust account. If we determine to engage
in a tender offer, such tender offer will be structured so that each public stockholder may tender any or all of his, her or its
public shares rather than some pro rata portion of his, her or its shares. If enough stockholders tender their shares so that we
are unable to satisfy any applicable closing condition set forth in the definitive agreement related to our initial business combination,
or we are unable to maintain net tangible assets of at least $5,000,001 upon the consummation of initial business combination,
we will not consummate such business combination. 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 based on a variety of factors
such as the timing of the transaction or whether the terms of the transaction would otherwise require us to seek stockholder approval.
If we provide stockholders with the opportunity to sell their shares to us by means of a tender offer, we will file tender offer
documents with the SEC which will contain substantially the same financial and other information about the initial business combination
as is required under the SEC’s proxy rules. If we seek stockholder approval of our initial business combination, we will
consummate the business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the
business combination.
We have determined not to consummate any
business combination unless we have net tangible assets of at least $5,000,001 upon such consummation in order to avoid being subject
to Rule 419 promulgated under the Securities Act. However, if we seek to consummate an initial business combination with a target
business that imposes any type of working capital closing condition or requires us to have a minimum amount of funds available
from the trust account upon consummation of such initial business combination, our net tangible asset threshold may limit our ability
to consummate such initial business combination (as we may be required to have a lesser number of shares redeemed) and may force
us to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we may not be able
to consummate such initial business combination and we may not be able to locate another suitable target within the applicable
time period, if at all. However, if we seek to consummate a business combination with a target business that imposes any type of
working capital closing condition or requires us to have a minimum amount of funds available from the trust account upon consummation
of such business combination, the net tangible asset requirement may limit our ability to consummate such a business combination
and may force us to seek third party financing which may not be available on terms acceptable to us or at all. As a result, we
may not be able to consummate such business combination and we may not be able to locate another suitable target within the applicable
time period, if at all.
Our initial stockholders, officers and
directors, have agreed (i) to vote their insider shares, private shares and any public shares owned by them in favor of any proposed
business combination and (ii) not to convert any shares (including the insider shares) in connection with a stockholder vote to
approve, or sell their shares to us in any tender offer in connection with, a proposed initial business combination. As a result,
if we sought stockholder approval of a proposed transaction we could need as little as 85,001 of our public shares (or approximately
2.13% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that only
a quorum was present at the meeting, that Chardan votes in favor of the transaction, and that the initial stockholders do not purchase
any units in the IPO or units or shares in the after-market). None of our officers, directors, initial stockholders or their affiliates
has indicated any intention to purchase units in the IPO or any units or shares of common stock in the open market or in private
transactions (other than the private units). However, if a significant number of stockholders vote, or indicate an intention to
vote, against a proposed business combination, our officers, directors, initial stockholders or their affiliates could make such
purchases in the open market or in private transactions in order to influence the vote. There is no limit on the amount of shares
that may be purchased by the insiders. Any purchases would be made in compliance with federal securities laws, including the fact
that all material information will be made public prior to such purchase, and no purchases would be made if such purchases would
violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are rules designed to stop potential manipulation of a company’s
stock.
Ability to Extend Time to Complete Business Combination
If we anticipate that we may not be able
to consummate our initial business combination within 12 months, we may, but are not obligated to, extend the period of time to
consummate a business combination three times by an additional three months each time (for a total of up to 21 months to complete
a business combination). Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement
entered into between us and American Stock Transfer & Trust Company, LLC simultaneously with the closing of the IPO, in order
to extend the time available for us to consummate our initial business combination, our insiders or their affiliates or designees,
upon five days advance notice prior to the applicable deadline, must deposit into the trust account $444,002 ($0.10 per share),
on or prior to the date of the applicable deadline. The insiders will receive a non-interest bearing, unsecured promissory note
equal to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination
unless there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial
business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional
private units at a price of $10.00 per unit. Our stockholders have approved the issuance of the private units upon conversion of
such notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination.
In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to effect an extension,
we intend to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition,
we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited.
Our insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for us to complete
our initial business combination. To the extent that some, but not all, of our insiders, decide to extend the period of time to
consummate our initial business combination, such insiders (or their affiliates or designees) may deposit the entire amount required.
Conversion Rights
In connection with any stockholder meeting called to approve a proposed initial business combination, each public stockholder will
have the right, regardless of whether he, she or it is voting for or against such proposed business combination, to demand that
we convert his, her or its public shares into a pro rata share of the trust account upon consummation of the business combination.
We may require public stockholders wishing
to exercise conversion rights, whether they are a record holder or hold their shares in “street name,” to either tender
the certificates they are seeking to convert to our transfer agent or to deliver the shares they are seeking to convert to the
transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s
option, at any time at or prior to the vote on the business combination. There is a nominal cost associated with this tendering
process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge
the tendering broker $45 and it would be up to the broker whether or not to pass this cost on to the converting holder. However,
this fee would be incurred regardless of whether or not we require holders to deliver their shares prior to the vote on the business
combination in order to exercise conversion rights. This is because a holder would need to deliver shares to exercise conversion
rights regardless of the timing of when such delivery must be effectuated. However, in the event we require stockholders to deliver
their shares prior to the vote on the proposed business combination and the proposed business combination is not consummated, this
may result in an increased cost to stockholders.
Under Delaware law, we may be required
to give a minimum of only ten days’ notice for each general meeting. As a result, if we require public stockholders who wish
to convert their shares of common stock into the right to receive a pro rata portion of the funds in the trust account to comply
with the foregoing delivery requirements, holders may not have sufficient time to receive the notice and deliver their shares for
conversion. Accordingly, investors may not be able to exercise their conversion rights and may be forced to retain our securities
when they otherwise would not want to.
If we require public stockholders who wish
to convert their shares of common stock to comply with specific delivery requirements for conversion described above and such proposed
business combination is not consummated, we will promptly return such certificates to the tendering public stockholders.
Liquidation if No Business Combination
If we are unable to complete our initial
business combination within 12 months from the closing of the IPO (or 21 months, if we extend the time to complete a business combination),
we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than ten business days thereafter, redeem 100% of the outstanding public shares for a pro rata portion of the funds held in
the trust account (net of interest that may be used by us to pay income taxes or other taxes) which redemption will completely
extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining holders of common stock and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii)
above) to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. However,
if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, but are not obligated
to, extend the period of time to consummate a business combination three times by an additional three months each time (for a total
of up to 21 months to complete a business combination). Pursuant to the terms of our amended and restated certificate of incorporation
and the trust agreement entered into between us and American Stock Transfer & Trust Company, LLC on the date of the Registration
Statement, in order to extend the time available for us to consummate our initial business combination, our insiders or their affiliates
or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $444,002 on or
prior to the date of the applicable deadline. The insiders will receive a non-interest bearing, unsecured promissory note equal
to the amount of any such deposit that will not be repaid in the event that we are unable to close a business combination unless
there are funds available outside the trust account to do so. Such notes would either be paid upon consummation of our initial
business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional
private units at a price of $10.00 per unit. Our stockholders have approved the issuance of the private units upon conversion of
such notes, to the extent the holder wishes to so convert such notes at the time of the consummation of our initial business combination.
In the event that we receive notice from our insiders five days prior to the applicable deadline of their intent to effect an extension,
we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.
In connection with our redemption of 100%
of our outstanding public shares, each holder will receive an amount equal to (1) the number of public shares being converted by
such public holder divided by the total number of public shares multiplied by (2) the amount then in the trust account (initially
$10.00 per share), which includes the deferred underwriting discounts and commissions, plus a pro rata portion of any interest
earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes (subject in each
case to our obligations under Delaware law to provide for claims of creditors). Holders of rights or warrants will receive no proceeds
in connection with the liquidation with respect to such rights or warrants, which will expire worthless.
The proceeds deposited in the trust account
could, however, become subject to claims of our creditors that are in preference to the claims of our stockholders. We may not
have funds sufficient to pay or provide for all creditors’ claims. Although we will seek to have all third parties (including
any vendors or other entities we engage after the IPO) and any prospective target businesses enter into valid and enforceable agreements
with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, there is no guarantee
that they will execute such agreements. There is also no guarantee that the third parties would not challenge the enforceability
of these waivers and bring claims against the trust account for monies owed them. In addition, if we are forced to file a bankruptcy
case or an involuntary bankruptcy case is filed against us that is not dismissed, the proceeds held in the trust account could
be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties
with priority over the claims of our stockholders. Therefore, the actual per-share redemption price may be less than $10.00.
The holders of the insider shares and private
units will not participate in any redemption with respect to their insider shares or private shares. If we are unable to conclude
our initial business combination and we expend all of the net proceeds of the IPO not deposited in the trust account, without taking
into account any interest earned on the trust account and assuming that we do not extend our life beyond 12 months, we expect that
the initial per-share redemption price will be approximately $10.00.
We will pay the costs of any liquidation
following the redemptions from our remaining assets outside of the trust account. If such funds are insufficient, our sponsor has
agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than approximately $18,500)
and has agreed not to seek repayment for such expenses.
The underwriters have agreed to waive their
rights to the deferred underwriting discounts and commissions held in the trust account in the event we do not consummate a business
combination within 12 months from the closing of the IPO (or 21 months, as applicable) and in such event, such amounts will be
included with the funds held in the trust account that will be available to fund the redemption of our public shares.
