As filed with the U.S. Securities and Exchange
Commission on July 13, 2021.
Registration No. 333-254010
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
CHARDAN NEXTECH ACQUISITION 2 CORP.
(Exact name of registrant
as specified in its charter)
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Delaware
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6770
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85-1873463
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(State
or other jurisdiction of incorporation or organization)
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(Primary
Standard Industrial Classification Code Number)
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(I.R.S.
Employer
Identification Number)
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17
State Street, 21st Floor
New York, NY 10004
(646)
465-9000
(Address, including zip
code, and telephone number, including area code, of registrant’s principal executive offices)
Jonas Grossman
Chief Executive Officer
17
State Street, 21st Floor
New York, NY 10004
(646)
465-9000
(Name, address, including
zip code, and telephone number, including area code, of agent for service)
Copies to:
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Ari
Edelman, Esq.
C. Craig Lilly, Esq.
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
(212) 521-5400
(212) 521-5450— Facsimile
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Alan
I. Annex, Esq.
Jason T. Simon, Esq.
Greenberg Traurig, LLP
1750 Tysons Blvd., Suite 1000
McLean, VA 22102
(703) 749-1300
(703) 749-1301 — Facsimile
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Approximate
date of commencement of proposed sale to the public: As soon as practicable after the effective date of this offering.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933 check the following box. ¨
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act:
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Large
accelerated filer
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¨
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Accelerated
filer
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¨
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Non-accelerated
filer
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x
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Smaller
reporting company
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x
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Emerging
growth company
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x
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Security being registered
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Amount
Being
Registered
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Proposed
Maximum
Offering
Price per Security(1)
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Proposed
Maximum
Aggregate
Offering
Price(1)(2)
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Amount of
Registration
Fee
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Units, each consisting of one share
of common stock, $0.0001 par value and one-half of one redeemable warrant entitling the holder to purchase one share of common stock(2)
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11,500,000
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$
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10.00
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$
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115,000,000
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$
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12,546.50
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Shares of common stock, $0.0001 par value, included
as part of the units(3)
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11,500,000
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—
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—
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—
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(4)
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Redeemable warrants included as part of the units(3)
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5,750,000
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—
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—
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—
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(4)
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Shares of common stock underlying the redeemable
warrants included as part of the units
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5,750,000
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11.50
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66,125,000
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7,214.25
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(5)
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Total
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$
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181,125,000.00
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$
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19,760.75
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(6)
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(1)
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Estimated solely
for the purpose of calculating the registration fee pursuant to Rule 457(o) under
the Securities Act of 1933, as amended.
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(2)
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Includes (A) the
aggregate of 10,000,000 units to be issued to public stockholders in the public offering,
and 1,500,000 units which may be issued upon exercise of a 45-day option granted to the Underwriters
to cover over-allotments, if any; and (B) shares of common stock and warrants underlying
such units.
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(3)
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Pursuant to Rule 416
under the Securities Act, there are also being registered an indeterminable number of additional
securities as may be issued to prevent dilution resulting from share sub-divisions, share
dividends or similar transactions.
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(4)
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No fee pursuant
to Rule 457(g) under the Securities Act.
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(5)
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Calculated pursuant to Rule 457(g),
based on the exercise price of the warrants.
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The Registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
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PRELIMINARY
PROSPECTUS
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SUBJECT TO COMPLETION, DATED
JULY 13, 2021
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$100,000,000
CHARDAN NEXTECH ACQUISITION 2 CORP.
10,000,000 UNITS
Chardan NexTech Acquisition
2 Corp., which we refer to as “we,” “us” or “our company,” is a newly organized blank check company
incorporated in Delaware and formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization,
reorganization or other similar business combination with one or more businesses or entities, which we refer to throughout this prospectus
as our “initial business combination.” Although we are not limited to a particular industry or geographic region for purposes
of consummating an initial business combination, we intend to focus our search on disruptive technology companies.
This is an initial public
offering of our securities. We are offering 10,000,000 units at an offering price of $10.00 per unit. Each unit consists of one share
of common stock, par value $0.0001, and one-half of one warrant, which we refer to throughout this prospectus as “warrants”
or the “public warrants.” Each whole warrant entitles the holder thereof to purchase one share of common stock at a price
of $11.50 per share, subject to adjustment, terms and limitations as described in the prospectus. Only whole warrants are exercisable.
Each warrant will become exercisable 30 days after the consummation of an initial business combination, and will expire five years after
the completion of an initial business combination, or earlier upon redemption.
We have granted Chardan
Capital Markets, LLC, the representative of the underwriters, a 45-day option to purchase up to an additional 1,500,000 units (over and
above the 10,000,000 units referred to above) solely to cover over-allotments, if any. Our sponsor, Chardan NexTech Investments 2 LLC,
and certain of our officers and directors are affiliated with the representative of the underwriters. We have engaged B. Riley Securities,
Inc. to act as a “qualified independent underwriter” for this offering.
We will provide the holders
of our outstanding shares of common stock that were sold as part of the units in this offering with the opportunity to redeem their shares
of common stock upon the consummation of our initial business combination at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account described below, including interest (net of taxes payable), divided by the number of then
outstanding shares of common stock that were sold as part of the units in this offering, which we refer to as our “public shares.”
We will have 15 months
from the closing of this offering (or up to 18 months from the closing of this offering if we have executed a definitive agreement and
filed a proxy statement for an initial business combination within 15 months from the closing of this offering) to consummate an initial
business combination. In addition, if we anticipate that we may not be able to consummate our initial business combination within 15
months and we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by such date
(or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial business combination within 15 months
from the closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to two times by an additional three months each time (for a total of up to 21 months to complete a business
combination), as described in more detail in this prospectus. Public stockholders will not be offered the opportunity to vote on or redeem
their shares in connection with any such extension. If we are unable to consummate our initial business combination within the above
time period, we will distribute the aggregate amount then on deposit in the trust account, pro rata to our public stockholders, by way
of the redemption of their shares and thereafter cease all operations except for the purposes of winding up of our affairs, as further
described herein. In such event, the warrants will expire and be worthless.
Chardan
NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase 5,238,461 warrants (or up to 5,469,230
warrants depending on the extent to which the underwriters’ over-allotment option is exercised) at a price of $0.65 per warrant
($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment option is exercised)) in a private
placement that will close simultaneously with the closing of this offering.
On July 23, 2020, our
sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4, 2021, we effected a 2.875-for-1
stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. Such shares are referred to herein as “founder
shares,” which includes an aggregate of up to 375,000 shares that are subject to forfeiture to the extent that the underwriters’
over-allotment option is not exercised in full or in part.
There is presently no public
market for our units, common stock, or warrants. We have applied to have our units listed on the Nasdaq Capital Market, or the Nasdaq,
under the symbol “CNTQU” on or promptly after the date of this prospectus. Once the securities comprising the units begin
separate trading as described in this prospectus, the shares of common stock and warrants will be traded on the Nasdaq under the symbols
“CNTQ” and “CNTQW,” respectively. We cannot assure you that our securities will continue to be listed on the
Nasdaq after this offering.
We are an “emerging
growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and will therefore be subject to reduced public company
reporting requirements.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 28 of this
prospectus for a discussion of information that should be considered in connection with an investment in our securities.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
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Price to
Public
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Underwriting
Discount and
Commissions(1)
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Proceeds,
Before
Expenses, to us
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Per unit
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$
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10.00
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$
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0.0050
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$
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9.9950
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Total
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$
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100,000,000
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$
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500,000
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$
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99,500,000
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(1)
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Includes
$100,000 payable to B. Riley Securities, Inc. for acting as a qualified independent underwriter. Such amount shall remain constant
at $500,000, even if the over-allotment option is exercised. Please see the section titled “Underwriting” for further
information relating to the underwriting arrangements agreed to between us and the underwriters in this offering.
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Upon consummation of
the offering, $10.10 per unit sold to the public in this offering (whether or not the over-allotment option has been exercised in full
or part) will be deposited into a United States-based trust account at Morgan Stanley with Continental Stock Transfer &
Trust Company acting as trustee. Except as described in this prospectus, these funds will not be released to us until the earlier of
the completion of our initial business combination and our redemption of the public shares upon our failure to consummate a business
combination within the required period.
The underwriters are offering
the units on a firm commitment basis. Chardan, acting as the representative of the underwriters, expects to deliver the units to purchasers
on or about , 2021.
Sole
Book-Running Manager
Chardan
, 2021
CHARDAN NEXTECH ACQUISITION 2 CORP.
TABLE OF CONTENTS
SUMMARY
This summary only highlights
the more detailed information appearing elsewhere in this prospectus. As this is a summary, it does not contain all of the information
that you should consider in making an investment decision. You should read this entire prospectus carefully, including the information
under “Risk Factors” and our financial statements and the related notes included elsewhere in this prospectus, before investing.
Unless otherwise stated in this prospectus:
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“$”,
“US$” and “U.S. dollar” each refer to the United States dollar;
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“Chardan”
refers to Chardan Capital Markets, LLC, the representative of the underwriters,
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“common
stock” refers to our shares of common stock, par value $0.0001 per share;
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“founder
shares” refers to the 2,875,000 shares of common stock held by our sponsor, officers,
directors, and affiliates of our management team prior to this offering (including up to
an aggregate of 375,000 shares of common stock subject to forfeiture to the extent that the
underwriters’ over-allotment option is not exercised in full or in part);
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“initial
stockholders” refers to all of our stockholders immediately prior to the date of this
prospectus, including our sponsor, officers and directors to the extent they hold founder
shares;
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“insiders” refers to our officers, directors, initial stockholders,
and Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor;
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“management”
or our “management team” are to our officers and directors;
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“private
warrants” refers to the warrants we are selling privately to our sponsor or its designees
upon consummation of this offering;
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“public
shares,” refers to the shares of common stock that are being sold as part of the units
in this public offering, whether they are purchased in this public offering or in the aftermarket;
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“public
stockholders” refers to the holders of our public shares, including any of our initial
stockholders to the extent that they purchase such public shares (except that our initial
stockholders will not have redemption or tender rights with respect to any public shares
they own);
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“sponsor”
refers to Chardan NexTech Investments 2 LLC, an entity affiliated with Chardan;
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“warrants”
refers to our redeemable warrants, which include the warrants underlying the units sold in
this offering, whether they are purchased in this public offering or in the aftermarket;
and
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“we,”
“us” or “our company” refers to Chardan NexTech Acquisition 2 Corp.,
a Delaware corporation.
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Each unit consists
of one share of common stock and one-half of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one
share of our common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus, and only whole warrants
are exercisable. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly,
unless you purchase a multiple of two units, the number of warrants issuable to you upon separation of the units will be rounded down
to the nearest whole number of warrants.
Unless otherwise provided
herein, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option and gives effect
to a 2.875-for-1 stock split we effected on March 4, 2021.
Certain financial information
contained in this prospectus has been rounded and, as a result, certain totals shown in this prospectus may not equal the arithmetic
sum of the figures that should otherwise aggregate to those totals.
You should rely only
on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to provide you with different
information. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not
permitted.
General
We are a blank check company
formed under the laws of the State of Delaware on June 23, 2020. We were formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer
to throughout this prospectus as our initial business combination. Our intent is to focus on opportunities in disruptive technologies
and leverage the tremendous proprietary deal flow that our Board, executive team and sponsor, Chardan have developed over the past 17
years in the special purpose acquisition company and investment banking marketplaces.
Our focus on disruptive technologies
is aligned to the investment expertise, relationships, proprietary deal flow, and connectivity of our management team, Board of Directors,
and Chardan. Through our multiple decades of special purpose acquisition company, sector, direct investment, and investment banking advisory
experiences, our sponsor and management team receive proprietary access to a tremendous pipeline of disruptive technology investment
opportunities. As Chardan’s special purpose acquisition company advisory and principal special purpose acquisition company practices
have expanded, our inbound deal flow in technology, among other sectors, has significantly increased as private companies seek out our
proprietary expertise.
At the time of preparing
this prospectus, we have not identified any specific business combination, nor has anyone on our behalf initiated or engaged in any substantive
discussions, formal or otherwise, related to such a transaction. Our efforts to date are limited to organizational activities related
to this offering.
The Opportunity
Having founded the third-ever
publicly listed special purpose acquisition company in 2004, Chardan had the foresight to recognize that the traditional initial public
offering process was broken. The initial public offering process has not changed in decades and it is a time and resource intensive process
that not only lacks deal and price certainty, but also prevents high-growth technology companies from sharing their financial projections.
We believe that Chardan has an unmatched track record as a special purpose acquisition company underwriter, sponsor (or co-sponsor) and
special purpose acquisition mergers and acquisitions advisor, which we intend to leverage as special purpose acquisition companies have
become more mainstream. We believe that the market is now only beginning to recognize the benefits of special purpose acquisition companies
as has been demonstrated within the last several months. In the second half of 2020, special purpose acquisition companies accounted
for ~56% of all capital raised in the initial public offering market, and have had record issuances in the first month of 2021, raising
nearly $24 billion, almost two times U.S. initial public offerings during the same period.
The opportunity for disruptive
technology companies to take advantage of the public markets is evident as there are over 2,000 private technology companies that have
raised at least $50MM in private funding or over $1 trillion in aggregate. We believe that such private funding has been a result of
many entrepreneurs adopting the philosophy to stay private longer, not only from a cost perspective, but also because of the volume of
private capital. Over the past year, however, we believe private company executives’ and stakeholders’ mindset has fundamentally
shifted as special purpose acquisition companies have provided a more effective and efficient path to access public markets and its greater
access to capital providers. We believe private companies are realizing that they are rewarded for providing greater transparency into
their growth plans and can potentially capture further upside via the special purpose acquisition company structure. Since 2019, disruptive
technology companies that have gone public via a special purpose acquisition company have experienced substantial share price growth,
with a number of recent transactions surging over 100% growth since their public market debuts. We aim to capitalize on the number of
disruptive technology companies that are still private and capable of achieving attractive risk-adjusted returns through our decades
of special purpose acquisition company experience.
Management Team, Sponsor, and Board of Directors
As we search for a prospective
target company or business, we intend to leverage the multiple decades of combined investment experience, successful special purpose
acquisition company and mergers and acquisitions execution experience, and the expansive network of relationships of the principals and
affiliates of our sponsor. Our management team, led by co-founders Kerry Propper and Jonas Grossman, have a combined 80 years
of investment and execution experience. Together with our management team, sponsor, and our board of directors, we are confident that
the combined experience makes us uniquely situated to identify, source, negotiate and execute an initial business combination with a
disruptive technology company.
Our Management Team
Kerry
Propper is our co-founder and will serve as our Chairman of the board of directors upon the effectiveness of the registration
statement of which this prospectus is a part. Mr. Propper was co-founder of Chardan and served as its chief executive officer and head
of its investment bank from 2003 to 2015. He is a pioneer in the special purpose acquisition marketplace and has been an executive or
senior advisor for six special purpose acquisition companies. Since 2015, Mr. Propper has served as the chairman of Chardan’s board
of directors and the co-founder and managing partner of ATW Partners, a growth-focused investment firm. Mr. Propper also sits on the
board of 340Basics, Credit Sesame, and PierianDx among other boards.
Jonas Grossman
is our co-founder and has been our Chief Executive Officer and a member of our board of directors since June 2020 and our
President, Secretary, and Treasurer since July 2020. Mr. Grossman has served as managing partner and head of capital markets
for Chardan since December 2003, and has additionally served as president of Chardan since September 2015. With nearly two
decades of transactional and special acquisition company expertise, Mr. Grossman has led or managed more than 500 transactions,
including providing underwriting and business combination advisory services to more than 85 special purpose acquisition companies in
a variety of industries. Mr. Grossman has been a founder and / or a member of the board of seven special purpose acquisition companies,
of which on four he also has served as Chief Executive Officer and President. Since April 2020, Mr. Grossman has served as
the President and Chief Executive Officer of Chardan Healthcare Acquisition 2 Corp which announced its merger with Renovacor, Inc
in March 2021. He also served as President and Chief Executive Officer of Chardan Healthcare Acquisition Corp. from March 2018
until its merger in October 2019 with BiomX Ltd. (NYSE: PHGE). He is currently a director of BiomX. Mr. Grossman was a founder
and director of LifeSci Acquisition Corp. from March 2020 until the close of its business combination with Vincera Pharma, Inc.
in December 2020. He has served as a director to Ventoux CCM Acquisition Corp. since December 2020 and CleanTech Acquisition
Corp since May 2021. Since July 2020, he has served as Chief Executive Officer and director of Chardan NexTech Acquisition Corp. Previously,
from 2001 to 2003, Mr. Grossman worked at Ramius Capital Group, LLC, a global multi-strategy hedge fund where he served as Vice
President and Head Trader. Mr. Grossman holds a B.A. in Economics from Cornell University and an M.B.A. from New York University’s
Stern School of Business. He has served on the board of directors for UNICEF since December 2016.
Alex
Weil has served as our Chief Financial Officer since April 2021 and will serve as a member of our board of directors upon the
effective date of the registration statement of which this prospectus is a part. Mr. Weil has spent over two decades on Wall Street
providing strategic advisory services to global companies, senior executives, boards of directors, and investors. Since March 2021,
he has served as chief financial officer of Chardan NexTech Acquisition Corp., and he has agreed to also serve on the board of directors.
Since December 2020 he has served as a director of Ventoux CCM Acquisition Corp., a special purpose acquisition company. Mr. Weil’s
background in strategic advisory work was built during his career at both global companies, such Citibank’s corporate strategy
and mergers and acquisition group, UBS Financial Institutions Group’s investment bank, and General Electric’s corporate development
group, and at boutique investment banking advisors, such as Lazard Middle Market and William Blair. He has advised on billions of dollars
of transactions ranging from corporate divestitures and spin offs, innovative technology company acquisitions to larger, more complex
mergers and acquisitions. Mr. Weil has participated or led a variety of transactions, such as: Genworth’s spin-off initial
public offering from General Electric; Citi-related transactions including a variety of technology and capital markets businesses (e.g.
Lava Trading, Knight Options Market Making, and Automated Trading Desk) along with the creation of Citi Holdings and subsequent sales
of Nikko Asset Management and its subprime auto finance business; Schwab’s acquisition of OptionsXpress; and CVC Capital Partner’s
majority investment in Alix Partners. Mr. Weil’s extensive FinTech and mergers and acquisitions expertise will help put us
in a strong position to originate and structure profitable investments.
Chardan
Our management team is supported
by Chardan’s team of investment banking professionals, which possesses extensive collective experience in corporate finance, mergers
and acquisitions, equity and debt capital markets, strategic consulting and operations.
Chardan has an extensive
track record in the special purpose acquisition company market as underwriter, sponsor and advisor. Since 2004, Chardan has been lead
or co-lead underwriter on 90 special purpose acquisition company initial public offerings. Since 2018, Chardan has been a mergers and
acquisition advisor to 16 special purpose acquisition companies, helping them close transactions valued at approximately $6.8 billion.
Chardan-advised special purpose acquisition companies have targeted a wide range of industries, including life sciences, healthcare services,
technology hardware and software, FinTech, insurance, financial services, education, media and entertainment, industrials, materials,
consumer staple, energy, hospitality, leisure, travel and dining sectors. Chardan has advised special purpose acquisition companies targeting
both global and regional markets as well as those with more defined areas of focus in emerging and other geographic markets, including
in North America. No special purpose acquisition company that has either been advised by Chardan or for which Chardan served as the lead
underwriter has liquidated to-date. In addition to its active advisory and underwriting business, Chardan’s principals have founded
or co-founded 13 special purpose acquisition companies, six of which have closed successful business combinations, one of which has announced
a business combination, three of which are seeking acquisitions, and three of which are publicly filed.
Our Board of Directors
In addition to Messrs. Propper,
Grossman, and Weil, the other members of our board will include the following independent directors:
Jonathan
C. “Jon” Biele will serve as a member of our board of directors upon the effective date of the registration
statement of which this prospectus is a part. Mr. Biele has over 28 years of investment banking experience serving in a variety
of roles. He recently joined PREEM, a vertical technology platform, as head of business and corporate development. Most recently, Mr. Biele
served as head of technology and services investment banking after helping rejuvenate the equity capital markets practice at SunTrust
Robinson Humphrey. During his career, Mr. Biele has focused on providing capital markets, strategic and tactical advice to companies,
boards of directors, private equity and venture capitalists. In addition to his tenure at SunTrust Robinson Humphrey, he has served as
head of equity capital markets for Citadel Securities, Cowen and Co,. and Lazard Freres in addition to his contribution in a variety
of capacities with the equity capital markets departments of Lehman Brothers, ABN Amro Rothschild and UBS Securities. In these roles,
Mr. Biele originated and executed numerous public and private equity and debt financings and provided strategic advice. His vast
experience in corporate finance and advisory spans across multiple sectors and asset classes, both public and private. In addition to
his professional activities, Mr. Biele most recently completed a third term as a trustee of Burke Mountain Academy, one of the premier
ski academies in the United States, and remains the lead investor and advisor to the chief executive officer of inGamba Tours, a luxury
cyclo-tourism business. Mr. Biele holds a B.A. in History from St. Lawrence University.
Perry
Boyle will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Boyle helped lead the launch of Point72 Asset Management, L.P., or Point72, as a registered investment
advisor, raising over $6 billion in external capital. He originally joined S.A.C. Capital Advisors, or S.A.C., in 2004 as the firm’s
first director of research. In January 2013 he became head of equities and, in January 2015, he became head of discretionary
investing at Point72. From June 2016 through December 2017 he served as the president and chief investment officer of Stamford
Harbor Capital, L.P., a company owned by businessman Steven A. Cohen. He returned to Point72 in January 2018. In his various leadership
roles at the firm, Mr. Boyle managed the long/short and macro portfolios. He created and led the firm’s professional development
programs, including P72 Academy and the 9s Program, and helped drive the internationalization of the firm, overseeing offices in London,
Hong Kong, Tokyo and Singapore. Prior to joining S.A.C., Mr. Boyle was a founding partner of Thomas Weisel Partners, an investment
banking company, and a managing director at Alex. Brown & Sons, an investment firm. He began his career as an investment banker
with Salomon Brothers Inc. Additionally, Mr. Boyle is a member of the advisory board of the Center for a New American Security (CNAS),
and a director of The US Friends of the International Institute for Strategic Studies (IISS). He has agreed to serve on the board of
directors of Chardan NexTech Acquisition Corp. upon the effectiveness of its registration statement. He was a 2018 and 2019 delegate
from the IISS to the Shangri-La Dialogue in Singapore. He is a council member of the Hoover Institution and a Lionel Curtis member of
Chatham House. Mr. Boyle helps lead the annual Ride For Our Vets, the major source of funding for the Connecticut Veterans Legal
Center.
Roderick
Hardamon will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Hardamon has over two decades of mergers and acquisitions business innovation and senior executive
leadership experience. He has served as chief executive officer of URGE Imprint LLC, a boutique management consulting firm headquartered
in Detroit, Michigan, and URGE Development Group LLC, a real estate development firm headquartered in Detroit, Michigan, since May 2016.
Previously, Mr. Hardamon held various positions at Citigroup, a leading global bank, including managing director and North American
head of Citigroup’s alternative investor services business. In this role, he led an organization with over $300 billion in assets
under administration and over 2,000 professionals spanning eight locations across the United States, Cayman Islands, Bermuda, Bahamas,
and India. Mr. Hardamon led multiple phases of Citigroup’s ownership of the business including: (1) initial acquisition
(BISYS Inc.); (2) integration into Citigroup; (3) operational transformation and growth; and (4) divestiture to SS&C
Technologies in March 2016. His prior roles at Citigroup included managing director and head of infrastructure & integration
and co-head/head of internal mergers and acquisitions for Citi Markets & Banking and Global Transaction Services, respectively.
After Citigroup, Mr. Hardamon briefly served as a managing director at SS&C Technologies, a global provider of services and
software for the financial services and healthcare industries. He is a graduate of Morehouse College with B.A.s in Accounting and Philosophy.
Jory
Des Jardins will serve as a member of our board of directors upon the effective date of the registration statement of
which this prospectus is a part. Ms. Jardins has decades of startup and marketing experience. Ms. Jardins is the chief marketing
officer of The @ Company, a builder of an internet protocol designed to put control over online data and user experiences back into the
hands of people. Additionally, Ms. Jardins is VC-in-Residence at the W Fund, a venture capital and private equity firm passionate
about evangelizing emerging and disruptive tech and leveling the playing field for underrepresented founders. She pioneered social marketing
as co-founder and president of BlogHer, a media marketplace representing thousands of digital influencers, which reached 100 million
monthly unique viewers at the time of its acquisition in 2015. She recently served as the head of global startup marketing at Amazon
Web Services, providing startups with the technology to launch, build, and scale. Ms. Jardins previously held the position of global
head of community at ConsenSys, a block chain studio building decentralized applications on Ethereum. Before ConsenSys, she was an advisor
at Tribal Advisors, a consulting and mergers and acquisitions advisory firm providing services to startups and corporates in the consumer
digital, software and systems technology sectors. She has advised dozens of scaling startups, focusing on companies that are evolving
digital influence, social content, media models, consumer marketplaces, ecommerce, block chain/token-based economies, and AR/VR/MR. Ms. Jardins
graduated from the University of Illinois at Urbana-Champaign.
Hitesh Thakrar
will serve as a member of our board of directors upon the effective date of the registration statement of which this prospectus is a
part. Mr. Thakrar is an experienced investor in the technology sector, having spent over 20 years investing in public equities in the
life sciences, information technology and innovation sectors. Since 2015, he has been active in early stage venture investing. Mr. Thakrar
is currently a Venture Partner at Syncona Limited, a Wellcome Trust backed early stage venture fund. He is also a Governance Board Member
of KQ Labs at the Francis Crick Institute, an accelerator supporting next generation businesses in data science and life sciences. He
is the main Board Trustee of the Alan Turing Institute which is the UK National Institute for Artificial Intelligence and Data Science
research. Additionally, Mr. Thakrar is the Chair of the Investment Committee for Newable Ventures, a pre-Series A fund focused on deep
technology. He is also an advisor to UKRI’s Science and Technology Funding Council (SFTC) which helps early stage companies spin
out from UK universities. He has previously served as a non-executive director for Desktop Genetics and Tropic Biosciences, both of which
specialize in the use of CRISPR technology in gene editing. Prior to 2015, Mr. Thakrar worked at various public market institutions in
global equity research and fund management including at ADIA (Abu Dhabi’s sovereign wealth fund), JP Morgan, Aviva Group, Dresdner
Bank and New Star Asset Management. He has previously held the position of Innovation Fellow at the University of Cambridge, recently
joined as a Trustee of the Royal National Orthopaedic Hospital Charity and is a member of the commercial Board of the Institute and Audit
committee. Mr. Thakrar has a degree in chemistry from Kings College, London, an MBA from Cranfield University and a CFA from the American
Association of Investment Analysts.
Todd
Thomson will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Thomson is currently the chief operating officer and chief financial officer of Kairos Ventures, an early-stage investment
firm. He is an accomplished operating executive and entrepreneur, having served as Citigroup chief financial officer for five years and
as chief executive officer of Citigroup’s nearly $10 billion global wealth management division for more than two years. Mr. Thomson
is a leading practitioner on mergers and acquisitions and business strategy, having led the acquisition and strategy efforts for Citigroup
and GE Capital, as well as serving as advisor to Fortune 500 firms while at Bain & Co., Booz Allen Hamilton, and Barents Group.
He has extensive investing experience as chief executive officer of Citigroup alternative investments, chairman of the Citigroup pension
investment committee, chairman of the dynasty investment committee, and a member of the investment committees for the Davidson College
and World Resources Institute endowments. Prior to joining Kairos Ventures, Mr. Thomson served as co-founder and chairman of
Dynasty Financial Partners, or Dynasty, a leading investment and technology platform for sophisticated independent advisors. Founded
by Mr. Thomson and his colleagues in 2010, Dynasty serves nearly 50 registered investment advisor firms nationally, with $50 billion
under management. In addition to serving as chairman, Todd served in several operating roles since Dynasty’s founding, including
chairing the investment committee, serving as chief investment officer, and designing and leading Dynasty Capital Strategies. Mr. Thomson
has also agreed to serve on the board of Chardan NexTech Acquisition Corp., a blank check company, upon the effectiveness of its registration
statement.
We believe our management
team’s operating, special purpose acquisition company, and mergers and acquisitions transaction experience and relationships with
companies will quickly provide us with a substantial number of attractive potential business combination targets. Over the course of
their careers, the members of our management team have developed a broad network of contacts and corporate relationships in and around
the disruptive technology industry. This network has grown through the activities of our management team sourcing, acquiring and financing
businesses, our management team’s relationships with sellers, financing sources and target management teams and the experience
of our management team in executing transactions under varying economic and financial market conditions.
Certain of our executive
officers and directors also served as executive officers and directors of Chardan Healthcare Acquisition Corp., or Chardan Health SPAC
1, a blank check company that consummated its initial public offering in December 2018 and consummated its initial business combination
with BiomX Ltd. (NYSE: PHGE) in October 2019.
Certain of our executive
officers and directors also serve as executive officers and directors of Chardan Healthcare Acquisition 2 Corp., or Chardan Health SPAC
2, a blank check company that consummated its initial public offering in April 2020.
Certain of our executive
officers and directors also serve as executive officers and directors of Ventoux CCM Acquisition Corp., or Ventoux CCM, a blank check
company that consummated its initial public offering in December 2020.
Certain of our executive
officers and directors also serve as executive officers and directors of Chardan NexTech Acquisition Corp., or Chardan NexTech 1, a blank
check company expected to consummate its initial public offering before the consummation of this offering.
From time to time, Chardan
acts as an underwriter for the initial public offering of special purpose acquisition companies and in addition to cash fees, Chardan
receive equity in the form of private placement securities. Some of those special purpose acquisition companies may be competitive with
our company as they look for targets in the same industries and geographies.
With respect to the foregoing
descriptions, the past performance of Chardan and its affiliates and our management team is not a guarantee either (i) that we will
be able to identify a suitable candidate for our initial business combination or (ii) of success with respect to any business combination
we may consummate. As described in this prospectus, Messrs. Propper, Grossman, Weil, and Boyle have had management and/or board
experience with blank check companies. None of our other officers or directors, our sponsor, nor any of its respective officers, directors,
employees, or affiliates, have had management experience with blank check companies or special purpose acquisition corporations in the
past. You should not rely on their respective historical records or performance of Chardan, its affiliates, or our management team as
indicative of our future performance. Our officers and directors may have conflicts of interest with other entities to which they owe
fiduciary or contractual obligations with respect to initial business combination opportunities, including for our officers with respect
to Chardan Health SPAC 2, Ventoux CCM and Chardan NexTech 1, collectively which we refer to as the Affiliated SPACs. In order to minimize
potential conflicts of interest which may arise from multiple affiliations, our officers who are also officers of any of the Affiliated
SPACs will be required to present all suitable target businesses to the Affiliated SPACs prior to presenting them to us, unless such
opportunity is expressly offered to such individual solely in his capacity as an officer of our company and such opportunity is one we
are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue, and to the extent such individual
is permitted to refer that opportunity to us without violating another legal obligation. For a list of our officers and directors and
entities for which a conflict of interest may or does exist between such officers or directors and the company, as well as the priority
and preference that such entity has with respect to performance of obligations and presentation of business opportunities to us, please
refer to the table and subsequent explanatory paragraph under “Management — Conflicts of Interest”.
Business Strategy
Our management team’s
objective is to generate attractive returns and create long-term value for our stockholders by applying a disciplined approach of identifying
attractive business combination targets that will benefit from becoming a publicly listed company and from the addition of strategic
growth capital, management expertise and strategic insight. Our strategy is to identify and complete our initial business combination
with a company in an industry that complements the experience and expertise of our management team, board of directors and advisors.
Our evaluation process will
leverage our co-founders’ and board’s network of industry, private equity sponsor, and lending community relationships, as
well as relationships with management teams of public and private companies, investment bankers, restructuring advisors, attorneys and
accountants, which we believe will provide us with a number of business combination opportunities. We intend to deploy a pro-active,
thematic sourcing strategy and to focus on companies where we believe the combination of our operating experience, relationships, capital
and capital markets expertise can be catalysts to transform a target company and can help accelerate the target’s growth and performance.
Certain members of our management
team, board and advisors have experience in:
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all key
activities of special purpose acquisition companies, including sponsoring, underwriting and
mergers and acquisitions advisory;
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operating
companies, setting and changing strategies, and identifying, monitoring and recruiting world-class
talent;
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developing
and growing companies, both organically and through acquisitions and strategic transactions
and expanding the product range and geographic footprint of a number of target businesses;
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sourcing,
structuring, acquiring and selling businesses;
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accessing
the capital markets, including financing businesses and helping companies transition to public
ownership;
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fostering
relationships with sellers, capital providers and target management teams; and
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executing
transactions in multiple geographies and under varying economic and financial market conditions.
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Upon completion of this
offering, members of our management team and board, as well as our advisers will communicate with their network of relationships to articulate
our initial business combination criteria, including the parameters of our search for a target business, and will begin the disciplined
process of pursuing and reviewing promising leads. At the time of preparing this prospectus, we have not identified any specific business
combination, nor has anyone on our behalf initiated or engaged in any substantive discussions, formal or otherwise, related to such a
transaction. Our efforts to date are limited to organizational activities related to this offering.
Investment Criteria
Consistent with our business
strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating candidates for
our initial business combination. We will use these criteria and guidelines in evaluating business combination opportunities, but we
may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We
intend to acquire one or more businesses that we believe:
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has a strong
competitive industry position with demonstrated competitive advantages to maintain barriers
to entry;
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has a historic
record of above average growth and strong free cash flow characteristics with high returns
on capital;
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has a strong,
experienced management team which would benefit from our management’s network or expertise,
such as additional management expertise, capital structure optimization, acquisition advice
or operational changes to drive improved financial performance;
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is positioned
for continued organic growth and may grow through bolt-on acquisitions;
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is a fundamentally
sound company with a proven track record;
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has an operating
model that has adapted or has an executable strategy to be able to meet the changing consumer
or business behaviors in a COVID-19 or post-COVID 19 environment;
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will offer
an attractive risk-adjusted return for our stockholders; and
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can benefit
from being a publicly traded company, are prepared to be a publicly traded company and can
utilize access to broader capital markets.
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Acquisition Strategy
Rigorous and comprehensive
due diligence on prospective business targets is particularly important for disruptive technology companies, which we intend to target.
In the process of identifying a potential business target, we expect to conduct an extensive due diligence review process which may encompass,
as appropriate and among other things, meetings with incumbent management teams and stakeholders, business plan reviews, interviews of
customers and suppliers, inspection of facilities and a review of financial, operational, legal and other information made available
to us about the target and its industry. We will also utilize our management team’s operational and capital planning experience.
We have not identified any
business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly,
with any business combination target. Our sponsor, all of the members of our management team and our board, and Chardan, are continuously
made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have
not (nor has anyone on our behalf) contacted, or had any discussions, formal or otherwise with, any prospective target business with
respect to a business combination transaction with us.
In addition, our officers
and directors are not prohibited from becoming either a director or officer of any other special purpose acquisition company with a class
of securities registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act.
Initial Business Combination
General
We will have 15 months
from the closing of this offering (or 18 months from the closing of this offering if we have executed a definitive agreement and filed
a proxy statement for an initial business combination within 15 months from the closing of this offering) to consummate an initial business
combination. In addition, if we anticipate that we may not be able to consummate our initial business combination within 15 months and
we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by such date (or 18 months
if we have executed a definitive agreement and filed a proxy statement for an initial business combination within 15 months from the
closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate a
business combination up to two times by an additional three months each time (for a total of up to 21 months to complete a business combination);
provided that, pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to
be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend
the time available for us to consummate our initial business combination in the absence of a definitive agreement is for our insiders
or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline, to deposit into the trust account
$1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per share in either case, or an aggregate of $2,000,000
(or $2,300,000 if the over-allotment option is exercised in full)), on or prior to the date of the applicable deadline. Public shareholders
will not be offered the opportunity to vote on or redeem their shares in connection with any such extension. In the event that our insiders
elected to extend the time to complete a business combination and deposited the applicable amount of money into trust, the insiders would
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. 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. If we are unable to consummate
our initial business combination within such time period, we will, as promptly as possible but not more than 10 business days thereafter,
redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion
of any interest earned on the funds held in the trust account and not previously released to us to pay our taxes, and then seek to dissolve
and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors which may take priority over
the claims of our public stockholders. In the event of our dissolution and liquidation, the private units will expire and will be worthless.
Nasdaq rules require
that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets
held in the trust account (excluding taxes payable on the interest earned on the trust account) at the time of our signing a definitive
agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market
value of our initial business combination. If our board of directors is not able to independently determine the fair market value of
our initial business combination, we may obtain an opinion from an independent investment banking or accounting firm as to the fair market
value of the target business. We have also agreed not to enter into a definitive agreement regarding an initial business combination
without the prior consent of our sponsor. In addition, pursuant to Nasdaq rules, any initial business combination must be approved by
a majority of our independent directors.
We may, at our option, pursue
a business combination opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as an “Affiliated
Joint Acquisition.” We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties would
co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction
to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic
merits of including such co-investors, the need for additional capital beyond the amount held in our trust account to fund the initial
business combination and/or the desire to obtain committed capital for closing the initial business combination. An Affiliated Joint
Acquisition may be effected through a co-investment with us in the target business at the time of our initial business combination, or
we could raise additional proceeds to complete the initial business combination by issuing to such parties a class of equity or equity-linked
securities. We refer to this potential future issuance, or a similar issuance to other specified purchasers, as a “specified future
issuance” throughout this prospectus. Any such Affiliated Joint Acquisition or specified future issuance would be in addition to,
and would not include, the forward purchase securities issued pursuant to the forward purchase contract. The amount and other terms and
conditions of any such specified future issuance would be determined at the time thereof. We are not obligated to make any specified
future issuance and may determine not to do so. This is not an offer for any specified future issuance.
We have not selected any
specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or
indirectly, with any business combination target. From the period commencing with our formation through the date of this prospectus,
there have been no communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts
or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other
representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly,
to locate or contact a target business. Additionally, we have not contacted any of the prospective target businesses that any of the
Affiliated SPACs had considered and rejected while such entity was a blank check company searching for target businesses to acquire.
We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations,
operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would
be attractive. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the
target business with which we may ultimately complete our initial business combination. Although our management will assess the risks
inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying
all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do
nothing to control or reduce the chances that those risks will adversely impact a target business.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way
so that the post-transaction company owns or acquires 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, including an Affiliated Joint Acquisition as
described above. However, we will only complete our initial business combination only if the post-transaction company in which our public
stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of
1940, as amended, or the Investment Company Act. Even if the post-transaction company owns 50% or more of the voting securities of the
target, our stockholders prior to the business combination may collectively own a minority interest in the post-business combination
company, depending on valuations ascribed to the target and us in the business combination transaction.
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, provided that in the event that
the business combination involves more than one target business, the 80% test will be based on the aggregate value of all of the target
businesses.
Chardan will be the beneficial
owner of founder shares or private warrants following this offering by virtue of its ownership of our sponsor and members of our management
team may indirectly own such securities. Our sponsor intends to allocate up to 20,000 founder shares to each of our independent directors.
Because of such ownership and interests, Chardan and our officers and directors may have a conflict of interest in determining whether
a particular target business is an appropriate business with which to effectuate our initial business combination. Further, each of our
officers and directors may have a conflict of interest with respect to evaluating a particular business combination if the retention
or resignation of any such officers and directors were to be included by a target business as a condition to any agreement with respect
to our initial business combination.
All of our officers are
employed by Chardan or its affiliates. Chardan is continuously made aware of potential business opportunities, one or more of which we
may desire to pursue for an initial business combination. While Chardan will not have any duty to offer acquisition opportunities to
us, Chardan may become aware of a potential transaction that is an attractive opportunity for us, which Chardan may decide to share with
us. We have not, however, selected any specific business combination target and we have not, nor has anyone on our behalf, initiated
any substantive discussions, directly or indirectly, with any business combination target regarding an initial business combination with
our company.
Our sponsor, officers, directors,
Chardan and their respective affiliates may participate in the formation of, or become an officer or director of, any other blank check
company prior to completion of our initial business combination. In particular, certain of our executive officers and directors also
serve as executive officers or directors of an Affiliated SPAC, which is focused on searching for businesses that may provide significant
opportunities for attractive investor returns in industries similar to the industries in which our search is focused. As a result, our
sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities
to us or to any other blank check company with which they may become involved.
Each of our officers and
directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to
one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity,
including an Affiliated SPAC. Our amended and restated certificate of incorporation will provide that we renounce our interest in any
corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or
her capacity as a director or officer of our company, such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity
to us without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties,
including an Affiliated SPAC, he or she will honor these obligations and duties to present such business combination opportunity to such
entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity
to us.
Advisory Services in Connection with the
Business Combination
We have engaged Chardan
as an advisor in connection with our business combination, pursuant to the Business Combination Marketing Agreement. We will pay Chardan
a cash fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5%
of the gross proceeds of this offering. As a result, Chardan will not be entitled to such fee unless we consummate our initial business
combination. Certain individuals who will perform advisory services on behalf of Chardan in connection with the business combination
also serve as our officers and directors.
Corporate Information
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified
by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”
including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval
of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may
be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can 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. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion
of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the prior year’s second quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning
associated with it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K promulgated by the Securities and Exchange Commission,
or the SEC. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things,
providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal
year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s
second fiscal quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of
our common stock held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
Private Placements
On July 23, 2020, our
sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4, 2021, we effected a 2.875-for-1
stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. Such number of shares includes an aggregate of
up to 375,000 shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised
in full or in part, so that our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering.
None of our initial stockholders has indicated any intention to purchase public units in this offering.
The founder shares are
identical to the public shares. However, our initial stockholders have agreed (1) to vote their founder shares in favor of any proposed
business combination, (2) not to propose, or vote in favor of prior to and unrelated to an initial business combination, an amendment
to our certificate of incorporation that would affect the substance or timing of our redemption obligation to redeem all public shares
if we cannot complete an initial business combination within 15 months (or up to 21 months, as applicable) of the closing of this offering,
unless we provide public stockholders an opportunity to redeem their public shares in conjunction with any such amendment, (3) not
to redeem any shares, including any founder shares, into the right to receive cash from the trust account in connection with a stockholder
vote to approve our proposed initial business combination, (4) not to sell any shares to us in any tender offer in connection with
our proposed initial business combination, and (5) that the founder shares shall not participate in any liquidating distribution
upon winding up if a business combination is not consummated.
On the date of this prospectus,
the founder shares will be placed into an escrow account maintained by Continental Stock Transfer & Trust Company acting as
escrow agent. 50% of these founder shares will not be transferred, assigned, sold or released from escrow until the earlier of (i) six
months after the date of the consummation of our initial business combination or (ii) the date on which the closing price of our
shares of common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations)
for any 10 trading days within any 30-trading day period commencing after our initial business combination. And the remaining 50% of
the founder 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 consummate a subsequent
liquidation, merger, stock exchange or other similar transaction that results in all of our stockholders having the right to exchange
their shares of common stock for cash, securities or other property.