Certificate of Incorporation
Our certificate of incorporation contains
certain requirements and restrictions relating to the IPO that will apply to us until the consummation of our initial business
combination. If we hold a stockholder vote to amend any provisions of our certificate of incorporation relating to stockholder’s
rights or pre-business combination activity (including the substance or timing within which we have to complete a business combination),
we will provide our public stockholders with the opportunity to redeem their shares of 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 earned
on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the
number of then outstanding public shares, in connection with any such vote. Our insiders and Chardan have agreed to waive any conversion
rights with respect to any insider shares, private shares and any public shares they may hold in connection with any vote to amend
our certificate of incorporation. Specifically, our certificate of incorporation provides, among other things, that:
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prior to the consummation of our initial
business combination, we shall either (1) seek stockholder approval of our initial business combination at a meeting called for
such purpose at which public stockholders may seek to convert their shares of common stock, regardless of whether they vote for
or against the proposed business combination, into a portion of the aggregate amount then on deposit in the trust account, or (2)
provide our stockholders with the opportunity to sell their shares to us by means of a tender offer (and thereby avoid the need
for a stockholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account,
in each case subject to the limitations described herein;
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we will consummate our initial business
combination only if public stockholders do not exercise conversion rights in an amount that would cause our net tangible assets
to be less than $5,000,001 and a majority of the outstanding shares of common stock voted are voted in favor of the business combination;
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if our initial business combination is
not consummated within 12 months of the closing of the IPO (or up to 21 months from the closing of the IPO if we extend the period
of time to consummate a business combination), then our existence will terminate and we will distribute all amounts in the trust
account to all of our public holders of shares of common stock;
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upon the consummation of the IPO, $44,400,240 shall be placed into
the trust account;
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we may not consummate any other business
combination, merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar transaction prior to
our initial business combination; and
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prior to our initial business combination,
we may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the trust
account or (ii) vote on any initial business combination.
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Potential Revisions to Agreements with Insiders
Each of our insiders has entered into letter
agreements with us pursuant to which each of them has agreed to do certain things relating to us and our activities prior to a
business combination. We could seek to amend these letter agreements without the approval of stockholders, although we have no
intention to do so. In particular:
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Restrictions relating to liquidating the trust account if we failed to consummate a business combination in the time-frames specified above could be amended, but only if we allowed all stockholders to redeem their shares in connection with such amendment;
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Restrictions relating to our insiders being required to vote in favor of a business combination or against any amendments to our organizational documents could be amended to allow our insiders to vote on a transaction as they wished;
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The requirement of members of the management team to remain our officer or director until the closing of a business combination could be amended to allow persons to resign from their positions with us if, for example, the current management team was having difficulty locating a target business and another management team had a potential target business;
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The restrictions on transfer of our securities could be amended to allow transfer to third parties who were not members of our original management team;
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The obligation of our management team to not propose amendments to our organizational documents could be amended to allow them to propose such changes to our stockholders;
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The obligation of insiders to not receive any compensation in connection with a business combination could be modified in order to allow them to receive such compensation;
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The requirement to obtain a valuation for any target business affiliated with our insiders, in the event it was too expensive to do so.
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Except as specified above, stockholders
would not be required to be given the opportunity to redeem their shares in connection with such changes. Such changes could result
in:
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Our having an extended period of time to consummate a business combination (although with less in trust as a certain number of our stockholders would certainly redeem their shares in connection with any such extension);
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Our insiders being able to vote against a business combination or in favor of changes to our organizational documents;
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Our operations being controlled by a new management team that our stockholders did not elect to invest with;
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Our insiders receiving compensation in connection with a business combination; and
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Our insiders closing a transaction with one of their affiliates without receiving an independent valuation of such business.
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We will not agree to any such changes unless
we believed that such changes were in the best interests of our stockholders (for example, if we believed such a modification were
necessary to complete a business combination). Each of our officers and directors have fiduciary obligations to us requiring that
they act in our best interests and the best interests of our stockholders.
Competition
In identifying, evaluating and selecting
a target business, we may encounter intense competition from other entities having a business objective similar to ours. Many of
these entities are well established and have extensive experience identifying and effecting business combinations directly or through
affiliates. Many of these competitors possess greater technical, human and other resources than us and our financial resources
will be relatively limited when contrasted with those of many of these competitors. While we believe there may be numerous potential
target businesses that we could acquire with the net proceeds of the IPO, our ability to compete in acquiring certain sizable target
businesses may be limited by our available financial resources.
The following also may not be viewed favorably
by certain target businesses:
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our obligation to seek stockholder approval of a business combination or obtain the necessary financial information to be sent to stockholders in connection with such business combination may delay or prevent the completion of a transaction;
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our obligation to convert shares of common stock held by our public stockholders may reduce the resources available to us for a business combination;
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NASDAQ may require us to file a new listing application and meet its initial listing requirements to maintain the listing of our securities following a business combination;
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our outstanding warrants, rights and unit purchase options and the potential future dilution they represent;
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our obligation to pay the deferred underwriting discounts and commissions to Chardan Capital Markets, LLC upon consummation of our initial business combination;
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our obligation to either repay or issue units upon conversion of up to $500,000 of working capital loans that may be made to us by our initial stockholders, officers, directors or their affiliates;
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our obligation to register the resale of the insider shares, as well as the private units (and underlying securities) and any securities issued to our initial stockholders, officers, directors or their affiliates upon conversion of working capital loans; and
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the impact on the target business’ assets as a result of unknown liabilities under the securities laws or otherwise depending on developments involving us prior to the consummation of a business combination.
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Any of these factors may place us at a
competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status
as a public entity and potential access to the United States public equity markets may give us a competitive advantage over privately-held
entities having a similar business objective as ours in acquiring a target business with significant growth potential on favorable
terms.
If we succeed in effecting a business combination,
there will be, in all likelihood, intense competition from competitors of the target business. We cannot assure you that, subsequent
to a business combination, we will have the resources or ability to compete effectively.
Facilities
We currently maintain our principal executive
offices at 555 Madison Avenue, Room 543, New York, NY 10022. The cost for this space is provided to us by our sponsor, at no cost.
We consider our current office space, combined with the other office space otherwise available to our executive officers, adequate
for our current operations.
Employees
We have two executive officers. These individuals
are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary
to our affairs. The amount of time they will devote in any time period will vary based on whether a target business has been selected
for the business combination and the stage of the business combination process the company is in. Accordingly, once management
locates a suitable target business to acquire, they will spend more time investigating such target business and negotiating and
processing the business combination (and consequently spend more time to our affairs) than they would prior to locating a suitable
target business. We presently expect our executive officers to devote such amount of time as they reasonably believe is necessary
to our business (which could range from only a few hours a week while we are trying to locate a potential target business to a
majority of their time as we move into serious negotiations with a target business for a business combination). We do not intend
to have any full time employees prior to the consummation of a business combination.
Periodic Reporting and Audited Financial
Statements
We have registered our units, common stocks,
warrants and rights under the Exchange Act and have reporting obligations, including the requirement that we file annual, quarterly
and current reports with the SEC. In accordance with the requirements of the Exchange Act, our annual report will contain financial
statements audited and reported on by our independent registered public accountants.
We will provide stockholders with audited
financial statements of the prospective target business as part of any proxy solicitation materials or tender offer documents sent
to stockholders to assist them in assessing the target business. These financial statements will need to be prepared in accordance
with or reconciled to United States GAAP or IFRS as issued by the IASB. A particular target business identified by us as a potential
business combination candidate may not have the necessary financial statements. To the extent that this requirement cannot be met,
we may not be able to consummate our initial business combination with the proposed target business.
We may be required by the Sarbanes-Oxley
Act to have our internal control over financial reporting audited for the fiscal year ending December 31, 2020. A target company
may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of their internal control over financial
reporting. The development of the internal control over financial reporting of any such entity to achieve compliance with the Sarbanes-Oxley
Act may increase the time and costs necessary to complete any such initial business combination.
We are an emerging growth company as defined
in the JOBS Act and will remain such for up to five years. However, if our non-convertible debt issued within a three-year period
or our total revenues exceed $1.07 billion or the market value of our shares of common stock that are held by non-affiliates exceeds
$700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company
as of the following fiscal year. As an emerging growth company, we have elected, under Section 107(b) of the JOBS Act, to take
advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised
accounting standards.
Legal Proceedings
There is no material litigation, arbitration or governmental
proceeding currently pending against us or any of our officers or directors in their capacity as such, and we and our officers
and directors have not been subject to any such proceeding in the 12 months preceding the date of this Report.
As a smaller reporting company we are not required to make disclosures
under this Item.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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Not applicable.
We do not own any real estate or other
physical properties materially important to our operations. We maintain our principal executive offices at 555 Madison Avenue,
Room 543, New York, NY 10022. The cost for this space is provided to us by our Sponsor, at no cost. We consider our current office
space, combined with the other office space otherwise available to our executive officers, adequate for our current operations.
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ITEM 3.
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LEGAL PROCEEDINGS
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We may be subject to legal proceedings,
investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material
litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim,
or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial
condition or results of operations.
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ITEM 4.
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MINE SAFETY DISCLOSURES
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Not Applicable.
part
II
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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The following table sets forth information about our directors
and executive officers as of March 30, 2019.
Name
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Age
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Position
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Wei Chen
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51
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Chief Executive Officer, Chairman and President
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Xiaocheng Peng
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31
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Chief Financial Officer and Director
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Lihua Zheng
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41
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Independent Director
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Ling Wu
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50
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Independent Director
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Tony Chi Ming Chan
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51
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Independent Director
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Below is a summary of the business experience of each of our
executive officers and directors:
Wei Chen has been our Chairman and
President since our inception and was appointed as our chief executive officer in March, 2019. Ms. Chen has been an independent
investor through her family office, Everpower International Holdings Co., Ltd. since January, 2009. She focuses on high technology,
the greater health industry, and entertainment opportunities and helps create strategic plans for target companies. Ms. Chen has
successfully helped multiple overseas technology companies moving their manufacturing operations to mainland China, including a
graphene technology application company supported by Rutgers University and a Taiwanese organic photovoltaic solar cell company.
She also helped these companies get local policy support and collaborate with Chinese private equity firms. Her family office has
been authorized to act as the exclusive licensee by the Hollywood Chamber of Commerce to engage in certain Hollywood-related commercial
activities in China. Ms. Chen is currently leading several projects such as a theme park and other Hollywood related real estate
projects. Previously, Ms. Chen was an officer at the China General Administration of Customs from January 1989 to January 2009.
She earned a degree in business management from Jiangsu Provincial Party School. We believe that Ms. Chen is well-qualified to
serve as Chief Executive Officer and Chairman of the Board due to her in-depth knowledge and extensive experience in the project
management. We believe Ms. Chen’s access to contacts and sources, ranging from private and public company contacts,
private equity funds and investment bankers will allow us to generate acquisition opportunities and identify suitable acquisition
candidates.
Xiaocheng Peng has been employed
by the Company since December 2019. Mr. Peng has served as an investment professional at Ms. Chen’s family office, Everpower
International Holdings Co., Ltd. since December 2015. He focuses on high technology and entertainment opportunities and helps create
strategic plans for target companies. Mr. Peng has led due diligence and prepared the related investment materials and analysis
reports for target companies. He is also experienced in deal negotiation and post-investment management. Mr. Peng earned his Master
of Business Administration degree from California State University Long Beach in 2015, a Master of Engineering in Environmental
Engineering from Oregon State University in 2013 and a bachelor’s degree in Food Safety and Quality from Jilin University
in China in 2001. Mr. Peng is well-qualified to serve as our Chief Financial Officer and Director due to his in-depth knowledge
and experience in the U.S. and China capital markets and his leadership in financings and mergers and acquisitions for several
public and private companies
Lihua Zheng has served as our independent
director since December 2018. Mr. Zheng has served as the Director and Co-Founder of AnHeart Therapeutics Inc. since October 2018and
of AnBio Inc. since December 2017, where he leads the operation in licensing in pharmaceutical development programs in both companies.
He is also the owner and founding partner of Zheng & Karg LLP, which he founded in January 2018. Prior to that, he was the
owner and founding partner of Liu Zheng Chen & Hoofman LLP from October 2015 to December 2017. Mr. Zheng worked at Proskauer
Rose LLP from June 2008 until September 2015. He was also a postdoctoral research scientist at Columbia University Medical Center
from November 2006 until May 2008. Mr. Zheng earned a juris doctor degree from Fordham University School of Law in 2012, a Ph.
D in molecular and human genetics from Baylor College of Medicine in 2006, and a master’s and bachelor’s degree in
biology from Fudan University in China in 2001. We believe that Mr. Zheng is well- qualified to serve as a member of our board
of directors given his number of years of service in the legal and biology industry, understanding of the fiduciary duties as a
board member, his high standards of ethics, as well as his demonstrated professionalism.
Ling Wu has served as our independent
director since December 2018. Mr. Wu is the founder and principal attorney of Wu Law Firm PLLC, which he founded in September 2011.
Prior to founding his own firm, he served as the project leader of Ricoh Corporation Information Technology Group from October
2002 until August 2011. Mr. Wu was an associate in the investment banking department of Morgan Stanley Dean Witter from October
2000 until February 2002. Prior to that, he was an software engineer at Lockheed Martin IMS from October 1999 until September 2000.
Mr. Wu earned a juris doctor degree from Rutgers University School of Law in 2011, a master’s degree in business computer
information systems from Baruch College of CUNY in 1999, and a bachelor’s degree in English from Shanghai University in China
in 1990. Mr. Wu is well- qualified to serve as a member of our board of directors given his number of years of service in the legal
and IT industry, understanding of the fiduciary duties as a board member, his high standards of ethics, as well as his demonstrated
professionalism.
Tony Chi Ming Chan has served as
our independent director since February 2019. Mr. Chan has served as the chief financial officer at Good Resources Holdings Limited
(“GRHL,” a Hong Kong public listed company with stock code: 109), where he is mainly responsible for the financial
and investment management, since January 2019. Mr. Chan is also an independent director of Theme International Holdings Limited
(a Hong Kong public listed company with stock code: 990). Mr. Chan was a non-executive director of Hua Xia Healthcare Holdings
Limited (“Hua Xia,” a Hong Kong public listed company with stock code: 8143) from November 2016 until July 2018 and
then served as an executive director of Hua Xia from July 2018 to January 2019. Prior to that, he was an executive director of
Wan Kei Group Holdings Limited (a Hong Kong public listed company with stock code:1748) from November 2016 until July 2018. Mr.
Chan served as company secretary and authorized representative of GRHL from September 2007 until May 2017. Prior to joining GRHL,
Mr. Chan worked at Deloitte Touche Tohmatsu (between July 2000 and September 2001), Ernst & Young (from November 1994 to June
2000 and then from June 2004 until August 2007), and Coopers & Lybrand (from July 1994 until November 1994). Mr. Chan holds
a bachelor’s degree in Accounting from Australian National University and master’s degree in Finance from University
of New South Wales. Mr. Chan was admitted as Certified Practicing Accountant of CPA Australia in November 1993 and was admitted
as Certified Public Accountant of Hong Kong Institute of Certified Public Accountants in February 2012. Mr. Chan is well-qualified
to serve as a member of our board of directors due to his extensive experience managing several companies, his over ten years of
experience in auditing in one of the big four auditing firms, his understanding of the fiduciary duties as a board member, his
high standards of ethics, as well as his demonstrated professionalism.
Our directors and officers will play a
key role in identifying, evaluating, and selecting target businesses, and structuring, negotiating and consummating our initial
acquisition transaction. Except as described below and under “— Conflicts of Interest,” none of these individuals
is currently a principal of or affiliated with a public company or blank check company that executed a business plan similar to
our business plan. We believe that the skills and experience of these individuals, their collective access to acquisition opportunities
and ideas, their contacts, and their transaction expertise should enable them to identify successfully and effect an acquisition
transaction, although we cannot assure you that they will, in fact, be able to do so.
Director Independence
Nasdaq requires that a majority of our
board must be composed of “independent directors.” Currently, Lihua Zheng, Ling Wu, and Tony Chi Ming Chan would each
be considered an “independent director” under the Nasdaq listing rules, which is defined generally as a person other
than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion
of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying
out the responsibilities of a director. Our independent directors will have regularly scheduled meetings at which only independent
directors are present.
We will only enter into a business combination if it is approved
by a majority of our independent directors. Additionally, we will only enter into transactions with our officers and directors
and their respective affiliates that are on terms no less favorable to us than could be obtained from independent parties. Any
related-party transactions must also be approved by our audit committee and a majority of disinterested independent directors.
Board Committees
The Board has a standing audit, nominating
and compensation committee. The independent directors oversee director nominations. Each committee has a charter.
Audit Committee
Under the Nasdaq listing standards and
applicable SEC rules, we are required to have three members of the audit committee all of whom must be independent. We have established
an audit committee of the board of directors, which consists of Lihua Zheng, Ling Wu, and Tony Chi Ming Chan, each of whom is an
independent director under Nasdaq’s listing standards. Tony Chi Ming Chan is the Chairperson of the audit committee. The
audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:
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reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our Form 10-K;
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discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;
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discussing with management major risk assessment and risk management policies;
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monitoring the independence of the independent auditor;
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verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
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reviewing and approving all related-party transactions;
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inquiring and discussing with management our compliance with applicable laws and regulations;
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pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;
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appointing or replacing the independent auditor;
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determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and
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approving reimbursement of expenses incurred by our management team in identifying potential target businesses.
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The Audit Committee held three (3) meetings during 2019.
The Board has determined that Tony Chi Ming Chan qualifies as an “audit committee financial expert,” as defined
under rules and regulations of the SEC.
Nominating Committee
The members of the Nominating Committee
are Lihua Zheng, Ling Wu, and Tony Chi Ming Chan, each of whom is an independent director under NASDAQ’s listing standards.
Tony Chi Ming Chan is the Chairperson of the Nominating Committee. The nominating committee is responsible for overseeing the selection
of persons to be nominated to serve on our board of directors. The nominating committee considers persons identified by its members,
management, stockholders, investment bankers and others.
The guidelines for selecting nominees,
which are specified in the Nominating Committee Charter, generally provide that persons to be nominated:
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should have demonstrated notable or significant achievements in business, education or public service;
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should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
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should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders
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The nominating committee will consider
a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating
a person’s candidacy for membership on the board of directors. The nominating committee may require certain skills or attributes,
such as financial or accounting experience, to meet specific board needs that arise from time to time and will also consider the
overall experience and makeup of its members to obtain a broad and diverse mix of board members. The nominating committee does
not distinguish among nominees recommended by stockholders and other persons.