In
addition, Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase 5,238,461 (or up to 5,469,230
depending on the extent to which the underwriters’ over-allotment option is exercised) warrants at a price of $0.65 per warrant
($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment option is exercised)) in a private
placement that will close simultaneously with the closing of this offering.
The proceeds from the
sale of the private warrants will be added to the proceeds of this offering and placed in a trust account in the United States maintained
by Continental Stock Transfer & Trust Company, as trustee. If we do not complete our initial business combination within 15
months (or up to 21 months, as applicable), the proceeds from the sale of the private warrants will be included in the liquidating distribution
to the holders of our public shares.
The private warrants
are identical to the warrants sold as part of the public units in this offering except that, so long as they are held by the initial
purchasers or their respective permitted transferees, the private warrants (i) will not be redeemable by us, (ii) may not,
subject to certain limited exceptions, be transferred, assigned or sold by the initial purchaser until 30 days after the completion
of our initial business combination, and (iii) may be exercised by the holders on a cashless basis. The private warrants purchased
by Chardan NexTech 2 Warrant Holdings LLC will not be exercisable more than five years from the effective date of the registration statement,
of which this prospectus forms a part, in accordance with Financial Industry Regulatory Authority, or FINRA, Rule 5110(g), as long
as Chardan or any of its related persons beneficially own these private warrants.
If public units or public
shares are purchased by any of our directors, officers or initial stockholders, they will be entitled to funds from the trust account
to the same extent as any other public stockholder upon our liquidation, but such directors, officers, or initial stockholders will not
have redemption rights related thereto.
Our
executive offices are located at 17 State Street, 21st Floor, New York, NY
10004, and our telephone number is (646) 465-9000.
THE OFFERING
In
making your decision on whether to invest in our securities, you should take into account not only the backgrounds of the members of
our management team, but also the special risks we face as a blank check company and the fact that we are not conducting this offering
in compliance with Rule 419 promulgated under the Securities Act. You will not be entitled to protections normally afforded to investors
in Rule 419 blank check offerings. You should carefully consider these and the other risks set forth in the section below entitled
“Risk Factors” beginning on page 28 of this prospectus.
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Securities
offered
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10,000,000
units, at $10.00 per unit, each unit consisting of one share of common stock and one-half
of one warrant. Each whole warrant entitles the holder thereof to purchase one share of common
stock at a price of $11.50, subject to adjustment as described in this prospectus.
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Listing
of our securities and proposed symbols
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We
anticipate the units, and the shares of common stock and the warrants, once they begin separate
trading, will be listed on the Nasdaq under the symbols “CNTQU,” “CNTQ,”
and “CNTQW,” respectively.
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Each
of the shares of common stock and warrants may trade separately on the 90th
day after the date of this prospectus unless Chardan determines that an earlier
date is acceptable (based upon, among other things, its assessment of the relative strengths
of the securities markets and small capitalization companies in general, and the trading
pattern of, and demand for, our securities in particular). In no event will Chardan allow
separate trading of the shares of common stock and warrants until we file an audited balance
sheet reflecting our receipt of the gross proceeds of this offering.
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Once
the shares of common stock and warrants commence separate trading, holders will have the
option to continue to hold units or separate their units into the component pieces. Holders
will need to have their brokers contact our transfer agent in order to separate the units
into separately trading shares of common stock and warrants.
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We
will file a Current Report on Form 8-K with the SEC, including an audited balance sheet, promptly upon the consummation of this
offering, which is anticipated to take place two business days from the date the units commence trading. The audited balance sheet
will reflect our receipt of the proceeds from the exercise of the over-allotment option if the over-allotment option is exercised
on the date of this prospectus. If the over-allotment option is exercised after the date of this prospectus, we will file an amendment
to the Current Report on Form 8-K or a new Current Report on Form 8-K to provide updated financial information to reflect
the exercise of the over-allotment option. We will also include in the Current Report on Form 8-K, or amendment thereto, or
in a subsequent Current Report on Form 8-K, information indicating if Chardan has allowed separate trading of the shares of
common stock and warrants prior to the 90th day after the date of this prospectus.
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Shares
of common stock:
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Number
issued and outstanding before this offering
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2,875,000
shares(1)
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Number
to be issued and outstanding after this offering
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12,500,000
shares(2)
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Redeemable
Warrants:
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Number
issued and outstanding before this offering
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0
warrants
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Number
to be issued and outstanding after this offering and sale of private warrants
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5,000,000
public warrants and 5,238,461 private warrants(3)
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Exercisability
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Each
unit contains one-half of one redeemable public warrant. Each whole redeemable public warrant
entitles the holder thereof to purchase one share of common stock, and each private warrant
entitles the holder thereof to purchase one share of common stock. Only whole warrants are
exercisable. No fractional warrants will be issued upon separation of the units and only
whole warrants will trade. Accordingly, unless you purchase a multiple of two units, the
number of warrants issuable to you upon separation of the units will be rounded down to the
nearest whole number of warrants.
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(1)
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This number includes
an aggregate of up to 375,000 founder shares held by our initial stockholders that are subject
to forfeiture if the over-allotment option is not fully exercised by the underwriters.
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(2)
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Assumes the over-allotment
option has not been exercised and an aggregate of 375,000 founder shares held by our initial
stockholders have been forfeited. If the over-allotment option is exercised in full, there
will be a total of 14,375,000 shares of common stock issued and outstanding.
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(3)
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Assumes
the over-allotment option has not been exercised. If the over-allotment option is exercised in full, there will be a total of 5,750,000
public warrants and 5,469,230 private warrants issued and outstanding.
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Exercise
price
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$11.50
per share
In addition, if (x) we issue additional
shares or equity-linked securities for capital raising purposes in connection with the closing of our initial business combination
(not including any securities to be issued in connection with the forward purchase agreement to be entered into with our sponsor)
at an issue price or effective issue price of less than $9.20 per share (as adjusted for stock splits, stock dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like) (with such issue price or effective issue price to
be determined in good faith by our board of directors, and in the case of any such issuance to our sponsor, initial stockholders
or their affiliates, without taking into account any founder shares held by them prior to such issuance) (the “Newly Issued
Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds,
and interest thereon, available for the funding of our initial business combination on the date of the consummation of our initial
business combination (net of redemptions), and (z) the volume weighted average trading price of our shares during the 20
trading day period starting on the trading day prior to the day on which we consummate our initial business combination (such
price, the “Market Value”) is below $9.20 per share, the exercise price of each warrant will be adjusted (to the
nearest cent) such that the effective exercise price per full share will be equal to 115% of the higher of (i) the Market
Value and (ii) the Newly Issued Price, and the $16.00 per share redemption trigger price described below under “Redemption”
will be adjusted (to the nearest cent) to be equal to 160% of the higher of (i) the Market Value and (ii) the Newly
Issued Price.
No public warrants will be exercisable
for cash unless we have 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. It is our current intention to have
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 in effect promptly following consummation of an initial business
combination. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise
of the public warrants is not effective within 120 days following the consummation of our initial business combination,
public warrant holders may, until such time as there is an effective registration statement and during any period when we shall
have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption
from registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering the whole
public warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of
the number of shares of common stock underlying the public warrants, multiplied by the difference between the exercise price
of the public warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair
market value” shall mean the average last reported sale price of the shares of common stock for the 10 trading days ending
on the day prior to the date of exercise. For example, if a holder held 300 warrants to purchase 300 shares and the fair market
value on the date prior to exercise was $15.00, that holder would receive 70 shares without the payment of any additional cash
consideration.
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Exercise
period
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The
warrants will become exercisable 30 days after the consummation of an initial business combination.
The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary
of our completion of an initial business combination, or earlier upon redemption. The private
warrants purchased by Chardan NexTech 2 Warrant Holdings LLC will not be exercisable
more than five years from the effective date of the registration statement, of which this
prospectus forms a part, in accordance with FINRA Rule 5110(g), as long as Chardan or
any of its related persons beneficially own these private warrants.
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Redemption
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We
may redeem the outstanding warrants (excluding the private warrants), in whole and not in
part, at a price of $0.01 per warrant:
•
at any time while the warrants are exercisable;
•
upon a minimum of 30 days’ prior written notice of redemption;
•
if, and only if, the last sales price of our common stock equals or exceeds $16.00 per share for any 10
trading days within a 30-trading day period ending three business days before we send the notice of redemption; and
•
if, and only if, there is a current registration statement in effect with respect to the offer and sale
of 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 foregoing
conditions are satisfied and we issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior
to the scheduled redemption date. However, the price of our common stock may fall below the $16.00 trigger price, as well as
the $11.50 warrant exercise price after the redemption notice is issued.
The redemption criteria for our warrants
have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price
and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share
price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price
of the warrants.
If
we call the warrants for redemption as described above, our management will have the option to require all holders that
wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price
by surrendering the whole warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the
product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price
of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market
value” shall mean the average last reported sale price of the shares of common stock for the 10 trading days ending on
the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether we will
exercise our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety
of factors including the price of our shares of common stock at the time the warrants are called for redemption, our cash needs
at such time and concerns regarding dilutive share issuances.
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Offering
proceeds to be held in trust
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$101,000,000
of the net proceeds of this offering and the private placement (or $116,150,000 if the over-allotment
option is exercised in full), will be placed in a trust account at Morgan Stanley, maintained
by Continental Stock Transfer & Trust Company, acting as trustee pursuant to an
agreement to be signed on the date of this prospectus.
Except
as set forth below, the proceeds in the trust account will not be released until the earlier of: (1) the completion
of an initial business combination within the required time period or (2) the redemption of 100% of the outstanding public
shares if we have not completed a business combination in the required time period. Therefore, unless and until our initial business
combination is consummated, the proceeds held in the trust account will not be available for our use for any expenses related
to this offering or expenses that we may incur related to the investigation and selection of a target business and the negotiation
of an agreement to acquire a target business.
Notwithstanding
the foregoing, there can be released to us, from time to time, any interest earned on the funds in the trust account that
we may need to pay our tax obligations. Unless and until we complete our initial business combination, no proceeds held in the
trust account will be available for our use. The proceeds held in the trust account will be invested only in U.S. government
securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7
under the Investment Company Act which invest only in direct U.S. government treasury obligations. We will disclose in each quarterly
and annual report filed with the SEC prior to our initial business combination whether the proceeds deposited in the trust account
are invested in U.S. government treasury obligations or money market funds or a combination thereof. Based upon current interest
rates, we expect the trust account to generate approximately $100,000 of interest annually assuming an interest rate of 0.1%
per year; however, we can provide no assurances regarding this amount.
Unless
and until we complete our initial business combination, expenses incurred by us may be paid prior to a business combination
only from the net proceeds of this offering not held in the trust account of approximately $1,330,000; provided, however,
that to meet our working capital needs following the consummation of this offering, if the funds not held in the trust account
are insufficient, our initial stockholders, officers and directors or their affiliates 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 be paid upon consummation of our initial business combination, without interest.
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Release
of funds in trust account on closing of our initial business combination
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On
the completion of our initial business combination, the funds held in the trust account will be used to pay amounts due to
any public stockholders who exercise their redemption rights. We will use the remaining funds to pay all or a portion of the consideration
payable to the target or owners of the target of our initial business combination and to pay other expenses associated with our initial
business combination, including the fee payable to Chardan pursuant to the Business Combination Marketing Agreement described under
“Underwriting (Conflicts of Interest) — Business Combination Marketing Agreement,” which fee we refer to
throughout this prospectus as the Marketing Fee. If our initial business combination is paid for using equity or debt securities,
or not all of the funds released from the trust account are used for payment of the consideration in connection with our initial
business combination or used for redemptions of our common stock, we may apply the balance of the cash released to us from the trust
account, as well as the proceeds from the sale of the private warrants described elsewhere in this prospectus, for general corporate
purposes, including for maintenance or expansion of operations of post-transaction businesses, the payment of principal or interest
due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working
capital.
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Limited
payments to insiders
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Prior
to the consummation of a business combination, there will be no fees, reimbursements or other
cash payments paid to our initial stockholders, officers, directors or their affiliates prior
to, or for any services they render in order to effectuate, the consummation of a business
combination (regardless of the type of transaction that it is) other than:
• repayment
of loans of up to $250,000 advanced to us by our sponsor to cover offering-related and organizational expenses;
• payment
of $10,000 per month to an affiliate of our sponsor for office space and related services, subject to deferral as described herein;
• repayment
of loans that may be made by our insiders, officers, directors or any of its or their respective affiliates to finance transaction
costs in connection with an initial business combination, the terms of which have not been determined;
• reimbursement
of out-of-pocket expenses incurred by our insiders, officers, directors or any of its or their respective affiliates in connection
with certain activities on our behalf, such as identifying and investigating possible business targets and business combinations;
• our
sponsor will transfer up to 20,000 founder shares to each of our independent directors; and
• payment
to Chardan of the underwriting discount and the Marketing Fee, fees for any financial advisory, placement agency or other similar
investment banking services Chardan may provide to our company in the future, including in connection with the closing of our
initial business combination, and reimbursement of Chardan for any out-of-pocket expenses incurred by it in connection with the
performance of such services.
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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 available to us, 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 any of 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.
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Stockholder
approval of, or tender offer in connection with, initial business combination
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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 redeem 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 redeem 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.
We may only redeem our public shares
so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny
stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a
minimum net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot
satisfy the net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of
our public shares or the initial business combination, and instead may search for an alternate 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 such business combination.
We have determined not to consummate
any business combination unless we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation
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.
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Our
initial stockholders have agreed (A) to vote their founder shares and any public shares
in favor of any proposed business combination, (B) not to propose, or vote in favor
of, prior to and unrelated to an initial business combination, an amendment to our certificate
of incorporation that would affect the substance or timing of our redemption obligation to
redeem all public shares if we cannot complete an initial business combination within 15
months (or up to 21 months, as applicable) unless we provide public stockholder an opportunity
to redeem their public shares in conjunction with any such amendment, (C) not to redeem
any shares (including the founder 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 to us in a tender offer in connection with our proposed initial business
combination, and (D) that the founder shares shall not participate in any liquidating
distribution upon winding up if a business combination is not consummated. None of our initial
stockholders or their affiliates has indicated any intention to purchase public units in
this offering or any units or shares of common stock in the open market or in private transactions.
However, if a significant number of stockholders vote, or indicate an intention to vote,
against a proposed business combination, our initial stockholders, officers, directors or
their affiliates could make such purchases in the open market or in private transactions
in order to influence the vote. Our initial stockholders, officers, directors and their affiliates
could purchase sufficient shares so that the initial business combination may be approved
without the majority vote of public shares held by non-affiliates. Notwithstanding the foregoing,
our officers, directors, initial stockholders and their affiliates will not make purchases
of shares of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5
of the Securities and Exchange Act of 1940, which we refer to as the Exchange Act, which
are rules designed to stop potential manipulation of a company’s stock or purchasing
shares when the buyer is in possession of material non-public information about the Company.
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Redemption
rights
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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 redeem 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 redemption rights, whether they are a record holder or hold their
shares in “street name,” to either tender the certificates they are seeking to redeem to our transfer agent or to
deliver the shares they are seeking to redeem to the transfer agent electronically using Depository Trust Company’s Deposit/Withdrawal
At Custodian System, or DWAC 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 to
pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether we require holders to deliver
their shares prior to the vote on the business combination in order to exercise redemption rights, because a holder would need
to deliver shares to exercise redemption 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. The redemption rights will include
the requirement that a beneficial holder must identify itself in order to validly redeem its shares.
Under Delaware law, we may be required
to give a minimum of only 10 days’ notice for each general meeting. As a result, if we require public stockholders who
wish to redeem 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 redemption. Accordingly, investors may not be able to exercise their redemption rights and may be forced to retain
our securities when they otherwise would not want to.
If we require public stockholders who
wish to redeem their shares of common stock to comply with specific delivery requirements for redemption described above and
such proposed business combination is not consummated, we will promptly return such certificates to the tendering public stockholders.
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Liquidation
if no business
combination
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If
we are unable to complete our initial business combination within 15 months (or up to 21
months, as applicable) from the closing of this offering, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not
more than five business days thereafter, redeem 100% of the outstanding public shares (including
any public units in this offering or any public units or shares that our initial stockholders
or their affiliates purchased in this offering or later acquired in the open market or in
private transactions), 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 practicable
following such redemption, subject to the approval of our remaining holders of common stock
and our board of directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company, subject (in the case of (ii) and (iii) above) to our
obligations to provide for claims of creditors and the requirements of applicable law.
In connection with our redemption of
100% of our outstanding public shares for a portion of the funds held in the trust account, each holder will receive a full pro
rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account
and not necessary to pay our taxes payable on such funds. Holders of warrants will receive no proceeds in connection with the
liquidation with respect to such warrants, which will expire worthless.
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 this offering) 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.
The holders of the founder shares and
private warrants will not participate in any redemption distribution with respect to their founder shares and private warrants,
but may have any public shares held by them redeemed upon liquidation.
If we are unable to conclude our initial
business combination and we expend all of the net proceeds of this offering not deposited in the trust account, without taking
into account any interest earned on the trust account, we expect that the initial per-share redemption price will be approximately
$10.10. 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. Furthermore, our underwriters may seek recourse against the proceeds in the trust account
relating to any future claims they may have against us. 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 approximately $10.10. We will pay
the costs of any subsequent liquidation 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 and has agreed not to seek repayment for such
expenses. We currently do not anticipate that such funds will be insufficient.
|
|
Ability
to extend time to complete business combination
|
|
If
we have filed a preliminary proxy statement with the SEC seeking stockholder approval of
an initial business combination within 15 months of this offering, the period of time we
have to consummate an initial business combination shall be automatically extended by an
additional three months for an aggregate of 18 months.
If we anticipate that we may not be able to consummate our initial
business combination within 15 months (or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial
business combination within 15 months from the closing of this offering), we may, by resolution of our board if requested by our sponsor,
extend the period of time to consummate a business combination up to two times, each by an additional three months (for a total of up
to 21 months to complete a business combination), subject to the sponsor depositing additional funds into the trust account as set out
below. Pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between
us and Continental Stock Transfer & Trust Company on the date of this prospectus, in order for the time available for us to
consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance notice
prior to the applicable deadline, must deposit into the trust account $1,000,000, or $1,150,000 if the underwriters’ over-allotment
option is exercised in full ($0.10 per share in either case), on or prior to the date of the applicable deadline, for each of the available
three month extensions providing a total possible business combination period of 21 months at a total payment value of $2,000,000, or
$2,300,000 if the underwriters’ over-allotment option is exercised in full. Any such payments would be made in the form of non-interest
bearing loans, evidenced by an unsecured promissory note equal to the amount of any such deposit, which 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. Our sponsor and
its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete our initial business combination.
Our public stockholders will not be entitled to vote or redeem their shares in connection with any such extension. As a result, we may
conduct such an extension even though a majority of our public stockholders do not support such an extension and will not be able to
redeem their shares in connection therewith.
|
|
Conflict
of Interest
|
|
Both
we and our sponsor are affiliates of Chardan, the representative of the underwriters in this
offering, and certain of our officers and directors are affiliated with Chardan. As a result,
Chardan is deemed to have a “conflict of interest” within the meaning of FINRA
Rule 5121(f)(5), or Rule 5121. Accordingly, this offering is being made in compliance
with the applicable requirements of Rule 5121.
Rule 5121 requires that a “qualified
independent underwriter,” as defined in Rule 5121, participate in the preparation of the registration statement and
prospectus and exercise the usual standards of due diligence with respect thereto. B. Riley Securities, Inc. has agreed to act
as a “qualified independent underwriter” for this offering. B. Riley Securities, Inc. will receive $100,000 from
the total underwriting discount, acting as a qualified independent underwriter. We have agreed to indemnify B. Riley Securities,
Inc. against certain liabilities incurred in connection with acting as a “qualified independent underwriter,”
including liabilities under the Securities Act. In addition, no underwriter with a conflict of interest will confirm sales to
any account over which it exercises discretionary authority without the specific prior written approval of the account holder.
All of our officers
are employed by Chardan or its affiliates. Chardan is continuously made aware of potential business opportunities, one or more
of which we may desire to pursue for an initial business combination. While Chardan will not have any duty to offer acquisition
opportunities to us, Chardan may become aware of a potential transaction that is an attractive opportunity for us, which Chardan
may decide to share with us. In addition, our officers and directors may have a duty to offer acquisition opportunities to other
entities to which they owe duties or clients of affiliates of our sponsor.
As a result,
affiliates of our sponsor and their respective clients may compete with us for acquisition opportunities in the same industries
and sectors as we may target for our initial business combination. If any of them decide to pursue any such opportunity, we may
be precluded from procuring such opportunities. In addition, investment ideas generated within Chardan, including by any of our
officers and other persons who may make decisions for the company, may be suitable both for us and for affiliates of our sponsor
or any of their respective clients, and will be directed initially to such persons rather than to us. None of Chardan nor members
of our management team who are also employed by Chardan or any of its affiliates have any obligation to present us with any opportunity
for a potential business combination of which they become aware unless it is offered to them solely in their capacity as a director
or officer of the Company and after they have satisfied their contractual and fiduciary obligations to other parties.
Our sponsor,
officers, directors, Chardan and their respective affiliates may participate in the formation of, or become an officer or director
of, any other blank check company prior to completion of our initial business combination. In particular, certain of our executive
officers and directors also serve as executive officers or directors of an Affiliated SPAC, which is focused on searching for
businesses that may provide significant opportunities for attractive investor returns in industries similar to the industries
in which our search is focused. As a result, our sponsor, officers or directors could have conflicts of interest in determining
whether to present business combination opportunities to us or to any other blank check company with which they may become involved.
|
|
|
|
As
described herein, each of our officers and directors presently has, and any of them in the
future may have additional, fiduciary, contractual or other obligations or duties to one
or more other entities pursuant to which such officer or director is or will be required
to present a business combination opportunity to such entities, including an Affiliated SPAC.
Accordingly, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for one or more entities to which he or she has fiduciary,
contractual or other obligations or duties, including an Affiliated SPAC, he or she will
honor these obligations and duties to present such business combination opportunity to such
entities first, and only present it to us if such entities reject the opportunity and he
or she determines to present the opportunity to us (including as described above). These
conflicts may not be resolved in our favor and a potential target business may be presented
to another entity prior to its presentation to us.
In
addition, we may, at our option, pursue an Affiliated Joint Acquisition. We do not expect
that we would pursue any such opportunity with an Affiliated SPAC. This would only occur,
though, if (i) permitted by applicable regulatory and other legal limitations; (ii) we
and Chardan considered a transaction to be mutually beneficial to us as well as the affiliated
entity; and (iii) other business reasons exist to do so, such as the strategic merits
of including such co-investors, the need for additional capital beyond the amount held in
our trust account to fund the initial business combination and/or the desire to obtain committed
capital for closing the initial business combination. An Affiliated Joint Acquisition could
involve a co-investment with us in the target business at the time of our initial business
combination, or we could raise additional proceeds to complete the initial business combination.
The
potential conflicts described above may limit our ability to enter into a business combination
or other transactions. These circumstances could give rise to numerous situations where interests
may conflict. There can be no assurance that these or other conflicts of interest with the
potential for adverse effects on the Company and investors will not arise.
|
Risks
We
are a newly formed company that has conducted no operations and has generated no revenues. Until we complete our initial business combination,
we will have no operations and will generate no operating revenues. In making your decision on whether to invest in our securities, you
should take into account not only the background of our management team, but also the special risks we face as a blank check company,
as well as the fact that this offering is not being conducted in compliance with Rule 419 promulgated under the Securities Act,
and, therefore, you will not be entitled to protections normally afforded to investors in Rule 419 blank check offerings. For additional
information concerning how Rule 419 blank check offerings differ from our offering, please see “Proposed Business —
Comparison to offerings of blank check companies subject to Rule 419.” You should carefully consider these and the other
risks set forth in the section entitled “Risk Factors” beginning on page 28 of this prospectus.
SUMMARY
FINANCIAL DATA
The following table summarizes
the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus.
We have not had any significant operations to date, so only balance sheet data are presented.
|
|
|
March
31, 2021
|
|
|
|
|
Actual
|
|
|
As
Adjusted(1)
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
$
|
(53,118
|
)
|
|
$
|
98,687,077
|
|
|
Total assets
|
|
$
|
150,000
|
|
|
$
|
102,354,000
|
|
|
Total liabilities
|
|
$
|
126,000
|
|
|
$
|
3,666,923
|
|
|
Value of shares of common stock subject to possible redemption/tender
|
|
$
|
—
|
|
|
$
|
93,687,070
|
|
|
Stockholder’s equity
|
|
$
|
24,000
|
|
|
$
|
5,000,007
|
|
|
(1)
|
The
“as adjusted” working capital and total assets amounts include the $3,405,000 we will receive from the sale of the
private warrants, and the “as adjusted” total liabilities of $3,666,923 relates to the warrant liability.
|
The “as adjusted”
information gives effect to the sale of the units we are offering, including the application of the related gross proceeds and the payment
of the estimated remaining costs from such sale and the repayment of the accrued and other liabilities required to be repaid such that
we have at least $5,000,001 of net tangible assets upon consummation of this offering and upon consummation of our initial business combination.
The “as adjusted”
working capital and total assets amounts include the $101,000,000 (without exercise of over-allotment option) to be held in the trust
account, which, except for limited situations described in this prospectus, will be available to us only upon the consummation of our
initial business combination within the time period described in this prospectus.
We will consummate our initial
business combination only if we have net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation
and a majority of the outstanding shares of common stock voted are voted in favor of the business combination (if a vote is required
or being obtained).
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
Some statements contained
in this prospectus may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking
statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions
or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,”
“might,” “plan,” “possible,” “potential,” “predict,” “project,”
“should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking. These risks and uncertainties include, but are not limited to the following risks,
uncertainties and other factors:
|
|
·
|
our
ability to select an appropriate target business or businesses;
|
|
|
·
|
our
ability to consummate an initial business combination, even if an appropriate target business
is selected;
|
|
|
·
|
our
success in retaining or recruiting, or changes required in, our officers, key employees or
directors following our initial business combination;
|
|
|
·
|
our
officers and directors allocating their time to other businesses and potentially having conflicts
of interest with our business or in approving our initial business combination, as a result
of which they would then receive expense reimbursements;
|
|
|
·
|
our
potential ability to obtain additional financing to complete our initial business combination;
|
|
|
·
|
our
pool of prospective target businesses in the disruptive technology sectors;
|
|
|
·
|
risks
associated with acquiring an operating company in the disruptive technology sectors;
|
|
|
·
|
the
ability of our officers and directors to generate a number of potential investment opportunities;
|
|
|
·
|
the
delisting of our securities from the Nasdaq or an inability to have our securities listed
on Nasdaq following a business combination;
|
|
|
·
|
our
public securities’ potential liquidity and trading;
|
|
|
·
|
the
lack of a market for our securities;
|
|
|
·
|
the
use of proceeds not held in the trust account or available to us from interest income on
the trust account balance;
|
|
|
·
|
the
trust account being subject to the claims of third parties; or
|
|
|
·
|
our
financial performance following this offering.
|
The
forward-looking statements contained in this prospectus 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”
beginning on page 28 of this prospectus. 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.
RISK FACTORS
An investment in our
securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information
contained in this prospectus, before making a decision to invest in our units. If any of the following events occur, our business, financial
condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline,
and you could lose all or part of your investment.
|
|
I.
|
Risks Relating to our
Search for, Consummation of, or Inability to Consummate, a Business Combination and Post-Business
Combination Risks
|
Our public stockholders may not be afforded
an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even
though a majority of our public stockholders do not support such a combination.
We may choose not to hold
a stockholder vote to approve our initial business combination unless the initial business combination would require stockholder approval
under applicable law or stock exchange listing requirements or if we decide to hold a stockholder vote for business or other legal reasons.
Except as required by law, the decision as to whether we will seek stockholder approval of a proposed initial business combination or
will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based
on a variety of factors, such as the timing of the transaction and whether the terms of the transaction would otherwise require us to
seek stockholder approval. Even if we seek stockholder approval, the holders of our founder shares will participate in the vote on such
approval. Accordingly, we may complete our initial business combination even if holders of a majority of our public shares do not approve
of the initial business combination we complete. Please see the section of this prospectus entitled “Proposed Business —
Stockholders May Not Have the Ability to Approve Our Initial Business Combination” for additional information.
If we seek stockholder approval of our
initial business combination, our sponsor, officers and directors have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.
Pursuant to the letter agreement,
our sponsor, officers and directors have agreed to vote their founder shares and any public shares purchased during or after this offering
(including in open market and privately negotiated transactions), in favor of our initial business combination. As a result, in addition
to our initial stockholders’ founder shares, we would need only 3,750,001, or 37.5%, of the 10,000,000 public shares sold in this
offering to be voted in favor of an initial business combination (assuming all outstanding shares are voted) in order to have our initial
business combination approved (assuming the over-allotment option is not exercised). Our initial stockholders and their permitted transferees
will own shares representing 20% of our outstanding shares of common stock immediately following the completion of this offering. Accordingly,
if we seek stockholder approval of our initial business combination, the agreement by our initial stockholders to vote in favor of our
initial business combination will increase the likelihood that we will receive the requisite stockholder approval for such initial business
combination. In addition, we have agreed not to enter into a definitive agreement regarding an initial business combination without the
prior consent of our sponsor.
Your only opportunity to affect the investment
decision regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of the initial business combination.
At the time of your investment
in us, you will not be provided with an opportunity to evaluate the specific merits or risks of our initial business combination. Since
our board of directors may complete an initial business combination without seeking stockholder approval, public stockholders may not
have the right or opportunity to vote on the initial business combination, unless we seek such stockholder vote.
Accordingly, if we do not
seek stockholder approval, your only opportunity to affect the investment decision regarding a potential business combination may be
limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender
offer documents mailed to our public stockholders in which we describe our initial business combination.
The ability of our public stockholders
to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make
it difficult for us to enter into an initial business combination with a target.
We
may seek to enter into an initial business combination agreement with a prospective target that requires as a closing condition that
we have a minimum net worth or a certain amount of cash. While we will have access to the proceeds from the $3,405,000 (or up to $3,555,000
depending on the extent to which the underwriters’ over-allotment option is exercised) private placement from our sponsor, if too
many public stockholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would
not be able to proceed with the initial business combination. If too many public stockholders exercise their redemption rights, we would
not be able to meet such closing condition and, as a result, would not be able to proceed with the initial business combination. Furthermore,
we may only redeem our public shares so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation
of our initial business combination and after payment of underwriters’ fees and commissions (so that we are not subject to the
SEC’s “penny stock” rules) or any greater net tangible asset or cash requirement which may be contained in the agreement
relating to our initial business combination. Consequently, if accepting all properly submitted redemption requests would cause our net
tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would
not proceed with such redemption and the related business combination and may instead search for an alternate business combination. Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into an initial business combination with us. The ability of
a large number of our stockholders to exercise redemption rights may not allow us to consummate the most desirable business combination
or optimize our capital structure.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination
or optimize our capital structure.
At the time we enter into
an agreement for our initial business combination, we will not know how many stockholders may exercise their redemption rights, and,
therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for
redemption. If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase
price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account
to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares is submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account
or arrange for third party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable business
combination available to us or optimize our capital structure.
The ability of our public stockholders
to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial business combination
would be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business
combination agreement requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have
a minimum amount of cash at closing, the probability that our initial business combination would be unsuccessful is increased. If our
initial business combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the
trust account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time
our stock may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material
loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your stock in the open market.
The requirement that we complete our initial
business combination within the prescribed time frame may give potential target businesses leverage over us in negotiating an initial
business combination and may decrease our ability to conduct due diligence on potential business combination targets, in particular as
we approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would
produce value for our stockholders.
Any potential target
business with which we enter into negotiations concerning an initial business combination will be aware that we must complete our initial
business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering. Consequently, such target
business may obtain leverage over us in negotiating an initial business combination, knowing that if we do not complete our initial business
combination with that particular target business, we may be unable to complete our initial business combination with any target business.
This risk will increase as we get closer to the timeframe described above. In addition, we may have limited time to conduct due diligence
and may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial
business combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding
up and we would redeem our public shares and liquidate, in which case our public stockholders may only receive $10.10 per share, or less
than such amount in certain circumstances, and our warrants will expire worthless.
Our sponsor, officers
and directors have agreed that we must complete our initial business combination within 15 months from the closing of this offering (or
up to 18 months from the closing of this offering if we have executed a definitive agreement and filed a proxy statement for an initial
business combination within 15 months from the closing of this offering) to consummate an initial business combination. In addition,
if we anticipate that we may not be able to consummate our initial business combination within 15 months and we have not entered into
a definitive agreement and filed a proxy statement for an initial business combination by such date (or 18 months if we have executed
a definitive agreement and filed a proxy statement for an initial business combination within 15 months from the closing of this offering),
our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate a business combination up to
two times by an additional three months each time (for a total of up to 21 months to complete a business combination), as described in
more detail in this prospectus. We may not be able to find a suitable target business and complete our initial business combination within
such time period. Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility
in the capital and debt markets and the other risks described herein. For example, the outbreak of COVID-19 continues to grow both in
the United States and globally and, while the extent of the impact of the outbreak on us will depend on future developments, it could
limit our ability to complete our initial business combination, including as a result of increased market volatility, decreased market
liquidity and third-party financing being unavailable on terms acceptable to us or at all. Additionally, the continued outbreak of COVID-19
may negatively impact businesses we may seek to acquire. If we have not completed our initial business combination within such 15-month
(or up to 21-month) period, we will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but not more than ten business days thereafter, subject to lawfully available funds therefor, redeem 100% of the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on
the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as
promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors,
dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements
of other applicable law, in which case, our public stockholders may only receive $10.10 per share, or less than such amount in certain
circumstances, and our warrants will expire worthless. See “— If third parties bring claims against us, the proceeds held
in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share”
and other risk factors herein.
Our search for a business combination,
and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent
coronavirus (COVID-19) outbreak and the status of debt and equity markets.
In March 2020, the
World Health Organization declared novel coronavirus disease 2019 (COVID-19) a global pandemic. The COVID-19 pandemic has negatively
impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption
in financial markets, and increased unemployment levels, all of which may become heightened concerns upon a second wave of infection
or future developments. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social
distancing and sheltering in place requirements in many states and communities. The COVID-19 pandemic has and a significant outbreak
of other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets
worldwide, and the business of any potential partner business with which we consummate a business combination could be materially and
adversely affected.
Furthermore, we may be unable
to complete a business combination if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with
potential investors or the partner business’s personnel, vendors and services providers are unavailable to negotiate and consummate
a transaction in a timely manner. 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. If the disruptions posed by COVID-19 or other matters of global concern
continue for an extensive period of time, our ability to consummate a business combination, or the operations of a partner business with
which we ultimately consummate a business combination, may be materially adversely affected.
In addition, our ability
to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and
other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable
on terms acceptable to us or at all
If we seek stockholder approval of our
initial business combination, our sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase
shares or warrants from public stockholders, which may influence a vote on a proposed initial business combination and reduce the public
“float” of our common stock or warrants.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our sponsor, directors, officers, advisors or any of their respective affiliates may purchase shares or public
warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following the completion
of our initial business combination, although they are under no obligation to do so. However, they have no current commitments, plans
or intentions to engage in such transactions and have not formulated any terms or conditions for any such transactions. None of the funds
in the trust account will be used to purchase shares or public warrants in such transactions.
Such a purchase may include
a contractual acknowledgement that such stockholder, although still the record holder of our shares is no longer the beneficial owner
thereof and therefore agrees not to exercise its redemption rights. In the event that our sponsor, directors, officers, advisors or any
of their respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected
to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares.
The price per share paid in any such transaction may be different than the amount per share a public stockholder would receive if it
elected to redeem its shares in connection with our initial business combination. The purpose of such purchases could be to vote such
shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder approval of the initial
business combination, or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or
a certain amount of cash at the closing of our initial business combination, where it appears that such requirement would otherwise not
be met. The purpose of any such purchases of public warrants could be to reduce the number of public warrants outstanding or to vote
such warrants on any matters submitted to the warrant holders for approval in connection with our initial business combination. Any such
purchases of our securities may result in the completion of our initial business combination that may not otherwise have been possible.
Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent such purchasers
are subject to such reporting requirements.
In addition, if such purchases
are made, the public “float” of our common stock or public warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive notice
of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures
for tendering its shares, such shares may not be redeemed.
We will comply with the
tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial business combination.
Despite our compliance with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder
may not become aware of the opportunity to redeem its shares. In addition, proxy materials or tender offer documents, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various procedures
that must be complied with in order to validly tender or redeem public shares. For example, we may require our public stockholders seeking
to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender
their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such holders, or up to two
business days prior to the vote on the proposal to approve the initial business combination in the event we distribute proxy materials,
or to deliver their shares to the transfer agent electronically. In the event that a stockholder fails to comply with these or any other
procedures, its shares may not be redeemed. See the section of this prospectus entitled “Proposed Business — Redemption
Rights for Public Stockholders upon Completion of our Initial Business Combination — Redemption/Tender Rights.”
You will not have any rights or interests
in funds from the trust account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced
to sell your public shares or warrants, potentially at a loss.
Our public stockholders
will be entitled to receive funds from the trust account only upon the earliest to occur of: (i) our completion of an initial business
combination, and then only in connection with those shares of common stock that such stockholder properly elected to redeem, subject
to the limitations described herein, (ii) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation to allow
redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial
business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering or (B) with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity and (iii) the redemption
of our public shares if we are unable to complete an initial business combination within 15 months (or up to 21 months, as applicable)
from the closing of this offering, subject to applicable law and as further described herein. In no other circumstances will a public
stockholder have any right or interest of any kind in the trust account. Holders of warrants will not have any right to the proceeds
held in the trust account with respect to the warrants. Accordingly, to liquidate your investment, you may be forced to sell your public
shares or warrants, potentially at a loss.
You will not be entitled to protections
normally afforded to investors of many other blank check companies.
Since
the net proceeds of this offering and the sale of the private warrants are intended to be used to complete an initial business
combination with a target business that has not been identified, we may be deemed to be a “blank check” company under the
United States securities laws. However, because we will have net tangible assets in excess of $5,000,000 either immediately prior
to or upon the successful completion of this offering and the sale of the private warrants and will file a Current Report on Form 8-K,
including an audited balance sheet demonstrating this fact, we are exempt from rules promulgated by the SEC to protect investors
in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules.
Among other things, this means our units will be immediately tradable and we will have a longer period of time to complete our initial
business combination than do companies subject to Rule 419. Moreover, if this offering were subject to Rule 419, that rule would
prohibit the release of any interest earned on funds held in the trust account to us unless and until the funds in the trust account
were released to us in connection with our completion of an initial business combination. For a more detailed comparison of our offering
to offerings that comply with Rule 419, please see the section of this prospectus entitled “Proposed Business —
Comparison to Offerings of Blank Check Companies Subject to Rule 419.”
Because of our limited resources and
the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business
combination. If we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.10
per share on our redemption of our public shares, or less than such amount in certain circumstances, and our warrants will expire worthless.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including private investors
(which may be individuals or investment partnerships), other blank check companies and other entities competing for the types of businesses
we intend to acquire, including affiliates of our sponsor. Many of these individuals and entities are well-established and have extensive
experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various
industries. Many of these competitors possess greater technical, human and other resources or more industry knowledge than we do, and
our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are
numerous target businesses we could potentially acquire with the net proceeds of this offering and the sale of the private warrants,
our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
Furthermore, because we are obligated to pay cash for the shares of common stock which our public stockholders redeem in connection with
our initial business combination, target companies will be aware that this may reduce the resources available to us for our initial business
combination. This may place us at a competitive disadvantage in successfully negotiating an initial business combination. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share, or less in certain
circumstances, on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.10 per share upon our liquidation. See “— If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share”
and other risk factors below.
If the net proceeds of this offering,
the sale of the private warrants not being held in the trust account and the loan committed by our sponsor for working capital are insufficient
to allow us to operate for at least the next 15 months (or up to 21 months, as applicable), we may be unable to complete our initial
business combination, in which case our public stockholders may only receive $10.10 per share, or less than such amount in certain circumstances,
and our warrants will expire worthless.
The funds available to
us outside of the trust account, together with the loan committed by our sponsor for working capital, may not be sufficient to allow
us to operate for at least the next 15 months (or up to 21 months, as applicable), assuming that our initial business combination is
not completed during that time. Management’s plans to address this need for capital through this offering and potential loans from
certain of our affiliates are discussed in the section of this prospectus titled “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and
we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses. We believe that, upon closing
of this offering, the funds available to us outside of the trust account, together with funds available from loans from our sponsor will
be sufficient to allow us to operate for at least the next 15 months (or up to 21 months, as applicable); however, we cannot assure you
that our estimate is accurate. Of the funds available to us, we could use a portion of the funds available to us to pay fees to consultants
to assist us with our search for a target business. We could also use a portion of the funds as a down payment or to fund a “no-shop”
provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around
for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed initial
business combination, although we do not have any current intention to do so. If we entered into a letter of intent or merger agreement
where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether
as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with
respect to, a target business. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.10 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire
worthless. In certain circumstances, our public stockholders may receive less than $10.10 per share upon our liquidation. See “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.10 per share” and other risk factors below.
If the net proceeds from this offering
and the sale of the private warrants, not being held in the trust account, and the loan committed by our sponsor for working capital
are insufficient, it could limit the amount available to fund our search for a target business or businesses and complete our initial
business combination and we will depend on additional loans from our sponsor or management team to fund our search for an initial business
combination, to pay our taxes and to complete our initial business combination. If we are unable to obtain these loans, we may be unable
to complete our initial business combination.
Of the net proceeds of
this offering and the sale of the private warrants, only approximately $1,330,000 will be available to us initially outside the trust
account to fund our working capital requirements. In the event that our offering expenses exceed our estimate of $575,000, we may fund
such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust
account would decrease by a corresponding amount. The amount held in the trust account will not be impacted as a result of such increase
or decrease. Conversely, in the event that the offering expenses are less than our estimate of $575,000, the amount of funds we intend
to be held outside the trust account would increase by a corresponding amount. If we are required to seek additional capital, we would
need to borrow funds from our sponsor, management team or other third parties to operate or may be forced to liquidate. In order to finance
transaction costs in connection with an intended initial business combination, our sponsor has committed up to $250,000 to be provided
to us to fund our expenses relating to investigating and selecting a target business and other working capital requirements after this
offering and prior to our initial business combination. None of our sponsor, members of our management team nor any of their affiliates
is under any obligation to advance additional funds to us in such circumstances. Any such advances would be repaid only from funds held
outside the trust account or from funds released to us upon completion of our initial business combination. Prior to the completion of
our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as
we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to
funds in our trust account. If we are unable to obtain these loans, we may be unable to complete our initial business combination. If
we are unable to complete our initial business combination because we do not have sufficient funds available to us, we will be forced
to cease operations and liquidate the trust account. Consequently, our public stockholders may only receive approximately $10.10 per
share on our redemption of our public shares, and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.10 per share on the redemption of their shares. See “— If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.10 per share” and other risk factors below.