Compensation Committee
The members of the Compensation Committee
are Lihua Zheng, Ling Wu, and Tony Chi Ming Chan, each of whom is an independent director under Nasdaq’s listing standards.
Tony Chi Ming Chan is the Chairperson of the compensation committee. The compensation committee’s duties, which are specified
in our Compensation Committee Charter, include, but are not limited to:
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reviewing and approving on an annual basis the corporate goals and objectives relevant to our President and Chief Executive Officer’s compensation, evaluating our President and Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our President and Chief Executive Officer based on such evaluation;
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reviewing and approving the compensation of all of our other executive officers;
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reviewing our executive compensation policies and plans;
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implementing and administering our incentive compensation equity-based remuneration plans;
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assisting management in complying with our proxy statement and annual report disclosure requirements;
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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
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producing a report on executive compensation to be included in our annual proxy statement; and
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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
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The charter also provides that the compensation
committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser
and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before
engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee
will consider the independence of each such adviser, including the factors required by NASDAQ and the SEC.
Conflicts of Interest
Investors should be aware of the following
potential conflicts of interest:
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None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities.
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In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our company as well as the other entities with which they are affiliated. Our officers and directors may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
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Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by our company.
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Unless we consummate our initial business combination, our officers, directors and insiders will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the trust account and the amount of interest income from the trust account that may be released to us as working capital.
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The insider shares beneficially owned by our officers and directors will be released from escrow only if our initial business combination is successfully completed. Additionally, if we are unable to complete an initial business combination within the required time frame, our officers and directors will not be entitled to receive any amounts held in the trust account with respect to any of their insider shares or private units. Furthermore, our insiders (and/or their designees) have agreed that the private units will not be sold or transferred by them until after we have completed our initial business combination. For the foregoing reasons, our board may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effect our initial business combination.
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In general, officers and directors of a
corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation
if:
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the corporation could financially undertake the opportunity;
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the opportunity is within the corporation’s line of business; and
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it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.
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Accordingly, as a result of multiple business
affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting
the above-listed criteria to multiple entities. Furthermore, our certificate of incorporation provides that the doctrine of corporate
opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine
would conflict with any fiduciary duties or contractual obligations they may have. In order to minimize potential conflicts of
interest which may arise from multiple affiliations, our officers and directors (other than our independent directors) have agreed
to present to us for our consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire
a target business, until the earlier of: (1) our consummation of an initial business combination and (2) 12 months (or 21 months,
as applicable) from August 2, 2019. This agreement is, however, subject to any pre-existing fiduciary and contractual obligations
such officer or director may from time to time have to another entity. Accordingly, if any of them becomes aware of a business
combination opportunity which is suitable for an entity to which he or she has pre-existing fiduciary or contractual obligations,
he or she will honor his or her fiduciary or contractual obligations to present such business combination opportunity to such entity,
and only present it to us if such entity rejects the opportunity. We do not believe, however, that the pre-existing fiduciary duties
or contractual obligations of our officers and directors will materially undermine our ability to complete our business combination
because in most cases the affiliated companies are closely held entities controlled by the officer or director or the nature of
the affiliated company’s business is such that it is unlikely that a conflict will arise.
The following table summarizes the current
pre-existing fiduciary or contractual obligations of our officers and directors.
Name of Individual
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Name of Affiliated Company
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Entity’s Business
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Affiliation
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Lu Zhou
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Capstone Capital Group, LLC
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Financial Services
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Executive Assistant and Project Manager
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Lihua Zheng
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AnHeart Therapeutics Inc.
AnBio Inc.
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Pharmaceutical Development
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Director and Co-Founder
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Tony Chi Ming Chan
|
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Good Resources Holdings Ltd.
Theme International Holdings Limited
LTC Consulting Limited
|
|
Financial Services
Investment Holding
Consulting
|
|
Chief Financial Officer
Independent Director
Director
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Wei Chen
|
|
Everpower International Holdings Co., Ltd.
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Financial Services
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Founder
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Our insiders and Chardan have agreed to
vote any shares of common stock held by them in favor of our initial business combination. In addition, they have agreed to waive
their respective rights to receive any amounts held in the trust account with respect to their insider shares and private shares
if we are unable to complete our initial business combination within the required time frame. If they purchase shares of common
stock in the IPO or in the open market, however, they would be entitled to receive their pro rata share of the amounts held in
the trust account if we are unable to complete our initial business combination within the required time frame, but have agreed
not to convert such shares in connection with the consummation of our initial business combination.
All ongoing and future transactions between
us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable
to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee
and a majority of our uninterested “independent” directors, or the members of our board who do not have an interest
in the transaction, in either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter
into any such transaction unless our audit committee and a majority of our disinterested “independent” directors determine
that the terms of such transaction are no less favorable to us than those that would be available to us with respect to such a
transaction from unaffiliated third parties.
To further minimize conflicts of interest,
we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our officers, directors
or insiders, unless we have obtained (i) an opinion from an independent investment banking firm that the business combination is
fair to our unaffiliated stockholders from a financial point of view and (ii) the approval of a majority of our disinterested and
independent directors (if we have any at that time). Furthermore, in no event will our insiders or any of the members of our management
team be paid any finder’s fee, consulting fee or other similar compensation prior to, or for any services they render in
order to effectuate, the consummation of our initial business combination (regardless of the type of transaction that it is).
Code of Ethics
We adopted a code of conduct and ethics applicable to our directors,
officers and employees in accordance with applicable federal securities laws. The code of ethics codifies the business and ethical
principles that govern all aspects of our business.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more
than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of our common stock and other equity securities. These executive officers, directors,
and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed
by such reporting persons.
Based solely on our review of such forms
furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable
to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner.
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ITEM 11.
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EXECUTIVE COMPENSATION
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Employment Agreements
We have not entered into any
employment agreements with our executive officers, and have not made any agreements to provide benefits upon termination of
employment.
Executive Officers and Director Compensation
No executive officer has received any cash
compensation for services rendered to us. No compensation of any kind, including finders, consulting or other similar fees, will
be paid to any of our existing stockholders, including our directors, or any of their respective affiliates, prior to, or for any
services they render in order to effectuate, the consummation of a business combination. However, such individuals will be reimbursed
for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses
and performing due diligence on suitable business combinations. There is no limit on the amount of these out-of-pocket expenses
and there will be no review of the reasonableness of the expenses by anyone other than our board of directors and audit committee,
which includes persons who may seek reimbursement, or a court of competent jurisdiction if such reimbursement is challenged.
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ITEM
12.
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
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The
following table sets forth as of March 30, 2020 the number of shares of common stock beneficially owned by (i) each person who
is known by us to be the beneficial owner of more than five percent of our issued and outstanding shares of common stock (ii)
each of our officers and directors; and (iii) all of our officers and directors as a group. As of March 30, 2020, we had 5,783,235
shares of common stock issued and outstanding.
Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all
shares of common stock beneficially owned by them. The following table does not reflect record of beneficial ownership of any
common stock issuable upon exercise of the warrants or conversion of rights, as the warrants are not exercisable within 60 days
of March 30, 2020 and the rights are not convertible within 60 days of March 30, 2020.
Name
and Address of Beneficial Owner(1)
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Amount and Nature of Beneficial
Ownership of Common Stock
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Approximate Percentage of
Outstanding Common Stock
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Everstone
Investments LLC(2)
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1,317,011
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22.77
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%
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Wei Chen(3)
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1,317,011
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22.77
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%
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Lihua Zheng
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1,000
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0.02
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%
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Ling Wu
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1,000
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0.02
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%
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Tony Chi Ming Chan
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1,000
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0.02
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%
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Lu Zhou
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1,000
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0.02
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%
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All directors and executive officers as a group (5
individuals)
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1,321,011
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22.84
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%
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Boothbay
Absolute Return Strategies LP(4)
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419,631
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7.26
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%
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Boothbay Fund
Management, LLC(4)
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419,631
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7.26
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%
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Ari Glass(4)
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419,631
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7.26
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%
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Hudson
Bay Capital Management LP(5)
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290,000
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5.01
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%
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Sander Gerber(5)
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290,000
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5.01
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%
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Weiss
Asset Management LP(6)
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290,000
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5.01
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%
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WAM
GP LLC(6)
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290,000
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5.01
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%
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Andrew
M. Weiss, PHD(6)
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|
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290,000
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5.01
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%
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Karpus
Investment Management(7)
|
|
|
432,525
|
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7.48
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%
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Periscope Capital Inc.
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334,791
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5.79
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%
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(1)
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Unless
otherwise indicated, the business address of each of the individuals is c/o Orisun Acquisition Corp., 555 Madison Avenue,
Room 543, New York, NY 10022.
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(2)
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Everstone
Investment LLC is owned and controlled by Wei Chen, our Chairman of the Board of Director and President.
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(3)
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Consists
of shares owned by Everstone Investments LLC, our sponsor, which is owned by Wei Chen, our chief executive officer.
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(4)
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Based
on a Schedule 13G filed by the reporting persons. The address for the reporting persons is 810 7th Avenue, Suite 615, New
York, NY 10019-5818. Boothbay Absolute Return Strategies LP, a Delaware limited partnership (the “Fund”), is managed
by Boothbay Fund Management, LLC, a Delaware limited liability company (the “Adviser”). The Adviser, in its capacity
as the investment manager of the Fund, has the power to vote and the power to direct the disposition of all Units held by
the Fund. Ari Glass is the Managing Member of the Adviser. Shares reported may be deemed beneficially owned by Boothbay Absolute
Return Strategies LP, Boothbay Fund Management, LLC and Ari Glass.