Subsequent to the completion of our initial
business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could
have a significant negative effect on our financial condition, results of operations and our stock price, which could cause you to lose
some or all of your investment.
Even
if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will
identify all material issues that may be present with a particular target business, that it would be possible to uncover all material
issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not
later arise. As a result of these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur
impairment or other charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks,
unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
Even though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may cause
us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a target business
or by virtue of our obtaining debt financing to partially finance the initial business combination. Accordingly, any security holders
who choose to remain security holders following the initial business combination could suffer a reduction in the value of their securities.
Such security holders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction
was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully
bring a private claim under securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the initial
business combination constituted an actionable material misstatement or omission.
If third parties bring claims against
us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less
than $10.10 per share.
Our placing of funds in
the trust account may not protect those funds from third-party claims against us. Although we will seek to have all vendors, service
providers, prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title,
interest or claim of any kind in or to any monies held in the trust account for the benefit of our public stockholders, such parties
may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust
account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as
claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets,
including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held
in the trust account, our management will perform an analysis of the alternatives available to it and will only enter into an agreement
with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly
more beneficial to us than any alternative. Making such a request of potential target businesses may make our acquisition proposal less
attractive to them and, to the extent prospective target businesses refuse to execute such a waiver, it may limit the field of potential
target businesses that we might pursue. WithumSmith+Brown, PC, our independent registered public accounting firm, and the underwriters
of the offering, will not execute agreements with us waiving such claims to the monies held in the trust account.
Examples of possible
instances where we may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose
particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree
to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there
is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Upon redemption of
our public shares, if we are unable to complete our initial business combination within the prescribed timeframe, or upon the exercise
of a redemption right in connection with our initial business combination, we will be required to provide for payment of claims of creditors
that were not waived that may be brought against us within the 10 years following redemption. Accordingly, the per-share redemption amount
received by public stockholders could be less than the $10.10 per share initially held in the trust account, due to claims of such creditors.
Pursuant to the letter agreement, the form of which is filed as Exhibit 10.1 to the registration statement of which this prospectus
forms a part, our sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent
registered public accounting firm) for services rendered or products sold to us, or a prospective target business with which we have
entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce the amount of
funds in the trust account to below the lesser of (i) $10.10 per public share and (ii) the actual amount per public share held
in the trust account as of the date of the liquidation of the trust account, if less than $10.10 per share due to reductions in the value
of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target
business who executed a waiver of any and all rights to the monies held in the trust account (whether or not such waiver is enforceable)
nor will it apply to any claims under our indemnity of the underwriters of this offering against certain liabilities, including liabilities
under the Securities Act. However, we have not asked our sponsor to reserve for such indemnification obligations, nor have we independently
verified whether our sponsor has sufficient funds to satisfy its indemnity obligations and believe that our sponsor’s only assets
are securities of our company. Therefore, we cannot assure you that our sponsor would be able to satisfy those obligations. None of our
officers or directors will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective
target businesses.
Our directors may decide not to enforce
the indemnification obligations of our sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution
to our public stockholders.
In the event that the
proceeds in the trust account are reduced below the lesser of (i) $10.10 per share and (ii) the actual amount per share held
in the trust account as of the date of the liquidation of the trust account if less than $10.10 per share due to reductions in the value
of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our sponsor asserts that it is unable
to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would
determine whether to take legal action against our sponsor to enforce its indemnification obligations.
While we currently expect
that our independent directors would take legal action on our behalf against our sponsor to enforce its indemnification obligations to
us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose
not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too
high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent
directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution
to our public stockholders may be reduced below $10.10 per share.
We may not have sufficient funds to satisfy
indemnification claims of our directors and officers.
We have agreed to indemnify
our officers and directors to the fullest extent permitted by law. However, our officers and directors have agreed to waive any right,
title, interest or claim of any kind in or to any monies in the trust account and to not seek recourse against the trust account for
any reason whatsoever. Accordingly, any indemnification provided will be able to be satisfied by us only if (i) we have sufficient
funds outside of the trust account or (ii) we consummate an initial business combination. Our obligation to indemnify our officers
and directors may discourage stockholders from bringing a lawsuit against our officers or directors for breach of their fiduciary duty.
These provisions also may have the effect of reducing the likelihood of derivative litigation against our officers and directors, even
though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment
may be adversely affected to the extent we pay the costs of settlement and damage awards against our officers and directors pursuant
to these indemnification provisions.
If, after we distribute the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our board may be exposed to claims of punitive
damages.
If, after we distribute
the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is
filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or
bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover some or all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by
paying public stockholders from the trust account prior to addressing the claims of creditors.
If, before distributing the proceeds in
the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us
that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share
amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.
If, before distributing
the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is
filed against us that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may
be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To
the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by our stockholders
in connection with our liquidation may be reduced.
Our stockholders may be held liable for
claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
Under the DGCL, stockholders
may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution.
The pro rata portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event
we do not complete our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering
may be considered a liquidating distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280
of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during
which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims
brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders
with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
However, it is our intention to redeem our public shares as soon as reasonably possible following the 15th month (or up to the 21st month,
as applicable) from the closing of this offering in the event we do not complete our initial business combination and, therefore, we
do not intend to comply with the foregoing procedures.
Because we will not be
complying with Section 280, Section 281(b) of the DGCL requires us to adopt a plan, based on facts known to us at such
time that will provide for our payment of all existing and pending claims or claims that may be potentially brought against us within
the 10 years following our dissolution. However, because we are a blank check company, rather than an operating company, and our operations
will be limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from our vendors
(such as lawyers, investment bankers, etc.) or prospective target businesses. If our plan of distribution complies with Section 281(b) of
the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s
pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred
after the third anniversary of the dissolution. We cannot assure you that we will properly assess all claims that may be potentially
brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them
(but no more) and any liability of our stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata
portion of our trust account distributed to our public stockholders upon the redemption of our public shares in the event we do not complete
our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering is not considered
a liquidating distribution under Delaware law and such redemption distribution is deemed to be unlawful (potentially due to the imposition
of legal proceedings that a party may bring or due to other circumstances that are currently unknown), then pursuant to Section 174
of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead
of three years, as in the case of a liquidating distribution.
We may not hold an annual meeting of stockholders
until after the consummation of our initial business combination, which could delay the opportunity for our stockholders to elect directors.
In accordance with Nasdaq
corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal
year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting
of stockholders for the purposes of electing directors in accordance with our bylaws unless such election is made by written consent
in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our
initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual
meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination,
they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of
the DGCL.
Because we are neither limited to evaluating
a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial
business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We will seek to complete
an initial business combination with an operating company in any industry or sector, though we intend to focus on the financial services,
healthcare, real estate services, technology and software industries, except that we will not, under our amended and restated certificate
of incorporation, be permitted to effectuate our initial business combination with another blank check company or similar company with
nominal operations. Because we have not yet selected or approached any specific target business with respect to a business combination,
there is no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations,
cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business combination, we may be affected
by numerous risks inherent in the business operations with which we combine. For example, if we combine with a financially unstable business
or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations
of a financially unstable or a development stage entity. Although our officers and directors will endeavor to evaluate the risks inherent
in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or
that we will have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave us
with no ability to control or reduce the chances that those risks will adversely impact a target business. We also cannot assure you
that an investment in our units will ultimately prove to be more favorable to investors than a direct investment, if such opportunity
were available, in a business combination target. Accordingly, any security holders who choose to remain security holders following our
initial business combination could suffer a reduction in the value of their securities. Such security holders are unlikely to have a
remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by our officers
or directors of a duty of care or other fiduciary duty owed to them, or if they are able to successfully bring a private claim under
securities laws that the proxy solicitation or tender offer materials, as applicable, relating to the business combination contained
an actionable material misstatement or material omission.
We may seek business combination opportunities
in industries or sectors which may or may not be outside of our management’s area of expertise.
We will consider a business
combination in sectors which may be outside of our management’s areas of expertise if such business combination candidate is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. Although our management will
endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately
ascertain or assess all of the significant risk factors. We also cannot assure you that an investment in our units will not ultimately
prove to be less favorable to investors in this offering than a direct investment, if an opportunity were available, in an initial business
combination candidate. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s
expertise may not be directly applicable to its evaluation or operation, and the information contained in this prospectus regarding the
areas of our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result,
our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition. Accordingly,
any security holders who choose to remain security holders following our initial business combination could suffer a reduction in the
value of their securities. Such security holders are unlikely to have a remedy for such reduction in value.
Although we have identified general criteria
and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination
with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified
general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter
into our initial business combination will not have all of these positive attributes. If we complete our initial business combination
with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination
with a business that does meet all of our general criteria and guidelines. In addition, if we announce a prospective business combination
with a target that does not meet our general criteria and guidelines, a greater number of stockholders may exercise their redemption
rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net
worth or a certain amount of cash. In addition, if stockholder approval of the transaction is required by applicable law or stock exchange
rules, or we decide to obtain stockholder approval for business or other legal reasons, it may be more difficult for us to attain stockholder
approval of our initial business combination if the target business does not meet our general criteria and guidelines. If we are unable
to complete our initial business combination, our public stockholders may receive only approximately $10.10 per share, or less in certain
circumstances, on the liquidation of our trust account and our warrants will expire worthless. In certain circumstances, our public stockholders
may receive less than $10.10 per share on the redemption of their shares. See “-— If third parties bring claims against us,
the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.10 per share” and other risk factors below.
We may seek business combination opportunities
with an early stage company, a financially unstable business or an entity lacking an established record of revenue, cash flow or earnings,
which could subject us to volatile revenues, cash flows or earnings or difficulty in retaining key personnel.
To the extent we complete
our initial business combination with an early stage company, a financially unstable business or an entity lacking an established record
of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks
include investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor to evaluate
the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors
and we may not have adequate time to complete due diligence. Furthermore, some of these risks may be outside of our control and leave
us with no ability to control or reduce the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion
from an independent investment banking firm or from an independent accounting firm, and consequently, you may have no assurance from
an independent source that the price we are paying for the business is fair to our stockholders from a financial point of view.
Unless we complete our initial
business combination with an affiliated entity or our board cannot independently determine the fair market value of the target business
or businesses, we are not required to obtain an opinion from an independent investment banking firm or another independent firm that
commonly renders valuation opinions that the price we are paying is fair to our stockholders from a financial point of view. If no opinion
is obtained, our stockholders will be relying on the judgment of our board of directors, who will determine fair market value based on
standards generally accepted by the financial community. Such standards used will be disclosed in our proxy materials or tender offer
documents, as applicable, related to our initial business combination.
Because we must furnish our stockholders
with target business financial statements, we may lose the ability to complete an otherwise advantageous initial business combination
with some prospective target businesses.
The federal proxy rules require
that a proxy statement with respect to a vote on an initial business combination meeting certain financial significance tests include
historical and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure
in connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States
of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS,
depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards
of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements may limit the pool
of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us
to disclose such financial statements in accordance with federal proxy rules and complete our initial business combination within
the prescribed time frame.
Compliance obligations under the Sarbanes-Oxley
Act may make it more difficult for us to effectuate our initial business combination, require substantial financial and management resources,
and increase the time and costs of completing an initial business combination.
Section 404 of the
Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K
for the year ending December 31, 2022. Only in the event we are deemed to be a large accelerated filer or an accelerated filer will
we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over
financial reporting. Further, for as long as we remain an emerging growth company, we will not be required to comply with the independent
registered public accounting firm attestation requirement on our internal control over financial reporting. The fact that we are a blank
check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public
companies because a target business with which we seek to complete our initial business combination may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of any such
entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such initial business
combination.
We do not have a specified maximum redemption
threshold. The absence of such a redemption threshold may make it possible for us to complete an initial business combination with which
a substantial majority of our stockholders do not agree.
Our amended and restated
certificate of incorporation will not provide a specified maximum redemption threshold, except that we may only redeem our public shares
so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (such that we are not subject to the SEC’s “penny stock”
rules) or any greater net tangible asset or cash requirement which may be contained in the agreement relating to our initial business
combination. As a result, we may be able to complete our initial business combination even though a substantial majority of our public
stockholders do not agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business
combination and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have
entered into privately negotiated agreements to sell their shares to our sponsor, officers, directors, advisors or any of their respective
affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed initial business combination
exceed the aggregate amount of cash available to us, we will not complete the initial business combination or redeem any shares, all
shares of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business
combination.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and other governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of incorporation
or governing instruments in a manner that will make it easier for us to complete our initial business combination that our stockholders
may not support.
In order to effectuate
an initial business combination, blank check companies have, in the recent past, amended various provisions of their charters and modified
governing instruments, including their warrant agreements. For example, blank check companies have amended the definition of business
combination, increased redemption thresholds and extended the time to consummate an initial business combination and, with respect to
their warrants, amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. Amending our
amended and restated certificate of incorporation will require the approval of holders of a majority of our common stock, and amending
our warrant agreement will require a vote of holders of at least a majority of the public warrants. In addition, our amended and restated
certificate of incorporation requires us to provide our public stockholders with the opportunity to redeem their public shares for cash
if we propose an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing of our
obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do not
complete our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering or (B) with
respect to any other provision relating to stockholders’ rights or pre-initial business combination activity. To the extent any
such amendments would be deemed to fundamentally change the nature of any securities offered through this registration statement, we
would register, or seek an exemption from registration for, the affected securities. We cannot assure you that we will not seek to amend
our charter or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial
business combination.
The provisions of our amended and restated
certificate of incorporation that relate to our pre-business combination activity (and corresponding provisions of the agreement governing
the release of funds from our trust account), including an amendment to permit us to withdraw funds from the trust account such that
the per share amount investors will receive upon any redemption or liquidation is substantially reduced or eliminated, may be amended
with the approval of holders of majority of our common stock, which is a lower amendment threshold than that of some other blank check
companies. It may be easier for us, therefore, to amend our amended and restated certificate of incorporation and the trust agreement
to facilitate the completion of an initial business combination that some of our stockholders may not support.
Our amended and restated
certificate of incorporation will provide that any of its provisions may be amended if approved by holders of majority of our common
stock entitled to vote thereon, and corresponding provisions of the trust agreement governing the release of funds from our trust account
may be amended if approved by holders of majority of our common stock entitled to vote thereon, subject to applicable provisions of the
DGCL or applicable stock exchange rules. We may not issue additional securities that can vote with common stockholders on matters related
to our pre-initial business combination activity, on any amendment to certain provisions of our amended and restated certificate of incorporation
or on our initial business combination. Our initial stockholders, who will collectively beneficially own up to 20% of our common stock
upon the closing of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our
amended and restated certificate of incorporation and/or trust agreement and will have the discretion to vote in any manner they choose.
As a result, we may be able to amend the provisions of our amended and restated certificate of incorporation which govern our pre-initial
business combination behavior more easily than some other blank check companies, and this may increase our ability to complete an initial
business combination with which you do not agree. Our stockholders may pursue remedies against us for any breach of our amended and restated
certificate of incorporation.
Our sponsor, officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated
certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our
initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 15
months (or up to 21 months, as applicable) from the closing of this offering or (ii) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, 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, divided by the number of then outstanding public shares. These agreements are contained
in a letter agreement that we have entered into with our sponsor, officers and directors. Our stockholders are not parties to, or third-party
beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against our sponsor, officers or directors
for any breach of these agreements. As a result, in the event of a breach, our stockholders would need to pursue a stockholder derivative
action, subject to applicable law.
We may be unable to obtain additional financing
to complete our initial business combination or to fund the operations and growth of a target business, which could compel us to restructure
or abandon a particular business combination.
We have not selected
any specific business combination target, but intend to target businesses larger than we could acquire with the net proceeds of this
offering and the sale of the private warrants. As a result, we may be required to seek additional financing to complete such proposed
initial business combination. We cannot assure you that such financing will be available on acceptable terms, if at all. To the extent
that additional financing proves to be unavailable when needed to complete our initial business combination, we would be compelled to
either restructure the transaction or abandon that particular business combination and seek an alternative target business candidate.
Further, the amount of additional financing we may be required to obtain could increase as a result of future growth capital needs for
any particular transaction, the depletion of the available net proceeds in search of a target business, the obligation to repurchase
for cash a significant number of shares from stockholders who elect redemption in connection with our initial business combination and/or
the terms of negotiated transactions to purchase shares in connection with our initial business combination. In addition, even if we
do not need additional financing to complete our initial business combination, we may require such financing to fund the operations or
growth of the target business. The failure to secure additional financing could have a material adverse effect on the continued development
or growth of the target business. None of our officers, directors or stockholders is required to provide any financing to us in connection
with or after our initial business combination. If we are unable to complete our initial business combination, our public stockholders
may only receive approximately $10.10 per share, or less in certain circumstances, on the liquidation of our trust account, and our warrants
will expire worthless. Furthermore, as described in the risk factor entitled “If third parties bring claims against us, the proceeds
held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share,”
under certain circumstances our public stockholders may receive less than $10.10 per share upon the liquidation of the trust account.
Our initial stockholders will hold a substantial
interest in us. As a result, they may exert a substantial influence on actions requiring a stockholder vote, potentially in a manner
that you do not support.
Upon the closing of this
offering, our initial stockholders will own shares representing 20% of our issued and outstanding shares of common stock (including the
shares of common stock underlying the private warrants and assuming they do not purchase any units in this offering). Neither our initial
stockholders nor, to our knowledge, any of our officers or directors, have any current intention to purchase additional securities, other
than as disclosed in this prospectus. Factors that would be considered in making such additional purchases would include consideration
of the current trading price of our common stock. In addition, as a result of their substantial ownership in our company, our initial
stockholders may exert a substantial influence on other actions requiring a stockholder vote, potentially in a manner that you do not
support, including amendments to our amended and restated certificate of incorporation and approval of major corporate transactions.
If our initial stockholders purchase any units in this offering or any additional shares of common stock in the aftermarket or in privately
negotiated transactions, this would increase their influence over these actions. In addition, our board of directors, whose members were
elected by our initial stockholders, is and will be divided into two classes, each of which will generally serve for a term of two years
with only one class of directors being elected in each year. We may not hold an annual meeting of stockholders to elect new directors
prior to the completion of our initial business combination, in which case all of the current directors will continue in office until
at least the completion of the initial business combination. If there is an annual meeting, as a consequence of our “staggered”
board of directors, only a portion of the board of directors will be considered for election. Accordingly, our initial stockholders will
exert significant influence over actions requiring a stockholder vote. Please see “Proposed Business — Stockholders May Not
Have the Ability to Approve an Initial Business Combination.”
Resources could be wasted in researching
business combinations that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.10 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire
worthless.
We anticipate that the
investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, consultants
and others. If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed
transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail
to complete our initial business combination for any number of reasons including those beyond our control. Any such event will result
in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.10 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. In
certain circumstances, our public stockholders may receive less than $10.10 per share on the redemption of their shares. See “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount
received by stockholders may be less than $10.10 per share” and other risk factors below.
Our key personnel may negotiate employment
or consulting agreements with a target business in connection with a particular business combination. These agreements may provide for
them to receive compensation following our initial business combination and as a result, may cause them to have conflicts of interest
in determining whether a particular business combination is the most advantageous.
Our key personnel may be
able to remain with the company after the completion of our initial business combination only if they are able to negotiate employment
or consulting agreements in connection with the initial business combination. Such negotiations would take place simultaneously with
the negotiation of the initial business combination and could provide for such individuals to receive compensation in the form of cash
payments and/or our securities for services they would render to us after the completion of the initial business combination. The personal
and financial interests of such individuals may influence their motivation in identifying and selecting a target business. However, we
believe the ability of such individuals to remain with us after the completion of our 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. There is no certainty, however,
that any of our key personnel will remain with us after the completion of our initial business combination. We cannot assure you that
any of our key personnel will remain in senior management or advisory positions with us. The determination as to whether any of our key
personnel will remain with us will be made at the time of our initial business combination.
We may have a limited ability to assess
the management of a prospective target business and, as a result, may effect our initial business combination with a target business
whose management may not have the skills, qualifications or abilities to manage a public company, which could, in turn, negatively impact
the value of our stockholders’ investment in us.
When evaluating the desirability
of effecting our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should the target’s
management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability
of the post-combination business may be negatively impacted. Accordingly, any security holders who choose to remain security holders
following the initial business combination could suffer a reduction in the value of their securities. Such securities are unlikely to
have a remedy for such reduction in value.
Unlike
other blank check companies, we may extend the time to complete a business combination by up to six months without a stockholder vote
or your ability to redeem your shares.
We
will have until 15 months from the closing of this offering to consummate an initial business combination. However, unlike other similarly
structured blank check companies, if we anticipate that we may not be able to consummate our initial business combination within
15 months and we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by such
date (or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial business combination within
15 months from the closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time
to consummate a business combination up to two times by an additional three months each time (for a total of up to 21 months to complete
a business combination); provided that, pursuant to the terms of our amended and restated certificate of incorporation and
the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus,
the only way to extend the time available for us to consummate our initial business combination in the absence of a definitive agreement
is for our insiders or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline, to deposit
into the trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per share in either case, or
an aggregate of $2,000,000 (or $2,300,000 if the over-allotment option is exercised in full)), on or prior to the date of the applicable
deadline. Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.
As the number of special purpose acquisition
companies increases, there may be more competition to find an attractive target for an initial business combination. This could increase
the costs associated with completing our initial business combination and may result in our inability to find a suitable target for our
initial business combination.
In recent years, the number
of special purpose acquisition companies that have been formed has increased substantially. Many companies have entered into business
combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets
for their initial business combination, as well as many additional special purpose acquisition companies currently in registration. As
a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable
target for an initial business combination.
In addition, because there
are more special purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition
for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions or increases in the cost of additional capital needed to close business combinations or operate targets post-business combination.
This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete
our initial business combination.
Changes in the market for directors and
officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market
for directors and officers liability insurance for special purpose acquisition companies has changed. Fewer insurance companies are offering
quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of
such policies have generally become less favorable. There can be no assurance that these trends will not continue.
The increased cost and decreased
availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial
business combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a
public company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However,
any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s
ability to attract and retain qualified officers and directors.
In addition, even after
we were to complete an initial business combination, our directors and officers could still be subject to potential liability from claims
arising from conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors
and officers, the post-business combination entity may need to purchase additional insurance with respect to any such claims (“run-off
insurance”). The need for run-off insurance would be an added expense for the post-business combination entity, and could interfere
with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If we effect our initial business combination
with a company with operations or opportunities outside of the United States, we would be subject to a variety of additional risks that
may negatively impact our operations.
If our management team pursues
a company with operations or opportunities outside of the United States for our initial business combination, we would be subject to
risks associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our
initial business combination, conducting due diligence in a foreign jurisdiction, having such transaction approved by any local governments,
regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
If we effect our initial
business combination with such a company, we would be subject to any special considerations or risks associated with companies operating
in an international setting, including any of the following:
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higher
costs and difficulties inherent in managing cross-border business operations and complying
with different commercial and legal requirements of overseas markets;
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rules and
regulations regarding currency redemption;
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complex
corporate withholding taxes on individuals;
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laws
governing the manner in which future business combinations may be effected;
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tariffs
and trade barriers;
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regulations
related to customs and import/export matters;
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longer
payment cycles and challenges in collecting accounts receivable;
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tax
issues, including but not limited to tax law changes and variations in tax laws as compared
to the United States;
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currency
fluctuations and exchange controls;
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cultural
and language differences;
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employment
regulations;
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crime,
strikes, riots, civil disturbances, terrorist attacks, natural disasters and wars;
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deterioration
of political relations with the United States; and
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government
appropriations of assets.
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We may not be able to adequately
address these additional risks. If we were unable to do so, we may be unable to complete such initial business combination or, if we
complete such initial business combination, our operations might suffer, either of which may adversely impact our business, results of
operations and financial condition.
If our management following our initial
business combination is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar with such
laws, which could lead to various regulatory issues.
Following our initial business
combination, any or all of our management could resign from their positions as officers of the Company, and the management of the target
business at the time of the business combination could remain in place. Management of the target business may not be familiar with U.S.
securities laws. If new management is unfamiliar with U.S. securities laws, they may have to expend time and resources becoming familiar
with such laws. This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our
operations.
We may issue notes or other debt securities,
or otherwise incur substantial debt, to complete an initial business combination, which may adversely affect our leverage and financial
condition and thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments
as of the date of this prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt following this
offering, we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur
any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies
held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust account.
Nevertheless, the incurrence of debt could have a variety of negative effects, including:
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default
and foreclosure on our assets if our operating revenues after an initial business combination
are insufficient to repay our debt obligations;
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acceleration
of our obligations to repay the indebtedness even if we make all principal and interest payments
when due if we breach certain covenants that require the maintenance of certain financial
ratios or reserves without a waiver or renegotiation of that covenant;
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our
immediate payment of all principal and accrued interest, if any, if the debt security is
payable on demand;
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our
inability to obtain necessary additional financing if the debt security contains covenants
restricting our ability to obtain such financing while the debt security is outstanding;
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our
inability to pay dividends on our common stock;
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using
a substantial portion of our cash flow to pay principal and interest on our debt, which will
reduce the funds available for dividends on our common stock if declared, our ability to
pay expenses, make capital expenditures and acquisitions, and fund other general corporate
purposes;
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limitations
on our flexibility in planning for and reacting to changes in our business and in the industry
in which we operate;
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increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation;
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limitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; and
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other
disadvantages compared to our competitors who have less debt.
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We may only be able to complete one business
combination with the proceeds of this offering and the sale of the private warrants, which will cause us to be solely dependent on a
single business which may have a limited number of services and limited operating activities. This lack of diversification may negatively
impact our operating results and profitability.
Of the net proceeds from
this offering and the sale of the private warrants, $101,000,000 (or $116,150,000 if the underwriters’ over-allotment option is
exercised in full) will be available to complete our initial business combination and pay related fees and expenses.
We may effectuate our initial
business combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors, including
the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that
present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
By completing our initial business combination with only a single entity, our lack of diversification may subject us to numerous economic,
competitive and regulatory developments. Further, we would not be able to diversify our operations or benefit from the possible spreading
of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different
industries or different areas of a single industry. In addition, we intend to focus our search for an initial business combination in
a single industry. Accordingly, the prospects for our success may be:
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solely
dependent upon the performance of a single business, property or asset, or
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dependent
upon the development or market acceptance of a single or limited number of products, processes
or services.
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This lack of diversification
may subject us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon
the particular industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete
business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and
give rise to increased costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously
acquire several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us, and
delay our ability, to complete our initial business combination. We do not, however, intend to purchase multiple businesses in unrelated
industries in conjunction with our initial business combination. With multiple business combinations, we could also face additional risks,
including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are
multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of
the acquired companies in a single operating business. If we are unable to adequately address these risks, it could negatively impact
our profitability and results of operations.
We may attempt to complete our initial
business combination with a private company about which little information is available, which may result in an initial business combination
with a company that is not as profitable as we suspected, if at all.
In pursuing our initial
business combination strategy, we may seek to effectuate our initial business combination with a privately held company. Very little
public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential
initial business combination on the basis of limited information, which may result in an initial business combination with a company
that is not as profitable as we suspected, if at all.
We may issue our shares to investors in
connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time.
In connection with our
initial business combination, we may issue shares to investors in private placement transactions (so-called PIPE transactions) at a price
of $10.10 per share or which approximates the per-share amounts in our trust account at such time, which is generally approximately $10.10.
The purpose of such issuances will be to enable us to provide sufficient liquidity to the post-business combination entity. The price
of the shares we issue may therefore be less, and potentially significantly less, than the market price for our shares at such time.
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II.
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Risks Relating to Chardan,
our Sponsor and Management Team
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Our ability to successfully effect our
initial business combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may
join us following our initial business combination. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
Our ability to successfully
effect our initial business combination is dependent upon the efforts of our key personnel. The role of our key personnel in the target
business, however, cannot presently be ascertained. Although some of our key personnel may remain with the target business in senior
management or advisory positions following our initial business combination, it is likely that some or all of the management of the target
business will remain in place. While we intend to closely scrutinize any individuals we employ after our initial business combination,
we cannot assure you that our assessment of these individuals will prove to be correct. These individuals may be unfamiliar with the
requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become
familiar with such requirements. In addition, the officers and directors of an initial business combination candidate may resign upon
completion of our initial business combination. The departure of an initial business combination target’s key personnel could negatively
impact the operations and profitability of our post-combination business. The role of an initial business combination candidate’s
key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although we contemplate that
certain members of an initial business combination candidate’s management team will remain associated with the initial business
combination candidate following our initial business combination, it is possible that members of the management of an initial business
combination candidate will not wish to remain in place. The loss of key personnel could negatively impact the operations and profitability
of our post-combination business.
We are dependent upon our officers and
directors and their departure could adversely affect our ability to operate.
Our operations are dependent
upon a relatively small group of individuals and, in particular, our officers and directors. We believe that our success depends on the
continued service of our officers and directors, at least until we have completed our initial business combination. We do not have an
employment agreement with, or key-man insurance on the life of, any of our directors or officers. The unexpected loss of the services
of one or more of our directors or officers could have a detrimental effect on us.
Since our sponsor, officers and directors
will lose their entire investment in us if our initial business combination is not completed, a conflict of interest may arise in determining
whether a particular business combination target is appropriate for our initial business combination.
On
July 23, 2020, our sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4,
2021, we effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. Such founder shares
include an aggregate of up to 375,000 shares that are subject to forfeiture to the extent that the underwriters’ over-allotment
option is not exercised in full or in part. The number of founder shares issued was determined based on the expectation that such founder
shares would represent 20% of the outstanding shares after this offering. The founder shares will be worthless if we do not complete
an initial business combination. In addition Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase
5,238,461 (or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised)
warrants at a price of $0.65 per warrant ($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment
option is exercised)) that will also be worthless if we do not consummate our initial business combination. Holders of founder shares
and private warrants have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination and
(B) not to redeem any founder shares in connection with a stockholder vote to approve a proposed initial business combination. In
addition, any loans from our sponsor will not be repaid if our business combination is not consummated. In addition, we may obtain loans
from our sponsor, affiliates of our sponsor or an officer or director. The personal and financial interests of our officers and directors
may influence their motivation in identifying and selecting a target business combination, completing an initial business combination
and influencing the operation of the business following the initial business combination.
Since our officers and directors will not
be eligible to be reimbursed for their out-of-pocket expenses, and our sponsor will not be eligible to be repaid for loans our sponsor
has provided to us, if our business combination is not completed, a conflict of interest may arise in determining whether a particular
business combination target is appropriate for our initial business combination.
Our officers and directors,
or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our
behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Reimbursement
for such expenses will be paid by us out of loans by our sponsor and interest earned on the trust account. There is no cap or ceiling
on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. In addition, at the closing of our
initial business combination, our sponsor will be repaid an aggregate of up to $250,000 in loans, which our sponsor has committed to
cover working capital costs and to finance transaction costs in connection with an intended initial business combination following this
offering, in addition to any additional loans our sponsor chooses to make. These financial interests of our sponsor, officers and directors
may influence their motivation in identifying and selecting a target business combination and completing an initial business combination.
Our officers and directors will allocate
their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
This conflict of interest could have a negative impact on our ability to complete our initial business combination.
Our officers and directors
are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their
time between our operations and our search for an initial business combination and their other businesses. We do not intend to have any
full-time employees prior to the completion of our initial business combination. Each of our officers is engaged in other business endeavors
for which he may be entitled to substantial compensation and our officers are not obligated to contribute any specific number of hours
per week to our affairs. In particular, our officers and non-independent directors are employed by Chardan and/or certain of its affiliates
and our other directors are employees of other companies. Our directors and officers also serve as officers and board members for other
entities. If our officers’ and directors’ other business affairs require them to devote substantial amounts of time to such
affairs in excess of their current commitment levels, it could limit their ability to devote time to our affairs which may have a negative
impact on our ability to complete our initial business combination. For a complete discussion of our officers’ and directors’
other business affairs, please see “Management — Directors and Officers.”
All of our officers and directors are now,
and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted
by us and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business
opportunity or other transaction should be presented.
Following the completion
of this offering and until we consummate our initial business combination, we intend to engage in the business of identifying and combining
with one or more businesses. Our officers and directors are, and may in the future become, affiliated with entities (such as operating
companies or investment vehicles) that are engaged in a similar business, including an Affiliated SPAC.
In order to minimize potential conflicts of interest which may arise from multiple affiliations, our officers who are also officers
of any Affiliated SPAC will be required to present all suitable target businesses to an
Affiliated SPAC prior to presenting them to us, unless such opportunity is expressly offered to such individual solely in his capacity
as an officer of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue, and to the extent such individual is permitted to refer that opportunity to us without violating another
legal obligation.
We do not have employment
contracts with our officers and directors that will limit their ability to work at other businesses. In addition, our officers and directors
may become an officer or director of any other special purpose acquisition company with a class of securities registered under the Exchange
Act even if we have not yet entered into a definitive agreement regarding our initial business combination. As a result, our officers
or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other
blank check company with which they may become involved.
Each of our officers and
directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties to
one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entities, including an Affiliated SPAC. Our officers and directors also may become aware of business opportunities which may
be appropriate for presentation to us and the other entities to which they owe certain fiduciary, contractual or other duties.
Accordingly, if any of our
officers or directors becomes aware of a business combination opportunity which is suitable for one or more entities to which he or she
has fiduciary, contractual or other obligations or duties, including an Affiliated SPAC, he
or she will honor these obligations and duties to present such business combination opportunity to such entities first, and only present
it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. These conflicts may not be
resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us. Our amended
and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered to any director
or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer
of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.
For a complete discussion
of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of,
please see the sections of this prospectus entitled “Management — Directors and Officers,” “Management —
Conflicts of Interest” and “Certain Relationships and Related Party Transactions.”
Our officers, directors, security holders
and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
We have not adopted a policy
that expressly prohibits our directors, officers, security holders or affiliates from having a direct or indirect pecuniary or financial
interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. In
fact, we may enter into an initial business combination with a target business that is affiliated with our sponsor, our directors or
officers, although we do not intend to do so, or we may acquire a target business through an Affiliated Joint Acquisition with one or
more affiliates of Chardan. We do not have a policy that expressly prohibits any such persons from engaging for their own account in
business activities of the types conducted by us. Accordingly, such persons or entities may have a conflict between their interests and
ours.
In particular, Chardan,
its respective affiliates, our directors and our officers have invested, and may in the future invest, in a broad array of sectors, including
those in which our company may invest, and are also focused on acquisitions and investments in industries in which we may search for
a target business. As a result, there may be substantial overlap between companies that would be a suitable business combination for
us and companies that would make an attractive target for such other affiliates.
We may engage in an initial business combination
with one or more target businesses that have relationships with entities that may be affiliated with our sponsor, officers, directors
or existing holders which may raise potential conflicts of interest.
In light of the involvement
of our sponsor, officers and directors with other businesses, we may decide to acquire one or more businesses affiliated or competitive
with our sponsor, officers or directors or their respective affiliates. Our officers and directors also serve as officers and board members
for other entities, including, without limitation, those described under the section of this prospectus entitled “Management —
Conflicts of Interest.” Such entities may compete with us for business combination opportunities. Our sponsor, officers and directors
are not currently aware of any specific opportunities for us to complete our initial business combination with any entities with which
they are affiliated, and there have been no preliminary discussions concerning an initial business combination with any such entity or
entities. Although we will not be specifically focusing on, or targeting, any transaction with any affiliated entities, we would pursue
such a transaction if we determined that such affiliated entity met our criteria for an initial business combination as set forth in
the section of this prospectus entitled “Proposed Business — Effecting a Business Combination — Selection of a Target
Business and Structuring of a Business Combination” and such transaction was approved by a majority of our independent and disinterested
directors. Despite our agreement to obtain an opinion from an independent investment banking firm or another independent firm that commonly
renders valuation opinions regarding the fairness to our stockholders from a financial point of view of an initial business combination
with one or more domestic or international businesses affiliated with our officers, directors or existing holders, potential conflicts
of interest still may exist and, as a result, the terms of the initial business combination may not be as advantageous to our public
stockholders as they would be absent any conflicts of interest. In order to satisfy applicable regulatory or other legal requirements
applicable to an Affiliated Joint Acquisition, our initial business combination may be effected on less favorable terms than otherwise
would apply if the initial business combination were not an Affiliated Joint Acquisition.
We may acquire a target business through
an Affiliated Joint Acquisition with one or more affiliates of Chardan. This may result in conflicts of interest as well as dilutive
issuances of our securities.
We may, at our option, pursue
an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties
would co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Chardan considered
a transaction to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist to do so,
such as the strategic merits of including such co-investors, the need for additional capital beyond the amount held in our trust account
to fund the initial business combination and/or the desire to obtain committed capital for closing the initial business combination.
An Affiliated Joint Acquisition may be effected through a co-investment with us in the target business at the time of our initial business
combination, or we could raise additional proceeds to complete the initial business combination by issuing to such parties a class of
equity or equity-linked securities. Accordingly, such persons or entities may have a conflict between their interests and ours.
We may compete with other affiliates of
Chardan for acquisition opportunities for our company, which could negatively impact our ability to locate a suitable business combination.
Our business strategy may
overlap with some of the strategies of Chardan and certain of its other affiliates. In order to minimize potential conflicts of interest
which may arise from multiple affiliations, our officers will be required to present all suitable target businesses to an Affiliated
SPAC prior to presenting them to us, unless such opportunity is expressly offered to such individual solely in his capacity as an officer
of our company and such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue, and to the extent such individual is permitted to refer that opportunity to us without violating another legal obligation.
In addition, Chardan and its affiliates specialize in financial services and real estate services and finance for institutional customers
operating in the global financial and commercial real estate markets. Acquisition opportunities that may be of interest to us may come
to those other affiliates instead of us or may be pursued by those affiliates. Our affiliates are not restricted from competing with
our business and none of our affiliates are required to refer any such opportunities to us. Our sponsor and its affiliates face conflicts
of interest relating to performing services on our behalf and allocating investment opportunities to us, and such conflicts may not be
resolved in our favor, meaning we could find less suitable acquisition opportunities which could limit our ability to find a business
combination that we find attractive.
Our management may not be able to maintain
control of a target business after our initial business combination.
We may structure an initial
business combination so that the post-transaction company in which our public stockholders own shares will own less than 100% of the
equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for us not to be required to register as an investment company under the Investment Company Act. We will not consider any
transaction that does not meet such criteria. Even if the post-transaction company owns 50% or more of the voting securities of the target,
our stockholders prior to the initial business combination may collectively own a minority interest in the post business combination
company, depending on valuations ascribed to the target and us in the initial business combination. For example, we could pursue a transaction
in which we issue a substantial number of new shares of common stock in exchange for all of the outstanding capital stock of a target.
In this case, we would acquire a 100% interest in the target. However, as a result of the issuance of a substantial number of new shares
of common stock, our stockholders immediately prior to such transaction could own less than a majority of our outstanding shares of common
stock subsequent to such transaction. In addition, other minority stockholders may subsequently combine their holdings resulting in a
single person or group obtaining a larger share of the company’s stock than we initially acquired. Accordingly, this may make it
more likely that our management will not be able to maintain our control of the target business. We cannot provide assurance that, upon
loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate
such business.
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III.
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Risks Relating to our
Securities
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The securities in which we invest the
proceeds held in the trust account could bear a negative rate of interest, which could reduce the interest income available for payment
of taxes or reduce the value of the assets held in trust such that the per-share redemption amount received by stockholders may be less
than $10.10 per share.
The net proceeds of this
offering and certain proceeds from the sale of the private placement warrants, in the amount of $101,000,000 (or $116,150,000 if the
over-allotment option is exercised in full), will be held in an interest-bearing trust account. The proceeds held in the trust account
may only be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain
conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. While
short-term U.S. treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in
recent years. Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the
Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States. In the event
of very low or negative yields, the amount of interest income (which we may use to pay our taxes, if any) would be reduced. In the event
that we are unable to complete our initial business combination, our public stockholders are entitled to receive their pro-rata share
of the proceeds then held in the trust account, plus any interest income (less up to $100,000 of interest to pay dissolution expenses).
If the balance of the trust account is reduced below $101,000,000 (or $116,150,000 if the over-allotment option is exercised in full)
as a result of negative interest rates, the amount of funds in the trust account available for distribution to our public stockholders
may be reduced below $10.10 per share.
If we are deemed to be an investment company
under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted,
which may make it difficult for us to complete our initial business combination.
If we are deemed to be an
investment company under the Investment Company Act, our activities may be restricted, including:
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restrictions
on the nature of our investments; and
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restrictions
on the issuance of securities, each of which may make it difficult for us to complete our
initial business combination.
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In addition, we may have
imposed upon us burdensome requirements, including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure; and
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reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations
that we are not currently subject to.
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In order not to be regulated
as an investment company under the Investment Company Act, unless we can qualify for an exclusion, we must ensure that we are engaged
primarily in a business other than investing, reinvesting or trading in securities and that our activities do not include investing,
reinvesting, owning, holding or trading “investment securities” constituting more than 40% of our total assets (exclusive
of U.S. government securities and cash items) on an unconsolidated basis. Our business will be to identify and complete an initial business
combination and thereafter to operate the post-transaction business or assets for the long term. We do not plan to buy businesses or
assets with a view to resale or profit from their resale. We do not plan to buy unrelated businesses or assets or to be a passive investor.
We do not believe that our
anticipated principal activities will subject us to the Investment Company Act. To this end, the proceeds held in the trust account may
only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company
Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act which invest only in direct U.S. government treasury obligations. Pursuant to the trust agreement, the trustee
is not permitted to invest in other securities or assets. By restricting the investment of the proceeds to these instruments, and by
having a business plan targeted at acquiring and growing businesses for the long term (rather than on buying and selling businesses in
the manner of a merchant bank or private equity fund), we intend to avoid being deemed an “investment company” within the
meaning of the Investment Company Act. This offering is not intended for persons who are seeking a return on investments in government
securities or investment securities.
The trust account is
intended as a holding place for funds pending the earliest to occur of: (i) the completion of our initial business combination;
(ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated
certificate of incorporation (A) to modify the substance or timing of our obligation to allow redemption in connection with our
initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 15
months (or up to 21 months, as applicable) from the closing of this offering or (B) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity; or (iii) absent an initial business combination within
15 months (or up to 21 months, as applicable) from the closing of this offering, our return of the funds held in the trust account to
our public stockholders as part of our redemption of the public shares. If we do not invest the proceeds as discussed above, we may be
deemed to be subject to the Investment Company Act. If we were deemed to be subject to the Investment Company Act, compliance with these
additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete
an initial business combination or may result in our liquidation. If we are unable to complete our initial business combination, our
public stockholders may receive only approximately $10.10 per share, or less in certain circumstances, on the liquidation of our trust
account and our warrants will expire worthless.
If we seek stockholder approval of our
initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group”
of stockholders are deemed to hold in excess of 15% of our common stock, you will lose the ability to redeem all such shares in excess
of 15% of our common stock.
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder, together with any
affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined
under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate
of 15% of the shares sold in this offering without our prior consent, which we refer to as the “Excess Shares.” However,
we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our
initial business combination. Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our
initial business combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial business combination.
And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required
to sell your stock in open market transactions, potentially at a loss.
Nasdaq may delist our securities from trading
on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading
restrictions.
We have applied to have
our units listed on Nasdaq. We expect that our units will be listed on Nasdaq on or promptly after the date of this prospectus. Following
the date the shares of our common stock and warrants are eligible to trade separately, we anticipate that the shares of our common stock
and warrants will be separately listed on Nasdaq. Although after giving effect to this offering we expect to meet, on a pro forma basis,
the minimum initial listing standards set forth in the Nasdaq listing standards, we cannot assure you that our securities will be, or
will continue to be, listed on Nasdaq in the future or prior to our initial business combination. In order to continue listing our securities
on Nasdaq prior to our initial business combination, we must maintain certain financial, distribution and stock price levels. Generally,
we must maintain a minimum amount in stockholders’ equity (generally $2,500,000) and a minimum number of holders of our securities
(generally 300 public holders). Additionally, in connection with our initial business combination, we will be required to demonstrate
compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements,
in order to continue to maintain the listing of our securities on Nasdaq. For instance, our stock price would generally be required to
be at least $4.00 per share, our stockholders’ equity would generally be required to be at least $5.0 million and we would be required
to have a minimum of 300 round lot holders (with at least 50% of such round lot holders holding securities with a market value of at
least $2,500) of our securities. We cannot assure you that we will be able to meet those initial listing requirements at that time.
If Nasdaq delists any of
our securities from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect
such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences,
including:
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a
limited availability of market quotations for our securities;
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reduced
liquidity for our securities;
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a
determination that our common stock is a “penny stock” which will require brokers
trading in our common stock to adhere to more stringent rules and possibly result in
a reduced level of trading activity in the secondary trading market for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities or obtain additional financing in the future.
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The National Securities
Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities,
which are referred to as “covered securities.” Because we expect that our units and eventually our common stock and warrants
will be listed on Nasdaq, our units, common stock and warrants will be covered securities. Although the states are preempted from regulating
the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and,
if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies,
other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers,
or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer
listed on Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer
our securities, including in connection with our initial business combination.
Our sponsor paid an aggregate of $25,000,
or approximately $0.01 per founder share, and, accordingly, you will experience immediate and substantial dilution from the purchase
of the founder shares.
The difference between
the public offering price per share (allocating all of the unit purchase price to the common stock and none to the warrant included in
the unit) and the pro forma net tangible book value per share of our common stock after this offering constitutes the dilution to you
and the other investors in this offering. Our initial stockholders acquired the founder shares at a nominal price, significantly contributing
to this dilution. Upon the closing of this offering, and assuming no value is ascribed to the warrants included in the units, you and
the other public stockholders will incur an immediate and substantial dilution of approximately 84.5% (or $8.45 per share, assuming no
exercise of the underwriters’ over-allotment option), the difference between the pro forma net tangible book value per share of
$1.55 and the initial offering price of $10.00 per unit. In addition, because of the anti-dilution rights of the founder shares, any
equity or equity-linked securities issued or deemed issued in connection with our initial business combination would be disproportionately
dilutive to our common stock.
We may issue additional common stock or
preferred stock to complete our initial business combination or under an employee incentive plan after completion of our initial business
combination. Any such issuances would dilute the interest of our stockholders and likely present other risks.
Our amended and restated
certificate of incorporation will authorize the issuance of up to 50,000,000 shares of common stock, par value $0.0001 per share, and
1,000,000 shares of preferred stock, par value $0.0001 per share. Immediately after this offering, there will be 27,261,539 (assuming,
in each case, that the underwriters have not exercised their over-allotment option) authorized but unissued shares of common stock, which
amount takes into account the shares of common stock reserved for issuance upon exercise of outstanding warrants. Immediately after the
consummation of this offering, there will be no shares of preferred stock issued and outstanding.
We may issue a substantial
number of additional shares of common or preferred stock to complete our initial business combination (including pursuant to a specified
future issuance) or under an employee incentive plan after completion of our initial business combination (although our amended and restated
certificate of incorporation will provide that we may not issue securities that can vote with common stockholders on matters related
to our pre-initial business combination activity, on any amendment to certain provisions of our amended and restated certificate of incorporation
or on our initial business combination). However, our amended and restated certificate of incorporation will provide, among other things,
that prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof
to (i) receive funds from the trust account or (ii) vote on any initial business combination.
These provisions of
our amended and restated certificate of incorporation, like all provisions of our amended and restated certificate of incorporation,
may be amended with the approval of our stockholders. However, our officers, directors and director nominees have agreed, pursuant to
a written agreement with us, that they will not propose any amendment to our amended and restated certificate of incorporation (A) to
modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete our initial business combination within 15 months (or up to 21 months, as applicable)
from the closing of this offering or (B) with respect to any other provision relating to stockholders’ rights or pre-initial
business combination activity, 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 (which interest shall be net of taxes payable), divided by the number of then outstanding public shares.
The issuance of additional
shares of common or preferred stock:
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·
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may
significantly dilute the equity interest of investors in this offering;
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·
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may
subordinate the rights of holders of common stock if preferred stock is issued with rights
senior to those afforded our common stock;
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·
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could
cause a change of control if a substantial number of shares of our common stock are issued,
which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
and
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·
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may
adversely affect prevailing market prices for our units, common stock and/or warrants.
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We are registering the offer and sale of
the shares of common stock underlying the public warrants under the Securities Act, however we cannot assure you that such registration
will be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants
except on a cashless basis and potentially causing such warrants to expire worthless.
Under the terms of the
warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial
business combination, we will use our commercially reasonable best efforts to file with the SEC a registration statement for the registration
under the Securities Act of the offer and sale of the shares of common stock issuable upon exercise of the warrants and thereafter will
use our commercially reasonable best efforts to cause the same to become effective within 60 business days following our initial business
combination and to maintain a current prospectus relating to the common stock issuable upon exercise of the warrants, until the expiration
of the warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for
example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or
prospectus, the financial statements contained or incorporated by reference therein are not current, complete or correct or the SEC issues
a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, we will be required to
permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis,
and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon
such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
or qualification is available. Notwithstanding the above, if our common stock is at the time of any exercise of a warrant not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required
to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our commercially reasonable
best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event
will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event
that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws and there is no exemption
available. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration
or qualification, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire
worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price
solely for the shares of common stock included in the units. If and when the warrants become redeemable by us, we may not exercise our
redemption right if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification
under applicable state blue sky laws or we are unable to effect such registration or qualification. We will use our commercially reasonable
best efforts to register or qualify such shares of common stock under the blue sky laws of the state of residence in those states in
which the warrants were offered by us in this offering. However, there may be instances in which holders of our public warrants may be
unable to exercise such public warrants but holders of our private warrants may be able to exercise such private warrants.
If you exercise your public warrants on
a “cashless basis,” you will receive fewer shares of common stock from such exercise than if you were to exercise such warrants
for cash.
There
are circumstances in which the exercise of the public warrants may be required or permitted to be made on a cashless basis. First, if
a registration statement covering the shares of common stock issuable upon exercise of the warrants is not effective by the 60th
business day after the closing of our initial business combination, warrant holders may, until such time as there is an effective
registration statement, exercise warrants on a cashless basis in accordance with Section 3(a)(9) of the Securities Act or another
exemption. Second, if our common stock is at any time of any exercise of a warrant not listed on a national securities exchange such
that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may,
at our option, require holders of public warrants who exercise their warrants to do so on a cashless basis in accordance with Section 3(a)(9) of
the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and
in the event we do not so elect, we will use our commercially reasonable best efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. Third, if we call the public warrants for redemption, our management will
have the option to require all holders that wish to exercise warrants to do so on a cashless basis. In the event of an exercise on a
cashless basis, a holder would pay the warrant exercise price by surrendering the warrants for that number of shares of common stock
equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied
by the difference between the exercise price of the warrants and the “fair market value” (as defined in the next sentence)
by (y) the fair market value. The “fair market value” is the volume weighted average last reported sale price of the
common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of exercise is received by
the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable. As a result, you would receive
fewer shares of common stock from such exercise than if you were to exercise such warrants for cash.
Since
our sponsor paid only approximately $0.01 per share for the founder shares, certain of our officers and directors
could potentially make a substantial profit even if we acquire a target business that subsequently declines in value.
In
July 2020, we issued 1,000,000 founder shares to our sponsor in exchange for a capital contribution of $25,000. In March 2021,
we effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock being held by our sponsor, resulting in a purchase
price of approximately $0.01 per share. Certain of our officers and directors have a significant economic interest in our sponsor. As
a result, the low acquisition cost of the founder shares creates an economic incentive whereby our officers and directors could potentially
make a substantial profit even if we complete a business combination with a target business that subsequently declines in value and is
unprofitable for public investors.
The nominal
purchase price paid by our sponsor for the founder shares may result in significant dilution to the implied value of your public shares
upon the consummation of our initial business combination.
We
are offering our units at an offering price of $10.00 per unit, implying an initial value of $10.00 per public share. However, prior
to this offering, our sponsor paid a nominal aggregate purchase price of $25,000 for the founder shares, or approximately $0.003 per
share. As a result, the value of your public shares may be significantly diluted upon the consummation of our initial business combination,
when the founder shares are converted into public shares. For example, the following table shows the dilutive effect of the founder shares
on the implied value of the public shares upon the consummation of our initial business combination, assuming that our equity value at
that time is $97,500,000, which is the amount we would have for our initial business combination in the trust account after payment of
$3,500,000 pursuant to the business combination marketing agreement, assuming the underwriters’ over-allotment option is not exercised,
no interest is earned on the funds held in the trust account, and no public shares are redeemed in connection with our initial business
combination, and without taking into account any other potential impacts on our valuation at such time, such as the trading price of
our public shares, the business combination transaction costs, any equity issued or cash paid to the target’s sellers or other
third parties, or the target’s business itself, including its assets, liabilities, management and prospects, as well as the value
of our public and private warrants. At such valuation, each of our shares of common stock would have an implied value of $7.80 per share
upon consummation of our initial business combination, which would be a 22.0% decrease as compared to the initial implied value per public
share of $10.00 (the price per unit in this offering, assuming no value to the public warrants).
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Public shares
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10,000,000
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Founder
shares(1)
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2,500,000
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Total shares
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12,500,000
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Total funds
in trust available for initial business combination (less business combination marketing agreement)
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$
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97,500,000
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Initial implied value per public
share
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$
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10.00
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Implied value
per share upon consummation of initial business combination
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$
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7.80
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(1)
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Assumes the full forfeiture of 375,000 founder shares
that are subject to forfeiture by our sponsor depending on the extent to which the underwriters’ over-allotment option is exercised.
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The
value of the founder shares following completion of our initial business combination is likely to be substantially
higher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00
per share.
Upon the closing of this
offering, assuming no exercise of the underwriters’ over-allotment option, our sponsor and its affiliates will have invested in
us an aggregate of $3,430,000, comprised of the $25,000 purchase price for the founder shares and the $3,405,000 purchase price for the
private placement warrants. Assuming a trading price of $10.00 per share upon consummation of our initial business combination, the 2,500,000
founder shares (assuming the underwriters’ option to purchase additional units is not exercised) would have an aggregate implied
value of $25,000,000. Even if the trading price of our common stock was as low as $1.38 per share, and the private placement warrants
were worthless, the value of the founder shares would be equal to the sponsor’s initial investment in us. As a result, our sponsor
is likely to be able to recoup its investment in us and make a substantial profit on that investment, even if our public shares have
lost significant value. Accordingly, our management team, which owns interests in our sponsor, may have an economic incentive that differs
from that of the public stockholders to pursue and consummate an initial business combination rather than to liquidate and to return
all of the cash in the trust to the public stockholders, even if that business combination were with a riskier or less-established target
business. For the foregoing reasons, you should consider our management team’s financial incentive to complete an initial business
combination when evaluating whether to redeem your shares prior to or in connection with the initial business combination.
Our private placement warrants are expected to be accounted
for as a warrant liability and will be recorded at fair value upon issuance with any changes in fair value each period reported in earnings,
which may have an adverse effect on the market price of our securities or may make it more difficult for us to consummate an initial
business combination.
Following the consummation of this offering
and the concurrent private placement of warrants, we will have 5,238,461 private placement warrants outstanding, assuming the underwriters’
option to purchase additional units is not exercised. We currently expect to account for these private placement warrants as a warrant
liability, which means that we will record them at fair value upon issuance with any changes in fair value each period reported in earnings.
The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities. In addition, potential
targets may seek a business combination partner that does not have warrants that are accounted for as a warrant liability, which may
make it more difficult for us to consummate an initial business combination with a target business.
We may amend the terms of the warrants
in a manner that may be adverse to holders of public warrants with the approval by the holders of a majority of the then outstanding
public warrants. As a result, the exercise price of your warrants could be increased, the warrants could be redeemed for cash or stock
(at a ratio different than initially provided), the exercise period could be shortened and the number of shares of our common stock purchasable
upon exercise of a warrant could be decreased, all without your approval.
Our warrants will be issued
in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct
any defective provision, but requires the approval by the holders of a majority of the then outstanding public warrants to make any change
that adversely affects the interests of the registered holders of public warrants. Accordingly, we may amend the terms of the public
warrants in a manner adverse to a holder if holders of a majority of the then outstanding public warrants approve of such amendment.
Although our ability to amend the terms of the public warrants with the consent of a majority of the then outstanding public warrants
is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, convert
the warrants into cash or stock (at a ratio different than initially provided), shorten the exercise period or decrease the number of
shares of our common stock purchasable upon exercise of a warrant.
Our initial stockholders
may purchase public warrants with the intention of reducing the number of public warrants outstanding or to vote such warrants on any
matters submitted to warrant holders for approval, including amending the terms of the public warrants in a manner adverse to the interests
of the registered holders of public warrants. While our initial stockholders have no current commitments, plans or intentions to engage
in such transactions and have not formulated any terms or conditions for such transactions, there is no limit on the number of our public
warrants that our initial stockholders may purchase and it is not currently known how many public warrants, if any, our initial stockholders
may hold at the time of our initial business combination or at any other time during which the terms of the public warrants may be proposed
to be amended. Please see “Proposed Business — Permitted purchases of our securities.”
Our
warrant agreement will designate the courts of the State of New York located in the in the Borough of Manhattan
or the United States District Court for the Southern District of New York as the exclusive forums for certain types of actions and proceedings
that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum
for disputes with our company.
Our warrant agreement
will provide that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating in any way
to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York located
in the Borough of Manhattan or the United States District Court for the Southern District of New York, and (ii) that we irrevocably
submit to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive
any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
Notwithstanding the foregoing,
these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act
or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person
or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and to have consented
to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the forum provisions
of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the
Southern District of New York, in the name of any holder of our warrants, such holder shall be deemed to have consented to: (x) the
personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such
court to enforce the forum provisions, or an enforcement action, and (y) having service of process made upon such warrant holder
in any such enforcement action by service upon such warrantholder’s counsel in such action as agent for such warrantholder.
The choice-of-forum provision
in our warrant agreement may (1) result in increased costs for investors to bring a claim or (2) limit a warrantholder’s ability
to bring a claim in a judicial forum that it finds favorable for disputes with our company, which may discourage such lawsuits. Alternatively,
if a court were to find this provision of our warrant agreement inapplicable or unenforceable with respect to one or more of the specified
types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could
materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and
resources of our management and board of directors. We note that there is uncertainty as to whether a court would enforce this provision
and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
Section 22 of the Securities
Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the
Securities Act or the rules and regulations thereunder. Section 27 of the Exchange Act creates exclusive federal jurisdiction
over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
We may redeem your
unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
We have the ability to redeem
outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the last reported sales price of our common stock equals or exceeds $16.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 10 trading days within a 30 trading-day period commencing once the warrants
become exercisable and ending on the third trading day prior to the date on which we give proper notice of such redemption and provided
certain other conditions are met. If and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance
of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue
sky laws or we are unable to effect such registration or qualification. We will use our commercially reasonable best efforts to register
or qualify such shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were offered
by us in this offering. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise
price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market
price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the
outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the
private warrants will be redeemable by us so long as they are held by our sponsor or its permitted transferees.
Our warrants and founder shares may have
an adverse effect on the market price of our common stock and make it more difficult to effectuate our initial business combination.
We
will be issuing warrants to purchase 5,000,000 shares of our common stock (or up to 5,750,000 shares of common stock if the underwriters’
over-allotment option is exercised in full) as part of the units offered by this prospectus and, simultaneously with the closing of this
offering, we will be issuing, in a private placement, an aggregate of 5,238,461 (or up to 5,469,230 depending on the extent to
which the underwriters’ over-allotment option is exercised) warrants at a price of $0.65 per warrant ($3,405,000 (or up to $3,555,000
depending on the extent to which the underwriters’ over-allotment option is exercised)), with each warrant exercisable for one
share of common stock at an exercise price of $11.50. Our initial stockholders currently own an aggregate of 2,875,000 founder shares.
Such founder shares include an aggregate of up to 375,000 shares that are subject to forfeiture to the extent that the underwriters’
over-allotment option is not exercised in full or in part.
To the extent we issue shares
of common stock to effectuate an initial business combination, the potential for the issuance of a substantial number of additional shares
of common stock upon exercise of these warrants and redemption rights could make us a less attractive business combination vehicle to
a target business. Any such issuance will increase the number of issued and outstanding shares of our common stock and reduce the value
of the shares of common stock issued to complete the initial business combination. Therefore, our warrants and founder shares may make
it more difficult to effectuate an initial business combination or increase the cost of acquiring the target business.
The private warrants and
warrants underlying the units issuable pursuant to the forward purchase contract are identical to the warrants sold as part of the units
in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable
by us, (ii) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions,
be transferred, assigned or sold by our sponsor until 30 days after the completion of our initial business combination, (iii) they
may be exercised by the holders on a cashless basis, (iv) will be entitled to registration rights and (v) for so long as they
are held by our sponsor, will not be exercisable more than five years from the effective date of the registration statement of which
this prospectus forms a part in accordance with FINRA Rule 5110(g).
Because each unit contains one-half
of one redeemable warrant and only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.
Each unit contains one-half
of one redeemable warrant. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly,
unless you purchase a multiple of two units, the number of warrants issuable to you upon separation of the units will be rounded down
to the nearest whole number of warrants. This is different from other offerings similar to ours whose units include one share of common
stock and one warrant to purchase one whole share. We have established the components of the units in this way in order to reduce the
dilutive effect of the warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate
for one-half of the number of shares compared to units that each contain a warrant to purchase one whole share, thus making us, we believe,
a more attractive merger partner for target businesses. Nevertheless, this unit structure may cause our units to be worth less than if
they included a warrant to purchase one whole share.
A provision of our warrant agreement may
make it more difficult for us to consummate an initial business combination.
If
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·
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we
issue additional shares or equity-linked securities for capital raising purposes in connection
with the closing of our initial business combination (not including any securities to be
issued in connection with the forward purchase agreement to be entered into with our sponsor)
at a Newly Issued Price of less than $9.20 per share (as adjusted for stock splits, stock
dividends, reorganizations, recapitalizations and the like), the aggregate gross proceeds
from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our initial business combination on the date of the consummation
of our initial business combination (net of redemptions), and
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·
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the
Market Value is below $9.20 per share (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like),
|
then the exercise price of each warrant will
be adjusted such that the effective exercise price per full share will be equal to 115% of the higher of the Market Value and the Newly
Issued Price, and the $16.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 160% of the higher
of the Market Value and the Newly Issued Price. This may make it more difficult for us to consummate an initial business combination
with a target business.
The grant of registration rights to our
initial stockholders and their permitted transferees may make it more difficult to complete our initial business combination, and the
future exercise of such rights may adversely affect the market price of our common stock.
Pursuant to an agreement
to be entered into concurrently with the issuance and sale of the securities in this offering, our initial stockholders and their permitted
transferees can demand that we register the private warrants and the founder shares held, or to be held, by them, and may demand that
we register such warrants or the common stock issuable upon exercise of such warrants. We will bear the cost of registering these securities.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect
on the market price of our common stock. In addition, the existence of the registration rights may make our initial business combination
more costly or difficult to conclude. This is because the stockholders of the target business may increase the equity stake they seek
in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our common stock that
is expected when the securities owned by our initial stockholders or their respective permitted transferees are registered.
The determination of the offering price
of our units and the size of this offering is more arbitrary than the pricing of securities and size of an offering of an operating company
in a particular industry. You may have less assurance, therefore, that the offering price of our units properly reflects the value of
such units than you would have in a typical offering of an operating company.
Prior to this offering there
has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated
between us and the underwriters. In determining the size of this offering, management held customary organizational meetings with representatives
of the underwriters, both prior to our inception and thereafter, with respect to the state of capital markets, generally, and the amount
the underwriters believed they reasonably could raise on our behalf. Factors considered in determining the size of this offering, prices
and terms of the units, including the common stock and warrants underlying the units, include:
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the
history and prospects of companies whose principal business is the acquisition of other companies;
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prior
offerings of those companies;
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our
prospects for acquiring an operating business;
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a
review of debt to equity ratios in leveraged transactions;
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an
assessment of our management and their experience in identifying operating companies;
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general
conditions of the securities markets at the time of this offering; and
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·
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other
factors as were deemed relevant.
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Although these factors were
considered, the determination of our offering price is more arbitrary than the pricing of securities of an operating company in a particular
industry since we have no historical operations or financial results.
There is currently no market for our securities
and a market for our securities may not develop, which would adversely affect the liquidity and price of our securities.
There is currently no market
for our securities. Stockholders therefore have no access to information about prior market history on which to base their investment
decision. Following this offering, the price of our securities may vary significantly due to one or more potential business combinations
and general market or economic conditions. Furthermore, an active trading market for our securities may never develop or, if developed,
it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.
Provisions in our amended and restated
certificate of incorporation and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to
pay in the future for our common stock and could entrench management.
Our amended and restated
certificate of incorporation will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider
to be in their best interests. These provisions include a staggered board of directors and the ability of the board of directors to designate
the terms of and issue new series of preferred shares, which may make the removal of management more difficult and may discourage transactions
that otherwise could involve payment of a premium over prevailing market prices for our securities.
Section 203 of the
DGCL affects the ability of an “interested stockholder” to engage in certain business combinations, for a period of three
years following the time that the stockholder becomes an “interested stockholder.” We will elect in our certificate of incorporation
not to be subject to Section 203 of the DGCL. Nevertheless, our certificate of incorporation will contain provisions that have the
same effect as Section 203 of the DGCL, except that it will provide that affiliates of our sponsor and their transferees will not
be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and will therefore
not be subject to such restrictions. These charter provisions may limit the ability of third parties to acquire control of our company.
An investment in this offering may result
in uncertain or adverse U.S. federal income tax consequences.
An investment in this
offering may result in uncertain U.S. federal income tax consequences. For instance, because there are no authorities that directly address
instruments similar to the units we are issuing in this offering, the allocation an investor makes with respect to the purchase price
of a unit between the share of common stock and the one-half of one warrant to purchase common stock included in each unit could be challenged
by the IRS or the courts. Furthermore, the U.S. federal income tax consequences of a cashless exercise of warrants included in the units
we are issuing in this offering is unclear under current law. It is also unclear whether the redemption rights with respect to our shares
of common stock suspend the running of a U.S. holder’s holding period for purposes of determining whether any gain or loss realized
by such holder on the sale or exchange of common stock is long-term capital gain or loss and for determining whether any dividend we
pay would be considered “qualified dividends” for federal income tax purposes. See the section titled “U.S. Federal
Income Tax Considerations” for a summary of certain material U.S. federal income tax consequences of an investment in our securities.
Prospective investors are urged to consult their tax advisors with respect to these and other tax consequences when purchasing, holding
or disposing of our securities.
Provisions in our amended and restated
certificate of incorporation and Delaware law may have the effect of discouraging lawsuits against our directors and officers.
Our amended and restated
and restated certificate of incorporation will require, subject to certain exceptions, unless we consent in writing to the selection
of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action
asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, agent to us or our stockholders,
(c) any action asserting a claim arising pursuant to any provision of the DGCL, the amended and restated certificate of incorporation
or bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine shall be the Court of Chancery of the State
of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction over such action or proceeding, then another court
of the State of Delaware or, if no court of the State of Delaware has jurisdiction, then the United States District Court for the District
of Delaware).
Although we believe
this forum provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to
which it applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may
have the effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have
waived our compliance with federal securities laws and the rules and regulations thereunder. Further, if any action, the subject
matter of which is within the scope the forum provisions of our amended and restated certificate of incorporation, is filed in a
court other than a court of the State of Delaware, such action we refer to as a foreign action, in the name of any stockholder, such
stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the
State of Delaware in connection with any action brought in such court to enforce the forum provisions, such action we refer to as an
enforcement action, and (ii) having service of process made upon such stockholder in any such enforcement action by service upon
such stockholder’s counsel in the foreign action as agent for such stockholder. In addition, our amended and restated
certificate of incorporation, will state that unless we consent in writing to the selection of an alternative forum, the federal
district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause
of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and
state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations
thereunder.
However, our amended
and restated certificate of incorporation does not purport to require suits brought to enforce a duty or liability created by the Exchange
Act to be brought in the Court of Chancery of the State of Delaware or another court of the State of Delaware. Section 27 of the Exchange
Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the
rules and regulations thereunder.
We are a company with no operating history
and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a company with no
operating results, and we will not commence operations until obtaining funding through this offering. Because we lack an operating history,
you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial business combination
with one or more target businesses. We have no plans, arrangements or understandings with any prospective target business concerning
an initial business combination and may be unable to complete our initial business combination. If we fail to complete our initial business
combination, we will never generate any operating revenues.
Past performance by Chardan, its affiliates
and members of our management team may not be indicative of future performance of an investment in the Company.
Information regarding performance
by, or businesses associated with, Chardan, its affiliates and members of our management team is presented for informational purposes
only. Any past experience and performance, including related to acquisitions, of Chardan, its affiliates and members of our management
team is not a guarantee either (i) that we will be able to locate a suitable candidate for our initial business combination or (ii) of
success with respect to any business combination we may consummate. You should not rely on the historical record or performance of Chardan,
its affiliates and members of our management team as indicative of the future performance of us or an investment in the Company or the
returns the Company will, or is likely to, generate going forward. An investment in us is not an investment in Chardan or any of its
affiliates.
Cyber incidents or attacks directed at
us could result in information theft, data corruption, operational disruption and/or financial loss.
We depend on digital technologies,
including information systems, infrastructure and cloud applications and services, including those of third parties with which we may
deal. Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure
of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential
data. As an early stage company without significant investments in data security protection, we may not be sufficiently protected against
such occurrences. We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability
to, cyber incidents. It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business
and lead to financial loss.
Changes in laws or regulations, or a failure
to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial
business combination and results of operations.
We are subject to laws and
regulations enacted by national, regional and local governments. In particular, we will be required to comply with certain SEC and other
legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
Those laws and regulations
and their interpretation and application may also change from time to time and those changes could have a material adverse effect on
our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted
and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business
combination and results of operations.
There are risks related to the software
and technology industries to which we may be subject.
Business combinations with
companies with operations in the software and technology industries entail special considerations and risks. If we are successful in
completing a business combination with a target business with operations in the software and technology industries, we will be subject
to, and possibly adversely affected by, the following risks, including but not limited to:
|
|
·
|
if
we do not develop successful new products or improve existing ones, our business will suffer;
|
|
|
·
|
we
may invest in new lines of business that could fail to attract or retain users or generate
revenue;
|
|
|
·
|
we
will face significant competition and if we are not able to maintain or improve our market
share, our business could suffer;
|
|
|
·
|
disruption
or failure of our networks, systems, platform or technology that frustrate or thwart our
users’ ability to access our products and services, may cause our users, advertisers,
and partners to cut back on or stop using our products and services altogether, which could
seriously harm our business;
|
|
|
·
|
mobile
malware, viruses, hacking and phishing attacks, spamming, and improper or illegal use of
our products could seriously harm our business and reputation;
|
|
|
·
|
if
we are unable to successfully grow our user base and further monetize our products, our business
will suffer;
|
|
|
·
|
if
we are unable to protect our intellectual property, the value of our brand and other intangible
assets may be diminished, and our business may be seriously harmed;
|
|
|
·
|
we
may be subject to regulatory investigations and proceedings in the future, which could cause
us to incur substantial costs or require us to change our business practices in a way that
could seriously harm our business; and
|
|
|
·
|
components
used in our products may fail as a result of a manufacturing, design, or other defect over
which we have no control, and render our devices inoperable.
|
Any of the foregoing could
have an adverse impact on our operations following a business combination. However, our efforts in identifying prospective target businesses
will not be limited to the software and technology industries. Accordingly, if we acquire a target business in another industry, these
risks will likely not affect us and we will be subject to other risks attendant with the specific industry in which we operate or target
business which we acquire, none of which can be presently ascertained.
We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to emerging growth companies and smaller reporting companies, this could make our securities less attractive to investors and
may make it more difficult to compare our performance with other public companies.
We are an “emerging
growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act,
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the
requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments
not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be
an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the
market value of our common stock held by non-affiliates exceeds $700 million as of the prior year’s second quarter, in which case
we would no longer be an emerging growth company as of the following fiscal year end. We cannot predict whether investors will find our
securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result
of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less
active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of
the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as
an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This
may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging
growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences
in accounting standards used.
Additionally, we are a “smaller
reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the end of the end of that year’s second fiscal quarter, or (2) our annual revenues exceeded $100
million during such completed fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of
the that year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, it may also make
comparison of our financial statements with other public companies difficult or impossible.
|
|
V.
|
Risks Associated with
Acquiring and Operating a Business outside of the United States
|
We may effect our initial business combination
with a company located outside of the United States.
If we effect our initial
business combination with a company located outside of the United States, we would be subject to any special considerations or risks
associated with companies operating in the target business’ home jurisdiction, including any of the following:
|
|
·
|
rules and
regulations or currency redemption or corporate withholding taxes on individuals;
|
|
|
·
|
laws
governing the manner in which future business combinations may be effected;
|
|
|
·
|
exchange
listing and/or delisting requirements;
|
|
|
·
|
tariffs
and trade barriers;
|
|
|
·
|
regulations
related to customs and import/export matters;
|
|
|
·
|
tax
issues, such as tax law changes and variations in tax laws as compared to the United States;
|
|
|
·
|
currency
fluctuations and exchange controls;
|
|
|
·
|
challenges
in collecting accounts receivable;
|
|
|
·
|
cultural
and language differences;
|
|
|
·
|
employment
regulations;
|
|
|
·
|
crime,
strikes, riots, civil disturbances, terrorist attacks and wars; and
|
|
|
·
|
deterioration
of political relations with the United States. We may not be able to adequately address these
additional risks. If we were unable to do so, our operations might suffer.
|
There are costs and difficulties inherent
in managing cross-border business operations.
Managing a business, operations,
personnel or assets in another country is challenging and costly. Any management that we may have (whether based abroad or in the United
States) may be inexperienced in cross-border business practices and unaware of significant differences in accounting rules, legal regimes
and labor practices. Even with a seasoned and experienced management team, the costs and difficulties inherent in managing cross-border
business operations, personnel and assets can be significant (and much higher than in a purely domestic business) and may negatively
impact our financial and operational performance.
Social unrest, acts of terrorism, regime
changes, changes in laws and regulations, political upheaval, or policy changes or enactments may occur in a country in which we may
operate after we effect our initial business combination.
Political events in another
country may significantly affect our business, assets or operations. Social unrest, acts of terrorism, regime changes, changes in laws
and regulations, political upheaval, and policy changes or enactments could negatively impact our business in a particular country.
Many countries have difficult and unpredictable
legal systems and underdeveloped laws and regulations that are unclear and subject to corruption and inexperience.
Our ability to seek and
enforce legal protections, including with respect to intellectual property and other property rights, or to defend ourselves with regard
to legal actions taken against us in a given country, may be difficult or impossible, which could adversely impact our operations, assets
or financial condition.
Rules and regulations
in many countries are often ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state,
regional and federal levels. The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.
Delay with respect to the
enforcement of particular rules and regulations, including those relating to customs, tax, environmental and labor, could cause
serious disruption to operations abroad and negatively impact our results.
If relations between the United States
and foreign governments deteriorate, it could cause potential target businesses or their goods and services to become less attractive.
The relationship between
the United States and foreign governments could be subject to sudden fluctuation and periodic tension. For instance, the United States
may announce its intention to impose quotas on certain imports. Such import quotas may adversely affect political relations between the
two countries and result in retaliatory countermeasures by the foreign government in industries that may affect our ultimate target business.
Changes in political conditions in foreign countries and changes in the state of U.S. relations with such countries are difficult to
predict and could adversely affect our operations or cause potential target businesses or their goods and services to become less attractive.
Because we are not limited to any specific industry, there is no basis for investors in this offering to evaluate the possible extent
of any impact on our ultimate operations if relations are strained between the United States and a foreign country in which we acquire
a target business or move our principal manufacturing or service operations.
If our management following our initial
business combination is unfamiliar with United States securities laws, they may have to expend time and resources becoming familiar with
such laws.
Following our initial business
combination, our management may resign from their positions as officers or directors of the company and the management of the target
business at the time of the business combination will remain in place. Management of the target business may not be familiar with United
States securities laws. If new management is unfamiliar with our laws, they may have to expend time and resources becoming familiar with
such laws. This could be expensive and time-consuming and could lead to various regulatory issues, which may adversely affect our operations.
Currency policies may cause a target business’
ability to succeed in the international markets to be diminished.
In the event we acquire
a non-U.S. target, all revenues and income would likely be received in a foreign currency, the dollar equivalent of our net assets and
distributions, if any, could be adversely affected by reductions in the value of the local currency. The value of the currencies in our
target regions fluctuate and are affected by, among other things, changes in political and economic conditions. Any change in the relative
value of such currency against our reporting currency may affect the attractiveness of any target business or, following consummation
of our initial business combination, our financial condition and results of operations. Additionally, if a currency appreciates in value
against the dollar prior to the consummation of our initial business combination, the cost of a target business as measured in dollars
will increase, which may make it less likely that we are able to consummate such transaction.
Because foreign law could govern our material
agreements, we may not be able to enforce our rights within such jurisdiction or elsewhere.
Foreign law could govern
our material agreements. The target business may not be able to enforce any of its material agreements or that remedies will be available
outside of such foreign jurisdiction’s legal system. The system of laws and the enforcement of existing laws and contracts in such
jurisdiction may not be as certain in implementation and interpretation as in the United States. The judiciaries in certain foreign countries
may be relatively inexperienced in enforcing corporate and commercial law, leading to a higher than usual degree of uncertainty as to
the outcome of any litigation, any such jurisdictions may not favor outsiders or could be corrupt. As a result, the inability to enforce
or obtain a remedy under any of our future agreements could result in a significant loss of business and business opportunities.
USE OF PROCEEDS
We are offering 10,000,000
units at a price of $10.00 per unit. We estimate that the net proceeds of this offering, together with the funds we receive from the
sale of the private warrants (all of which will be deposited into the trust account), will be used as set forth in the following table:
|
|
|
Without
Over-Allotment
Option
|
|
|
Over-Allotment
Option
Exercised
|
|
|
Gross proceeds
|
|
|
|
|
|
|
|
|
|
From
offering
|
|
$
|
100,000,000
|
|
|
$
|
115,000,000
|
|
|
From
sale of private warrants
|
|
|
3,405,000
|
|
|
|
3,555,000
|
|
|
Total
gross proceeds
|
|
$
|
103,405,000
|
|
|
$
|
118,555,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Offering
expenses(1)
|
|
|
|
|
|
|
|
|
|
Underwriting
and qualified independent underwriter fees
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
|
Initial Trustees’
fee
|
|
|
11,000
|
|
|
|
11,000
|
|
|
Company legal fees
and expenses
|
|
|
250,000
|
|
|
|
250,000
|
|
|
Transfer agent fees
|
|
|
35,000
|
|
|
|
35,000
|
|
|
Nasdaq listing and
filing fees
|
|
|
75,000
|
|
|
|
75,000
|
|
|
Printing and engraving
expenses
|
|
|
20,000
|
|
|
|
20,000
|
|
|
Accounting fees and
expenses
|
|
|
40,000
|
|
|
|
40,000
|
|
|
FINRA filing fee
|
|
|
27,669
|
|
|
|
27,669
|
|
|
SEC registration
fee
|
|
|
19,761
|
|
|
|
19,761
|
|
|
Miscellaneous
expenses
|
|
|
96,570
|
|
|
|
96,570
|
|
|
Total offering expenses
(excluding underwriter commissions)
|
|
$
|
575,000
|
|
|
$
|
575,000
|
|
|
Net proceeds
|
|
|
|
|
|
|
|
|
|
Held
in trust(2)
|
|
$
|
101,000,000
|
|
|
$
|
116,150,000
|
|
|
Not
held in trust
|
|
|
1,330,000
|
|
|
|
1,330,000
|
|
|
Total
net proceeds
|
|
$
|
102,330,000
|
|
|
$
|
117,480,000
|
|
|
Use
of net proceeds not held in the trust account(3) (4)
|
|
|
|
|
|
|
|
|
|
Legal, accounting
and other third party expenses attendant to the search for target businesses and to the due diligence investigation, structuring
and negotiation of a business combination
|
|
$
|
250,000
|
|
|
|
18.8
|
%
|
|
Due diligence of
prospective target businesses by officers, directors and initial stockholders
|
|
|
250,000
|
|
|
|
18.8
|
%
|
|
Legal and accounting
fees relating to SEC reporting obligations
|
|
|
50,000
|
|
|
|
3.8
|
%
|
|
Nasdaq continued
listing fees
|
|
|
75,000
|
|
|
|
5.6
|
%
|
|
Payment of administrative
fee to an affiliate of our sponsor
|
|
|
150,000
|
|
|
|
11.3
|
%
|
|
Director and officer liability insurance
premiums
|
|
|
375,000
|
|
|
|
28.2
|
%
|
|
Working
capital to cover miscellaneous expenses, general corporate purposes, liquidation obligations and reserves
|
|
|
180,000
|
|
|
|
13.5
|
%
|
|
Total
|
|
$
|
1,330,000
|
|
|
|
100.0
|
%
|
|
|
(1)
|
A portion of the offering expenses,
including the SEC registration fee, the FINRA filing fee, the non-refundable portion of the
Nasdaq listing fee and a portion of the legal and audit fees, have been paid from the funds
we borrowed from our sponsor. These funds will be repaid out of the proceeds of this offering
available to us.
|
|
|
(2)
|
The funds held in the trust account
will be used to acquire a target business, to pay holders who wish to redeem or sell their
shares for a portion of the funds held in the trust account, to pay the Marketing Fee of
$3,500,000 (or $4,025,000 if the underwriters’ over-allotment option is exercised in
full), or for general corporate purposes, including payment of principal or interest on indebtedness
incurred in connection with our initial business combination, to fund the purchases of other
companies or for working capital.
|
|
|
(3)
|
The estimated amount of proceeds not held in trust will remain constant at $1,330,000 even if the
over-allotment is exercised.
|
|
|
(4)
|
These are estimates only. Our
actual expenditures for some or all of these items may differ from the estimates set forth
herein. For example, we may incur greater legal and accounting expenses than our current
estimates in connection with negotiating and structuring our initial business combination
based upon the level of complexity of that business combination. We do not anticipate any
change in our intended use of proceeds, other than fluctuations among the current categories
of allocated expenses, which fluctuations, to the extent they exceed current estimates for
any specific category of expenses, would be deducted from our excess working capital.
|
The payment to an affiliate
of our sponsor of a monthly fee of $10,000 is for general and administrative services including office space, utilities and secretarial
support. However, pursuant to the terms of such agreement, we may delay payment of such monthly fee upon a determination by our audit
committee that we lack sufficient funds held outside the trust to pay actual or anticipated expenses in connection with our initial business
combination. Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of
our initial business combination. This arrangement is being agreed to by an affiliate of our sponsor for our benefit. We believe that
the fee charged by the affiliate of our sponsor is at least as favorable as we could have obtained from an unaffiliated person. This
arrangement will terminate upon completion of our initial business combination or the distribution of the trust account to our public
stockholders. Other than the $10,000 per month fee, no compensation of any kind (including finder’s fees, consulting fees or other
similar compensation) will be paid to our insiders, members of our management team or any of our or their respective affiliates, 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. Since the role of present management after our initial business combination is uncertain, we
have no ability to determine what remuneration, if any, will be paid to those persons after our initial business combination.
A total of $10.10 per
share (whether or not the underwriters’ over-allotment option is exercised in full) of the net proceeds from this offering and
the sale of the private warrants described in this prospectus will be placed in a trust account in the United States at Morgan Stanley,
maintained by Continental Stock Transfer & Trust Company acting as trustee and will be invested only in U.S. government treasury
bills, notes and bonds with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under
the Investment Company Act and which invest solely in U.S. Treasuries. We estimate that the interest
earned on the trust account will be approximately $100,000 per year, assuming an interest rate of 0.1% per year; however, we can
provide no assurance regarding this amount. Except for all interest income that may be released to us to pay our tax obligations,
as discussed below, none of the funds held in the trust account will be released from the trust account until the earlier of: (i) the
consummation of our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering
and (ii) a redemption to public stockholders prior to any voluntary winding-up in the event we do not consummate our initial business
combination within the applicable period.
The net proceeds held in
the trust account may be used as consideration to pay the sellers of a target business with which we ultimately complete our initial
business combination. If our initial business combination is paid for using shares or debt securities, or not all of the funds released
from the trust account are used for payment of the purchase price in connection with our business combination, we may apply the cash
released from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or
expansion of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating the
initial business combination, to fund the purchase of other companies or for working capital.
We believe that amounts
not held in trust will be sufficient to pay the costs and expenses to which such proceeds are allocated. This belief is based on the
fact that while we may begin preliminary due diligence of a target business in connection with an indication of interest, we intend to
undertake in-depth due diligence, depending on the circumstances of the relevant prospective acquisition, only after we have negotiated
and signed a letter of intent or other preliminary agreement that addresses the terms of our initial business combination. However, if
our estimate of the costs of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual
amount necessary to do so, or the amount of interest available to use from the trust account is minimal as a result of the current interest
rate environment, we may be required to raise additional capital, the amount, availability and cost of which is currently unascertainable.
In this event, we could seek such additional capital through loans or additional investments from members of our management team, but
such members of our management team are not under any obligation to advance funds to, or invest in, us.
As of the date of this prospectus,
our sponsor has not loaned us any amounts to be used for a portion of the expenses of this offering. Any loans will be non-interest bearing
and payable on the date on which we consummate the offering.
In addition, in order to
finance transaction costs in connection with an intended initial business combination, our initial stockholders, officers and directors
or any of their respective affiliates may, but are not obligated to, loan us funds as may be required 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
be paid upon consummation of our initial business combination, without interest. Loans made by Chardan or any of its related persons
will not be convertible into any of our securities and Chardan and its related persons will have no recourse with respect to their ability
to convert their loans into any of our securities.
We may only redeem our public
shares so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny
stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a minimum
net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the
net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or
the initial business combination, and instead may search for an alternate business combination.