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(5)
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Based
on a Schedule 13G filed by the reporting persons. The address for the reporting persons is 777 Third Avenue, 30th Floor, New
York, NY 10017. Hudson Bay Capital Management LP (the “Investment Manager”) serves as the investment manager to
Hudson Bay Master Fund Ltd. Tech Opportunities LLC, in whose name the securities reported herein are held, is controlled by
Hudson Bay Master Fund Ltd. As such, the Investment Manager may be deemed to be the beneficial owner of all securities held
by Tech Opportunities LLC. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general
partner of the Investment Manager. Mr. Gerber disclaims beneficial ownership of these securities.
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(6)
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Based
on a Schedule 13G filed by the reporting persons. The address for the reporting persons is 222 Berkeley St., 16th floor, Boston,
Massachusetts 02116. Weiss Asset Management is the sole investment manager to a private investment partnership (“Partnership”)
and a private investment fund. WAM GP is the sole general partner of Weiss Asset Management. Andrew Weiss is the managing
member of WAM GP. Shares reported for WAM GP, Andrew Weiss and Weiss Asset Management include shares beneficially owned by
the Partnership and the Fund.
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(7)
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Based
on a Schedule 13G filed by the reporting person. The address for the reporting person is 183 Sully’s Trail, Pittsford, New
York 14534. Karpus Management, Inc., d/b/a Karpus Investment Management (“KIM”), is an investment advisor in accordance
with §240.13d-1(b)(1)(ii)(E). Accounts managed by KIM (the “Accounts”) have the right to receive all dividends
from, and any proceeds from the sale of the shares. None of the Accounts has an interest in shares constituting more than
5% of the shares outstanding.
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(8)
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Based
on a Schedule 13G filed by the reporting person. The address for the reporting persons is 333 Bay Street, Suite 1240, Toronto,
Ontario, Canada M5H 2R2. Periscope Capital Inc. (“Periscope”) acts as investment manager of, and exercises investment
discretion with respect to, certain private investment funds (each, a “Periscope Fund”).
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All
of the insider shares issued and outstanding prior to the IPO were placed in escrow with American Stock Transfer & Trust Company,
LLC, as escrow agent. Subject to certain limited exceptions, 50% of these shares will not be transferred, assigned, sold or released
from escrow until the earlier of six months after the date of the consummation of our initial business combination and the date
the closing price of our common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations
and recapitalizations) for any 20 trading days within any 30-trading day period commencing after our initial business combination
and the remaining 50% of the insider shares will not be transferred, assigned, sold or released from escrow until six months after
the date of the consummation of our initial business combination or earlier in either case if, subsequent to our initial business
combination, we complete a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
During
the escrow period, the holders of these shares will not be able to sell or transfer their securities except (1) transfers among
the insiders, to our officers, directors, advisors and employees, (2) transfers to an insider’s affiliates or its members
upon its liquidation, (3) transfers to relatives and trusts for estate planning purposes, (4) transfers by virtue of the laws
of descent and distribution upon death, (5) transfers pursuant to a qualified domestic relations order, (6) private sales made
at prices no greater than the price at which the securities were originally purchased or (7) transfers to us for cancellation
in connection with the consummation of an initial business combination, in each case (except for clause 7) where the transferee
agrees to the terms of the escrow agreement and forfeiture, as the case may be, as well as the other applicable restrictions and
agreements of the holders of the insider shares. If dividends are declared and payable in shares of common stock, such dividends
will also be placed in escrow. If we are unable to effect a business combination and liquidate, there will be no liquidation distribution
with respect to the insider shares.
During
the escrow period, the holders of these shares will not be able to sell or transfer their securities except (i) for transfers
to our officers, directors or their respective affiliates (including for transfers to an entity’s members upon its liquidation),
(ii) to relatives and trusts for estate planning purposes, (iii) by virtue of the laws of descent and distribution upon death,
(iv) pursuant to a qualified domestic relations order, (v) by certain pledges to secure obligations incurred in connection with
purchases of our securities, (vi) by private sales made at or prior to the consummation of a business combination at prices no
greater than the price at which the shares were originally purchased or (vii) to us for no value for cancellation in connection
with the consummation of our initial business combination, in each case (except for clause (vii)) where the transferee agrees
to the terms of the escrow agreement, but will retain all other rights as our stockholders, including, without limitation, the
right to vote their shares of common stock and the right to receive cash dividends, if declared. If dividends are declared and
payable in shares of common stock, such dividends will also be placed in escrow. If we are unable to effect a business combination
and liquidate the trust account, none of our initial stockholders will receive any portion of the liquidation proceeds with respect
to their insider shares.
In
order to meet our working capital needs, our initial stockholders, our insiders, officers and directors may, but are not obligated
to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan
would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination,
without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our
business combination into additional private units at a price of $10.00 per unit (which, for example, would result in the holders
being issued units to acquire 55,000 shares of common stock (which includes 5,000 shares issuable upon conversion of rights) and
warrants to purchase 25,000 shares of common stock if $500,000 of notes were so converted). Our stockholders have approved the
issuance of the private units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time
of the consummation of our initial business combination. If we do not complete a business combination, any outstanding loans from
our insiders, officers and directors or their affiliates, will be repaid only from amounts remaining outside our trust account,
if any.
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ITEM
13.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
In
December 2018, we sold an aggregate of 1,150,000 shares of our common stock for $25,000, or approximately $0.02 per share, to
our initial officers and directors.
The
underwriters exercised a portion of their over-allotment option. Our insiders forfeited an aggregate of 39,990 insider shares
in proportion to the portion of the over-allotment option that was not exercised. We recorded the forfeited shares as treasury
stock and simultaneously retired the shares. Such forfeited shares were immediately cancelled which resulted in the retirement
of the treasury shares and a corresponding charge to additional paid-in capital.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the sale of 220,000 Units at a price of $10.00 per Private
Unit in a private placement to the Sponsor and Chardan, generating gross proceeds of $2,200,000. In addition, on August 28, 2019,
in connection with the underwriters’ election to partially exercise their over-allotment option, the Company consummated
sale of an additional 13,201 Private Units at a price of at $10.00 per unit, generating gross proceeds of $132,010. American Stock
Transfer & Trust Company, LLC deposited the purchase price into the trust account simultaneously with the consummation of
the IPO and the over-allotment option. The private units are identical to the units sold in the IPO except that the private warrants
will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by Everstone
Investments LLC, Chardan Capital Markets, LLC or their permitted transferees. Additionally, because the private units will be
issued in a private transaction, Everstone Investments LLC and Chardan Capital Markets, LLC will be allowed to exercise the private
warrants for cash even if a registration statement covering the shares of common stock issuable upon exercise of such warrants
is not effective and receive unregistered shares of common stock. Furthermore, the holders agreed (A) to vote their private shares
and any public shares acquired in or after the IPO in favor of any proposed business combination, (B) not to propose, or vote
in favor of, an amendment to our certificate of incorporation that would affect the substance or timing of our obligation to redeem
100% of our public shares if we do not complete our initial business combination within 12 months from the closing of the IPO
(or 21 months, as applicable), unless we provide our public stockholders with the opportunity to redeem their shares of 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 earned on the funds held in the trust account and not previously released to us to pay
our franchise and income taxes, divided by the number of then outstanding public shares, (C) not to convert any shares (including
the private shares) into the right to receive cash from the trust account in connection with a stockholder vote to approve our
proposed initial business combination (or sell any shares they hold to us in a tender offer in connection with a proposed initial
business combination) or a vote to amend the provisions of our certificate of incorporation relating to the substance or timing
of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 12 months
from the closing of the IPO (or 21 months, as applicable) and (D) that the private shares shall not be entitled to be redeemed
for a pro rata portion of the funds held in the trust account if a business combination is not consummated. Additionally, our
insiders (and/or their designees) have agreed not to transfer, assign or sell any of the private units or underlying securities
(except to transferees that agree to the same terms and restrictions agreed to by the insiders) until the completion of our initial
business combination.
In order to meet our working capital needs
following the consummation of the IPO, our insiders, officers and directors may, but are not obligated to, loan us funds, from
time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by
a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or,
at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into
additional private units at a price of $10.00 per unit (which, for example, would result in the holders being issued units to
acquire 55,000 shares of common stock (which includes 5,000 shares issuable upon conversion of rights) and warrants to purchase
25,000 shares of common stock if $500,000 of notes were so converted). Our stockholders have approved the issuance of the private
units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the consummation
of our initial business combination. If we do not complete a business combination, any outstanding loans from our insiders, officers
and directors or their affiliates, will be repaid only from amounts remaining outside our trust account, if any.
The
holders of our insider shares issued and outstanding on the date of this Report, as well as the holders of the private units (and
underlying securities) and any shares our insiders, officers, directors or their affiliates may be issued in payment of working
capital loans made to us, will be entitled to registration rights dated August 2, 2019. The holders of a majority of these securities
are entitled to make up to two demands that we register such securities. The holders of the majority of the insider shares can
elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common
stock are to be released from escrow. The holders of a majority of the private units or shares issued in payment of working capital
loans made to us can elect to exercise these registration rights at any time after we consummate a business combination. In addition,
the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to our consummation of our initial business combination. We will bear the expenses incurred in connection with the filing of any
such registration statements.