A public stockholder
will be entitled to receive funds from the trust account only upon the earlier to occur of: (i) our consummation of our initial
business combination, and then only in connection with those shares of common stock that such stockholder properly elected to redeem,
subject to the limitations described herein, (ii) the redemption of our public shares if we are unable to consummate our initial
business combination within 15 months (or up to 21 months, as applicable) following the closing of this offering, subject to applicable
law, or (iii) if we seek to amend our certificate of incorporation to affect the substance or timing of our obligation to redeem
all public shares if we cannot complete an initial business combination within 15 months (or up to 21 months, as applicable) of the closing
of this offering and such amendment is duly approved. In no other circumstances will a public stockholder have any right or interest
of any kind to or in the trust account.
Our initial stockholders
have agreed to waive their redemption rights with respect to any shares they own in connection with the consummation of our initial business
combination, including their founder shares and public shares that they purchase during or after the offering, if any. In addition, our
initial stockholders have agreed to waive their rights to liquidating distributions with respect to their founder shares if we fail to
consummate our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering. However,
if our initial stockholders acquire public shares in or after this offering, they will be entitled to receive liquidating distributions
with respect to such public shares if we fail to consummate our initial business combination within the required time period.
DIVIDEND POLICY
We have not paid any cash
dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of our initial business
combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements
and general financial condition subsequent to completion of our initial business combination. The payment of any cash dividends subsequent
to our initial business combination will be within the discretion of our board of directors at such time and subject to the Delaware
law. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the
foreseeable future, except if we increase the size of the offering pursuant to Rule 462(b) under the Securities Act, in which
case we will effect a share dividend immediately prior to the consummation of the offering in such amount as to maintain our initial
stockholders’ ownership at 20% of the issued and outstanding shares of common stock upon the consummation of this offering (assuming
no purchase in this offering and not taking into account ownership of the private warrants). Further, if we incur any indebtedness in
connection with our initial business combination, our ability to declare dividends may be limited by restrictive covenants we may agree
to in connection therewith.
DILUTION
The difference between the
public offering price per share, assuming no value is attributed to the warrants included in the units we are offering by this prospectus,
and the pro forma net tangible book value per share after this offering constitutes the dilution to investors in this offering. Such
calculation does not reflect any dilution associated with sale and exercise of warrants, including the private warrants. Net tangible
book value per share is determined by dividing our net tangible book value, which is our total tangible assets less total liabilities
(including the value of shares of common stock which may be redeemed for cash), by the number of outstanding shares of common stock.
At March 31, 2021, our
net tangible book deficit was $(53,118) or approximately $(0.02) per share. After giving effect to the sale of 10,000,000 shares of common
stock included in the units we are offering by this prospectus and the proceeds received from the sale of the private warrants, the deduction
of underwriting discounts and estimated expenses of this offering, our pro forma net tangible book value at March 31, 2021 would have
been $5,000,007 or $1.55 per share (or $1.38 per share if the underwriters’ over-allotment if the underwriters’ over-allotment
option is exercised in full), representing an immediate increase in net tangible book value of $1.57 per share (or $1.40 per share if
the underwriters’ over-allotment if the underwriters’ over-allotment option is exercised in full) to the initial stockholders
and an immediate dilution of $8.45 per share or 84.5% (or $8.62 per share or 86.2% if the underwriters’ over-allotment if the underwriters’
over-allotment option is exercised in full) to new investors not exercising their redemption/tender rights. For purposes of presentation,
our pro forma net tangible book value after this offering is $93,687,070 (or $108,675,530 if the underwriters’ over-allotment if
the underwriters’ over-allotment option is exercised in full) less than it otherwise would have been because, if we effect a business
combination, the ability of public stockholders to exercise redemption rights or sell their shares to us in any tender offer may result
in the redemption or tender of up to 9,275,948 shares (or 10,759,953 if the underwriters’ over-allotment if the underwriters’
over-allotment option is exercised in full) sold in this offering.
The following table illustrates
the dilution to the new investors on a per-share basis, assuming no value is attributed to the redeemable warrants, including the private
warrants:
|
|
|
Without
Over-Allotment
|
|
|
With
Over-Allotment
|
|
|
Public offering price
|
|
|
|
|
|
$
|
10.00
|
|
|
|
|
|
|
$
|
10.00
|
|
|
Net tangible book value before this offering
|
|
$
|
(0.02)
|
|
|
|
|
|
|
$
|
(0.02)
|
|
|
|
|
|
|
Increase
attributable to new investors, private sales and capital contribution
|
|
|
1.57
|
|
|
|
|
|
|
|
1.40
|
|
|
|
|
|
|
Pro forma net tangible
book value after this offering
|
|
|
|
|
|
|
1.55
|
|
|
|
|
|
|
|
1.38
|
|
|
Dilution to new investors
|
|
|
|
|
|
$
|
8.45
|
|
|
|
|
|
|
$
|
8.62
|
|
|
Percentage of dilution to new investors
|
|
|
|
|
|
|
84.5
|
%
|
|
|
|
|
|
|
86.2
|
%
|
The following table sets
forth information with respect to our initial stockholders and the new investors:
|
|
|
Shares
Purchased
|
|
|
Total
Consideration
|
|
|
Average Price
|
|
|
|
|
Number
|
|
|
Percentage
|
|
|
Amount
|
|
|
Percentage
|
|
|
Per Share
|
|
|
Initial
stockholders(1)(2)
|
|
|
2,500,000
|
|
|
|
20.0
|
%
|
|
$
|
25,000
|
|
|
|
0.02
|
%
|
|
$
|
0.01
|
|
|
New investors
|
|
|
10,000,000
|
|
|
|
80.0
|
%
|
|
|
100,000,000
|
|
|
|
99.98
|
%
|
|
$
|
10.00
|
|
|
|
|
|
12,500,000
|
|
|
|
100.00
|
%
|
|
$
|
100,025,000
|
|
|
|
100.00
|
%
|
|
|
|
|
|
|
(1)
|
Assumes the over-allotment option
has not been exercised and an aggregate of 375,000 shares of common stock held by our initial
stockholders have been forfeited as a result thereof.
|
|
(2)
|
In
May and June 2021, our sponsor transferred 20,000 founder shares to each of Messrs. Biele,
Boyle, Hardamon, Thakrar and Thomson and Ms. Jardins.
|
The pro forma net tangible
book value after the offering is calculated as follows:
|
Numerator:
|
|
Without
Over-Allotment(1)
|
|
|
With
Over-Allotment
|
|
|
Net
tangible book deficit before this offering
|
|
$
|
(53,118
|
)
|
|
$
|
(53,118
|
)
|
|
Net
proceeds from this offering and private placement of private warrants
|
|
|
102,330,000
|
|
|
|
117,480,000
|
|
|
Plus: Offering
costs paid in advance; excluding from tangible book value before this offering
|
|
|
77,118
|
|
|
|
77,118
|
|
|
Less:
Warrant liabilities(2)
|
|
|
(3,666,923
|
)
|
|
|
(3,828,461
|
)
|
|
Less:
Proceeds held in trust subject to redemption to maintain net tangible assets of $5,000,001(3)(4)
|
|
|
(93,687,070
|
)
|
|
|
(108,675,530
|
)
|
|
|
|
$
|
5,000,007
|
|
|
$
|
5,000,009
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
Shares of common
stock issued and outstanding prior to this offering
|
|
|
2,500,000
|
|
|
|
2,875,000
|
|
|
Shares of common stock to be sold in this offering
|
|
|
10,000,000
|
|
|
|
11,500,000
|
|
|
Less:
Shares subject to redemption/tender
|
|
|
(9,275,948
|
)
|
|
|
(10,759,953
|
)
|
|
|
|
|
3,224,052
|
|
|
|
3,615,047
|
|
|
(1)
|
Assumes the over-allotment option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited by us as a result thereof.
|
|
|
|
|
(2)
|
The
private placement warrants are expected to be accounted for as warrant liabilities and will be recorded at fair value upon issuance
with changes in fair value each reporting period included in earnings as determined by the Company based upon a valuation report
obtained from its independent third-party valuation firm.
|
|
(3)
|
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our initial stockholders, directors, officers, advisors or their affiliates
may purchase shares or public warrants in privately negotiated transactions or in the open market either prior to or following the
completion of our initial business combination. In the event of any such purchases of our shares prior to the completion of our initial
business combination, the number of shares of common stock subject to redemption will be reduced by the amount of any such purchases,
increasing the pro forma net tangible book value per share.
|
|
(4)
|
The
actual number of shares subject to redemption may exceed this amount so long as we have at least $5,000,001 immediately prior to
or upon consummation of our initial business combination.
|
CAPITALIZATION
The following table sets
forth our capitalization at March 31, 2021, and as adjusted to give effect to the sale of our units and the private warrants and the
application of the estimated net proceeds derived from the sale of such securities.
|
|
|
March
31, 2021
|
|
|
|
|
Actual
|
|
|
As
Adjusted(1)
|
|
|
Promissory
note – related party(2)
|
|
$
|
125,000
|
|
|
$
|
—
|
|
|
Warrant
liabilities(3)
|
|
|
—
|
|
|
|
3,666,923
|
|
|
Shares
of common stock, $0.0001 par value, none and 9,275,948 shares are subject to possible redemption/tender, respectively
|
|
|
—
|
|
|
|
93,687,070
|
|
|
Shares
of common stock, $0.0001 par value, 50,000,000 shares authorized, 2,875,000 shares issued and outstanding, actual; 50,000,000 shares
authorized(6), 3,224,052 shares issued and outstanding(4) (5) (excluding 9,275,948 shares
subject to possible redemption/tender), as adjusted
|
|
|
288
|
|
|
|
322
|
|
|
Additional
paid-in capital
|
|
|
24,712
|
|
|
|
5,017,608
|
|
|
Accumulated
deficit
|
|
|
(1,000
|
)
|
|
|
(17,923
|
)
|
|
Total
stockholders’ equity
|
|
|
24,000
|
|
|
|
5,000,007
|
|
|
Total
capitalization
|
|
$
|
149,000
|
|
|
$
|
102,354,000
|
|
|
|
(1)
|
Includes the $3,405,000
we will receive from the sale of the private warrants (assuming no exercise of the over-allotment option).
|
|
|
(2)
|
Our sponsor has agreed to loan us an aggregate of $250,000 to be used to pay formation and a portion of the expenses of this offering. The loan is non-interest bearing and payable on the date on which we consummate the offering.
|
|
|
(3)
|
The private placement
warrants are expected to be accounted for as warrant liabilities and will be recorded at fair value upon issuance with changes in
fair value each reporting period included in earnings as determined by the Company based upon a valuation report obtained from its
independent third-party valuation firm.
|
|
|
(4)
|
Assumes the over-allotment
option has not been exercised and an aggregate of 375,000 shares of common stock held by our initial stockholders have been forfeited
as a result thereof.
|
|
|
(5)
|
Upon the completion
of our initial business combination, we will provide our stockholders with the opportunity to redeem their public shares for cash
equal to their pro rata share of the aggregate amount then on deposit in the trust account as of two business days prior to the consummation
of the initial business combination including interest earned on the funds held in the trust account and not previously released
to us to pay our taxes, subject to the limitations described herein whereby our net tangible assets will be maintained at a minimum
of $5,000,001 and any limitations (including, but not limited to, cash requirements) created by the terms of the proposed initial
business combination. The actual number of shares subject to redemption may exceed this amount so long as we have at least $5,000,001
immediately prior to or upon consummation of our initial business combination.
|
|
|
(6)
|
The Company intends
to file an Amended and Restated Certificate of Incorporation prior to the closing date of the Proposed Public Offering such that
the Company will be authorized to issue 50,000,000 shares of common stock with a par value of $0.0001 per share.
|
MANAGEMENT’S DISCUSSION
AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We were incorporated on June 23,
2020, as a Delaware corporation, and we were formed to serve as a vehicle to effect a merger, share exchange, asset acquisition, share
purchase, recapitalization, reorganization or similar business combination with one or more target businesses. We
have not selected any specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions,
directly or indirectly, with any business combination target regarding an initial business combination with our company. We intend to
effectuate our initial business combination using cash from the proceeds of this offering and the private placement of the private warrants,
the proceeds of the sale of our securities in connection with our initial business combination, shares issued to the owners of the target,
debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional
shares in connection with our business combination to the owners of the target or other investors:
|
|
·
|
may
significantly dilute the equity interest of investors in this offering;
|
|
|
·
|
may
subordinate the rights of holders of common stock if we issue preferred shares with rights
senior to those afforded to our shares of common stock;
|
|
|
·
|
could
cause a change in control if a substantial number of shares of our common stock is issued,
which may affect, among other things, our ability to use our net operating loss carry forwards,
if any, and could result in the resignation or removal of our present officers and directors;
|
|
|
·
|
may
have the effect of delaying or preventing a change of control of us by diluting the stock
ownership or voting rights of a person seeking to obtain control of us; and
|
|
|
·
|
may
adversely affect prevailing market prices for securities.
|
|
|
|
Similarly, if
we issue debt securities, or otherwise incur significant debt to bank or other lenders or
the owners of a target, it could result in:
|
|
|
·
|
default
and foreclosure on our assets if our operating revenues after a business combination are
insufficient to pay our debt obligations;
|
|
|
·
|
acceleration
of our obligations to repay the indebtedness, even if we have made all principal and interest
payments when due, if the debt security contains covenants that required the maintenance
of certain financial ratios or reserves and we breach any such covenant without a waiver
or renegotiation of that covenant;
|
|
|
·
|
our
immediate payment of all principal and accrued interest, if any, if the debt security is
payable on demand;
|
|
|
·
|
our
inability to obtain necessary additional financing if the debt security contains covenants
restricting our ability to obtain additional financing while such security is outstanding;
|
|
|
·
|
our
inability to pay dividends on our common stock;
|
|
|
·
|
using
a substantial portion of our cash flow to pay principal and interest on our debt, which will
reduce the funds available for dividends on our common stock if declared, our ability to
pay expenses, make capital expenditures and acquisitions, and fund other general corporate
purposes;
|
|
|
·
|
limitations
on our flexibility in planning for and reacting to changes in our business and in the industry
in which we operate;
|
|
|
·
|
increased
vulnerability to adverse changes in general economic, industry and competitive conditions
and adverse changes in government regulation;
|
|
|
·
|
imitations
on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions,
debt service requirements, and execution of our strategy; and
|
|
|
·
|
other
purposes and other disadvantages compared to our competitors who have less debt.
|
As indicated in the accompanying
financial statements, at March 31, 2021, we had $72,882 in cash and $77,118 in deferred offering costs. Further, we expect to continue
to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete
our initial business combination will be successful.
Results of Operations and Known Trends or
Future Events
We have neither engaged in
any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those
necessary to prepare for this offering. Following this offering, we will not generate any operating revenues until after completion of
our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents after
this offering. There has been no significant change in our financial or trading position and no material adverse change has occurred
since the date of our audited financial statements. After this offering, we expect to incur increased expenses as a result of being a
public company (for legal, financial reporting, accounting and auditing compliance), as well as
expenses as we conduct due diligence on prospective business combination candidates. We expect our expenses to increase substantially
after the closing of this offering.
Liquidity and Capital Resources
As indicated in the accompanying
financial statements, at March 31, 2021, we had $72,882 in cash and a working capital deficit of $(53,118). Further, we have incurred
and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Management’s plans to address
this uncertainty through this offering are discussed above.
Our
liquidity needs have been satisfied to date through receipt of $25,000 from the sale of the founder shares and loans from our sponsor
in an aggregate amount of $250,000. We estimate that the net proceeds from (1) the sale of the units in this offering, after deducting
offering expenses of approximately $575,000 and underwriting discounts and commissions of $500,000 and (2) the sale of the private
warrants for a purchase price of $3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment
option is exercised) will be $102,330,000 (or $117,480,000 if the over-allotment option is exercised in full). Of this amount, $101,000,000
(or $116,150,000 if the over-allotment option is exercised in full) will be held in the trust account. The proceeds held in the trust
account will be invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
The remaining $1,330,000 (whether or not the over-allotment option is exercised in full) will not be held in the trust account.
We intend to use substantially
all of the net proceeds of this offering, including the funds held in the trust account, to acquire a target business or businesses and
to pay our expenses relating thereto. To the extent that our share capital is used in whole or in part as consideration to effect our
initial business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be
used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways
including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development
of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred
prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient
to cover such expenses.
Over the next 15 months
(or up to 21 months, as applicable), assuming a business combination is not consummated prior thereto, we will be using the funds held
outside of the trust account for identifying and evaluating prospective acquisition candidates, performing business due diligence on
prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing
corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring,
negotiating and consummating the business combination. Out of the funds available outside the trust account, we anticipate that we will
incur approximately:
|
|
·
|
$250,000
of expenses for the search for target businesses and for the legal, accounting and other
third-party expenses attendant to the due diligence investigations, structuring and negotiating
of a business combination;
|
|
|
·
|
$250,000
of expenses for the due diligence and investigation of a target business by our officers,
directors and initial stockholders;
|
|
|
·
|
$50,000
of expenses in legal and accounting fees relating to our SEC reporting obligations;
|
|
|
·
|
$75,000
of expenses in Nasdaq continued listing fees;
|
|
|
·
|
$150,000
for the payment of the administrative fee to an affiliate of our sponsor (of $10,000 per month for up to 15 months); and
|
|
|
·
|
$375,000 for director and
officer liability insurance premiums; and
|
|
|
·
|
$180,000
for general working capital that will be used for miscellaneous expenses
|
If our estimates of the costs
of undertaking in-depth due diligence and negotiating our initial business combination is less than the actual amount necessary to do
so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need
to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant
number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or
incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate
such financing simultaneously with the consummation of our initial business combination. Following our initial business combination,
if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Related Party Transactions
On July 23, 2020, our
sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4, 2021, we effected a 2.875-for-1
stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. Such number of shares includes an aggregate of
up to 375,000 shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised
in full or in part, so that our initial stockholders will collectively own 20% of our issued and outstanding shares after this offering.
None of our initial stockholders has indicated any intention to purchase public units in this offering.
Commencing on the date that
our securities are first listed on the NASDAQ through the earlier of consummation of our initial business combination and our liquidation,
we will pay our sponsor a total of $10,000 per month for office space, administrative and shared personnel support services. Upon completion
of our initial business combination or our liquidation, we will cease paying these monthly fees.
Our sponsor intends to allocate
up to 20,000 founder shares to each of our independent directors.
Our
sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in
connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business
combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors or
our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling
on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
Our sponsor has agreed to
loan us an aggregate of $250,000 on a non-interest bearing basis, for payment of offering expenses on our behalf.
In
addition, Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase from us an aggregate of 5,238,461
(or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised) warrants at a price
of $0.65 per warrant ($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment option
is exercised)), with each warrant exercisable for one share of common stock at an exercise price of $11.50 per share. These purchases
will take place on a private placement basis simultaneously with the consummation of this offering.
Pursuant to a registration
rights agreement we will enter into with our initial stockholders on or prior to the closing of this offering, we may be required to
register certain for sale under the Securities Act. These holders are entitled under the registration rights agreement to make up
to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the
securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, the holders
have certain “piggy-back” registration rights on registration statements filed after the consummation of our initial business
combination. We will bear the costs and expenses of filing any such registration statements. See the section of this prospectus entitled
“Certain Relationships and Related Party Transactions.” Notwithstanding the foregoing, our sponsor may not exercise its demand
and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration
statement of which this prospectus forms a part and may not exercise its demand rights on more than one occasion.
We have engaged Chardan as
an advisor in connection with our business combination, pursuant to the Business Combination Marketing Agreement described under “Underwriting
(Conflicts of Interest) — Business Combination Marketing Agreement.” We will pay Chardan a cash fee for such services upon
the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of this offering.
As a result, Chardan will not be entitled to such fee unless we consummate our initial business combination.
If needed to finance transaction
costs in connection an intended initial business combination, our initial stockholders, officers and directors or any of their respective
affiliates may, but are not obligated to, loan us funds as may be required from time to time or at any time, in whatever amount they
deem reasonable in their sole discretion. In the event that the initial business combination does not close, we may use a portion of
the working capital held outside the trust account to repay such loaned amounts, but no proceeds from our trust account would be used
for such repayment. Such loans would be evidenced by promissory notes. The notes would be repaid upon consummation of our initial business
combination, without interest. Loans made by Chardan or any of its related persons will not be convertible into any of our securities
and Chardan and its related persons will have no recourse with respect to their ability to convert their loans into any of our securities.
Controls and Procedures
We are not currently required
to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to
comply with the internal control requirements of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2022. Only in the
event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent
registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in
the JOBS Act, we intend to 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 requirement.
Prior to the closing of this
offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, of internal
controls. We expect to assess the internal controls of our target business or businesses prior to the completion of our initial business
combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we
maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley
Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business
combination may have internal controls that need improvement in areas such as:
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staffing
for financial, accounting and external reporting areas, including segregation of duties;
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reconciliation
of accounts;
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proper
recording of expenses and liabilities in the period to which they relate;
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evidence
of internal review and approval of accounting transactions;
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documentation
of processes, assumptions and conclusions underlying significant estimates; and
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documentation
of accounting policies and procedures.
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Because it will take time,
management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory
requirements and market expectations for our operation of a target business, we may incur significant expense in meeting our public reporting
responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively
may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Once our management’s
report on internal controls is complete, we will retain our independent registered public accounting firm to audit and render an opinion
on such report when required by Section 404 of the Sarbanes-Oxley Act. The independent registered public accounting firm may identify
additional issues concerning a target business’s internal controls while performing their audit of internal control over financial
reporting.
Quantitative and Qualitative Disclosures about
Market Risk
The net proceeds of this
offering, including amounts in the trust account, will be invested in United States government treasury bills, bonds or notes having
a maturity of 185 days or less, or in money market funds meeting the applicable conditions under Rule 2a-7 promulgated under the
Investment Company Act and that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there
will be no associated material exposure to interest rate risk.
Off-Balance Sheet Arrangements; Commitments
and Contractual Obligations; Quarterly Results
As of the date of this prospectus,
we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC and
did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have
conducted no operations to date.
JOBS Act
On April 5, 2012, the
JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying
public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new
or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay
the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the
relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements
may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the
process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain
conditions set forth in the JOBS Act, if, as an “emerging growth company”, we choose to rely on such exemptions we may not
be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our
system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure
that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply
with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of independent
registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and
analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation
and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period
of five years following the completion of this offering or until we are no longer an “emerging growth company,” whichever
is earlier.
PROPOSED BUSINESS
Introduction
We are a blank check company
formed under the laws of the State of Delaware on June 23, 2020. We were formed for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer
to throughout this prospectus as our initial business combination. Our intent is to focus on opportunities in disruptive technologies
and leverage the tremendous proprietary deal flow that our Board, executive team and sponsor, Chardan have developed over the past 17
years in the SPAC and investment banking marketplaces.
Our focus on disruptive technologies
is aligned to the investment expertise, relationships, proprietary deal flow, and connectivity of our management team, Board of Directors,
and Chardan. Through our multiple decades of special purpose acquisition company, sector, direct investment, and investment banking advisory
experiences, our sponsor and management team receive proprietary access to a tremendous pipeline of disruptive technology investment
opportunities. As Chardan’s special purpose acquisition company advisory and principal special purpose acquisition company practices
have expanded, our inbound deal flow in technology, among other sectors, has significantly increased as private companies seek out our
proprietary expertise.
At the time of preparing
this prospectus, we have not identified any specific business combination, nor has anyone on our behalf initiated or engaged in any substantive
discussions, formal or otherwise, related to such a transaction. Our efforts to date are limited to organizational activities related
to this offering.
The Opportunity
Having founded the third-ever
publicly listed special purpose acquisition company in 2004, Chardan had the foresight to recognize that the traditional initial public
offering process was broken. The initial public offering process has not changed in decades and it is a time and resource intensive process
that not only lacks deal and price certainty, but also prevents high-growth technology companies from sharing their financial projections.
We believe that Chardan has an unmatched track record as a special purpose acquisition company underwriter, sponsor (or co-sponsor) and
special purpose acquisition mergers and acquisitions advisor, which we intend to leverage as special purpose acquisition companies have
become more mainstream. We believe that the market is now only beginning to recognize the benefits of SPACs as has been demonstrated
within the last several months. In the second half of 2020, SPACs accounted for ~56% of all capital raised in the IPO market, and have
had record issuances in the first month of 2021, raising nearly $24 billion, almost two times U.S. initial public offerings during the
same period.
The opportunity for disruptive
technology companies to take advantage of the public markets is evident as there are over 2,000 private technology companies that have
raised at least $50MM in private funding or over $1 trillion in aggregate. We believe that such private funding has been a result of
many entrepreneurs adopting the philosophy to stay private longer, not only from a cost perspective, but also because of the volume of
private capital. Over the past year, however, we believe private company executives’ and stakeholders’ mindset has fundamentally
shifted as special purpose acquisition companies have provided a more effective and efficient path to access public markets and its greater
access to capital providers. We believe private companies are realizing that they are rewarded for providing greater transparency into
their growth plans and can potentially capture further upside via the SPAC structure. Since 2019, disruptive technology companies that
have gone public via a special purpose acquisition company have experienced substantial share price growth with a number of recent transactions
surging over 100% growth since their public market debuts. We aim to capitalize on the number of disruptive technology companies that
are still private and capable of achieving attractive risk-adjusted returns through our decades of special purpose acquisition company
experience.
Our Management Team
As we search for a prospective
target company or business, we intend to leverage the multiple decades of combined investment experience, successful special purpose
acquisition company and mergers and acquisitions execution experience, and the expansive network of relationships of the principals and
affiliates of our sponsor. Our board and management team, led by co-founders Kerry Propper and Jonas Grossman, have a combined 80 years
of investment and execution experience. Together with our management team, sponsor, and our board of directors, we are confident that
the combined experience makes us uniquely situated to identify, source, negotiate and execute an initial business combination with a
disruptive technology company.
Kerry Propper is
our co-founder and will serve as our Chairman of the board of directors upon the effectiveness of the registration statement of which
this prospectus is a part. Mr. Propper was co-founder of Chardan and served as its chief executive officer and head of its investment
bank from 2003 to 2015. He is a pioneer in the special purpose acquisition marketplace and has been an executive or senior advisor for
six special purpose acquisition companies. Since 2015, Mr. Propper has served as the chairman of Chardan’s board of directors and
the co-founder and managing partner of ATW Partners, a growth-focused investment firm. Mr. Propper also sits on the board of 340 Basics,
Credit Sesame, and PierianDx among other boards.
Jonas
Grossman is our co-founder and has been our Chief Executive Officer and a member of our board of directors since June 2020
and our President, Secretary, and Treasurer since July 2020. Mr. Grossman has nearly two decades of special purpose acquisition
company expertise. He has provided underwriting and business combination advisory services to more than 80 special purpose acquisition
companies in a variety of industries. Mr. Grossman has been a founder and member of the board of four special purpose acquisition
companies, of which on two he also has served as chief executive officer and president. Since April 2020, Mr. Grossman has
served as the president and chief executive officer of Chardan Healthcare Acquisition 2 Corp. He served as president and chief executive
officer of Chardan Healthcare Acquisition Corp. from March 2018 until its merger in October 2019 with BiomX Ltd. (NYSE: PHGE).
Mr. Grossman is currently a director of BiomX. Mr. Grossman was a founder and director of LifeSci Acquisition Corp. from March,
2020 until the close of its business combination with Vincera Pharma, Inc. in December of 2020. Since July 2020 he has
served as chief executive officer and director of Chardan NexTech Acquisition Corp. He has served as a director to Ventoux CCM Acquisition
Corp. since December, 2020.
Alex
Weil has served as our Chief Financial Officer since April 2021 and will serve as a member of our board of directors upon
the effective date of the registration statement of which this prospectus is a part. Mr. Weil has spent over two decades on Wall
Street providing strategic advisory services to global companies, senior executives, boards of directors, and investors. Since March 2021,
he has served as chief financial officer and director of Chardan NexTech Acquisition Corp., and he has agreed to serve on the board of
director’s. Since December 2020 he has served as a director of Ventoux CCM Acquisition Corp., a special purpose acquisition
company. Mr. Weil’s background in strategic advisory work was built during his career at both global companies, such Citibank’s
corporate strategy and mergers and acquisition group, UBS Financial Institutions Group’s investment bank, and General Electric’s
corporate development group, and at boutique investment banking advisors, such as Lazard Middle Market and William Blair. He has advised
on billions of dollars of transactions ranging from corporate divestitures and spin offs, innovative technology company acquisitions
to larger, more complex mergers and acquisitions. Mr. Weil has participated or led a variety of transactions, such as: Genworth’s
spin-off initial public offering from General Electric; Citi-related transactions including a variety of technology and capital markets
businesses (e.g. Lava Trading, Knight Options Market Making, and Automated Trading Desk) along with the creation of Citi Holdings
and subsequent sales of Nikko Asset Management and its subprime auto finance business; Schwab’s acquisition of OptionsXpress; and
CVC Capital Partner’s majority investment in Alix Partners. Mr. Weil’s extensive FinTech and mergers and acquisitions
expertise will help put us in a strong position to originate and structure profitable investments.
Chardan
Our management team is supported
by Chardan’s team of investment banking professionals, which possesses extensive collective experience in corporate finance, mergers
and acquisitions, equity and debt capital markets, strategic consulting and operations.
Chardan has an extensive
track record in the special purpose acquisition company market as underwriter, sponsor and advisor. Since 2004, Chardan has been lead
or co-lead underwriter on 82 special purpose acquisition company initial public offerings. Since 2018, Chardan has been a mergers and
acquisition advisor to 12 special purpose acquisition companies, helping them close transactions valued at approximately $5.7 billion.
Chardan-advised special purpose acquisition companies have targeted a wide range of industries, including life sciences, healthcare services,
technology hardware and software, FinTech, insurance, financial services, education, media and entertainment, industrials, materials,
consumer staple, energy, hospitality, leisure, travel and dining sectors. Chardan has advised special purpose acquisition companies targeting
both global and regional markets as well as those with more defined areas of focus in emerging and other geographic markets, including
in North America. No special purpose acquisition company that has either been advised by Chardan or for which Chardan served as the lead
underwriter has liquidated to-date. In addition to its active advisory and underwriting business, Chardan’s principals have founded
or co-founded eight special purpose acquisition companies, five of which have closed successful business combinations, one of which has
announced a business combination and two of which are currently seeking acquisitions.
In addition to Messrs. Propper,
Grossman, and Weil, the other members of our board will include the following independent directors:
Jonathan
C. “Jon” Biele will serve as a member of our board of directors upon the effective date of the registration
statement of which this prospectus is a part. Mr. Biele has over 28 years of investment banking experience serving in a variety
of roles. He recently joined PREEM Inc., a vertical technology platform, as head of business and corporate development. Most recently,
Mr. Biele served as head of technology and services investment banking after helping rejuvenate the equity capital markets practice
at SunTrust Robinson Humphrey. During his career, Mr. Biele has focused on providing capital markets, strategic and tactical advice
to companies, boards of directors, private equity and venture capitalists. In addition to his tenure at SunTrust Robinson Humphrey, he
has served as head of equity capital markets for Citadel Securities, Cowen and Co. and Lazard Freres in addition to his contribution
in a variety of capacities with the equity capital markets departments of Lehman Brothers, ABN Amro Rothschild and UBS Securities. In
these roles, Mr. Biele originated and executed numerous public and private equity and debt financings and provided strategic advice.
His vast experience in corporate finance and advisory spans across multiple sectors and asset classes, both public and private. In addition
to his professional activities, Mr. Biele most recently completed a third term as a trustee of Burke Mountain Academy, one of the
premier ski academies in the United States, and remains the lead investor and advisor to the chief executive officer of inGamba Tours,
a luxury cyclo-tourism business. Mr. Biele holds a B.A. in History from St. Lawrence University.
Perry
Boyle will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Boyle helped lead the launch of Point72 Asset Management, L.P., or Point72, as a registered investment
advisor, raising over $6 billion in external capital. He originally joined S.A.C. Capital Advisors, or S.A.C., in 2004 as the firm’s
first director of research. In January 2013 he became head of equities and, in January 2015, he became head of discretionary
investing at Point72. From June 2016 through December 2017 he served as the president and chief investment officer of Stamford
Harbor Capital, L.P., a company owned by businessman Steven A. Cohen. He returned to Point72 in January 2018. In his various leadership
roles at the firm, Mr. Boyle managed the long/short and macro portfolios. He created and led the firm’s professional development
programs, including P72 Academy and the 9s Program, and helped drive the internationalization of the firm, overseeing offices in London,
Hong Kong, Tokyo and Singapore. Prior to joining S.A.C., Mr. Boyle was a founding partner of Thomas Weisel Partners, an investment
banking company, and a managing director at Alex. Brown & Sons, an investment firm. He began his career as an investment banker
with Salomon Brothers Inc. Additionally, Mr. Boyle is a member of the advisory board of the Center for a New American Security (CNAS),
and a director of The US Friends of the International Institute for Strategic Studies (IISS). He has agreed to serve on the board of
directors of Chardan NexTech Acquisition Corp. upon the effectiveness of its registration statement. He was a 2018 and 2019 delegate
from the IISS to the Shangri-La Dialogue in Singapore. He is a council member of the Hoover Institution and a Lionel Curtis member of
Chatham House. Mr. Boyle helps lead the annual Ride For Our Vets, the major source of funding for the Connecticut Veterans Legal
Center.
Roderick
Hardamon will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Hardamon has over two decades of mergers and acquisitions business innovation and senior executive
leadership experience. He has served as chief executive officer of URGE Imprint LLC, a boutique management consulting firm headquartered
in Detroit, Michigan, and URGE Development Group LLC, a real estate development firm headquartered in Detroit, Michigan, since May 2016.
Previously, Mr. Hardamon held various positions at Citigroup, a leading global bank, including managing director and North American
head of Citigroup’s alternative investor services business. In this role, he led an organization with over $300 billion in assets
under administration and over 2,000 professionals spanning eight locations across the United States, Cayman Islands, Bermuda, Bahamas,
and India. Mr. Hardamon led multiple phases of Citigroup’s ownership of the business including: (1) initial acquisition
(BISYS Inc.); (2) integration into Citigroup; (3) operational transformation and growth; and (4) divestiture to SS&C
Technologies in March 2016. His prior roles at Citigroup included managing director and head of infrastructure & integration
and co-head/head of internal mergers and acquisitions for Citi Markets & Banking and Global Transaction Services, respectively.
After Citigroup, Mr. Hardamon briefly served as a managing director at SS&C Technologies, a global provider of services and
software for the financial services and healthcare industries. He is a graduate of Morehouse College with B.A.s in Accounting and Philosophy.
Jory
Des Jardins will serve as a member of our board of directors upon the effective date of the registration statement of
which this prospectus is a part. Ms. Jardins has decades of startup and marketing experience. Ms. Jardins is the chief marketing
officer of The @ Company, a builder of an internet protocol designed to put control over online data and user experiences back into the
hands of people. Additionally, Ms. Jardins is VC-in-Residence at the W Fund, a venture capital and private equity firm passionate
about evangelizing emerging and disruptive tech and leveling the playing field for underrepresented founders. She pioneered social marketing
as co-founder and president of BlogHer, a media marketplace representing thousands of digital influencers, which reached 100 million
monthly unique viewers at the time of its acquisition in 2015. She recently served as the head of global startup marketing at Amazon
Web Services, providing startups with the technology to launch, build, and scale. Ms. Jardins previously held the position of global
head of community at ConsenSys, a block chain studio building decentralized applications on Ethereum. Before ConsenSys, she was an advisor
at Tribal Advisors, a consulting and mergers and acquisitions advisory firm providing services to startups and corporates in the consumer
digital, software and systems technology sectors. She has advised dozens of scaling startups, focusing on companies that are evolving
digital influence, social content, media models, consumer marketplaces, ecommerce, block chain/token-based economies, and AR/VR/MR. Ms. Jardins
graduated from the University of Illinois at Urbana-Champaign.
Hitesh Thakrar
will serve as a member of our board of directors upon the effective date of the registration statement of which this prospectus is a
part. Mr. Thakrar is an experienced investor in the technology sector, having spent over 20 years investing in public equities in the
life sciences, information technology and innovation sectors. Since 2015, he has been active in early stage venture investing. Mr. Thakrar
is currently a Venture Partner at Syncona Limited, a Wellcome Trust backed early stage venture fund. He is also a Governance Board Member
of KQ Labs at the Francis Crick Institute, an accelerator supporting next generation businesses in data science and life sciences. He
is the main Board Trustee of the Alan Turing Institute which is the UK National Institute for Artificial Intelligence and Data Science
research. Additionally, Mr. Thakrar is the Chair of the Investment Committee for Newable Ventures, a pre-Series A fund focused on deep
technology. He is also an advisor to UKRI’s Science and Technology Funding Council (SFTC) which helps early stage companies spin
out from UK universities. He has previously served as a non-executive director for Desktop Genetics and Tropic Biosciences, both of which
specialize in the use of CRISPR technology in gene editing. Prior to 2015, Mr. Thakrar worked at various public market institutions in
global equity research and fund management including at ADIA (Abu Dhabi’s sovereign wealth fund), JP Morgan, Aviva Group, Dresdner
Bank and New Star Asset Management. He has previously held the position of Innovation Fellow at the University of Cambridge, recently
joined as a Trustee of the Royal National Orthopaedic Hospital Charity and is a member of the commercial Board of the Institute and Audit
committee. Mr. Thakrar has a degree in chemistry from Kings College, London, an MBA from Cranfield University and a CFA from the American
Association of Investment Analysts.
Todd
Thomson will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Thomson is currently the chief operating officer and chief financial officer of Kairos Ventures, an early-stage investment
firm. He is an accomplished operating executive and entrepreneur, having served as Citigroup chief financial officer for five years and
as chief executive officer of Citigroup’s nearly $10 billion global wealth management division for more than two years. Mr. Thomson
is a leading practitioner on mergers and acquisitions and business strategy, having led the acquisition and strategy efforts for Citigroup
and GE Capital, as well as serving as advisor to Fortune 500 firms while at Bain & Co., Booz Allen Hamilton, and Barents Group.
He has extensive investing experience as chief executive officer of Citigroup alternative investments, chairman of the Citigroup pension
investment committee, chairman of the dynasty investment committee, and a member of the investment committees for the Davidson College
and World Resources Institute endowments. Prior to joining Kairos Ventures, Mr. Thomson served as co-founder and chairman of
Dynasty Financial Partners, or Dynasty, a leading investment and technology platform for sophisticated independent advisors. Founded
by Mr. Thomson and his colleagues in 2010, Dynasty serves nearly 50 registered investment advisor firms nationally, with $50 billion
under management. In addition to serving as chairman, Todd served in several operating roles since Dynasty’s founding, including
chairing the investment committee, serving as chief investment officer, and designing and leading Dynasty Capital Strategies. Mr. Thomson
has also agreed to serve on the board of Chardan NexTech Acquisition Corp., a blank check company, upon the effectiveness of its registration
statement.
We believe our management
team’s operating, SPAC, and mergers and acquisitions transaction experience and relationships with companies will quickly provide
us with a substantial number of attractive potential business combination targets. Over the course of their careers, the members of our
management team have developed a broad network of contacts and corporate relationships in and around the disruptive technology industry.
This network has grown through the activities of our management team sourcing, acquiring and financing businesses, our management team’s
relationships with sellers, financing sources and target management teams and the experience of our management team in executing transactions
under varying economic and financial market conditions.
Certain of our executive
officers and directors also served as executive officers and directors of Chardan Healthcare Acquisition Corp., or Chardan Health SPAC
1, a blank check company that consummated its initial public offering in December 2018 and consummated its initial business combination
with BiomX Ltd. (NYSE: PHGE) in October 2019.
Certain of our executive
officers and directors also serve as executive officers and directors of Chardan Healthcare Acquisition 2 Corp., or Chardan Health SPAC
2, a blank check company that consummated its initial public offering in April 2020.
Certain of our executive
officers and directors also serve as executive officers and directors of Ventoux CCM Acquisition Corp., or Ventoux CCM, a blank check
company that consummated its initial public offering in December 2020.
Certain
of our executive officers and directors also serve as executive officers and directors of Chardan NexTech Acquisition Corp., or Chardan
NexTech 1, a blank check company that is expected to consummate its initial public offering before the consummation of this offering.
From
time to time, Chardan acts as an underwriter for the initial public offering of special purpose acquisition companies and in addition
to cash fees, Chardan receive equity in the form of private placement securities. Some of those special purpose acquisition companies
may be competitive with our company as they look for targets in the same industries and geographies.
With
respect to the foregoing descriptions, the past performance of Chardan and its affiliates and our management team is not a guarantee
either (i) that we will be able to identify a suitable candidate for our initial business combination or (ii) of success with
respect to any business combination we may consummate. As described in this prospectus, Messrs. Propper, Grossman, Weil,
and Boyle have had management and/or board experience with blank check companies. None of our other officers or directors, our sponsor,
nor any of its respective officers, directors, employees, or affiliates, have had management experience with blank check companies or
special purpose acquisition corporations in the past. You should not rely on their respective historical records or performance of
Chardan, its affiliates, or our management team as indicative of our future performance. Our
officers and directors may have conflicts of interest with other entities to which they owe fiduciary or contractual obligations with
respect to initial business combination opportunities, including for our officers with respect to Chardan Health SPAC 2, Ventoux CCM,
and Chardan NexTech 1, collectively which we refer to as the Affiliated SPACs. In order to minimize potential conflicts of interest which
may arise from multiple affiliations, our officers who are also officers of any of the Affiliated SPACs will be required to present all
suitable target businesses to the Affiliated SPACs prior to presenting them to us, unless such opportunity is expressly offered to such
individual solely in his capacity as an officer of our company and such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue, and to the extent such individual is permitted to refer that opportunity
to us without violating another legal obligation. For a list of our officers and directors and entities for which a conflict of interest
may or does exist between such officers or directors and the company, as well as the priority and preference that such entity has with
respect to performance of obligations and presentation of business opportunities to us, please refer to the table and subsequent explanatory
paragraph under “Management — Conflicts of Interest”.
Business Strategy
Our management team’s
objective is to generate attractive returns and create long-term value for our stockholders by applying a disciplined approach of identifying
attractive business combination targets that will benefit from becoming a publicly listed company and from the addition of strategic
growth capital, management expertise and strategic insight. Our strategy is to identify and complete our initial business combination
with a company in an industry that complements the experience and expertise of our management team, board of directors and advisors.
Our evaluation process will
leverage our co-founders’ and board’s network of industry, private equity sponsor, and lending community relationships, as
well as relationships with management teams of public and private companies, investment bankers, restructuring advisors, attorneys and
accountants, which we believe will provide us with a number of business combination opportunities. We intend to deploy a pro-active,
thematic sourcing strategy and to focus on companies where we believe the combination of our operating experience, relationships, capital
and capital markets expertise can be catalysts to transform a target company and can help accelerate the target’s growth and performance.