We
will reimburse our officers and directors for any reasonable out-of-pocket business expenses incurred by them in connection with
certain activities on our behalf such as identifying and investigating possible target businesses and business combinations. There
is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses exceed
the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust account,
such expenses would not be reimbursed by us unless we consummate an initial business combination. Our audit committee will review
and approve all reimbursements and payments made to any initial stockholder or member of our management team, or our or their
respective affiliates, and any reimbursements and payments made to members of our audit committee will be reviewed and approved
by our Board of Directors, with any interested director abstaining from such review and approval.
No
compensation or fees of any kind, including finder’s fees, consulting fees or other similar compensation, will be paid to
our insiders or any of the members of our management team, for services rendered to us prior to, or in connection with the consummation
of our initial business combination (regardless of the type of transaction that it is). However, such individuals will receive
reimbursement for any out-of-pocket expenses incurred by them in connection with activities on our behalf, such as identifying
potential target businesses, performing business due diligence on suitable target businesses and business combinations as well
as traveling to and from the offices, plants or similar locations of prospective target businesses to examine their operations.
There is no limit on the amount of out-of-pocket expenses reimbursable by us; provided, however, that to the extent such expenses
exceed the available proceeds not deposited in the trust account and the interest income earned on the amounts held in the trust
account, such expenses would not be reimbursed by us unless we consummate an initial business combination.
Related
Party Policy
Our
Code of Ethics requires us to avoid, wherever possible, all related party transactions that could result in actual or potential
conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). Related-party transactions
are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar
year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election
as a director, (b) greater than 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons
referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of
being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person
takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of
interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his
or her position.
We
also require each of our directors and executive officers to annually complete a directors’ and officers’ questionnaire
that elicits information about related party transactions.
Our
audit committee, pursuant to its written charter, will be responsible for reviewing and approving related-party transactions to
the extent we enter into such transactions. All ongoing and future transactions between us and any of our officers and directors
or their respective affiliates will be on terms believed by us to be no less favorable to us than are available from unaffiliated
third parties. Such transactions will require prior approval by our audit committee and a majority of our uninterested “independent”
directors, or the members of our board who do not have an interest in the transaction, in either case who had access, at our expense,
to our attorneys or independent legal counsel. We will not enter into any such transaction unless our audit committee and a majority
of our disinterested “independent” directors determine that the terms of such transaction are no less favorable to
us than those that would be available to us with respect to such a transaction from unaffiliated third parties. Additionally,
we require each of our directors and executive officers to complete a directors’ and officers’ questionnaire that
elicits information about related party transactions.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents
a conflict of interest on the part of a director, employee or officer.
To
further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity which
is affiliated with any of our initial stockholders unless we obtain an opinion from an independent investment banking firm that
the business combination is fair to our unaffiliated stockholders from a financial point of view. Furthermore, in no event will
any of our existing officers, directors or initial stockholders, or any entity with which they are affiliated, be paid any finder’s
fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of
a business combination.
Director
Independence
Nasdaq
listing standards require that within one year of the listing of our securities on the Nasdaq Capital Market we have at least
three independent directors and that a majority of our board of directors be independent. For a description of the director independence,
see above Part III, Item 10 - Directors, Executive Officers and Corporate Governance.
|
ITEM
14.
|
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
|
The
following is a summary of fees paid or to be paid to Marcum LLP, or Marcum, for services rendered.
Audit
Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements
and services that are normally provided by Marcum in connection with regulatory filings. The aggregate fees billed by Marcum for
professional services rendered for the audit of our annual financial statements, review of the financial information included
in our Forms 10-Q for the respective periods and other required filings with the SEC for the year ended December 31, 2019 and
for the period from October 22, 2018 (inception) through December 31, 2018 totaled $88,215 and $0, respectively. The above amounts
include interim procedures and audit fees, as well as attendance at audit committee meetings.
Audit-Related
Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance
of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include
attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting
standards. We did not pay Marcum for consultations concerning financial accounting and reporting standards for the year ended
December 31, 2019 and for the period from October 22, 2018 (inception) through December 31, 2018.
Tax
Fees. We did not pay Marcum for tax planning and tax advice for the year ended December 31, 2019 and for the period from October
22, 2018 (inception) through December 31, 2018.
All
Other Fees. We did not pay Marcum for other services for the year ended December 31, 2019 and for the period from October
22, 2018 (inception) through December 31, 2018.
Pre-Approval
Policy
Our
audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve
all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our
board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will
pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees
and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved
by the audit committee prior to the completion of the audit).
part
IV
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Orisun Acquisition Corp. (the “Company”)
was incorporated in Delaware on October 22, 2018. The Company was formed for the purpose of entering into a merger, share exchange,
asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses
or entities (the “Business Combination”).
Although the Company is not limited to
a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on
companies in and around the high-tech industry. The Company is an early stage and emerging growth company and, as such, the Company
is subject to all of the risks associated with early stage and emerging growth companies.
As of December 31, 2019, the Company had
not commenced any operations. All activity for the period from October 22, 2018 (inception) through December 31, 2019 relates to
the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below, and
identifying a target company for a Business Combination. The Company will not generate any operating revenues until after the completion
of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from
the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s
Initial Public Offering was declared effective on August 2, 2019. On August 6, 2019, the Company consummated the Initial Public
Offering of 4,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold,
the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $40,000,000, which is described in Note 4.
Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 220,000 units (the “Private Units”) at a price of $10.00
per Private Unit in a private placement to Everstone Investments, LLC (the “Sponsor”) and Chardan Capital Markets LLC
(and their designees) (“Chardan”), generating gross proceeds of $2,200,000, which is described in Note 5.
Following the closing of the Initial Public
Offering on August 6, 2019, an amount of $40,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial
Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), located in the
United States which has been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended
investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of
the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and
(ii) the distribution of the Trust Account, as described below.
On August 28, 2019, in connection with
the underwriters’ election to partially exercise their over-allotment option, the Company consummated the sale of an additional
440,024 Units at a price of $10.00 per Unit and the sale of an additional 13,201 Private Units at a price of at $10.00 per unit,
generating total gross proceeds of $4,532,250. Following the closing, an additional $4,400,240 of net proceeds ($10.00 per Unit)
was placed in the Trust Account, resulting in $44,400,240 ($10.00 per Unit) held in the Trust Account.
Transaction costs amounted to $3,180,906,
consisting of $1,332,010 of underwriting fees, $1,332,010 of deferred underwriting fees and $516,886 of other offering costs. In
addition, at December 31, 2019, cash of $336,270 was held outside of the Trust Account (as defined below) and is available for
working capital purposes.
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private
Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete
a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding
the deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the agreement to
enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The Company will provide its holders of
the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their
Public Shares upon the completion of a 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 the Company will seek stockholder approval
of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released
to the Company to pay its franchise and income tax obligations). There will be no redemption rights upon the completion of a Business
Combination with respect to the Company’s warrants. The Public Shares subject to redemption will be recorded at a redemption
value and classified as temporary equity upon the completion of the Proposed Offering in accordance with the Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with
a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination
and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination.
If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal
reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate
of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission
(“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder
approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons,
the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to
the tender offer rules. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they
vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination,
the Company’s Sponsor and any of the Company’s officers or directors that may hold Founder Shares (as defined in Note
6) (the “Initial Stockholders”) and Chardan have agreed (a) to vote their Founder Shares, Private Shares (as defined
in Note 5) and any Public Shares purchased during or after the Initial Public Offering in favor of approving a Business Combination
and (b) not to convert any shares (including the Founder Shares) in connection with a stockholder vote to approve, or sell the
shares to the Company in any tender offer in connection with, a proposed Business Combination.
If the Company seeks stockholder approval
of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate
of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom
such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate
of 20% or more of the Public Shares, without the prior consent of the Company.
The Initial Stockholders and Chardan have
agreed (a) to waive their redemption rights with respect to the Founder Shares, Private Shares and Public Shares held by them in
connection with the completion of a Business Combination and (b) not to propose, or vote in favor of, an amendment to the Amended
and Restated Certificate of Incorporation that would affect the substance or timing of the Company’s obligation to redeem
100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders
with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until August 6, 2020
to consummate a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination
by August 6, 2020, the Company may extend the period of time to consummate a Business Combination up to three times, each by an
additional three months (for a total of 21 months to complete a Business Combination) (the “Combination Period”). In
order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliate or designees
must deposit into the Trust Account $444,002 ($0.10 per Public Share), or an aggregate of $1,332,010, or $0.30 per Unit, on or
prior to the date of the applicable deadline for each three month extension.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
If the Company is unable to complete a
Business Combination within the Combination Period, the Company 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 the Company to pay franchise and income taxes, 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 the Company’s remaining stockholders and the Company’s
board of directors, dissolve and liquidate, subject in each case to the Company’s 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 the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination
within the Combination Period.
The Sponsor and Chardan have agreed to
waive their liquidation rights with respect to the Founder Shares and Private Shares if the Company fails to complete a Business
Combination within the Combination Period. However, if the Sponsor or Chardan acquires Public Shares in or after the Initial Public
Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete
a Business Combination within the Combination Period. The underwriters have agreed to waive their rights to their deferred underwriting
commission (see Note 7) held in the Trust Account in the event the Company does not complete a Business Combination within in the
Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be
available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value
of the assets remaining available for distribution will be less than the Initial Public Offering price per Unit ($10.00).