Certain members of our management team, board
and advisors have experience in:
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all
key activities of special purpose acquisition companies, sponsoring, underwriting and mergers
and acquisitions advisory;
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operating
companies, setting and changing strategies, and identifying, monitoring and recruiting world-class
talent;
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developing
and growing companies, both organically and through acquisitions and strategic transactions
and expanding the product range and geographic footprint of a number of target businesses;
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sourcing,
structuring, acquiring and selling businesses;
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accessing
the capital markets, including financing businesses and helping companies transition to public
ownership;
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fostering
relationships with sellers, capital providers and target management teams; and’
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executing
transactions in multiple geographies and under varying economic and financial market conditions.
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Upon completion of this offering,
members of our management team and board, as well as our advisers will communicate with their network of relationships to articulate
our initial business combination criteria, including the parameters of our search for a target business, and will begin the disciplined
process of pursuing and reviewing promising leads. At the time of preparing this prospectus, we have not identified any specific business
combination, nor has anyone on our behalf initiated or engaged in any substantive discussions, formal or otherwise, related to such a
transaction. Our efforts to date are limited to organizational activities related to this offering.
Investment Criteria
Consistent with our business
strategy, we have identified the following general criteria and guidelines that we believe are important in evaluating candidates for
our initial business combination. We will use these criteria and guidelines in evaluating business combination opportunities, but we
may decide to enter into our initial business combination with a target business that does not meet these criteria and guidelines. We
intend to acquire one or more businesses that we believe:
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has
a strong competitive industry position with demonstrated competitive advantages to maintain
barriers to entry;
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has
a historic record of above average growth and strong free cash flow characteristics with
high returns on capital;
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has
a strong, experienced management team which would benefit from our management’s network
or expertise, such as additional management expertise, capital structure optimization, acquisition
advice or operational changes to drive improved financial performance;
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is
positioned for continued organic growth and may grow through bolt-on acquisitions;
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is
a fundamentally sound company with a proven track record;
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has
an operating model that has adapted or has an executable strategy to be able to meet the
changing consumer or business behaviors in a COVID-19 or post-COVID 19 environment;
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will
offer an attractive risk-adjusted return for our stockholders; and
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can
benefit from being a publicly traded company, are prepared to be a publicly traded company
and can utilize access to broader capital markets.
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Acquisition Strategy
Rigorous and comprehensive
due diligence on prospective business targets is particularly important for disruptive technology companies, which we intend to target.
In the process of identifying a potential business target, we expect to conduct an extensive due diligence review process which may encompass,
as appropriate and among other things, meetings with incumbent management teams and stakeholders, business plan reviews, interviews of
customers and suppliers, inspection of facilities and a review of financial, operational, legal and other information made available
to us about the target and its industry. We will also utilize our management team’s operational and capital planning experience.
We have not identified any
business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly,
with any business combination target. Our sponsor, all of the members of our management team and our board, and Chardan, are continuously
made aware of potential business opportunities, one or more of which we may desire to pursue, for a business combination, but we have
not (nor has anyone on our behalf) contacted, or had any discussions, formal or otherwise with, any prospective target business with
respect to a business combination transaction with us.
In addition, our officers
and directors are not prohibited from becoming either a director or officer of any other special purpose acquisition company with a class
of securities registered under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act.
Initial Business Combination
Nasdaq rules require
that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets
held in the trust account (excluding taxes payable on the interest earned on the trust account) at the time of our signing a definitive
agreement in connection with our initial business combination. Our board of directors will make the determination as to the fair market
value of our initial business combination. If our board of directors is not able to independently determine the fair market value of
our initial business combination, we may obtain an opinion from an independent investment banking or accounting firm as to the fair market
value of the target business. We have also agreed not to enter into a definitive agreement regarding an initial business combination
without the prior consent of our sponsor. In addition, pursuant to Nasdaq rules, any initial business combination must be approved by
a majority of our independent directors.
We may, at our option, pursue
a business combination opportunity jointly with Chardan or one or more entities affiliated with Chardan, which we refer to as an “Affiliated
Joint Acquisition.” We do not expect that we would pursue any such opportunity with an Affiliated SPAC. Any such parties would
co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we and Chardan considered a transaction
to be mutually beneficial to us as well as the affiliated entity; and (iii) other business reasons exist to do so, such as the strategic
merits of including such co-investors, the need for additional capital beyond the amount held in our trust account to fund the initial
business combination and/or the desire to obtain committed capital for closing the initial business combination. An Affiliated Joint
Acquisition may be effected through a co-investment with us in the target business at the time of our initial business combination, or
we could raise additional proceeds to complete the initial business combination by issuing to such parties a class of equity or equity-linked
securities. We refer to this potential future issuance, or a similar issuance to other specified purchasers, as a “specified future
issuance” throughout this prospectus. Any such Affiliated Joint Acquisition or specified future issuance would be in addition to,
and would not include, the forward purchase securities issued pursuant to the forward purchase contract. The amount and other terms and
conditions of any such specified future issuance would be determined at the time thereof. We are not obligated to make any specified
future issuance and may determine not to do so. This is not an offer for any specified future issuance.
We have not selected any
specific business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or
indirectly, with any business combination target. From the period commencing with our formation through the date of this prospectus,
there have been no communications or discussions between any of our officers, directors or our sponsor and any of their potential contacts
or relationships regarding a potential initial business combination. Additionally, we have not engaged or retained any agent or other
representative to identify or locate any suitable acquisition candidate, to conduct any research or take any measures, directly or indirectly,
to locate or contact a target business. Additionally, we have not contacted any of the prospective target businesses that any of the
Affiliated SPACs had considered and rejected while such entity was a blank check company searching for target businesses to acquire.
We do not currently intend to contact any of such targets; however, we may do so in the future if we become aware that the valuations,
operations, profits or prospects of such target business, or the benefits of any potential transaction with such target business, would
be attractive. Accordingly, there is no current basis for investors in this offering to evaluate the possible merits or risks of the
target business with which we may ultimately complete our initial business combination. Although our management will assess the risks
inherent in a particular target business with which we may combine, we cannot assure you that this assessment will result in our identifying
all risks that a target business may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do
nothing to control or reduce the chances that those risks will adversely impact a target business.
We anticipate structuring
our initial business combination either (i) in such a way so that the post-transaction company in which our public stockholders
own shares will own or acquire 100% of the equity interests or assets of the target business or businesses, or (ii) in such a way
so that the post-transaction company owns or acquires 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, including an Affiliated Joint Acquisition as
described above. However, we will only complete our initial business combination only if the post-transaction company in which our public
stockholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling
interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of
1940, as amended, or the Investment Company Act. Even if the post-transaction company owns 50% or more of the voting securities of the
target, our stockholders prior to the business combination may collectively own a minority interest in the post-business combination
company, depending on valuations ascribed to the target and us in the business combination transaction.
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, provided that in the event that
the business combination involves more than one target business, the 80% test will be based on the aggregate value of all of the target
businesses.
Chardan
will be the beneficial owner of founder shares or private warrants following this offering by virtue of its ownership of our sponsor
and members of our management team may indirectly own such securities. Our sponsor intends to allocate up to 20,000 founder shares to
each of our independent directors. Because of such ownership and interests, Chardan and our officers and directors may have a conflict
of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business
combination. Further, each of our officers and directors may have a conflict of interest with respect to evaluating a particular business
combination if the retention or resignation of any such officers and directors were to be included by a target business as a condition
to any agreement with respect to our initial business combination.
All
of our officers are employed by Chardan or its affiliates. Chardan is continuously made aware of potential business opportunities, one
or more of which we may desire to pursue for an initial business combination. While Chardan will not have any duty to offer acquisition
opportunities to us, Chardan may become aware of a potential transaction that is an attractive opportunity for us, which Chardan may
decide to share with us. We have not, however, selected any specific business combination target and we have not, nor has anyone on our
behalf, initiated any substantive discussions, directly or indirectly, with any business combination target regarding an initial business
combination with our company.
Our
sponsor, officers, directors, Chardan and their respective affiliates may participate in the formation of, or become an officer or director
of, any other blank check company prior to completion of our initial business combination. In particular, certain of our executive officers
and directors also serve as executive officers or directors of Chardan NexTech 1, which is focused on searching for businesses that may
provide significant opportunities for attractive investor returns in industries similar to the industries in which our search is focused.
As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination
opportunities to us or to any other blank check company with which they may become involved.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity, including Chardan Health SPAC 2. Our amended and restated certificate of incorporation will provide that we renounce our
interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person
solely in his or her capacity as a director or officer of our company, such opportunity is one we are legally and contractually permitted
to undertake and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that
opportunity to us without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business
combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations
or duties, including Chardan Health SPAC 2, he or she will honor these obligations and duties to present such business combination opportunity
to such entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity
to us.
Effecting a Business Combination
General
We are not presently engaged
in, and we will not engage in, any operations for an indefinite period of time following this offering. We intend to effectuate our initial
business combination using cash from the proceeds of this offering and the private placement of the private warrants, our shares, new
debt, or a combination of these, as the consideration to be paid in our initial business combination. We may seek to consummate our initial
business combination with a company or business that may be financially unstable or in its early stages of development or growth (such
as a company that has begun operations but is not yet at the stage of commercial manufacturing and sales), which would subject us to
the numerous risks inherent in such companies and businesses, although we will not be permitted to effectuate our initial business combination
with another blank check company or a similar company with nominal operations.
If our initial business combination
is paid for using shares or debt securities, or not all of the funds released from the trust account are used for payment of the purchase
price in connection with our business combination or used for redemptions of purchases of our common stock, we may apply the cash released
to us from the trust account that is not applied to the purchase price for general corporate purposes, including for maintenance or expansion
of operations of acquired businesses, the payment of principal or interest due on indebtedness incurred in consummating our initial business
combination, to fund the purchase of other companies or for working capital.
We will have 15 months
from the closing of this offering (or up to 18 months from the closing of this offering if we have executed a definitive agreement and
filed a proxy statement for an initial business combination within 18 months from the closing of this offering) to consummate an initial
business combination. In addition, if we anticipate that we may not be able to consummate our initial business combination within 15
months and we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by such date
(or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial business combination within 15 months
from the closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to two times by an additional three months each time (for a total of up to 21 months to complete a business
combination); provided that, pursuant to the terms of our amended and restated certificate of incorporation and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way
to extend the time available for us to consummate our initial business combination in the absence of a definitive agreement is for our
insiders or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline, to deposit into the
trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per share in either case, or an aggregate
of $2,000,000 (or $2,300,000 if the over-allotment option is exercised in full)), on or prior to the date of the applicable deadline.
In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money
into trust, the insiders would 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. 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. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private units
will expire and will be worthless.
Subject to the requirement
that our initial business combination must be with one or more target businesses or assets having an aggregate fair market value of at
least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business
combination, we have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses. Accordingly,
there is no current basis for investors in this offering to evaluate the possible merits or risks of the target business with which we
may ultimately complete our initial business combination. Although our management will assess the risks inherent in a particular target
business with which we may combine, this assessment may not result in our identifying all risks that a target business may encounter.
Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that
those risks will adversely impact a target business.
We may seek to raise additional
funds through a private offering of debt or equity securities in connection with the consummation of our initial business combination,
and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the
trust account. Subject to compliance with applicable securities laws, we would consummate such financing only simultaneously with the
consummation of our business combination. In the case of an initial business combination funded with assets other than the trust account
assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and,
only if required by law or the Nasdaq, we would seek stockholder approval of such financing. There are no prohibitions on our ability
to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any
arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.
Sources of Target Businesses
We anticipate that target
business candidates will be brought to our attention from various unaffiliated sources, including investment bankers, venture capital
funds, private equity groups, 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
also may introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these sources
will have read this prospectus and know what types of businesses we are targeting. Our officers and directors, as well as their affiliates,
also may 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. In addition, we expect to receive
a number of proprietary deal flow opportunities that would not otherwise necessarily be available to us as a result of the business relationships
of our officers and directors. While we do not presently anticipate engaging the services of professional firms or other individuals
that specialize in business acquisitions on any formal basis, we may engage these firms or other individuals 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. We will engage a finder only to the extent our management determines that the use of a finder may bring
opportunities to us that may not otherwise be available to us or if finders approach us on an unsolicited basis with a potential transaction
that our management determines is in our best interest to pursue. Payment of finder’s fees is customarily tied to completion of
a transaction, in which case any such fee will be paid out of the funds held in the trust account. Although some of our officers and
directors may enter into employment or consulting agreements with the acquired business following our initial business combination, the
presence or absence of any such arrangements will not be used as a criterion in our selection process of an acquisition candidate.
We are not prohibited from
pursuing an initial business combination with a business that is affiliated with Chardan or its affiliates or our sponsor, officers or
directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business combination with an initial
business combination target that is affiliated with our sponsor, officers or directors, we, or a committee of independent directors,
would obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions
that such an initial business combination is fair to our stockholders from a financial point of view. We are not required to obtain such
an opinion in any other context.
As
more fully discussed in the section of this prospectus entitled “Management — Conflicts of Interest”, each of our officers
and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations or duties
to one or more other entities pursuant to which such officer or director is or will be required to present a business combination opportunity
to such entities, including Chardan Healthcare Acquisition 2 Corp., Ventoux CCM Acquisition Corp. and Chardan NexTech Acquisition Corp.
Our officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other
entities to which they owe certain fiduciary, contractual or other duties. Accordingly, if any of our officers or directors becomes aware
of a business combination opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other
obligations or duties, including Chardan Healthcare Acquisition 2 Corp., Ventoux CCM Acquisition Corp. and Chardan NexTech Acquisition
Corp., he or she will honor these obligations and duties to present such business combination opportunity to such entities first, and
only present it to us if such entities reject the opportunity and he or she determines to present the opportunity to us. These conflicts
may not be resolved in our favor and a potential target business may be presented to another entity prior to its presentation to us.
Our amended and restated certificate of incorporation will provide that we renounce our interest in any corporate opportunity offered
to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director
or officer of our company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise
be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another
legal obligation.
We
may, at our option, pursue an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity with an Affiliated
SPAC. Any such parties would co-invest only if (i) permitted by applicable regulatory and other legal limitations; (ii) we
and our sponsor considered a transaction to be mutually beneficial to us as well as the affiliated entity; and (iii) other business
reasons exist to do so, such as the strategic merits of including such co-investors, the need for additional capital beyond the amount
held in our trust account to fund the initial business combination and/or the desire to obtain committed capital for closing the initial
business combination. An Affiliated Joint Acquisition may be effected through a co-investment with us in the target business at the time
of our initial business combination, or we could raise additional proceeds to complete the initial business combination by issuing to
such parties a class of equity or equity-linked securities. Any such Affiliated Joint Acquisition or specified future issuance would
be in addition to, and would not include, the forward purchase securities issued pursuant to the forward purchase contract.
Selection of a Target Business and Structuring
of a Business Combination
So long as we obtain and
maintain a listing for our securities on Nasdaq, we must complete one or more business combinations having an aggregate fair market value
of at least 80% of the value of the assets held in the trust account (excluding taxes payable on the interest earned on the trust account)
at the time of our signing a definitive agreement in connection with our initial business combination. The fair market value of our initial
business combination will be determined by our board of directors based upon one or more standards generally accepted by the financial
community, such as discounted cash flow valuation, a valuation based on trading multiples of comparable public businesses or a valuation
based on the financial metrics of mergers and acquisitions transactions of comparable businesses. If our board of directors is not able
to independently determine the fair market value of our initial business combination, we will obtain an opinion from an independent investment
banking firm or another independent firm that commonly renders valuation opinions with respect to the satisfaction of such criteria.
While we consider it unlikely that our board of directors will not be able to make an independent determination of the fair market value
of our initial business combination, it may be unable to do so if it is less familiar or experienced with the business of a particular
target or if there is a significant amount of uncertainty as to the value of a target’s assets or prospects. We do not intend to
purchase multiple businesses in unrelated industries in conjunction with our initial business combination. We have also agreed not to
enter into a definitive agreement regarding an initial business combination without the prior consent of our sponsor. Subject to this
requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target
businesses, although we will not be permitted to effectuate our initial business combination with another blank check company or a similar
company with nominal operations.
In any case, we will only
complete an initial business combination in which we own or acquire 50% or more of the outstanding voting securities of the target or
otherwise acquire a controlling interest in the target sufficient for it not to be required to register as an investment company under
the Investment Company Act. If we own or acquire less than 100% of the equity interests or assets of a target business or businesses,
the portion of such business or businesses that are owned or acquired by the post-transaction company is what will be taken into account
for purposes of Nasdaq’s 80% fair market value test. There is no basis for investors in this offering to evaluate the possible
merits or risks of any target business with which we may ultimately complete our initial business combination.
To the extent we effect our
initial business combination with a company or business that may be financially unstable or in its early stages of development or growth
we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to evaluate the risks
inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all significant risk factors.
In evaluating a prospective
target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent
management and employees, document reviews, interviews of customers and suppliers, inspection of facilities, as well as a review of financial
and other information which will be made available to us.
The time required to select
and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and evaluation of
a prospective target business with which a business combination is not ultimately completed will result in our incurring losses and will
reduce the funds we can use to complete another business combination. We will not pay any finders or consulting fees to members of our
management team, or any of their respective affiliates, for services rendered to or in connection with our initial business combination.
Lack of Business Diversification
For an indefinite period
of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance
of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or
several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in
a single line of business. 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 on the particular industry in which we operate after our
initial business combination, and
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cause
us to depend on the marketing and sale of a single product or limited number of products
or services.
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Limited Ability to Evaluate the Target’s Management Team
Although we intend to closely
scrutinize the management of a prospective target business when evaluating the desirability of effecting our initial business combination
with that business, our assessment of the target business’ management may not prove to be correct. The future role of members of
our management team, if any, in the target business cannot presently be stated with any certainty. Consequently, members of our management
team may not become a part of the target’s management team, and the future management may not have the necessary skills, qualifications
or abilities to manage a public company. Further, it is also not certain whether one or more of our directors will remain associated
in some capacity with us following our initial business combination. Moreover, members of our management team may not have significant
experience or knowledge relating to the operations of the particular target business. Our key personnel may not remain in senior management
or advisory positions with the combined company. The determination as to whether any of our key personnel will remain with the combined
company will be made at the time of our initial business combination.
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 additional managers will have the requisite skills, knowledge or experience necessary
to enhance the incumbent management.
Stockholders May Not Have the Ability
to Approve an Initial Business Combination
In connection with any proposed
business combination, we will either (1) seek stockholder approval of our initial business combination at a meeting called for such
purpose at which public stockholders may seek to redeem 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 redeem 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 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. 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 and whether the terms of the transaction would otherwise require us to seek stockholder approval. If we so choose and we
are legally permitted to do so, we have the flexibility to avoid a stockholder vote and allow our stockholders to sell their shares pursuant
to Rule 13e-4 and Regulation 14E of the Exchange Act which regulate issuer tender offers. In that case, 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.
We may only redeem our public
shares so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny
stock” rules) and the agreement for our initial business combination may require as a closing condition that we have a minimum
net worth or a certain amount of cash. If too many public stockholders exercise their redemption rights so that we cannot satisfy the
net tangible asset requirement or any net worth or cash requirements, we would not proceed with the redemption of our public shares or
the initial business combination, and instead may search for an alternate business combination.
We chose our net tangible
asset threshold of $5,000,001 to ensure that we would 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 or sold to us) 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. Public stockholders may therefore have to wait 15 months
(or up to 21 months, as applicable) from the closing of this offering in order to be able to receive a pro rata share of the trust account.
Our initial stockholders
and our officers and directors have agreed (1) to vote any shares of common stock owned by them in favor of any proposed business
combination, (2) not to redeem any shares of common stock in connection with a stockholder vote to approve a proposed initial business
combination and (3) not sell any shares of common stock in any tender in connection with a proposed initial business combination.
As a result, if we sought stockholder approval of a proposed transaction, we would need only 3,750,001,
or 37.5%, of the 10,000,000 public shares sold in this offering to be voted in favor of an initial business combination (assuming all
outstanding shares are voted) in order to have our initial business combination approved (assuming the over-allotment option is not exercised).
None of our officers, directors,
initial stockholders or their affiliates has indicated any intention to purchase units or shares of common stock in this offering or
from persons in the open market or in private transactions. However, if we hold a meeting to approve a proposed business combination
and a significant number of stockholders vote, or indicate an intention to vote, against such 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. Notwithstanding the foregoing, our officers, directors, initial stockholders and their affiliates will not make
purchases of common stock if the purchases would violate Section 9(a)(2) or Rule 10b-5 of the Exchange Act, which are
rules designed to stop potential manipulation of a company’s stock.
Permitted Purchases of our Securities
If we seek stockholder approval
of our initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our initial stockholders, directors, officers, advisors or any their respective affiliates may purchase shares
or public warrants in privately negotiated transactions or in the open market either prior to or following the completion of our initial
business combination. There is no limit on the number of shares our initial stockholders, directors, officers, advisors or any of their
respective affiliates may purchase in such transactions, subject to compliance with applicable law and Nasdaq rules. However, they have
no current commitments, plans or intentions to engage in such transactions and have not formulated any terms or conditions for any such
transactions.
In the event our initial
stockholders, directors, officers, advisors or any of their respective affiliates determine to make any such purchases at the time of
a stockholder vote relating to our initial business combination, such purchases could have the effect of influencing the vote necessary
to approve such transaction. If they engage in such transactions, they will be restricted from making any such purchases when they are
in possession of any material non-public information not disclosed to the seller or if such purchases are prohibited by Regulation
M under the Exchange Act. Such a purchase may include a contractual acknowledgement that such stockholder, although still the
record holder of our shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. We
do not currently anticipate that such purchases, if any, would constitute a tender offer subject to the tender offer rules under
the Exchange Act or a going-private transaction subject to the going-private rules under the Exchange Act; however,
if the purchasers determine at the time of any such purchases that the purchases are subject to such rules, the purchasers will comply
with such rules. Any such purchases will be reported pursuant to Section 13 and Section 16 of the Exchange Act to the extent
such purchasers are subject to such reporting requirements. None of the funds held in the trust account will be used to purchase shares
or public warrants in such transactions prior to completion of our initial business combination.
The purpose of any such purchases
of shares could be to vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining
stockholder approval of the initial business combination or to satisfy a closing condition in an agreement with a target that requires
us to have a minimum net worth or a certain amount of cash at the closing of our initial business combination, where it appears that
such requirement would otherwise not be met. The purpose of any such purchases of public warrants could be to reduce the number of public
warrants outstanding or to vote such warrants on any matters submitted to the warrant holders for approval in connection with our initial
business combination. Any such purchases of our securities may result in the completion of our initial business combination that may
not otherwise have been possible. In addition, if such purchases are made, the public “float” of our shares of common stock
or warrants may be reduced and the number of beneficial holders of our securities may be reduced, which may make it difficult to maintain
or obtain the quotation, listing or trading of our securities on a national securities exchange.
Our sponsor, officers, directors,
advisors and/or any of their respective affiliates anticipate that they may identify the stockholders with whom our sponsor, officers,
directors, advisors or any of their respective affiliates may pursue privately negotiated purchases by either the stockholders contacting
us directly or by our receipt of redemption requests submitted by stockholders following our mailing of proxy materials in connection
with our initial business combination. To the extent that our sponsor, officers, directors, advisors or any of their respective affiliates
enter into a private purchase, they would identify and contact only potential selling stockholders who have expressed their election
to redeem their shares for a pro rata share of the trust account or vote against our initial business combination, whether or not such
stockholder has already submitted a proxy with respect to our initial business combination. Such persons would select the stockholders
from whom to acquire shares based on the number of shares available, the negotiated price per share and such other factors as any such
person may deem relevant at the time of purchase. The price per share paid in any such transaction may be different than the amount per
share a public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Our
sponsor, officers, directors, advisors or any of their respective affiliates will purchase shares only if such purchases comply with Regulation
M under the Exchange Act and the other federal securities laws
Any purchases by our sponsor,
officers, directors and/or any of their respective affiliates who are affiliated purchasers under Rule 10b-18 under the Exchange
Act will only be made to the extent such purchases are able to be made in compliance with Rule 10b-18, which is a safe harbor
from liability for manipulation under Section 9(a)(2) and Rule 10b-5 of the Exchange Act. Rule 10b-18 has certain
technical requirements that must be complied with in order for the safe harbor to be available to the purchaser. Our sponsor, officers,
directors, advisors and/or any of their respective affiliates will not make purchases of common stock if the purchases would violate
Section 9(a)(2) or Rule 10b-5 of the Exchange Act. Any such purchases will be reported pursuant to Section 13 and
Section 16 of the Exchange Act to the extent such purchases are subject to such reporting requirements.
Redemption/Tender Rights
At any meeting called to
approve an initial business combination, public stockholders may seek to redeem 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,
less any taxes then due but not yet paid. Notwithstanding the foregoing, our initial stockholders have agreed, pursuant to written letter
agreements with us, not to redeem any public shares held by them into their pro rata share of the aggregate amount then on deposit in
the trust account. If we hold a meeting to approve an initial business combination, a holder will always have the ability to vote against
a proposed business combination and not seek redemption of his shares.
Alternatively, if we engage
in a tender offer, each public stockholder will be provided the opportunity to sell his public shares to us in such tender offer. The
tender offer rules require us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount
of time we would need to provide holders to determine whether they want to sell their public shares to us in the tender offer or remain
an investor in our company.
Our initial stockholders,
officers and directors will not have redemption rights with respect to any shares of common stock owned by them, directly or indirectly,
whether acquired prior to this offering or purchased by them in this offering or in the aftermarket.
We may also require public
stockholders, whether they are a record holder or hold their shares in “street name,” to either tender their certificates
(if any) to our transfer agent or to deliver their shares 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.
The proxy solicitation materials that we will furnish to stockholders in connection with the vote for any proposed business combination
will indicate whether we are requiring stockholders to satisfy such delivery requirements. Accordingly, a stockholder would have from
the time our proxy statement is mailed through the vote on the business combination to deliver his shares if he wishes to seek to exercise
his redemption rights. Under Delaware law and our bylaws, we are required to provide at least 10 days’ advance notice of any stockholder
meeting, which would be the minimum amount of time a stockholder would have to determine whether to exercise redemption rights. As a
result, if we require public stockholders who wish to redeem 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 redemption. Accordingly, investors may not be able to exercise their redemption rights and may
be forced to retain our securities when they otherwise would not want to. The redemption rights will include the requirement that a beneficial
holder must identify itself in order to validly redeem its shares.
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 redeeming holder.
However, this fee would be incurred regardless of whether or not we require holders seeking to exercise redemption rights. The need to
deliver shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated. However,
in the event we require stockholders seeking to exercise redemption rights to deliver their shares prior to the consummation of the proposed
business combination and the proposed business combination is not consummated, this may result in an increased cost to stockholders.
Any request to redeem or
tender such shares once made, may be withdrawn at any time up to the vote on the proposed business combination or expiration of the tender
offer. Furthermore, if a holder of a public share delivered his certificate in connection with an election of their redemption or tender
and subsequently decides prior to the vote on the business combination or the expiration of the tender offer not to elect to exercise
such rights, he may simply request that the transfer agent return the certificate (physically or electronically).
Our amended and restated
certificate of incorporation will provide that we may only redeem our public shares so long as our net tangible assets are at least $5,000,001
either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’ fees and
commissions (so that we are not subject to the SEC’s “penny stock” rules) or any greater net tangible asset or cash
requirement which may be contained in the agreement relating to our initial business combination. For example, the proposed initial business
combination may require: (i) cash consideration to be paid to the target or its owners, (ii) cash to be transferred to the
target for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions in accordance
with the terms of the proposed initial business combination. In the event the aggregate cash consideration we would be required to pay
for all shares of common stock that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant
to the terms of the proposed initial business combination exceed the aggregate amount of cash available to us, we will not complete the
initial business combination or redeem any shares, and all shares of common stock submitted for redemption will be returned to the holders
thereof.
Notwithstanding the foregoing,
if we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial
business combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public
stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as
a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with
respect to more than an aggregate of 15% of the shares sold in this offering, which we refer to as the “Excess Shares.” Such
restriction shall also be applicable to our affiliates. We believe this restriction will discourage stockholders from accumulating large
blocks of shares, and subsequent attempts by such holders to use their ability to exercise their redemption rights against a proposed
initial business combination as a means to force us or our management to purchase their shares at a significant premium to the then-current
market price or on other undesirable terms. Absent this provision, a public stockholder holding more than an aggregate of 15% of the
shares sold in this offering could threaten to exercise its redemption rights if such holder’s shares are not purchased by us or
our management at a premium to the then-current market price or on other undesirable terms. By limiting our stockholders’ ability
to redeem no more than 15% of the shares sold in this offering without our prior consent, we believe we will limit the ability of a small
group of stockholders to unreasonably attempt to block our ability to complete our initial business combination, particularly in connection
with an initial business combination with a target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. However, we would not be restricting our stockholders’ ability to vote all of their shares (including Excess Shares)
for or against our initial business combination.
If the initial business combination
is not approved or completed for any reason, then our public stockholders who elected to exercise their redemption or tender rights would
not be entitled to redeem their shares for the applicable pro rata share of the trust account. In such case, we will promptly return
any shares delivered by public holders.
Liquidation of Trust Account if No Business
Combination
If we do not complete
a business combination within 15 months from the closing of this offering (or up to 18 months from the closing of this offering if we
have executed a definitive agreement and filed a proxy statement for an initial business combination within 15 months from the closing
of this offering), 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 and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate,
subject (in the case of (ii) and (iii) above) to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law. However, if we anticipate that we may not be able to consummate our initial business combination
within 15 months and we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by
such date (or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial business combination within
15 months from the closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time
to consummate a business combination up to two times by an additional three months each time (for a total of up to 21 months to complete
a business combination); provided that, pursuant to the terms of our amended and restated certificate of incorporation and
the trust agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus,
the only way to extend the time available for us to consummate our initial business combination in the absence of a definitive agreement
is for our insiders or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline, to deposit
into the trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per share in either case, or
an aggregate of $2,000,000 (or $2,300,000 if the over-allotment option is exercised in full)), on or prior to the date of the applicable
deadline. Public stockholders will not be offered the opportunity to vote on or redeem their shares in connection with any such extension.
In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money
into trust, the insiders would 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. 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. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. There will be no redemption rights or liquidating distributions with
respect to our warrants, which will expire worthless if we fail to complete our initial business combination within the allotted time
period.
Our sponsor, officers
and directors have entered into a letter agreement with us, pursuant to which they have waived their rights to liquidating distributions
from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination within
15 months (or up to 21 months, as applicable) from the closing of this offering. However, if our sponsor, officers or directors acquire
public shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such
public shares if we fail to complete our initial business combination within the allotted time period.
Our sponsor, officers
and directors have agreed, pursuant to a written agreement with us, that they will not propose any amendment to our amended and restated
certificate of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our
initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination within 15
months (or up to 21 months, as applicable) from the closing of this offering or (ii) with respect to any other provision relating
to stockholders’ rights or pre-initial business combination activity, 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 taxes divided by the number of then outstanding public shares. However, we may only redeem our public shares so long
as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial business combination
and after payment of underwriters’ fees and commissions (so that we are not subject to the SEC’s “penny stock”
rules). If this optional redemption right is exercised with respect to an excessive number of public shares such that we cannot satisfy
the net tangible asset requirement (described above), we would not proceed with the amendment or the related redemption of our public
shares at such time.
Under the Delaware General
Corporation Law, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received
by them in a dissolution. The pro rata portion of our trust account distributed to our public stockholders upon the redemption of 100%
of our outstanding public shares in the event we do not complete our initial business combination within the required time period may
be considered a liquidation distribution under Delaware law. If the corporation complies with certain procedures set forth in Section 280
of the Delaware General Corporation Law intended to ensure that it makes reasonable provision for all claims against it, including a
60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation
may reject any claims brought, and an additional 150-day waiting period before any redemptions are made to stockholders, any liability
of stockholders with respect to a redemption is limited to the lesser of such stockholder’s pro rata share of the claim or the
amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution.
Furthermore, if the pro
rata portion of our trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event
we do not complete our initial business combination within the required time period is not considered a liquidation distribution under
Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the Delaware General Corporation
Law, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of
three years, as in the case of a liquidation distribution. It is our intention to redeem our public shares as soon as reasonably possible
following the 15th month (or up to 21st month, as applicable) from the closing of this offering, but not more than five business days
thereafter, and, therefore, we do not intend to comply with the above procedures. As such, our stockholders could potentially be liable
for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond
the third anniversary of such date.
Because we will not be complying
with Section 280 of the Delaware General Corporation Law, Section 281(b) of the Delaware General Corporation Law requires
us to adopt a plan, based on facts known to us at such time that will provide for our payment of all existing and pending claims or claims
that may be potentially brought against us within the subsequent 10 years. However, because we are a blank check company, rather than
an operating company, and our operations will be limited to seeking to complete an initial business combination, the only likely claims
to arise would be from our vendors (such as lawyers, investment bankers, etc.) or prospective target businesses.
We will seek to have all
third parties (including any vendors or other entities we engage after this offering) and any prospective target businesses enter into
valid and enforceable agreements with us waiving any right, title, interest or claim of any kind they may have in or to any monies held
in the trust account. The underwriters in this offering will execute such a waiver agreement.
As a result, the claims
that could be made against us will be limited, thereby lessening the likelihood that any claim would result in any liability extending
to the trust. We therefore believe that any necessary provision for creditors will be reduced and should not have a significant impact
on our ability to distribute the funds in the trust account to our public stockholders. Nevertheless, there is no guarantee that vendors,
service providers and prospective target businesses will execute such agreements. In the event that a potential contracted party was
to refuse to execute such a waiver, we will execute an agreement with that entity only if our management first determines that we would
be unable to obtain, on a reasonable basis, substantially similar services or opportunities from another entity willing to execute such
a waiver. Examples of instances where we may engage a third party that refused to execute a waiver would be the engagement of a third
party consultant who cannot sign such an agreement due to regulatory restrictions, such as our independent public registered accounting
firm, who are unable to sign due to independence requirements, or whose particular expertise or skills are believed by management to
be superior to those of other consultants that would agree to execute a waiver or a situation in which management does not believe it
would be able to find a provider of required services willing to provide the waiver. There is also no guarantee that, even if they execute
such agreements with us, they will not seek recourse against the trust account. Our insiders have agreed that they will be jointly and
severally liable to us if and to the extent any claims by a vendor for services rendered or products sold to us, or a prospective target
business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the trust account to below
$10.10 per public share, except as to any claims by a third party who executed a valid and enforceable agreement with us 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
our indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act. Our board
of directors has evaluated our insiders’ financial net worth and believes they will be able to satisfy any indemnification obligations
that may arise. However, our insiders may not be able to satisfy their indemnification obligations, as we have not required our insiders
to retain any assets to provide for their indemnification obligations, nor have we taken any further steps to ensure that they will be
able to satisfy any indemnification obligations that arise. Moreover, our insiders will not be liable to our public stockholders and
instead will only have liability to us. As a result, if we liquidate, the per-share distribution from the trust account could be less
than approximately $10.10 due to claims or potential claims of creditors. We will distribute to all of our public stockholders, in proportion
to their respective equity interests, an aggregate sum equal to the amount then held in the trust account, inclusive of any interest
not previously released to us, (subject to our obligations under Delaware law to provide for claims of creditors as described below).
If we are unable to consummate
an initial business combination and are forced to redeem 100% of our outstanding public shares for a portion of the funds held in the
trust account, we anticipate notifying the trustee of the trust account to begin liquidating such assets promptly after such date and
anticipate it will take no more than 5 business days to effectuate the redemption of our public shares. Our insiders have waived their
rights to participate in any redemption with respect to their founder shares. We will pay the costs of any subsequent liquidation from
our remaining assets outside of the trust account. If such funds are insufficient, our insiders have agreed to pay the funds necessary
to complete such liquidation (currently anticipated to be no more than approximately $15,000) and have agreed not to seek repayment of
such expenses. Each holder of public shares will receive a full pro rata portion of the amount then in the trust account, plus any pro
rata interest earned on the funds held in the trust account and not previously released to us or necessary to pay our taxes. The proceeds
deposited in the trust account could, however, become subject to claims of our creditors that are in preference to the claims of public
stockholders.
Our public stockholders shall
be entitled to receive funds from the trust account only in the event of our failure to complete our initial business combination in
the required time period or if the stockholders seek to have us redeem their respective shares of common stock upon a business combination
which is actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or in the
trust account.
If we are forced to file
a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the proceeds held in the trust account
could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties
with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the trust account, the per share redemption
or redemption amount received by public stockholders may be less than $10.10.
If, after we distribute the
proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed
against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or
bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court
could seek to recover all amounts received by our stockholders. In addition, our board of directors may be viewed as having breached
its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by
paying public stockholders from the trust account prior to addressing the claims of creditors. Claims may be brought against us for these
reasons.
Amended and Restated Certificate of Incorporation
Our amended and restated
certificate of incorporation will contain certain requirements and restrictions relating to this offering 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 have agreed to
waive any redemption rights with respect to any founder 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 redeem 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
redemption 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 15 months (or up to 21
months, as applicable) of the closing of this offering, 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 this offering, $101,000,000, or $116,150,000 if the over-allotment option
is exercised in full, 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 for our initial business combination, we may encounter intense competition from other entities having
a business objective similar to ours, including other blank check companies, private equity groups and leveraged buyout funds, and operating
businesses seeking strategic acquisitions. Many of these entities are well established and have significant experience identifying and
effecting business combinations directly or through affiliates. Moreover, many of these competitors possess greater financial, technical,
human and other resources than us. Our ability to acquire larger target businesses will be limited by our available financial resources.
This inherent limitation gives others an advantage in pursuing the acquisition of a target business. Furthermore, the requirement that
we acquire a target business or businesses having a fair market value equal to at least 80% of the value of the trust account (excluding
any taxes payable) at the time of the agreement to enter into the business combination, our obligation to pay cash in connection with
our public stockholders who exercise their redemption rights and the number of our outstanding warrants and the future dilution they
potentially represent, may not be viewed favorably by certain target businesses. Any of these factors may place us at a competitive disadvantage
in successfully negotiating our initial business combination.
Facilities
We
currently maintain our executive offices at 17 State Street, 21st Floor, New York,
NY 10004. Our sponsor is making this space available to us for a fee of $10,000 per month. We consider our current office space adequate
for our current operations.
Employees
We currently have two executive
officers. These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much
of their time as they deem necessary to our affairs until we have completed our initial business combination. The amount of time they
will devote in any time period will vary based on whether a target business has been selected for our initial business combination and
the stage of the business combination process we are in. We do not intend to have any full time employees prior to the consummation of
our initial business combination.
Financial Position
With
funds available for an initial business combination initially in the amount of $97,500,000, after payment of the Marketing Fee of $3,500,000
(or $112,125,000 after payment of the Marketing Fee of up to $4,025,000 if the underwriters’ over-allotment option is exercised
in full), before fees and expenses associated with our initial business combination, we offer a target business a variety of options
such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening
its balance sheet by reducing its debt or leverage ratio. Because we are able to complete 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, we have not taken
any steps to secure third party financing and there can be no assurance it will be available to us.
Periodic Reporting and Audited Financial Statements
We have registered the
offer and sale of our units, shares of common stock and warrants 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 sent to stockholders to assist
them in assessing the target business. In all likelihood, the financial information included in the proxy solicitation materials will
need to be prepared in accordance with U.S. GAAP or IFRS, depending on the circumstances, and the historical financial statements may
be required to be audited in accordance with the standards of the PCAOB. The financial statements may also be required to be prepared
in accordance with U.S. GAAP for the Form 8-K announcing the closing of an initial business combination, which would need to be
filed within four business days thereafter. We cannot assure you that any particular target business identified by us as a potential
acquisition candidate will have the necessary financial information. To the extent that this requirement cannot be met, we may not be
able to acquire the proposed target business.
We will be required to comply
with the internal control requirements of the Sarbanes-Oxley Act beginning for the fiscal year ending December 31, 2022. A target
company may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of their internal controls. The development
of the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary
to complete any such acquisition.
We are an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as amended, or the Securities Act, as modified by
the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including,
but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval
of any golden parachute payments not previously approved. If some investors find our securities less attractive as a result, there may
be a less active trading market for our securities and the prices of our securities may be more volatile.
In addition, Section 107
of the JOBS Act also provides that an “emerging growth company” can 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. In other words, an “emerging
growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We intend to take advantage of the benefits of this extended transition period.
We will remain an emerging
growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion
of this offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed
to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the prior year’s second quarter, and (2) the date on which we have issued more than $1.0 billion in non-convertible
debt securities during the prior three-year period. References herein to “emerging growth company” shall have the meaning
associated with it in the JOBS Act.
Additionally, we are a “smaller
reporting company” as defined in Item 10(f)(1) of Regulation S-K promulgated by the Securities and Exchange Commission, or
the SEC. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing
only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which
(1) the market value of our common stock held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal
quarter, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our common stock
held by non-affiliates exceeds $700 million as of the end of that year’s second fiscal quarter.
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 prospectus.
Comparison of Redemption or Purchase Prices
in Connection with Our Initial Business Combination and if We Fail to Complete Our Initial Business Combination
The
following table compares the redemptions and other permitted purchases of public shares that may take place in connection with the completion
of our initial business combination and if we are unable to complete our initial business combination within 15 months (or up to 21 months,
as applicable) from the closing of this offering.
|
|
|
Redemptions
in Connection with our
Initial Business
Combination
|
|
Other
Permitted
Purchases of Public
Shares by us or our
Affiliates
|
|
Redemptions
if we
fail to Complete an
Initial Business
Combination
|
|
|
Calculation of redemption
price
|
|
Redemptions at the time
of our initial business combination may be made pursuant to a tender offer or in connection with a stockholder vote. The redemption
price will be the same whether we conduct redemptions pursuant to a tender offer or in connection with a stockholder vote. In either
case, our public stockholders may redeem their public shares for cash equal to the aggregate amount then on deposit in the trust
account as of two business days prior to the consummation of the initial business combination (which is initially anticipated to
be $10.10 per public share), including interest earned on the funds held in the trust account and not previously released to us to
pay our taxes divided by the number of then outstanding public shares, subject to the limitation that we may only redeem our public
shares so long as our net tangible assets are at least $5,000,001 either immediately prior to or upon consummation of our initial
business combination and any limitations (including but not limited to cash requirements) agreed to in connection with the negotiation
of terms of a proposed initial business combination.
|
|
If we seek stockholder
approval of our initial business combination, our sponsor, directors, officers, advisors or their affiliates may purchase shares
in privately negotiated transactions or in the open market prior to or following completion of our initial business combination.