In order to protect the amounts held in
the Trust Account, Ms. Wei Chen, the Company’s chief executive officer, has agreed to be liable to the Company if and to
the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with
which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below
$10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company
waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except
as to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that
an executed waiver is deemed to be unenforceable against a third party, Ms. Wei Chen, the chief executive officer, will not be
responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that Ms.
Chen Wei will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers,
prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving
any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Nasdaq Notification
On August 28,
2019, the Company received a written notice from the Staff of the Listing Qualifications Department (the “Staff”) of
The Nasdaq Stock Market LLC (“Nasdaq”) indicating that based upon the Staff’s determination, the common stock
contained in the Company’s Units is not in compliance with the minimum 300 round lot holders required for the listing of
its Units on The Nasdaq Capital Market, as set forth in the initial listing requirements of Nasdaq Listing Rule 5505(a)(3), or
the minimum 300 public holders required for continued listing, as set forth in the continued listing requirements of Rule 5550(a)(3).
The Company appealed the delisting, and on November 4, 2019, Nasdaq found the Company has met the requirements for listing and
as such the Company will remain listed.
NOTE 2. LIQUIDITY AND GOING CONCERN
As of December 31, 2019, the Company had
$336,270 in its operating bank accounts, $44,694,457 in securities held in the Trust Account to be used for a Business Combination
or to repurchase or redeem its common stock in connection therewith and working capital of $206,161, which excludes franchise and
income taxes payable as these amounts can be paid from the interest earned in the Trust Account. As of December 31, 2019, approximately
$294,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s
tax obligations.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Until the consummation of a Business Combination,
the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates,
performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire,
and structuring, negotiating and consummating the Business Combination.
The Company will need to raise additional
capital through loans or additional investments from its Sponsor, officers, directors, or their affiliates. The Company’s
officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever
amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company
may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending
the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing
will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s
ability to continue as a going concern through August 6, 2020, the date that the Company will be required to cease all operations,
except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any
adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should
the Company be unable to continue as a going concern.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of presentation
The accompanying financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)
and pursuant to the rules and regulations of the SEC.
Emerging growth company
The Company is an “emerging growth
company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012
(the “JOBS Act”), and it 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in its 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.
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 election to opt out is irrevocable. The Company has 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, the Company, 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 the Company’s financial statement with another public company
which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Use of estimates
The preparation of the financial statements
in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Making estimates requires management to
exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or
set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly
from those estimates.
Cash and cash equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents
as of December 31, 2019 and 2018.
Marketable securities held in Trust Account
At December 31, 2019, the assets held in
the Trust Account were substantially held in U.S. Treasury Bills.
Common stock subject to possible redemption
The Company accounts for its common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability
instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption
rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely
within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’
equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s
control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented
at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
Income taxes
The Company follows the asset and liability
method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized
for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
ASC 740 prescribes a recognition threshold
and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken
in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination
by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax
expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2019 and
2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material
deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net loss per common share
Net loss per share is computed by dividing
net loss by the weighted average number of shares of common stock outstanding during the period. The Company applies the two-class
method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2019, which are
not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic loss per common
share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not
considered the effect of (1) warrants sold in the Initial Public Offering and private placement to purchase 2,336,613 shares of
common stock (2) rights sold in the Initial Public Offering and private placement that convert into 467,323 share of common stock
and (3) a unit purchase option sold to the underwriter that is exercisable for 333,002 shares of common stock, warrants to purchase
166,501 shares of common stock and rights that convert into 33,300 shares of common stock, in the calculation of diluted loss per
share, since the exercise of the warrants and the conversion of the rights into shares of common stock are contingent upon the
occurrence of future events. As a result, diluted loss per share is the same as basic loss per share for the period presented.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Reconciliation of net loss per common
share
The Company’s net income (loss) is
adjusted for the portion of income that is attributable to common stock subject to possible redemption, as these shares only participate
in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per common
share is calculated as follows:
|
|
Year Ended
December 31,
|
|
|
For the
Period from
October 22,
2018
(Inception)
Through
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Net loss
|
|
$
|
(31,401
|
)
|
|
$
|
(863
|
)
|
Less: Income attributable to shares subject to possible redemption
|
|
|
(226,672
|
)
|
|
|
—
|
|
Adjusted net loss
|
|
$
|
(258,073
|
)
|
|
$
|
(863
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding, basic and diluted
|
|
|
1,366,531
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share
|
|
$
|
(0.19
|
)
|
|
$
|
(0.00
|
)
|
Concentration of credit risk
Financial instruments that potentially
subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times may exceed
the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management
believes the Company is not exposed to significant risks on such accounts.
Fair value of financial instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Recent accounting pronouncements
Management does not believe that any recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s
financial statements.
NOTE 4. PUBLIC OFFERING
Pursuant to the Initial Public Offering,
the Company sold 4,440,024 units at $10.00 per Unit, inclusive of 440,024 Units sold to the underwriters on August 28, 2019 upon
the underwriters’ election to partially exercise their over-allotment option. Each Unit consists of one share of common stock,
one right (“Public Right”) and one warrant (“Public Warrant”). Each Public Right will convert into one-tenth
(1/10) of one share of common stock upon the consummation of a Business Combination (see Note 8). Each Public Warrant entitles
the holder to purchase one half of one share of common stock at a price of $11.50 per whole share, subject to adjustment
(see Note 8).
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 5. PRIVATE PLACEMENT
Simultaneously with the closing of the
Initial Public Offering, the Sponsor and Chardan (and their designees) purchased an aggregate of 220,000 Private Units at a price
of $10.00 per Private Unit, of which 200,000 Private Units were purchased by the Sponsor and 20,000 Private Units were purchased
by Chardan, for an aggregate purchase price of $2,200,000. On August 28, 2019, the Company consummated the sale of an additional
13,201 Private Units at a price of $10.00 per Private Unit, which was purchased by the Sponsor and Chardan, generating gross proceeds
of $132,010. Each Private Unit consists of one share of common stock (“Private Share”), one right (“Private Right”)
and one warrant (“Private Warrant”). Each Private Right will convert into one-tenth (1/10) of one share of common stock
upon the consummation of a Business Combination (see Note 8). Each Private Warrant is exercisable to purchase one-half of one share
of common stock at an exercise price of $11.50 per whole share, subject to adjustment (see Note 8). The proceeds from the Private
Units were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a
Business Combination within the Combination Period, the proceeds from the sale of the Private Units will be used to fund the redemption
of the Public Shares (subject to the requirements of applicable law), and the Private Units and all underlying securities will
expire worthless.
NOTE 6. RELATED PARTY TRANSACTIONS
Founder Shares
In December 2018, the Sponsor purchased
1,150,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000. The
Founder Shares included an aggregate of up to 150,000 shares subject to forfeiture by the Initial Stockholders to the extent that
the underwriters’ over-allotment was not exercised in full or in part, so that the Initial Stockholders would collectively
own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the Initial Stockholders
did not purchase any Public Shares in the Initial Public Offering and excluding the Private Units). On August 28, 2019, as a result
of the underwriters’ election to partially exercise their over-allotment option, 110,010 Founder Shares are no longer subject
to forfeiture. The underwriters elected not to exercise the remaining portion of the over-allotment option and, therefore, 39,990
Founder Shares were forfeited.
The Initial Stockholders have agreed, subject
to certain limited exceptions, not to transfer, assign or sell any of their Founder Shares until, with respect to 50% of the Founder
Shares, the earlier of six months after the consummation of a Business Combination and the date on which the closing price of the
common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within a 30-trading day period commencing after a Business Combination and, with respect
to the remaining 50% of the Founder Shares, until the six months after the consummation of a Business Combination, or earlier,
in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other
similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common
stock for cash, securities or other property.
Advances — Related Party
The Sponsor advanced the Company an aggregate
of $57,500 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing and due on demand.
At December 31, 2019, advances of $57,500 were outstanding and due on demand.
Promissory Note — Related Party
On December 28, 2018, the Company issued
an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to
an aggregate principal amount of $300,000, of which $225,000 was outstanding under the Promissory Note as of June 30, 2019. The
Promissory Note is non-interest bearing and due on the earlier of the consummation of the Initial Public Offering or on the date
on which the Company determines not to proceed with the Initial Public Offering. On August 9, 2019, the outstanding balance of
$234,000 under the Promissory Note was repaid in full.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
Related Party Loans
In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor, or certain of the Company’s officers and directors or their
affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the
Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account
released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account.
In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account
to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.
Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist
with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $500,000 of such Working Capital Loans may be converted into units of the
post Business Combination entity at a price of $10.00 per unit. The units would be identical to the Private Units.
Related Party Extension Loans
As discussed in Note 1, the Company may
extend the period of time to consummate a Business Combination up to three times, each by an additional three months (for
a total of 21 months to complete a Business Combination). In order to extend the time available for the Company to consummate
a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account $444,002 ($0.10 per Public
Share), or an aggregate of $1,332,010, or $0.30 per Unit, on or prior to the date of the applicable deadline. The Sponsor will
receive a non-interest bearing, unsecured promissory note that will not be repaid in the event that the Company is unable to close
a Business Combination unless there are funds available outside the Trust Account to do so. The note would either be repaid upon
consummation of a Business Combination or, at the lender’s discretion, converted upon the consummation of a Business Combination
into additional Private Units at a price of $10.00 per unit. The initial stockholders and its affiliates or designees are
not obligated to fund the Trust Account to extend the time for the Company to complete a Business Combination.
NOTE 7. COMMITMENTS
Registration Rights
Pursuant to a registration rights agreement
entered into on August 2, 2019, the holders of the Founder Shares, Private Units (and all underlying securities), and any shares
that may be issued upon conversion of Working Capital Loans will be entitled to registration rights. The holders of the majority
of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority
of the Founder Shares can elect to exercise these registration rights at any time commencing three months prior to the date on
which the Founder Shares are to be released from escrow. The holders of a majority of the Private Units and units issued in payment
of Working Capital Loans made to the Company can elect to exercise these registration rights at any time commencing on the date
that the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration
rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will
bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
45-day option to purchase up to 600,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price
less the underwriting discounts and commissions. On August 28, 2019, the underwriters elected to partially exercise their over-allotment
option to purchase an additional 440,024 Units at a purchase price of $10.00 per Unit.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
In connection with the closing of the Initial
Public Offering and the over-allotment option, the underwriters are entitled to a deferred fee of $0.30 per Unit, or $1,332,010
in the aggregate. The deferred fee will be forfeited by the underwriters solely in the event that the Company fails to complete
a Business Combination, subject to the terms of the underwriting agreement.
Right of First Refusal
The Company has granted Chardan a right
of first refusal, for a period of 18 months after the date of the consummation of a Business Combination, to act as lead investment
banker, or minimally as a co-manager, with at 30% of the economics or 20% if three investment banks are involved in the transaction,
for any public or private equity and debt offerings during such period.
Warrant Solicitation Fee
The Company has agreed to pay Chardan a
warrant solicitation fee of 5% of the exercise price of each Public Warrant exercised during the period commencing 12 months from
the effective date of the registration statement (August 2, 2019) other than (a) in conjunction with a force-call provision, or
(b) in the case that all solicitations to warrant holders are made exclusively by the Company and/or the Sponsor without third
party assistance on an engaged or non-engaged basis. The warrant solicitation fee will be payable in cash. There is no limitation
on the maximum warrant solicitation fee payable to Chardan except to the extent it is limited by the number of warrants outstanding.
NOTE 8. STOCKHOLDERS’ EQUITY
Common Stock — The
Company is authorized to issue 30,000,000 shares of common stock with a par value of $0.00001 per share. Holders of the common
stock are entitled to one vote for each share. At December 31, 2019 and 2018, there were 1,952,097 and 1,150,000 shares of common
stock issued and outstanding, excluding 3,831,138 and no shares of common stock subject to possible redemption, respectively.
Rights — Each holder
of a right will receive one-tenth (1/10) of one share of common stock upon consummation of a Business Combination, even if the
holder of such right redeemed all shares held by it in connection with a Business Combination. No fractional shares will be issued
upon conversion of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive
its additional shares upon consummation of a Business Combination, as the consideration related thereto has been included in the
Unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for
a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders
of rights to receive the same per share consideration the holders of the common stock will receive in the transaction on an as-converted
into common stock basis and each holder of a right will be required to affirmatively covert its rights in order to receive 1/10
share underlying each right (without paying additional consideration). The shares issuable upon conversion of the rights will be
freely tradable (except to the extent held by affiliates of the Company).
If the Company is unable to complete a
Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of rights
will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s
assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are
no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination.
Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, holders of the rights might
not receive the shares of common stock underlying the rights.
Warrants — Public Warrants
may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The
Public Warrants will become exercisable on the later of (a) the completion of a Business Combination or (b) 12 months from
the closing of the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective
and current registration statement covering the shares of common stock issuable upon exercise of the Public Warrants and a current
prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares
of common stock issuable upon exercise of the Public Warrants is not effective within 90 days from the consummation of a Business
Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the
Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant
to the exemption from registration provided by Section 3(a)(9) of the Securities Act provided that such exemption is available.
If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis.
The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The Company may call the warrants for redemption
(excluding the private warrants and warrants underlying the units that may be issued upon conversion of working capital loans but
including any outstanding warrants issued upon exercise of the unit purchase option issued to Chardan Capital Markets, LLC), in
whole and not in part, at a price of $0.01 per warrant:
|
●
|
at
any time while the warrants are exercisable,
|
|
|
|
|
●
|
upon
not less than 30 days’ prior written notice of redemption to each warrant holder,
|
|
|
|
|
●
|
if,
and only if, the reported last sale price of the shares of common stock equals or exceeds $16.50 per share (as adjusted for
stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-trading day period
ending on the third business day prior to the notice of redemption to warrant holders, and
|
|
|
|
|
●
|
if,
and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such
warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter
until the date of redemption.
|
If the Company calls the Public Warrants
for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a
“cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable
upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary
dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances
of shares of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash
settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company
liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants,
nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants.
Accordingly, the warrants may expire worthless.
The Private Warrants are identical to the
Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares of common
stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion
of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless
basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants
are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by
the Company and exercisable by such holders on the same basis as the Public Warrants.
Unit Purchase Option
The Company sold to Chardan (and its designees),
for $100, an option to purchase 300,000 Units exercisable at $11.50 per Unit (or an aggregate exercise price of $3,450,000) commencing
on the later of February 2, 2020 and the consummation of a Business Combination. In connection with the underwriters election to
partially exercise their over-allotment option on August 28, 2019, the Company issued an additional 33,002 unit purchase options
to Chardan and its designees. The unit purchase option may be exercised for cash or on a cashless basis, at the holder’s
option, and expires August 2, 2024. The Units issuable upon exercise of the option are identical to those sold in the Initial Public
Offering. The Company accounted for the unit purchase option, inclusive of the receipt of $100 cash payment, as an expense of the
Initial Public Offering, resulting in a charge directly to stockholders’ equity. The Company estimated the fair value of
the unit purchase option to be approximately $941,000 (or $2.83 per Unit) using the Black-Scholes option-pricing model. The fair
value of the unit purchase option granted to the underwriters was estimated as of the date of grant using the following assumptions:
(1) expected volatility of 35%, (2) risk-free interest rate of 1.53% and (3) expected life of five years. The option and the underlying
securities that may be issued upon exercise of the option, have been deemed compensation by FINRA and are therefore subject to
a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA’s NASDAQ Conduct Rules. Additionally, the option may not be sold,
transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180-day period) following the date
of Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public Offering and their
bona fide officers or partners. The option grants to holders demand and “piggyback” rights for periods of five and
seven years, respectively, from the effective date of the registration statement with respect to the registration under the Securities
Act of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses
attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves.
The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including
in the event of a stock dividend, or the Company’s recapitalization, reorganization, merger or consolidation. However, the
option will not be adjusted for issuances of shares of common stock at a price below its exercise price.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 9. INCOME TAX
The Company did not have any significant
deferred tax assets or liabilities as of December 31, 2019 and 2018. The provision for income taxes was deemed to be immaterial
for the year ended December 31, 2019 and for the period from October 22, 2018 (inception) to December 31, 2018.
The income tax provision for the year ended December 31, 2019
consists of the following:
Federal
|
|
|
|
Current
|
|
$
|
—
|
|
Deferred
|
|
|
(6,594
|
)
|
|
|
|
|
|
State
|
|
|
|
|
Current
|
|
$
|
—
|
|
Deferred
|
|
|
—
|
|
Change in valuation allowance
|
|
|
6,594
|
|
Income tax provision
|
|
$
|
—
|
|
As of December 31, 2019, the Company had U.S.
federal and state net operating loss carryovers (“NOLs”) in the amount of $31,401 available to offset future taxable
income. The NOLs have an unlimited carry-forward period; however, under IRS regulations the ability to utilize NOLs will be limited
by any change of control and other factors.
In assessing the realization of the
deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which temporary differences representing net future deductible amounts become
deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment. After consideration of all of the information available, management believes
that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore
established a full valuation allowance. For the year ended December 31, 2019, the change in the valuation allowance was
$6,594.
A reconciliation of the federal income
tax rate to the Company’s effective tax rate at December 31, 2019 is as follows:
Statutory federal income tax rate
|
|
|
21.0
|
%
|
State taxes, net of federal tax benefit
|
|
|
0.0
|
%
|
Valuation allowance
|
|
|
(21.0
|
)%
|
Income tax provision
|
|
|
0.0
|
%
|
The Company files income tax returns in
the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.
The Company’s tax returns since inception remain open and subject to examination.
NOTE 10. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC
820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial
assets and liabilities that are re-measured and reported at fair value at least annually.
ORISUN ACQUISITION CORP.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with
the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants
at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize
the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal
assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify
assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
|
|
|
|
Level 2:
|
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
|
|
|
|
|
Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
The following table presents information
about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2019 and indicates the fair
value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
|
|
|
December 31,
|
|
Description
|
|
Level
|
|
2019
|
|
Assets:
|
|
|
|
|
|
Marketable securities held in Trust Account
|
|
1
|
|
$
|
44,694,457
|
|
NOTE 11. SUBSEQUENT EVENTS
The Company evaluated subsequent events
and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon
this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial
statements.
F-18