There is no limit to the prices that our sponsor, directors, officers, advisors or their affiliates may pay in these transactions.
|
|
If we are unable to
complete our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering,
we will redeem all public shares at a per-share price, payable in cash, equal to the aggregate amount, then on deposit in the trust
account (which is initially anticipated to be $10.10 per public share) including interest earned on the funds held in the trust account
and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the
number of then outstanding public shares.
|
|
|
|
|
Redemptions
in Connection with our
Initial Business
Combination
|
|
Other
Permitted
Purchases of Public
Shares by us or our
Affiliates
|
|
Redemptions
if we
fail to Complete an
Initial Business
Combination
|
|
|
Impact to remaining
stockholders
|
|
The redemptions in
connection with our initial business combination will reduce the book value per share for our remaining stockholders,
who will bear the burden of the Marketing Fee, taxes payable.
|
|
If the permitted
purchases described above are made there would be no impact to our remaining stockholders because the purchase price would not be
paid by us.
|
|
The redemption
of our public shares if we fail to complete our initial business combination will reduce the book value per share for the shares
held by our initial stockholders, who will be our only remaining stockholders after such redemptions.
|
|
Comparison to Offerings of Blank Check Companies
Subject to Rule 419
The following table compares
and contrasts the terms of our offering and the terms of an offering of blank check companies under Rule 419 promulgated by the
SEC assuming that the gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as
this offering and that the underwriters will not exercise their over-allotment option. None of the terms of a Rule 419 offering
will apply to this offering because we will be listed on a national securities exchange, we will have net tangible assets in excess of
$5,000,001 either immediately prior to or upon the successful consummation of this offering and will file a Current Report on Form 8-K,
including an audited balance sheet demonstrating this fact.
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Escrow
of offering proceeds
|
|
$101,000,000 of the
net offering proceeds and proceeds from the sale of the private warrants will be deposited into a trust account in the United States,
maintained by Continental Stock Transfer & Trust Company, acting as trustee.
|
|
$90,450,000 of the offering
proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate
bank account established by a broker-dealer in which the broker-dealer acts as trustee for persons having the beneficial interests
in the account.
|
|
|
|
|
|
|
|
Investment
of net proceeds
|
|
The $101,000,000 of
the net offering proceeds and proceeds from the sale of the private warrants held in trust will only be invested in United States
government treasury bills, bonds or notes with a maturity of 185 days or less or in money market funds meeting the applicable conditions
under Rule 2a-7 promulgated under the Investment Company Act and that invest solely in United States government treasuries.
|
|
Proceeds could be invested
only in specified securities such as a money market fund meeting conditions of the Investment Company Act or in securities that are
direct obligations of, or obligations guaranteed as to principal or interest by, the United States.
|
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Receipt
of interest on escrowed funds
|
|
Interest on proceeds from
the trust account to be paid to stockholders is reduced by (i) any taxes paid or payable and (ii) in the event of our liquidation
for failure to complete our initial business combination within the allotted time, up to $100,000 of net interest that may be released
to us should we have no or insufficient working capital to fund the costs and expenses of our dissolution and liquidation.
|
|
Interest on funds in escrow
account would be held for the sole benefit of investors, unless and only after the funds held in escrow were released to us in connection
with our completion of a business combination.
|
|
|
|
|
|
|
|
Limitation
on fair value or net assets of target business
|
|
The initial target business
that we acquire must have a fair market value equal to at least 80% of the balance in our trust account net of taxes payable at the
time of the execution of a definitive agreement for our initial business combination.
|
|
We would be restricted
from acquiring a target business unless the fair value of such business or net assets to be acquired represent at least 80% of the
maximum offering proceeds.
|
|
|
|
|
|
|
|
Trading
of securities issued
|
|
The units may commence
trading on or promptly after the date of this prospectus. The shares of common stock and warrants comprising the units will begin
to trade separately on the 90th day after the date of this prospectus unless
Chardan informs us of its decision to allow earlier separate trading (based upon its assessment of the relative strengths of the
securities markets and small capitalization and blank check companies in general, and the trading pattern of, and demand for, our
securities in particular), provided we have filed with the SEC a Current Report on Form 8-K, which includes an audited balance
sheet reflecting our receipt of the proceeds of this offering.
|
|
No trading of the units
or the underlying securities would be permitted until the completion of a business combination. During this period, the securities
would be held in the escrow or trust account.
|
|
|
|
|
|
|
|
Exercise
of the warrants
|
|
The warrants cannot be
exercised until the completion of a business combination and, accordingly, will be exercised only after the trust account has been
terminated and distributed.
|
|
The warrants could be exercised
prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be
deposited in the escrow or trust account.
|
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Election
to remain an investor
|
|
We will either (1) give
our stockholders the opportunity to vote on the business combination or (2) provide our public stockholders with the opportunity
to sell their public shares to us in a tender offer for cash equal to their pro rata share of the aggregate amount then on
deposit in the trust account, less taxes. If we hold a meeting to approve a proposed business combination, we will send each stockholder
a proxy statement containing information required by the SEC. Under our certificate of incorporation, we must provide at least 10
days advance notice of any meeting of stockholders. Accordingly, this is the minimum amount of time we would need to provide holders
to determine whether to exercise their rights to redeem their shares into cash at such a meeting or to remain an investor in our
company. Alternatively, if we do not hold a meeting and instead conduct a tender offer, we will conduct such tender offer in accordance
with the tender offer rules of the SEC and file tender offer documents with the SEC which will contain substantially the same
financial and other information about the initial business combination as we would have included in a proxy statement.
|
|
A prospectus containing
information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company,
in writing, within a period of no less than 20 business days and no more than 45 business days from the effective date of the post-effective
amendment, to decide whether he or she elects to remain a stockholder of the company or require the return of his or her investment.
If the company has not received the notification by the end of the 45th
business day, funds and interest or dividends, if any, held in the trust or escrow account would automatically be returned to the
stockholder. Unless a sufficient number of investors elect to remain investors, all of the deposited funds in the escrow account
must be returned to all investors and none of the securities will be issued.
|
|
|
|
|
|
|
|
|
|
The tender offer rules require
us to hold the tender offer open for at least 20 business days. Accordingly, this is the minimum amount of time we would need to
provide holders to determine whether they want to sell their shares to us in the tender offer or remain an investor in our company.
|
|
|
|
|
|
|
|
|
|
Business
combination deadline
|
|
Pursuant to our certificate of incorporation,
if we do not complete an initial business combination within 15 months (or up to 21 months, as applicable) from the consummation
of this offering, it will trigger our automatic winding up, dissolution and liquidation.
|
|
If an acquisition has
not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or
escrow account would be returned to investors.
|
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Limitation
on redemption rights of stockholders holding more than 15% of the shares sold in this offering if we hold a stockholder vote
|
|
If we seek stockholder
approval of our initial business combination and we do not conduct redemptions in connection with our initial business combination
pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder
(including our affiliates), together with any affiliate of such stockholder or any other person with whom such stockholder is acting
in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption
rights with respect to Excess Shares (more than an aggregate of 1% of the shares sold in this offering). Our public stockholders’
inability to redeem Excess Shares will reduce their influence over our ability to complete our initial business combination and they
could suffer a material loss on their investment in us if they sell any Excess Shares in open market transactions.
|
|
Many blank check companies
provide no restrictions on the ability of stockholders to redeem shares based on the number of shares held by such stockholders in
connection with an initial business combination
|
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Tendering
stock certificates in connection with a tender offer or redemption rights
|
|
We may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,”
to either tender their certificates to our transfer agent prior to the date set forth in the tender offer documents mailed to such
holders or up to two business days prior to the vote on the proposal to approve the initial business combination in the event we
distribute proxy materials, or to deliver their shares to the transfer agent electronically using The Depository Trust Company’s
DWAC System, at the holder’s option. The tender offer or proxy materials, as applicable, that we will furnish to holders of
our public shares in connection with our initial business combination will indicate whether we are requiring public stockholders
to satisfy such delivery requirements. Accordingly, a public stockholder would have from the time we send out our tender offer materials
until the close of the tender offer period, or up to two business days prior to the vote on the initial business combination if we
distribute proxy materials, as applicable, to tender its shares if it wishes to seek to exercise its redemption rights.
|
|
In order to perfect redemption
rights in connection with their business combinations, holders could vote against a proposed initial business combination and check
a box on the proxy card indicating such holders were seeking to exercise their redemption rights. After the business combination
was approved, the company would contact such stockholders to arrange for them to deliver their certificate to verify ownership.
|
|
|
|
Terms
of the Offering
|
|
Terms
Under a Rule 419 Offering
|
|
Release
of funds
|
|
Except for interest
earned on the funds held in the trust account that may be released to us to pay our tax obligations, the proceeds from this offering
and the sale of the private warrants held in the trust account will not be released until the earliest to occur of: (i) the
completion of our initial business combination, (ii) the redemption of any public shares properly submitted in connection with
a stockholder vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our
obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we do
not complete our initial business combination within 15 months (or up to 21 months, as applicable) from the closing of this offering
or (B) with respect to any other provision relating to stockholders’ rights or pre-business combination activity and (iii) the
redemption of 100% of our public shares if we are unable to complete an initial business combination within the required time frame
(subject to the requirements of applicable law). On the completion of our initial business combination, all amounts held in the trust
account will be released to us, less amounts released to a separate account controlled by the trustee for disbursal to redeeming
stockholders. We will use these funds to pay amounts due to any public stockholders who exercise their redemption rights as described
above under “Redemption rights for public stockholders upon completion of our initial business combination,” to pay all
or a portion of the consideration payable to the target or owners of the target of our initial business combination and to pay other
expenses associated with our initial business combination, including the Marketing Fee pursuant to the Business Combination Marketing
Agreement described under “Underwriting (Conflicts of Interest) — Business Combination Marketing Agreement.”
|
|
The proceeds held in
the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a
business combination within the allotted time.
|
MANAGEMENT
Officers, Directors and Director Nominees
Our officers, directors,
and director nominees are as follows:
|
Name
|
|
Position
|
|
Kerry Propper
|
|
Co-Founder and Director
Nominee (Chairman)
|
|
Jonas Grossman
|
|
Co-Founder, Chief Executive
Officer, President, Secretary, Treasurer and Director
|
|
Alex Weil
|
|
Chief Financial Officer
and Director Nominee
|
|
Jonathan Biele
|
|
Director Nominee
|
|
Perry
Boyle
|
|
Director
Nominee
|
|
Roderick Hardamon
|
|
Director
Nominee
|
|
Jory Des Jardins
|
|
Director
Nominee
|
|
Hitesh Thakrar
|
|
Director
Nominee
|
|
Todd Thomson
|
|
Director
Nominee
|
Kerry Propper,
46, is our co-founder and will serve as our Chairman of the board of directors upon the effectiveness of the registration
statement of which this prospectus is a part. Mr. Propper was co-founder of Chardan and served as its chief executive officer and head
of its investment bank from 2003 to 2015. He is a pioneer in the special purpose acquisition marketplace and has been an executive or
senior advisor for six special purpose acquisition companies. Since 2015 Mr. Propper has been the chairman of Chardan’s board of
directors and the co-founder and managing partner of ATW Partners, a growth-focused investment firm. Mr. Propper also sits on the board
of 340Basics, Credit Sesame, PierianDx, and China Networks. Mr. Propper dedicates much of his time to philanthropy and is a founding
member of Nadia’s Initiative. He also serves on the board of trustees of the International Crisis Group and sits on the executive
boards of Keep A Child Alive, Voices of Rwanda, Yazda and Digital Citizens Fund. Mr. Propper earned his B.A. in Economics and International
Studies from Colby College. We believe Mr. Propper is qualified to serve on our board of directors because of his extensive industry
and transaction expertise and wide network of relationships with industry participants.
Jonas Grossman,
47, is our co-founder and has been our Chief Executive Officer and a member of our board of directors since June 2020 and our President,
Secretary, and Treasurer since July 2020. Since July 2020, Mr. Grossman has served as Chief Executive Officer and director
of Chardan NexTech Acquisition Corp. Since April 2020, Mr. Grossman has been the Chief Executive Officer and president of Chardan
Healthcare Acquisition 2 Corp., a special purpose acquisition company, which announced its merger with Renovacor, Inc in March 2021.
He was the Chief Executive officer and President of Chardan Healthcare Acquisition Corp. from March 2018 until its merger in October 2019
with BiomX (NYSE: PHGE). Mr. Grossman is currently a director of BiomX. He was a co-founder and director for LifeSci Acquisition
Corp., a special purpose acquisition company from March 2020 until its merger with Vincera Pharma, Inc. in December of
2020. Since December 2020, Mr. Grossman has served as a director of Ventoux CCM Acquisition Corp., a special purpose acquisition
company. Since May 2021, Mr. Grossman has served as a director of CleanTech Acquisition Corp., a special purpose acquisition
company. He has served as managing partner and head of capital markets for Chardan, a New York headquartered broker/dealer, since December 2003,
and has additionally served as president of Chardan since September 2015. Since 2003, Mr. Grossman has overseen the Chardan’s
investment banking and capital markets activities and initiatives. He has extensive transactional experience having led or managed more
than 500 transactions during his tenure at Chardan. Since December 2006, Mr. Grossman has served as a founding partner for
Cornix Advisors, LLC, a New York based hedge fund. From 2001 until 2003, Mr. Grossman worked at Ramius Capital Group, LLC, a global
multi-strategy hedge fund where he served as Vice President and Head Trader. Mr. Grossman served as a director for Ideanomics, Inc.
(formerly China Broadband, Inc.) (NASDAQ: IDEX) from January 2008 until November 2010. He holds a B.A. in Economics from
Cornell University and an M.B.A. from NYU’s Stern School of Business. Mr. Grossman has served on the board of directors for
UNICEF since December 2016. We believe Mr. Grossman is qualified to serve on our board of directors because of his long-running
capital markets experience as well as his previous company board positions.
Alex
Weil, 49, has served as our Chief Financial Officer since April 2021 and will serve as a member of our board of directors
upon the effective date of the registration statement of which this prospectus is a part. Since March 2021, Mr. Weil has served
as chief financial officer of Chardan NexTech Acquisition Corp., and he has agreed to serve on the board of directors. Mr. Weil
has served as managing director and co-head of FinTech investment banking at Chardan, a New York headquartered broker/dealer, since March 2020
and as a director of Ventoux CCM Acquisition Corp., a special purpose acquisition company, since December 2020. From January 2018
to March 2020, he served as managing director and head of insurtech investment banking at SenaHill Securities, LLC, a New York headquartered
broker/dealer. From January 2013 to September 2017, Mr. Weil was a director at PricewaterhouseCoopers Inc., a network
of firms providing assurance, advisory and tax services. Prior to 2012, Mr. Weil held positions as a director at Lazard Middle Market,
LLC, an executive director at UBS Securities LLC and a director at Citigroup Global Markets Inc. Mr. Weil holds a B.A. in Business
Administration from the University of Colorado, Boulder. We believe Mr. Weil is qualified to serve on our board of directors extensive
capital markets and transaction management experience and network of relationships.
Jonathan
C. “Jon” Biele, 51, has agreed to become a member of our board of directors as of the effective date of the
registration statement of which this prospectus is a part. Mr. Biele recently joined PREEM Inc., a vertical technology platform,
as head of business and corporate development after a 28-year career in investment banking serving in a variety of leadership roles.
Most recently, Mr. Biele served as head of technology and services investment banking after rejuvenating the equity capital markets
practice at SunTrust Robinson Humphrey, where he worked from July 2013 to February 2020. During his career, Mr. Biele
focused on providing capital markets, strategic and tactical advice to companies, boards of directors, private equity and venture capitalists.
In addition to his tenure at SunTrust Robinson Humphrey, Mr. Biele served as head of equity capital markets for Citadel Securities
from 2010 to 2013, for Cowen and Co. from 2007 to 2010, and for Lazard Freres from 2005 to 2007, in addition to his contribution in a
variety of capacities with the equity capital markets departments of Lehman Brothers, ABN Amro Rothschild, and UBS Securities. In these
roles Mr. Biele originated and executed numerous public and private equity and debt financings and provided strategic advice. His
vast experience in corporate finance and advisory spans across multiple sectors and asset classes both public and private. In addition
to his professional activities, Mr. Biele most recently completed a third term as a trustee of Burke Mountain Academy, a premier
ski academy in the United States, and remains the lead investor and advisor to the chief executive officer of inGamba Tours, a luxury
cyclo-tourism business. Mr. Biele earned a B.A. in History in 1992 from St. Lawrence University. We believe that Mr. Biele’s
vast experience in corporate finance and strategy, in addition to his vast network of relationships, will be an extremely valuable contribution
to our board of directors.
Perry
Boyle, 57, will serve as a member of our board of directors upon the effective date of the registration statement of which
this prospectus is a part. Mr. Boyle was with Point72 Asset Management, L.P., or Point 72, and Point 72 affiliates from 2004 through
his retirement in March 2020. He helped lead Point72’s launch as a registered investment advisor, raising over $6 billion
in external capital. He originally joined S.A.C. Capital Advisors in 2004 as the firm’s first director of research. In January 2013
he became head of equities and, in January 2015, he became head of discretionary investing at Point72. From June 2016 through
December 2017 he served as the president and chief investment officer of Stamford Harbor Capital, L.P., a company owned by businessman
Steven A. Cohen. He returned to Point72 in January 2018. In his various leadership roles at the firm, Mr. Boyle managed the
long/short and macro portfolios. He created and led the firm’s professional development programs, including P72 Academy and the
9s Program, and helped drive the internationalization of the Point72, overseeing offices in London, Hong Kong, Tokyo and Singapore.
Prior to joining S.A.C., Mr. Boyle was a founding partner of Thomas Weisel Partners from 2000 until 2004, and a managing director
at Alex. Brown & Sons from 1992-2000. He began his career as an investment banker with Salomon Brothers Inc. Mr. Boyle
is a member of the advisory board of the Center for a New American Security (CNAS), and a director of The US Friends of the International
Institute for Strategic Studies (IISS). He has agreed to serve on the board of directors of Chardan NexTech Acquisition Corp. upon the
effectiveness of its registration statement. He was a 2018 and 2019 delegate from the IISS to the Shangri-La Dialogue in Singapore. He
is a council member of the Hoover Institution and a Lionel Curtis member of Chatham House. Mr. Boyle helps lead the annual Ride
For Our Vets, the major source of funding for the Connecticut Veterans Legal Center. He received his B.A. in Economics from Stanford
University, his M.B.A. from Dartmouth College and a M.A. from the Fletcher School at Tufts University. He has lectured on investing at
Brown, Yale, Dartmouth, Harvard, Cambridge and UNC, and delivered testimony to Congress on financial regulation. We believe Mr. Boyle
is qualified to serve on our board of directors because of industry leadership and capital markets experience from research to fundraising.
Roderick
Hardamon, 44, will serve as a member of our board of directors upon the effective date of the registration statement of
which this prospectus is a part. Mr. Hardamon has served as chief executive officer of URGE Imprint LLC, a boutique management consulting
firm headquartered in Detroit, Michigan, and URGE Development Group, a real estate development firm headquartered in Detroit, Michigan,
since May 2016. From July 1998 to March 2016, Mr. Hardamon held various positions at Citigroup, a leading global
bank, finally serving as managing director and North American head of Citigroup’s alternative investor services business. From
March 2016 to April 2016, Mr. Hardamon briefly served as a managing director at SS&C Technologies, a global provider
of services and software for the financial services and healthcare industries. Mr. Hardamon graduated from Morehouse College with
B.A.s in accounting and Philosophy in 1998. We believe Mr. Hardamon is qualified to serve on our board of directors because of his
extensive experience in business innovation, mergers and acquisitions, and senior executive leadership.
Jory
Des Jardins, 49, will serve as a member of our board of directors upon the effective date of the registration statement
of which this prospectus is a part. Ms. Jardins is the chief marketing officer of The @ Company, a position she has held since 2020.
She has also served as VC-in-Residence at the W Fund since 2020. Ms. Jardins recently served as the head of global startup marketing
at Amazon Web Services from 2019 to 2020. Before her time at Amazon Web Services, she served as the global head of community at ConsenSys
from 2018 to 2019. Ms. Jardins served as an advisor at Tribal Advisors from 2016 to 2018. In 2005, she co-founded BlogHer and served
as the company’s president until its acquisition in 2015. Ms. Jardins graduated from the University of Illinois at Urbana-Champaign
in 1993 where she studied history, literature, and psychology. We believe that Ms. Jardins is qualified to serve on our board of
directors given her exposure to dozens of scaling startups as well as her experience with disruptive technology.
Hitesh
Thakrar, 59, will serve as a member of our board of directors upon the effective date of the registration statement of
which this prospectus is a part. Mr. Thakrar is an experienced investor in the technology sector, having spent over 20 years investing
in public equities in the life sciences, information technology and innovation sectors. Since 2015, he has been active in early stage
venture investing. Mr. Thakrar is currently a Venture Partner at Syncona Limited, a Wellcome Trust backed early stage venture fund, a
position he has held since February 2016. He has also served as a Governance Board Member of KQ Labs at the Francis Crick Institute since
December 2018. Since August 2020, he has been the main Board Trustee of the Alan Turing Institute which is the UK National Institute
for Artificial Intelligence and Data Science research. Additionally, since November 2016, Mr. Thakrar has been the Chair of the Investment
Committee for Newable Ventures, a pre-Series A fund focused on deep technology. He has also served as an advisor to UKRI’s Science
and Technology Funding Council (SFTC), which helps early stage companies spin out from UK universities, since July 2020. He has previously
served as a non-executive director for Desktop Genetics and Tropic Biosciences since 2015 and 2017 respectively, both of which specialize
in the use of CRISPR technology in gene editing. Previously, Mr. Thakrar held the position of Portfolio Manager, Global Innovation Fund
with the Abu Dhabi Investment Authority (ADIA), from 2009 until 2015. He has worked at several other public market institutions in global
equity research and fund management including JP Morgan, Aviva Group, Dresdner Bank and New Star Asset Management. He has previously
held the position of Innovation Fellow at the University of Cambridge, recently joined as a Trustee of the Royal National Orthopaedic
Hospital Charity and is a member of the commercial Board of the Institute and Audit committee. Mr. Thakrar has a degree in chemistry
from Kings College, London, an MBA from Cranfield University and a CFA from the American Association of Investment Analysts. We believe
Mr. Thakrar is qualified to serve as a member of our board of directors given his decades of technology investing and public company
expertise.
Todd
Thomson, 60, will serve as a member of our board of directors upon the effective date of the registration statement of
which this prospectus is a part. He is currently the chief operating officer and chief financial officer of Kairos Ventures, an early-stage
investment firm. He is an accomplished operating executive and entrepreneur, having served as Citigroup chief financial officer for five
years and as chief executive officer of Citigroup’s nearly $10 billion global wealth management division for more than two years.
Mr. Thomson is a leading practitioner on mergers and acquisitions and business strategy, having led the acquisition and strategy efforts
for Citigroup and GE Capital, as well as serving as advisor to Fortune 500 firms while at Bain & Co., Booz Allen Hamilton, and Barents
Group. He has extensive investing experience as chief executive officer of Citigroup alternative investments, chairman of the Citigroup
pension investment committee, chairman of the dynasty investment committee, and a member of the investment committees for the Davidson
College and World Resources Institute endowments. Prior to joining Kairos Ventures, Mr. Thomson served as co-founder and chairman of
Dynasty Financial Partners, or Dynasty, a leading investment and technology platform for sophisticated independent advisors. Founded
by Mr. Thomson and his colleagues in 2010, Dynasty serves nearly 50 registered investment advisor firms nationally, with $50 billion
under management. In addition to serving as chairman, Todd served in several operating roles since Dynasty’s founding, including
chairing the investment committee, serving as chief investment officer, and designing and leading Dynasty Capital Strategies. Mr. Thomson
has also agreed to serve on the board of Chardan NexTech Acquisition Corp., a blank check company, upon the effectiveness of its registration
statement. We believe Mr. Thomson is qualified to serve on our board of directors because experience in public company corporate finance
and early-stage investing.
Director Independence
So
long as we obtain and maintain a listing for our securities on Nasdaq, a majority of our board of directors generally must be
independent, subject to certain limited exceptions and phase-in period set forth under the rules of Nasdaq. An
“independent director” is defined generally as a person other than an officer or employee of the company or its
subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would
interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board
of directors has determined that each of Messrs. Biele, Boyle, Hardamon, Thakrar and
Thomson and Ms. Jardins, is an “independent director” as defined in the Nasdaq listing standards and
applicable SEC rules. We expect a majority of our board of directors to be comprised of independent directors within
12 months from the date of listing to comply with the majority independent board requirement in
Rule 5605(b) of the Nasdaq listing rules. Our independent directors will have regularly scheduled meetings at which only
independent directors are present.
Number and Terms of Office of Officers and
Directors
We will have eight
directors upon completion of this offering. Our board of directors will be divided into two classes with only one class of directors
being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders)
serving a 2-year term. In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual meeting
until one year after our first fiscal year end following our listing on Nasdaq. The term of office of the first class of directors,
consisting of Messrs. Biele, Boyle, Hardamon, Thakrar and
Thomson and Ms. Jardins will expire at our first annual meeting of stockholders. The term of office of the
second class of directors, consisting of Messrs. Grossman, Propper, and Weil, will expire at our second annual meeting of
stockholders. We may not hold an annual meeting of stockholders until after we consummate our initial business combination. Subject
to the terms of any preferred stock, any or all of the directors may be removed from office at any time, but only for cause and only
by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of our capital stock entitled to
vote generally in the election of directors, voting together as a single class; Subject to any other special rights applicable to
the stockholders, including holders of preferred stock, whenever any director shall have been elected by the holders of any class of
stock voting separately as a class, such director may be removed and the vacancy filled only by the holders of that class of stock
voting separately as a class. Vacancies caused by any such removal and not filled by the stockholders at the meeting at which such
removal shall have been made, or any vacancy caused by the death or resignation of any director or for any other reason, and any
newly created directorship resulting from any increase in the authorized number of directors, may be filled by the affirmative vote
of a majority of the directors then in office, although less than a quorum, and any director so elected to fill any such vacancy or
newly created directorship shall hold office until his or her successor is elected and qualified or until his or her earlier
resignation or removal.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board
of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that
our officers may consist of a Chairman of the Board, Vice Chairmen of the Board, President, Vice Presidents, Secretary, Treasurer, Assistant
Secretaries, Assistant Treasurers, and such other offices as may be determined by the board of directors.
Officer and Director Compensation
None of our officers or directors
has received any cash compensation for services rendered to us. Except as described below, to date, no compensation of any kind, including
any finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our officers
and directors, or, other than as described herein, to our sponsor or any affiliate of our sponsor or officers, prior to, or in connection
with any services rendered in order to effectuate, the consummation of our initial business combination (regardless of the type of transaction
that it is). However, in May and June 2021, our sponsor transferred
20,000 founder shares to each of Messrs. Biele, Boyle, Hardamon, Thakrar and Thomson
and Ms. Jardins. In addition,
commencing on the date our securities are first listed on Nasdaq, we will pay an amount equal to $10,000 per month to our sponsor for
office space, administrative and shared personnel support services. Also, our officers and directors 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. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers
or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made using funds held outside
the trust account. Other than quarterly audit committee review of such payments, we do not expect to have any additional controls in
place governing our reimbursement payments to our directors and officers for their out-of-pocket expenses incurred in connection with
identifying and consummating an initial business combination.
After the completion of our
initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials
or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business combination. We have not
established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management.
It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination, because the directors
of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to
our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take
any action to ensure that members of our management team maintain their positions with us after the consummation of our initial business
combination, although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements
to remain with us after our initial business combination. The existence or terms of any such employment or consulting arrangements to
retain their positions with us may influence our management’s motivation in identifying or selecting a target business but we do
not believe that the ability of our management to remain with us after the consummation of our initial business combination will be a
determining factor in our decision to proceed with any potential business combination. We are not party to any agreements with our officers
and directors that provide for benefits upon termination of employment.
Committees of the Board of Directors
Our board of directors will
have two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and certain limited exceptions,
Nasdaq rules and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of
independent directors. In addition, Nasdaq rules generally require that the compensation committee of a listed company be comprised
solely of independent directors, subject to certain limited exceptions set forth thereunder.
Audit Committee
Prior to the consummation
of this offering, we will establish an audit committee of the board of directors. Messrs. Hardamon, Boyle and Grossman will serve
as members of our audit committee, and Mr. Hardamon will chair the audit committee. Under the Nasdaq listing standards and applicable
SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain
phase-in provisions. Mr. Hardamon and Mr. Boyle meet the independent director standard under Nasdaq listing standards and under
Rule 10-A-3(b) (1) of the Exchange Act but Mr. Grossman does not meet such standards.
Each member of the audit
committee is financially literate and our board of directors has determined that Mr. Hardamon qualifies as an “audit committee
financial expert” as defined in applicable SEC rules.
We
will adopt an audit committee charter, which will detail the principal functions of the audit committee, including:
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the
appointment, compensation, retention, replacement, and oversight of the work of the independent
registered public accounting firm engaged by us;
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pre-approving
all audit and permitted non-audit services to be provided by the independent registered public
accounting firm engaged by us, and establishing pre-approval policies and procedures;
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setting
clear hiring policies for employees or former employees of the independent registered public
accounting firm, including but not limited to, as required by applicable laws and regulations;
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setting
clear policies for audit partner rotation in compliance with applicable laws and regulations;
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obtaining
and reviewing a report, at least annually, from the independent registered public accounting
firm describing (i) the independent registered public accounting firm’s internal
quality-control procedures, (ii) any material issues raised by the most recent internal
quality-control review, or peer review, of the audit firm, or by any inquiry or investigation
by governmental or professional authorities within the preceding five years respecting one
or more independent audits carried out by the firm and any steps taken to deal with such
issues and (iii) all relationships between the independent registered public accounting
firm and us to assess the independent registered public accounting firm’s independence;
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reviewing
and approving any related party transaction required to be disclosed pursuant to Item 404
of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
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reviewing
with management, the independent registered public accounting firm, and our legal advisors,
as appropriate, any legal, regulatory or compliance matters, including any correspondence
with regulators or government agencies and any employee complaints or published reports that
raise material issues regarding our financial statements or accounting policies and any significant
changes in accounting standards or rules promulgated by the Financial Accounting Standards
Board, the SEC or other regulatory authorities.
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Compensation Committee
Prior to the consummation
of this offering, we will establish a compensation committee of the board of directors. Ms. Jardins, Mr. Biele and Mr. Thomson
will serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we generally would
be required to have at least two members of the compensation committee, all of whom must be independent, subject to certain limited exceptions
set forth under the rules of Nasdaq. Ms. Jardins, Mr. Biele and Mr. Thomson are independent, and Ms. Jardins will
chair the compensation committee.
We will adopt a compensation
committee charter, which will detail the principal functions of the compensation committee, including:
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reviewing
and approving on an annual basis the corporate goals and objectives relevant to our Chief
Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive
Officer’s performance in light of such goals and objectives and determining and approving
the remuneration (if any) of our Chief Executive Officer based on such evaluation;
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reviewing
and approving on an annual basis the compensation, if any is paid by us, of all of our other
officers;
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reviewing
on an annual basis our executive compensation policies and plans;
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implementing
and administering our incentive compensation equity-based remuneration plans;
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assisting
management in complying with our proxy statement and annual report disclosure requirements;
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approving
all special perquisites, special cash payments and other special compensation and benefit
arrangements for our officers and employees;
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if
required, producing a report on executive compensation to be included in our annual proxy
statement; and
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reviewing,
evaluating and recommending changes, if appropriate, to the remuneration for directors.
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The
charter will also provide 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.
Director Nominations
We do not have a standing
nominating committee, although we intend to form a corporate governance and nominating committee as and when required to do so by law
or Nasdaq rules. In accordance with Rule 5605 of the Nasdaq rules, a majority of the independent directors may recommend a director
nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry
out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
All of our independent directors who will participate in the consideration and recommendation of director nominees. In accordance with
Rule 5605 of the Nasdaq rules, each of Messrs. Biele, Boyle, Hardamon, Thakrar and Thomson and Ms. Jardins is independent. As there is no standing nominating committee, we do not have a nominating committee charter
in place.
The board of directors will
also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees
to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders
that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws. However,
prior to our initial business combination, holders of our public shares will not have the right to recommend director candidates for
nomination to our board of directors.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience,
knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests
of our stockholders.
Code of Ethics
Prior to the consummation
of this offering, we will adopt a Code of Ethics applicable to our directors, officers and employees. We will file a copy of our Code
of Ethics and our audit and compensation committee charters as exhibits to the registration statement of which this prospectus is a part.
You will be able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a
copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of
certain provisions of our Code of Ethics in a Current Report on Form 8-K. See the section of this prospectus entitled “Where
You Can Find Additional Information” for more information.
Conflicts of Interest
All
of our officers are employed by Chardan or its affiliates. Chardan is continuously made aware of potential business opportunities, one
or more of which we may desire to pursue for an initial business combination. While Chardan will not have any duty to offer acquisition
opportunities to us, Chardan may become aware of a potential transaction that is an attractive opportunity for us, which Chardan may
decide to share with us. In addition, our officers and directors may have a duty to offer acquisition opportunities to other entities
to which they owe duties or clients of affiliates of our sponsor.
As
a result, affiliates of our sponsor and their respective clients may compete with us for acquisition opportunities in the same industries
and sectors as we may target for our initial business combination. If any of them decide to pursue any such opportunity, we may be precluded
from procuring such opportunities. In addition, investment ideas generated within Chardan, including by any of our officers and other
persons who may make decisions for the company, may be suitable both for us and for affiliates of our sponsor or any of their respective
clients, and will be directed initially to such persons rather than to us. None of Chardan nor members of our management team who are
also employed by Chardan or any of its affiliates have any obligation to present us with any opportunity for a potential business combination
of which they become aware unless it is offered to them solely in their capacity as a director or officer of the Company and after they
have satisfied their contractual and fiduciary obligations to other parties.
Our
sponsor, officers, directors, Chardan and their affiliates may participate in the formation of, or become an officer or director of,
any other blank check company prior to completion of our initial business combination. In particular, certain of our executive officers
and directors also serve as executive officers or directors of Chardan NexTech 1, which is focused on searching for businesses that may
provide significant opportunities for attractive investor returns in industries similar to the industries in which our search is focused.
As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination
opportunities to us or to any other blank check company with which they may become involved.
Each
of our officers and directors presently has, and any of them in the future may have additional, fiduciary, contractual or other obligations
or duties to one or more other entities pursuant to which such officer or director is or will be required to present a business combination
opportunity, including an Affiliated SPAC. Our amended and restated certificate of incorporation will provide that we renounce our interest
in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in
his or her capacity as a director or officer of our company, such opportunity is one we are legally and contractually permitted to undertake
and would otherwise be reasonable for us to pursue, and to the extent the director or officer is permitted to refer that opportunity
to us without violating another legal obligation. Accordingly, if any of our officers or directors becomes aware of a business combination
opportunity which is suitable for one or more entities to which he or she has fiduciary, contractual or other obligations or duties,
including an Affiliated SPAC, he or she will honor these obligations and duties to present such business combination opportunity to such
entities first, and only present it to us if such entities reject the opportunity and he or she determines to present the opportunity
to us.
Notwithstanding
the foregoing, we may, at our option, pursue an Affiliated Joint Acquisition. We do not expect that we would pursue any such opportunity
with an Affiliated SPAC. This would only occur, though, if (i) permitted by applicable regulatory and other legal limitations; (ii) we
and our sponsor considered a transaction to be mutually beneficial to us as well as the affiliated entity; and (iii) other business
reasons exist to do so, such as the strategic merits of including such co-investors, the need for additional capital beyond the amount
held in our trust account to fund the initial business combination and/or the desire to obtain committed capital for closing the initial
business combination. An Affiliated Joint Acquisition could involve a co-investment with us in the target business at the time of our
initial business combination, or we could raise additional proceeds to complete the initial business combination. Any such Affiliated
Joint Acquisition or specified future issuance would be in addition to, and would not include, the forward purchase securities issued
pursuant to the forward purchase contract.
The
potential conflicts described above may limit our ability to enter into a business combination or other transactions. These circumstances
could give rise to numerous situations where interests may conflict. There can be no assurance that these or other conflicts of interest
with the potential for adverse effects on the Company and investors will not arise.
Potential investors should
be aware of the additional 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 management has
pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest
in determining to which entity a particular business opportunity should be presented, any
pre-existing fiduciary obligation will be presented the opportunity before we are presented
with it.
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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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The
founder shares owned by our officers and directors will be released from escrow only if a
business combination is successfully completed and subject to certain other limitations.
Additionally, our officers and directors will not receive distributions from the trust account
with respect to any of their founder shares if we do not complete a business combination.
In addition, our officers and directors may loan funds to us after this offering and may
be owed reimbursement for expenses incurred in connection with certain activities on our
behalf which would only be repaid if we complete an initial business combination. For the
foregoing reasons, the personal and financial interests of our directors and executive officers
may influence their motivation in identifying and selecting a target business, completing
a business combination in a timely manner and securing the release of their shares.
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Our
sponsor, officers and directors have agreed to waive their redemption rights with respect
to any founder shares and any public shares held by them in connection with the consummation
of our initial business combination. Additionally, our initial stockholders, officers and
directors have agreed to waive their rights to liquidating distributions from the trust account
with respect to any founder shares held by them if we fail to consummate our initial business
combination within the completion window. However, if our initial stockholders or any of
our officers, directors or affiliates acquire public shares in or after this offering, they
will be entitled to liquidating distributions from the trust account with respect to such
public shares if we fail to consummate our initial business combination within the completion
window. 50% of these founder shares will not be transferred, assigned, sold or released from
escrow until the earlier of (i) six months after the date of the consummation of our
initial business combination or (ii) the date on which the closing price of our shares
of common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends,
reorganizations and recapitalizations) for any 10 trading days within any 30-trading day
period commencing after our initial business combination. And the remaining 50% of the founder
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 consummate a subsequent liquidation,
merger, stock exchange or other similar transaction that results in all of our stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
Since our sponsor, officers and directors may directly or indirectly own common stock and
warrants following this offering, our officers and directors may have a conflict of interest
in determining whether a particular target business is an appropriate business with which
to effectuate our initial business combination.
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Our
officers and directors may have a conflict of interest with respect to evaluating a particular
business combination if the retention or resignation of any such officers and directors was
included by a target business as a condition to any agreement with respect to our initial
business combination.
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Our
sponsor, officers or directors may have a conflict of interest with respect to evaluating
a business combination and financing arrangements as we may obtain loans from our sponsor
or an affiliate of our sponsor or any of our officers or directors to finance transaction
costs in connection with an intended initial business combination.
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In
order to minimize potential conflicts of interest which may arise from multiple affiliations,
our officers will be required to present all suitable target businesses to an Affiliated
SPAC prior to presenting them to us, unless such opportunity is expressly offered to such
individual solely in his capacity as an officer of our company and such opportunity is one
we are legally and contractually permitted to undertake and would otherwise be reasonable
for us to pursue, and to the extent such individual is permitted to refer that opportunity
to us without violating another legal obligation.
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Our
sponsor intends to allocate up to 20,000 founder shares to each of our independent directors.
Such securities will be worthless if we do not complete an initial business combination.
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We
may engage Chardan, or another affiliate of our sponsor, as a financial advisor in connection
with our initial business combination and pay such affiliate a customary financial advisory
fee in an amount that constitutes a market standard financial advisory fee for comparable
transactions.
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Furthermore,
we may acquire a target company that has engaged Chardan, or another affiliate of our sponsor,
as a financial advisor, and such target company may pay such affiliate a financial advisory
fee in connection with 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) 15 months (or up to 21 months, as applicable)
from the date of this prospectus. 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 other relevant pre-existing fiduciary or contractual obligations of our officers and directors:
|
Name
of Affiliated Company
|
|
Name
of Individual
|
|
Priority/Preference
relative to
Chardan NexTech Acquisition 2 Corp.
|
|
340Basics d/b/a Nuvem
ATW Partners
Chardan Capital Markets, LLC
Chardan NexTech Acquisition Corp.
China Networks International Holdings Ltd.
Credit Sesame, Inc.
PierianDx, Inc.
|
|
Kerry
Propper
|
|
340Basics
d/b/a Nuvem, ATW Partners, and Chardan Capital Markets, LLC, Chardan NexTech Acquisition Corp., China Networks International Holdings
Ltd., Credit Sesame, Inc., and PierianDx, Inc. will each have priority over us.
|
|
|
|
|
|
|
|
Chardan Capital
Markets, LLC
Chardan Healthcare Acquisition 2 Corp.
Chardan NexTech Acquisition Corp.
Chardan NexTech Investments LLC
CleanTech Acquisition Corp.
Cornix Advisers, LLC
BiomX, Inc.
Ventoux CCM Acquisition Corp.
|
|
Jonas
Grossman
|
|
Chardan
Capital Markets, LLC, Chardan Healthcare Acquisition 2 Corp., Chardan NexTech Acquisition Corp., Chardan NexTech Investments LLC,
Cornix Advisers, LLC, BiomX, Inc. and Ventoux CCM Acquisition Corp. will each have priority over us.
|
|
|
|
|
|
|
|
Chardan Capital Markets, LLC
Chardan NexTech Acquisition Corp.
Ventoux CCM Acquisition Corp.
|
|
Alex
Weil
|
|
Chardan
Capital Markets, LLC, Chardan NexTech Acquisition Corp. and Ventoux CCM Acquisition Corp. will each have priority over us.
|
|
|
|
|
|
|
|
PREEM
Inc.
|
|
Jonathan
Biele
|
|
PREEM
Inc. will have priority over us.
|
|
|
|
|
|
|
|
Chardan
NexTech Acquisition Corp.
|
|
Perry
Boyle
|
|
Chardan
NexTech Acquisition Corp. will have priority over us.
|
|
|
|
|
|
|
URGE Development
Group
URGE Imprint LLC
|
|
Roderick
Hardamon
|
|
URGE
Development Group and URGE Imprint LLC will each have priority over us.
|
|
|
|
|
|
|
The
@ Company
W Fund
|
|
Jory
Des Jardins
|
|
The
@ Company and W Fund will each have priority over us.
|
|
|
|
|
|
|
|
Syncona Limited
KQ Labs
|
|
Hitesh
Thakrar
|
|
Syncona
Limited and KQ Labs will each have priority over us.
|
|
|
|
|
|
|
|
Kairos Ventures Investments, LLC
Chardan NexTech Acquisition Corp.
|
|
Todd
Thomson
|
|
Kairos Ventures Investments, LLC and Chardan NexTech Acquisition
Corp. will each have priority over us.
|
As noted above, some of our
officers and directors are affiliated with Chardan, which is also our sponsor and the underwriter in this offering. Such officers and
directors owe a pre-existing fiduciary duty to Chardan, meaning that they will present opportunities to Chardan prior to presenting them
to us, if, for example, a potential target company is open to either raising funds in an offering or engaging in a transaction with a
SPAC. This may limit the number of potential targets they present to us for purposes of completing a business combination.
In connection with the vote
required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to
vote their respective founder shares in favor of any proposed business combination. In addition, they have agreed to waive their respective
rights to participate in any liquidation distribution with respect to those shares of common stock acquired by them prior to this offering.
If they purchase shares of common stock in this offering or in the open market, however, they would be entitled to participate in any
liquidation distribution in respect of such shares but have agreed not to redeem such shares (or sell their shares in any tender offer)
in connection with the consummation of our initial business combination or an amendment to our certificate of incorporation relating
to pre-business combination activity.
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 initial stockholders, 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 any of our initial stockholders, officers, directors,
special advisors or their respective affiliates 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.
Limitation on Liability and Indemnification
of Officers and Directors
Our
amended and restated certificate of incorporation will provide that our officers and directors will be indemnified by us to the fullest
extent authorized by Delaware law, as it now exists or may in the future be amended. In addition, our amended and restated certificate
of incorporation will provide that our directors will not be personally liable for monetary damages to us or our stockholders for breaches
of their fiduciary duty as directors, unless they violated their duty of loyalty to us or our stockholders, acted in bad faith, knowingly
or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived
an improper personal benefit from their actions as directors.
We
will enter into agreements with our officers and directors to provide contractual indemnification in addition to the indemnification
provided for in our amended and restated certificate of incorporation. Our bylaws also will permit us to secure insurance on behalf of
any officer, director or employee for any liability arising out of his or her actions, regardless of whether Delaware law would permit
such indemnification. We will purchase a policy of directors’ and officers’ liability insurance that insures our officers
and directors against the cost of defense, settlement or payment of a judgment in some circumstances and insures us against our obligations
to indemnify our officers and directors.
These
provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. These provisions
also may have the effect of reducing the likelihood of derivative litigation against officers and directors, even though such an action,
if successful, might otherwise benefit us and our stockholders. Furthermore, a stockholder’s investment may be adversely affected
to the extent we pay the costs of settlement and damage awards against officers and directors pursuant to these indemnification provisions.
We
believe that these provisions, the directors’ and officers’ liability insurance and the indemnity agreements are necessary
to attract and retain talented and experienced officers and directors.
PRINCIPAL
STOCKHOLDERS
The following table sets
forth information regarding the beneficial ownership of our shares of common stock as of the date of this prospectus and as adjusted
to reflect the sale of our shares of common stock included in the units offered by this prospectus (assuming none of the individuals
listed purchase units in this offering), by:
|
|
·
|
each
person known by us to be the beneficial owner of more than 5% of our issued and outstanding
shares of common stock;
|
|
|
·
|
each
of our officers, directors, and director nominees that beneficially owns shares of our common
stock; and
|
|
|
·
|
all
of our officers, directors, and director nominees as a group.
|
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 or beneficial ownership of the private warrants, as such warrants are not
exercisable within 60 days of the date of this prospectus.
On
July 23, 2020, our sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4,
2021, we effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock being held by our sponsor (up to 375,000 of
which are subject to forfeiture if the underwriters’ over-allotment option is not exercised in full). In May and June 2021, our
sponsor transferred 20,000 founder shares to each of Messrs. Biele, Boyle, Hardamon, Thakrar
and Thomson and Ms. Jardins. In addition, Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed,
pursuant to a written agreement, to purchase an aggregate of 5,238,461 (or up to 5,469,230 depending on the extent to which the
underwriters’ over-allotment option is exercised) private warrants for a purchase price of $0.65 per private warrant in a private
placement that will occur simultaneously with the closing of this offering. The following table presents the number of shares and percentage
of our common stock owned by our initial stockholders before and after this offering. The post-offering numbers and percentages presented
assume that the underwriters do not exercise their over-allotment option, that our initial stockholders forfeit 375,000 founder shares
on a pro rata basis, and that there are an aggregate of 12,500,000 shares of common stock, consisting of issued and outstanding after
this offering.
|
|
|
Prior
to Offering
|
|
|
After
Offering(2)
|
|
|
Name and
Address of Beneficial Owner(1)
|
|
Number
of Shares Beneficially Owned(2)
|
|
|
Approximate
Percentage of
Outstanding
Shares of
Common
Stock
|
|
|
Number
of Shares Beneficially Owned
|
|
|
Approximate
Percentage of
Outstanding
Shares of
Common
Stock
|
|
|
Chardan NexTech Investments 2
LLC(3)
|
|
|
2,755,000
|
|
|
|
95.83
|
%
|
|
|
2,380,000
|
|
|
|
19.04
|
%
|
|
Kerry Propper
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Jonas Grossman(3)
|
|
|
2,755,000
|
|
|
|
95.83
|
%
|
|
|
2,380,000
|
|
|
|
19.04
|
%
|
|
Alex Weil
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Jonathan Biele
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
Perry Boyle
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
Roderick Hardamon
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
Jory Des Jardins
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
Hitesh Thakrar
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
Todd Thomson
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
*
|
|
|
All officers and directors as a group (8 individuals)
|
|
|
2,875,000
|
|
|
|
100
|
%
|
|
|
2,500,000
|
|
|
|
20.0
|
%
|
* Less than
1%.
|
|
(1)
|
Unless
otherwise indicated, the business address of each of the individuals is c/o Chardan NexTech
Acquisition 2 Corp., 17 State Street, 21st Floor, New York, NY 10004.
|
|
|
(2)
|
Interests shown consist of founder
shares.
|
|
(3)
|
Our sponsor
is the record holder of such shares. Jonas Grossman is the sole member of our sponsor. As such, Mr. Grossman may be deemed to
have beneficial ownership of the common stock held directly by our sponsor. Mr. Grossman disclaims any beneficial ownership of the
reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. Certain other employees
of Chardan or its affiliates, including each of our executive officers, have direct or indirect membership interests in our sponsor,
and thus have pecuniary interests in certain of the reported shares.
|
Immediately after this offering,
our initial stockholders will beneficially own 20% of the then issued and outstanding shares of common stock (assuming none of them purchase
any units offered by this prospectus). None of our initial stockholders, officers and directors has indicated to us that he intends to
purchase securities in this offering. Because of the ownership block held by our initial stockholders, such individuals may be able to
effectively exercise control over all matters requiring approval by our stockholders, including the election of directors and approval
of significant corporate transactions other than approval of our initial business combination.
If the underwriters do not
exercise all or a portion of the over-allotment option, our initial stockholders will have up to an aggregate 375,000 shares of common
stock subject to forfeiture. Only a number of shares necessary to maintain our initial stockholders’ collective 20% ownership interest
in our shares of common stock after giving effect to the offering and the exercise, if any, of the underwriters’ over-allotment
option will be forfeited.
In
addition, Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase from us an aggregate of 5,238,461
(or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised) warrants at a price
of $0.65 per warrant ($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment option
is exercised)), with each warrant exercisable for one share of common stock at an exercise price of $11.50 per share. These purchases
will take place on a private placement basis simultaneously with the consummation of this offering.
The proceeds from the
sale of the private warrants will be added to the proceeds of this offering and placed in a trust account in the United States maintained
by Continental Stock Transfer & Trust Company, as trustee. If we do not complete our initial business combination within 15 months
(or up to 21 months, as applicable), the proceeds from the sale of the private warrants will be included in the liquidating distribution
to the holders of our public shares.
The private warrants are
identical to the warrants sold as part of the public units in this offering except that, so long as they are held by the initial purchasers
or their respective permitted transferees, the private warrants (i) will not be redeemable by us, (ii) may not, subject to
certain limited exceptions, be transferred, assigned or sold by the initial purchaser until 30 days after the completion of our initial
business combination, and (iii) may be exercised by the holders on a cashless basis. The private warrants purchased by Chardan NexTech
2 Warrant Holdings LLC will not be exercisable more than five years from the effective date of the registration statement, of which this
prospectus forms a part, in accordance with Financial Industry Regulatory Authority, or FINRA, Rule 5110(g), as long as Chardan
or any of its related persons beneficially own these private warrants
To meet our working capital
needs following the consummation of this offering, if the funds not held in the trust account are insufficient, our initial stockholders,
officers and directors or their affiliates 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 be paid upon
consummation of our initial business combination, without interest. Loans made by Chardan or any of its related persons will not be convertible
into any of our securities and Chardan and its related persons will have no recourse with respect to their ability to convert their loans
into any of our securities.
Each of our sponsor, officers
and directors is our “promoter,” as that term is defined under the federal securities laws.
Restrictions on Transfers of Founder Shares
and Private Warrants
All of the founder shares
issued and outstanding prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer & Trust
Company, as escrow agent, until (1) with respect to 50% of the founder shares, the earlier of six months after the date of the consummation
of our initial business combination and the date on which the closing price of our common stock equals or exceeds $12.50 per share (as
adjusted for share splits, share capitalizations, reorganizations and recapitalizations) for any 10 trading days within any 30-trading
day period commencing after our initial business combination and (2) with respect to the remaining 50% of the founder shares, 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 consummate a liquidation, merger, share exchange or other similar transaction which results in all of our stockholders
having the right to exchange their shares for cash, securities or other property. Up to 375,000 of the founder shares may also be released
from escrow earlier than this date for forfeiture and cancellation if the over-allotment option is not exercised in full as described
above.
During the escrow period,
the holders of the founder shares will not be able to sell or transfer their securities except (1) to any parties (including their
respective affiliates and stockholders) participating in the private placement of the private warrants, officers, directors, stockholders,
employees and members of our sponsor and its affiliates, (2) amongst initial stockholders or to our officers, directors, and employees,
(3) if a holder is an entity, as a distribution to its, partners, stockholders or members upon its liquidation, (4) by bona
fide gift to a member of the holder’s immediate family or to a trust, the beneficiary of which is a holder or a member of a holder’s
immediate family, for estate planning purposes, (5) by virtue of the laws of descent and distribution upon death, (6) pursuant
to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred in connection with purchases of our
securities, (8) by private sales at prices no greater than the price at which the shares were originally purchased, (9) in
the event of our liquidation prior to our completion of our initial business combination, (10) by virtue of the laws of the State
of Delaware or our sponsor’s operating agreement upon dissolution of our sponsor or the organizational documents of Chardan upon
dissolution of Chardan; or (11) for the cancellation of up to 375,000 founder shares subject to forfeiture to the extent that the underwriters’
over-allotment is not exercised in full or in part or in connection with the consummation of our initial business combination, in each
case (except for clause 11 or with our prior consent) where the transferee agrees to the terms of the escrow agreement and the insider
letter.
Registration Rights
The holders of our founder
shares issued and outstanding on the date of this prospectus, as well as the holders of the private warrants (and underlying securities)
will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering. 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 founder 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 warrants (and underlying
securities) 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 a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan
and its related persons may not, with respect to the private warrants purchased by Chardan NexTech 2 Warrant Holdings LLC , (i) have
more than one demand registration right at our expense, (ii) exercise their demand registration rights more than five years from
the effective date of the registration statement of which this prospectus forms a part, and (iii) exercise their “piggy-back”
registration rights more than seven years from the effective date of the registration statement of which this prospectus forms a part,
as long as Chardan or any of its related persons are beneficial owners of private warrants.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On July 23, 2020,
our sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4, 2021, we effected
a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. In
May and June 2021, our sponsor transferred 20,000 founder shares to each of Messrs. Biele,
Boyle, Hardamon, Thakrar and Thomson and Ms. Jardins. If the underwriters do not exercise all or a portion of their over-allotment
option, our initial stockholders have agreed to forfeit and immediately cancel up to an aggregate of 375,000 founder shares in proportion
to the portion of the over-allotment option that was not exercised.
If the underwriters determine
the size of the offering should be increased (including pursuant to Rule 462(b) under the Securities Act) or decreased, a share
capitalization or a contribution back to capital, as applicable, would be effectuated in order to maintain our initial stockholders’
ownership at 20% of the number of shares issued and outstanding after the closing of this offering.
Chardan
NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase from us an aggregate of 5,238,461 (or up
to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised) warrants at a price of $0.65
per warrant ($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment option is exercised)),
with each warrant exercisable for one share of common stock at an exercise price of $11.50 per share. These purchases will take place
on a private placement basis simultaneously with the consummation of this offering. If we do not complete our initial business combination
within 15 months from the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time
to consummate a business combination by the maximum amount as described in more detail in this prospectus), the proceeds from the sale
of the private warrants will be included in the liquidating distribution to the holders of our public shares. The private warrants are
identical to the warrants sold as part of the public units in this offering except that, so long as they are held by the initial purchasers
or their respective permitted transferees, the private warrants (i) will not be redeemable by us, (ii) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the initial purchaser until 30 days after the completion of our initial business combination,
and (iii) may be exercised by the holders on a cashless basis. The private warrants purchased by Chardan NexTech 2 Warrant Holdings LLC
will not be exercisable more than five years from the effective date of the registration statement, of which this prospectus forms a
part, in accordance with Financial Industry Regulatory Authority, or FINRA, Rule 5110(g), as long as Chardan or any of its related persons
beneficially own these private warrants.
To meet our working capital
needs following the consummation of this offering, if the funds not held in the trust account are insufficient, our initial stockholders,
officers and directors or their affiliates 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 be paid upon
consummation of our initial business combination, without interest. Loans made by Chardan or any of its related persons will not be convertible
into any of our securities and Chardan and its related persons will have no recourse with respect to their ability to convert their loans
into any of our securities.
Our initial stockholders,
holders of the private warrants (and all underlying securities) and holders of the warrants (and all underlying securities) issuable
in payment of working capital loans made to us, will be entitled to registration rights pursuant to an agreement to be signed prior to
or on the effective date of this offering. 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 founder 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 warrants or warrants 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 a business combination. We will bear the expenses
incurred in connection with the filing of any such registration statements. Chardan and its related persons may not, with respect to
the private warrants purchased by Chardan NexTech 2 Warrant Holdings LLC , (i) have more than one demand registration right at our
expense, (ii) exercise their demand registration rights more than five years from the effective date of the registration statement
of which this prospectus forms a part, and (iii) exercise their “piggy-back” registration rights more than seven years
from the effective date of the registration statement of which this prospectus forms a part, as long as Chardan or any of its related
persons are beneficial owners of private warrants.
We will have 15 months
from the closing of this offering (or up to 18 months from the closing of this offering if we have executed a definitive agreement and
filed a proxy statement for an initial business combination within 18 months from the closing of this offering) to consummate an initial
business combination. In addition, if we anticipate that we may not be able to consummate our initial business combination within 15
months and we have not entered into a definitive agreement and filed a proxy statement for an initial business combination by such date
(or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial business combination within 15 months
from the closing of this offering), our insiders or their affiliates may, but are not obligated to, extend the period of time to consummate
a business combination up to two times by an additional three months each time (for a total of up to 21 months to complete a business
combination); provided that, pursuant to the terms of our amended and restated certificate of incorporation and the trust
agreement to be entered into between us and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way
to extend the time available for us to consummate our initial business combination in the absence of a definitive agreement is for our
insiders or their affiliates or designees, upon five days’ advance notice prior to the applicable deadline, to deposit into the
trust account $1,000,000, or $1,150,000 if the over-allotment option is exercised in full ($0.10 per share in either case, or an aggregate
of $2,000,000 (or $2,300,000 if the over-allotment option is exercised in full)), on or prior to the date of the applicable deadline.
In the event that our insiders elected to extend the time to complete a business combination and deposited the applicable amount of money
into trust, the insiders would 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. 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. If we are
unable to consummate our initial business combination within such time period, we will, as promptly as possible but not more than 10
business days thereafter, redeem 100% of our outstanding public shares for a pro rata portion of the funds held in the trust account,
including a pro rata portion of any interest earned on the funds held in the trust account and not previously released to us to pay our
taxes, and then seek to dissolve and liquidate. However, we may not be able to distribute such amounts as a result of claims of creditors
which may take priority over the claims of our public stockholders. In the event of our dissolution and liquidation, the private units
will expire and will be worthless.
We
are not prohibited from pursuing an initial business combination with a business that is affiliated with our sponsor, its affiliates,
or our officers or directors, including an Affiliated Joint Acquisition. In the event we seek to complete our initial business combination
with a business that is affiliated with our sponsor, its affiliates or our officers or directors, we, or a committee of independent directors,
will obtain an opinion from an independent investment banking firm or another independent firm that commonly renders valuation opinions
that our initial business combination is fair to our stockholders from a financial point of view. Any such Affiliated Joint Acquisition
or specified future issuance would be in addition to, and would not include, the forward purchase securities issued pursuant to the forward
purchase contract.
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 any of our initial stockholders,
officers or directors who owned our shares of common stock prior to this offering, or to any of their respective affiliates, prior to
or with respect to the business combination (regardless of the type of transaction that it is).
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, including the payment of any compensation, will require
prior approval by a majority of our uninterested “independent” directors (to the extent we have any) 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 disinterested “independent” directors (or, if there
are no “independent” directors, our disinterested 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.
Commencing
on the date our securities are first listed on Nasdaq, we will pay an amount equal to $10,000 per month to our sponsor for office space,
administrative and shared personnel support services. Upon completion of our initial business combination or our liquidation, we will
cease paying these monthly fees. Accordingly, in the event the consummation of our initial business combination takes 15 months, our
sponsor will be paid a total of $150,000 ($10,000 per month) and will be entitled to be reimbursed for any out-of-pocket expenses.
We
may engage Chardan, or another affiliate of our sponsor, as a financial advisor in connection with our initial business combination and
pay such affiliate a customary financial advisory fee in an amount that constitutes a market standard financial advisory fee for comparable
transactions. Furthermore, we may acquire a target company that has engaged Chardan, or another affiliate of our sponsor, as a financial
advisor, and such target company may pay such affiliate a financial advisory fee in connection with our initial business combination.
We
have engaged Chardan as an advisor in connection with our business combination, pursuant to the Business Combination Marketing Agreement
described under “Underwriting (Conflicts of Interest) — Business Combination Marketing Agreement.” We will pay
Chardan a cash fee for such services upon the consummation of our initial business combination in an amount equal to, in the aggregate,
3.5% of the gross proceeds of this offering. As a result, Chardan will not be entitled to such fee unless we consummate our initial business
combination.
Related Party Policy
We have not yet adopted a
formal policy for the review, approval or ratification of related party transactions. Accordingly, the transactions discussed above were
not reviewed, approved or ratified in accordance with any such policy.
Prior to the consummation
of this offering, we will adopt a code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines
or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with
the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship
(including any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics that we plan to adopt prior
to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part.
In addition, our audit committee,
pursuant to a written charter that we will adopt prior to the consummation of this offering, will be responsible for reviewing and approving
related party transactions to the extent that we enter into such transactions. An affirmative vote of a majority of the members of the
audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction. A
majority of the members of the entire audit committee will constitute a quorum. Without a meeting, the unanimous written consent of all
of the members of the audit committee will be required to approve a related party transaction. A form of the audit committee charter
that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus
is a part. We also require each of our directors and 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 conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated
with any of our sponsor, officers or directors unless we, or a committee of independent directors, have obtained an opinion from an independent
investment banking firm or another independent firm that commonly renders valuation opinions that our initial business combination is
fair to our stockholders from a financial point of view. Furthermore, there will be no finder’s fees, reimbursement, consulting
fee, non-cash payments, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors,
or any affiliate of our sponsor or officers prior to, or in connection with any services rendered in order to effectuate, the consummation
of our initial business combination (regardless of the type of transaction that it is) other than the following payments, none of which
will be made from the proceeds of this offering held in the trust account prior to the completion of our initial business combination:
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Repayment
of up to an aggregate of $250,000 in loans made to us by our sponsor, which our sponsor has
committed to cover offering-related and organizational expenses;
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Repayment
to our sponsor for office space, administrative and shared personnel support services, in
an amount equal to $10,000 per month;
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Our
sponsor intends to allocate up to 20,000 founder shares to each of our independent directors;
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Reimbursement
for any out-of-pocket expenses related to identifying, investigating and completing an initial
business combination;
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Repayment
of loans, which may be made by our sponsor or an affiliate of our sponsor or certain of our
officers and directors to finance transaction costs in connection with an intended initial
business combination, the terms of which have not been determined nor have any written agreements
been executed with respect thereto (provided that in no event will any loans provided by
our sponsor be convertible into our securities); and
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Payment
to Chardan of the Marketing Fee, fees for any financial advisory, placement agency or other
similar investment banking services Chardan may provide to our company in the future, including
in connection with the closing of our initial business combination, and reimbursement of
Chardan for any out-of-pocket expenses incurred by it in connection with the performance
of such services.
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Our
audit committee will review on a quarterly basis all payments that were made to our sponsor, officers or directors, or our or their affiliates.
DESCRIPTION
OF SECURITIES
General
Our amended certificate of
incorporation will authorize the issuance of 50,000,000 shares of common stock, $0.0001 par value per share, and 1,000,000 shares of
preferred stock, $0.0001 par value per share. As of the date of this prospectus, 2,875,000 shares of common stock are issued and outstanding,
which are held by our initial stockholders.
Units
Each unit consists of
one share of common stock and one-half of one warrant. Each whole warrant entitles the holder thereof
to purchase one share of our common stock at a price of $11.50 per share, subject to adjustment as described in this prospectus. Pursuant
to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of common stock. Thus, only a
whole warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units
and only whole warrants will trade. Accordingly, unless you purchase a multiple of two units, the number of warrants issuable to you
upon separation of the units will be rounded down to the nearest whole number of warrants.
We
expect that the common stock and warrants comprising the units will begin separate trading on the 52nd day following the closing
of this offering unless Chardan informs us of its decision to allow earlier separate trading, subject to our having filed the Current
Report on Form 8-K described below and having issued a press release announcing when such separate trading will begin. Once the
shares of common stock and warrants commence separate trading, holders will have the option to continue to hold units or separate their
units into the component securities. Holders will need to have their brokers contact our transfer agent in order to separate the units
into shares of common stock and warrants.
In no event will the common
stock and warrants be traded separately until we have filed with the SEC a Current Report on Form 8-K that includes an audited balance
sheet reflecting our receipt of the gross proceeds at the closing of this offering. We will file a Current Report on Form 8-K that
includes this audited balance sheet upon the completion of this offering, which closing is anticipated to take place three business days
after the date of this prospectus. If the underwriters’ over-allotment option is exercised following the initial filing of such
Current Report on Form 8-K, a second or amended Current Report on Form 8-K will be filed to provide updated financial information
to reflect the exercise of the underwriters’ over-allotment option.
Common Stock
Upon
the closing of this offering, 12,500,000 shares of our common stock will be outstanding (assuming no exercise of the underwriters’
over-allotment option and the corresponding forfeiture of 375,000 founder shares by our initial stockholders), consisting of:
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10,000,000
shares of common stock underlying the units being offered in this offering;
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2,500,000
founder shares held by our initial stockholders.
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If we increase or decrease
the size of this offering (including pursuant to Rule 462(b) under the Securities Act), a share capitalization or a contribution
back to capital, as applicable, would be effectuated in order to maintain our initial stockholders’ ownership at 20% of the number
of shares issued and outstanding after the closing of this offering.
Common stockholders of record
are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless
specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable law or stock exchange rules,
the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our
stockholders (other than the election of directors). Our board of directors will be divided into two classes, each of which will generally
serve for a term of two years with only one class of directors being elected in each year. There is no cumulative voting with respect
to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can
elect all of the directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors
out of funds legally available therefor.
Because our amended and restated
certificate of incorporation will authorize the issuance of up to 50,000,000 shares of common stock, if we were to enter into an initial
business combination, we may (depending on the terms of such an initial business combination) be required to increase the number of shares
of common stock that we are authorized to issue at the same time as our stockholders vote on the initial business combination to the
extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq
corporate governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal
year end following our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting
of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent
in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our
initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual
meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our initial business combination,
they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of
the DGCL.
We
will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our initial
business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account calculated
as of two business days prior to the consummation of our initial business combination including interest earned on the funds held in
the trust account and not previously released to us to pay our taxes, divided by the number of then outstanding public shares, subject
to the limitations described herein. The amount in the trust account is initially anticipated to be $10.10 per public share. Our sponsor,
officers and directors have entered into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights
with respect to any founder shares and any public shares held by them in connection with the completion of our initial business combination.
Unlike many blank check companies that hold stockholder votes and conduct proxy solicitations in conjunction with their initial business
combinations and provide for related redemptions of public shares for cash upon completion of such initial business combinations even
when a vote is not required by law, if a stockholder vote is not required by law and we do not decide to hold a stockholder vote for
business or other legal reasons, we will, pursuant to our amended and restated certificate of incorporation, conduct the redemptions
pursuant to the tender offer rules of the SEC, and file tender offer documents with the SEC prior to completing our initial business
combination. Our amended and restated certificate of incorporation will require these tender offer documents to contain substantially
the same financial and other information about the initial business combination and the redemption rights as is required under the SEC’s
proxy rules. If, however, a stockholder approval of the transaction is required by law, or we decide to obtain stockholder approval for
business or other legal reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation
pursuant to the proxy rules and not pursuant to the tender offer rules. If we seek stockholder approval, we will complete our initial
business combination only if a majority of the outstanding shares of common stock voted are voted in favor of the initial business combination.
A quorum for such meeting will consist of the holders present in person or by proxy of shares of outstanding capital stock of the company
representing a majority of the voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.
However,
the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described
in this prospectus), if any, could result in the approval of our initial business combination even if a majority of our public stockholders
vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority of our
outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination once a quorum
is obtained. We intend to give approximately 30 days (but not less than 10 days nor more than 60 days) prior written notice of any such
meeting, if required, at which a vote shall be taken to approve our initial business combination. These quorum and voting thresholds,
and the voting agreements of our initial stockholders, may make it more likely that we will consummate our initial business combination.
If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our initial business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public stockholder,
together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”
(as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate
of 15% of the shares of common stock sold in this offering, which we refer to as the Excess Shares. However, we would not be restricting
our stockholders’ ability to vote all of their shares (including Excess Shares) for or against our initial business combination.
Our stockholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business
combination, and such stockholders could suffer a material loss in their investment if they sell such Excess Shares on the open market.
Additionally, such stockholders will not receive redemption distributions with respect to the Excess Shares if we complete the initial
business combination. And, as a result, such stockholders will continue to hold that number of shares exceeding 15% and, in order to
dispose such shares would be required to sell their stock in open market transactions, potentially at a loss.
If
we seek stockholder approval in connection with our initial business combination, pursuant to the letter agreement our sponsor, officers
and directors have agreed to vote their founder shares and any public shares purchased during or after this offering (including in open
market and privately negotiated transactions) in favor of our initial business combination. As a result, in addition to our initial stockholders’
founder shares, we would need only 7,500,001, or 37.5%, of the 20,000,000 public shares sold in this offering to be voted in favor of
an initial business combination (assuming all outstanding shares are voted) in order to have our initial business combination approved
(assuming the over-allotment option is not exercised). Additionally, each public stockholder may elect to redeem its public shares irrespective
of whether they vote for or against the proposed transaction (subject to the limitation described in the preceding paragraph).
Pursuant
to our amended and restated certificate of incorporation, if we do not complete a business combination within 15 months from the closing
of this offering (or up to 18 months from the closing of this offering if we have executed a definitive agreement and filed a proxy statement
for an initial business combination within 15 months from the closing of this offering), 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 and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above)
to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. However, if we
anticipate that we may not be able to consummate our initial business combination within 15 months and we have not entered into a definitive
agreement and filed a proxy statement for an initial business combination by such date (or 18 months if we have executed a definitive
agreement and filed a proxy statement for an initial business combination within 15 months from the closing of this offering), our insiders
or their affiliates may, but are not obligated to, extend the period of time to consummate a business combination up to two times by
an additional three months each time (for a total of up to 21 months to complete a business combination); provided that,
pursuant to the terms of our amended and restated certificate of incorporation and the trust agreement to be entered into between us
and Continental Stock Transfer & Trust Company on the date of this prospectus, the only way to extend the time available for us to
consummate our initial business combination in the absence of a definitive agreement is for our insiders or their affiliates or designees,
upon five days’ advance notice prior to the applicable deadline, to deposit into the trust account $1,000,000, or $1,150,000 if
the over-allotment option is exercised in full ($0.10 per share in either case, or an aggregate of $2,000,000 (or $2,300,000 if the over-allotment
option is exercised in full)), on or prior to the date of the applicable deadline. In the event that our insiders elected to extend the
time to complete a business combination and deposited the applicable amount of money into trust, the insiders would 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. 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. If we are unable to consummate our initial business combination
within such time period, we will, as promptly as possible but not more than 10 business days thereafter, redeem 100% of our outstanding
public shares for a pro rata portion of the funds held in the trust account, including a pro rata portion of any interest earned on the
funds held in the trust account and not previously released to us to pay our taxes, and then seek to dissolve and liquidate. However,
we may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of our public
stockholders. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless
if we fail to complete our initial business combination within the allotted time period. Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions from the trust
account with respect to any founder shares held by them if we fail to complete our initial business combination within 15 months from
the closing of this offering (or up to 21 months from the closing of this offering if we extend the period of time to consummate a business
combination by the maximum amount as described in more detail in this prospectus). However, if our initial stockholders acquire public
shares in or after this offering, they will be entitled to liquidating distributions from the trust account with respect to such public
shares if we fail to complete our initial business combination within the prescribed time period.
In
the event of a liquidation, dissolution or winding up of the company after an initial business combination, our stockholders are entitled
to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made
for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights.
There are no sinking fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity
to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon
the completion of our initial business combination, subject to the limitations described herein.
Founder Shares
The
founder shares are identical to the shares of common stock included in the units being sold in this offering, and holders of founder
shares have the same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer
restrictions, as described in more detail below, (ii) our sponsor, officers and directors have entered into a letter agreement with
us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder shares and any public shares
held by them in connection with the completion of our initial business combination, (B) to waive their redemption rights with respect
to their founder shares and public shares in connection with a stockholder vote to approve an amendment to our amended and restated certificate
of incorporation (x) to modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our public shares if we do not complete our initial business combination within 15 months
(or up to 21 months, as applicable) from the closing of this offering or (y) with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity and (C) to waive their
rights to liquidating distributions from the trust account with respect to any founder shares held by them if we fail to complete our
initial business combination within 15 months (or up to 21 months, as applicable) from
the closing of this offering, although they will be entitled to liquidating distributions from the trust account with respect to any
public shares they hold if we fail to complete our initial business combination within such time period, and (iii) are entitled
to registration rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and
directors have agreed pursuant to the letter agreement to vote any founder shares held by them and any public shares purchased during
or after this offering (including in open market and privately negotiated transactions) in favor of our initial business combination.
With
certain limited exceptions, 50% of the
founder shares will not be
transferred, assigned, sold or released from escrow until the earlier of (i) six
months after the date
of the consummation of a
business combination or (ii) the
date on which the closing price of our shares
of common stock equals or exceeds $12.50
per share (as adjusted for stock splits, stock dividends, reorganizations and
recapitalizations) for any 10
trading days within any 30-trading day period commencing after a
business combination. The
remaining 50% of the founder shares will not be transferred, assigned, sold or released from escrow until 6 months after the
date of the consummation of a business combination, or earlier, in either
case, if, subsequent to a business combination, we consummate a subsequent liquidation, merger,
stock exchange or other similar transaction which results
in all of the stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
Preferred Stock
There are no shares of
preferred stock outstanding as of the date of this prospectus. Our amended and restated certificate of incorporation to be filed
with the State of Delaware will authorize the issuance of 1,000,000 shares of preferred stock with such designation, rights, and
preferences as may be determined from time to time by our board of directors. No shares of preferred stock are being issued or
registered in this offering. Accordingly, our board of directors is empowered, without stockholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights
of the holders of common stock. However, the underwriting agreement prohibits us, prior to a business combination, from issuing
preferred stock that participates in any manner in the proceeds of the trust account, or which votes as a class with the common
stock on our initial business combination. We may issue some or all of the preferred stock to effect our initial business
combination. In addition, the preferred stock could be used as a method of discouraging, delaying or preventing a change in control
of us. Although we do not currently intend to issue any shares of preferred stock, we reserve the right to do so in the future.
Redeemable Warrants
Public Warrants
Each
whole warrant entitles the registered holder to purchase one share of our common stock at a price of $11.50 per share, subject to adjustment
as discussed below, at any time commencing 30 days after the completion of our initial business combination. Pursuant to the warrant
agreement, a warrant holder may exercise its warrants only for a whole number of shares of common stock. This means that only a whole
warrant may be exercised at any given time by a warrant holder. No fractional warrants will be issued upon separation of the units and
only whole warrants will trade. Accordingly, unless you purchase a multiple of two units, the number of warrants issuable to you upon
separation of the units will be rounded down to the nearest whole number of warrants. The warrants will expire five years after the completion
of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
We
will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle
such warrant exercise unless a registration statement under the Securities Act with respect to the offer and sale of the shares
of common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying our
obligations described below with respect to registration. No warrant will be exercisable and we will not be obligated to issue shares
of common stock upon exercise of a warrant unless common stock issuable upon such warrant exercise has been registered, qualified or
deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the
conditions in the two immediately preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not
be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will we be required to net
cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit
containing such warrant will have paid the full purchase price for the unit solely for the share of common stock underlying such unit.
We
are registering the offer and sale of our common stock underlying the public warrants under the Securities Act. In addition, we have
agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination,
we will use our commercially reasonable best efforts to file with the SEC a registration statement covering the shares of common stock
issuable upon exercise of the warrants, to cause such registration statement to become effective within 60 business days after the closing
of our initial business combination, and to maintain a current prospectus relating to those shares of common stock until the warrants
expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of common stock issuable
upon exercise of the warrants is not effective by the 60th business day after the closing of our initial business combination, warrant
holders may, until such time as there is an effective registration statement and during any period when we will have failed to maintain
an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of
the Securities Act or another exemption. Notwithstanding the above, if our common stock is at the time of any exercise of a warrant not
listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, we may, at our option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required
to file or maintain in effect a registration statement, and in the event we do not so elect, we
will use our commercially reasonable best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available.
Once
the warrants become exercisable, we may call the warrants for redemption:
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In
whole and not in part;
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At
a price of $0.01 per warrant;
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upon
not less than 30 days’ prior written notice of redemption to each warrant holder, and
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if,
and only if, the last reported sale price of the shares of common stock equals or exceeds
$16.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 10 trading days within a 30-day trading period commencing once the
warrants become exercisable and ending three trading days before we send the notice of redemption
to warrant holders.
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If
and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares of common stock upon
exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect
such registration or qualification. We will use our commercially reasonable best efforts to register or qualify such shares of common
stock under the blue sky laws of the state of residence in those states in which the warrants were offered by us in this offering.
We
have established the last of the redemption criterion discussed above to prevent a redemption call unless there is, at the time of the
call, a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and we issue a notice of redemption
of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price
of the common stock may fall below the $16.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations,
recapitalizations and the like) as well as the $11.50 warrant exercise price after the redemption notice is issued.
If
we call the warrants for redemption as described above, our management will have the option to require any holder that wishes to exercise
its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a
“cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that are outstanding
and the dilutive effect on our stockholders of issuing the maximum number of shares of common stock issuable upon the exercise of our
warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their
warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares
of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair
market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the volume weighted
average last reported sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which
the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the notice of redemption
will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the warrants,
including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the number of shares
to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive option to us if
we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants for redemption
and our management does not take advantage of this option, our sponsor and its permitted transferees would still be entitled to exercise
their private warrants for cash or on a cashless basis using the same formula described above that other warrant holders would have been
required to use had all warrant holders been required to exercise their warrants on a cashless basis, as described in more detail below.
A
holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have the
right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as
a holder may specify) of the shares of common stock outstanding immediately after giving effect to such exercise.
If
the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split-up
of shares of common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the
number of shares of common stock issuable on exercise of each warrant will be increased in proportion to such increase in the outstanding
shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a price
less than the fair market value will be deemed a stock dividend of a number of shares of common stock equal to the product of (i) the
number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights
offering that are convertible into or exercisable for common stock) and (ii) one minus the quotient of (x) the price per share
of common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering
is for securities convertible into or exercisable for common stock, in determining the price payable for common stock, there will be
taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or redemption and
(ii) fair market value means the volume weighted average price of common stock as reported during the 10-trading day period ending
on the trading day prior to the first date on which the shares of common stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive such rights.
In
addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash, securities
or other assets to the holders of common stock on account of such shares of common stock (or other shares of our capital stock into which
the warrants are convertible), other than (a) as described above, (b) certain ordinary cash dividends, (c) to satisfy
the redemption rights of the holders of common stock in connection with a proposed initial business combination, (d) to satisfy
the redemption rights of the holders of common stock in connection with a stockholder vote to amend our amended and restated certificate
of incorporation (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business
combination or to redeem 100% of our common stock if we do not complete our initial business combination within 15 months (or up to 21
months, as applicable) from the closing of this offering or (ii) with respect to any other provision relating to stockholders’
rights or pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure
to complete our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective
date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of common
stock in respect of such event.
If
the number of outstanding shares of our common stock is decreased by a consolidation, combination, reverse stock split or reclassification
of shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of common stock issuable on exercise of each warrant will be decreased in proportion
to such decrease in outstanding shares of common stock.
Whenever
the number of shares of common stock purchasable upon the exercise of the warrants is adjusted, as described above, the warrant exercise
price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator
of which will be the number of shares of common stock purchasable upon the exercise of the warrants immediately prior to such adjustment,
and (y) the denominator of which will be the number of shares of common stock so purchasable immediately thereafter.
In
case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or that solely
affects the par value of such shares of common stock), or in the case of any merger or consolidation of us with or into another corporation
(other than a consolidation or merger in which we are the continuing corporation and that does not result in any reclassification or
reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation or entity
of the assets or other property of us as an entirety or substantially as an entirety in connection with which we are dissolved, the holders
of the warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in
the warrants and in lieu of the shares of our common stock immediately theretofore purchasable and receivable upon the exercise of the
rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder
of the warrants would have received if such holder had exercised their warrants immediately prior to such event. If less than 70% of
the consideration receivable by the holders of common stock in such a transaction is payable in the form of common stock in the successor
entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to
be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the
warrant within thirty days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in
the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The purpose of such exercise
price reduction is to provide additional value to holders of the warrants when an extraordinary transaction occurs during the exercise
period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential value of the warrants
in order to determine and realize the option value component of the warrant. This formula is to compensate the warrant holder for the
loss of the option value portion of the warrant due to the requirement that the warrant holder exercise the warrant within 30 days of
the event. The Black-Scholes model is an accepted pricing model for estimating fair market value where no quoted market price for an
instrument is available.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as
warrant agent, and us. You should review a copy of the warrant agreement, which will be filed as an exhibit to the registration statement
of which this prospectus is a part, for a complete description of the terms and conditions applicable to the warrants. The warrant agreement
provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective
provision, but requires the approval by the holders of a majority of the then outstanding public warrants to make any change that adversely
affects the interests of the registered holders of public warrants.
In
addition, if (x) we issue additional shares or equity-linked securities for capital raising purposes in connection with the closing
of our initial business combination (not including any securities to be issued in connection with the forward purchase agreement to be
entered into with our sponsor) at a Newly Issued Price of less than $9.20 per share (as adjusted for stock splits, stock dividends, rights
issuances, subdivisions, reorganizations, recapitalizations and the like), (y) the aggregate gross proceeds from such issuances
represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of our initial business combination
on the date of the consummation of our initial business combination (net of redemptions), and the Market Value is below $9.20 per share
(as adjusted for stock splits, stock dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like), then
the exercise price of each warrant will be adjusted (to the nearest cent) such that the effective exercise price per full share will
be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $16.00 per share redemption trigger price described
above will be adjusted (to the nearest cent) to be equal to 160% of the higher of the Market Value and the Newly Issued Price. This may
make it more difficult for us to consummate an initial business combination with a target business.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied by full
payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to us, for the number
of warrants being exercised. The warrant holders do not have the rights or privileges of holders of common stock and any voting rights
until they exercise their warrants and receive shares of common stock. After the issuance of shares of common stock upon exercise of
the warrants, each holder will be entitled to one vote for each share held of record on all matters to be voted on by stockholders.
No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive
a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of common stock to be issued
to the warrant holder.
We
have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the
warrant agreement will be brought and enforced in the courts of the State of New York in the Borough of Manhattan or the United States
District Court for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the
exclusive forum for any such action, proceeding or claim. See “Risk Factors – Our warrant agreement will designate the courts
of the State of New York located in the in the Borough of Manhattan or the United States District Court for the Southern District of
New York as the exclusive forums for certain types of actions and proceedings that may be initiated by holders of our warrants, which
could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.” This provision
applies to claims under the Securities Act but does not apply to claims under the Exchange Act or any claim for which the federal district
courts of the United States of America are the sole and exclusive forum.
Private Warrants
The private warrants (including
the common stock issuable upon exercise of the private warrants) will not be transferable, assignable or salable until 30 days after
the completion of our initial business combination (except, among other limited exceptions as described under the section of this prospectus
entitled “Principal Stockholders — Restrictions on Transfers of Founder Shares and Private Warrants” to our
officers and directors and other persons or entities affiliated with our sponsor) and they will not be redeemable by us so long as they
are held by our sponsor or its permitted transferees. Our sponsor, or its permitted transferees, has the option to exercise the private
warrants on a cashless basis. Except as described below, the private warrants have terms and provisions that are identical to those of
the warrants being sold as part of the units in this offering, including as to exercise price, exercisability and exercise period. If
the private warrants are held by holders other than our sponsor or its permitted transferees, the private warrants will be redeemable
by us and exercisable by the holders on the same basis as the warrants included in the units being sold in this offering.
If
holders of the private warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering their warrants
for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of shares of
common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market
value” (defined below) by (y) the fair market value. The “fair market value” shall mean the volume weighted average
last reported sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice
of warrant exercise is sent to the warrant agent. The reason that we have agreed that these warrants will be exercisable on a cashless
basis so long as they are held by our sponsor or its permitted transferees is because it is not known at this time whether they will
be affiliated with us following an initial business combination. If they remain affiliated with us, their ability to sell our securities
in the open market will be significantly limited. We expect to have policies in place that prohibit insiders from selling our securities
except during specific periods of time. Even during such periods of time when insiders will be permitted to sell our securities, an insider
cannot trade in our securities if he or she is in possession of material non-public information. Accordingly, unlike public stockholders
who could sell the shares of common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly
restricted from doing so. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.
In
addition, holders of our private warrants are entitled to certain registration rights and any private warrants purchased by Chardan
NexTech 2 Warrant Holdings LLC will not be exercisable more than five years from the effective date of the registration statement, of
which this prospectus forms a part, in accordance with FINRA Rule 5110(g), as long as Chardan or any of its related persons beneficially
own these private warrants.
Pursuant
to the letter agreement, the private warrants (including the common stock issuable upon exercise of any of the private warrants) are
not transferable or salable until 30 days after the completion of our initial business combination, except (a) to our officers
or directors, any affiliates or family members of any of our officers or directors, any members of Chardan NexTech 2 Warrant Holdings
LLC, our sponsor, or any of their respective affiliates; (b) in the case of an individual, by gift to a member of the individual’s
immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family, an affiliate of such
person or to a charitable organization; (c) in the case of an individual, by virtue of laws of descent and distribution upon death
of the individual; (d) in the case of an individual, pursuant to a qualified domestic relations order; (e) by private sales
or transfers made in connection with the consummation of an initial business combination at prices no greater than the price at which
the shares or warrants were originally purchased; (f) in the event of our liquidation prior to the completion of our initial business
combination; or (g) by virtue of the laws of Delaware or the applicable limited liability company agreement upon dissolution of
Chardan NexTech 2 Warrant Holdings LLC, provided, however, that in the case of clauses (a) through (e) or (g), these permitted
transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained
in the letter agreements and by the same agreements entered into by Chardan NexTech 2 Warrant Holdings LLC, our sponsor, officers, and
directors of the Company, as the case may be, with respect to such securities (including provisions relating to voting, the trust account
and liquidation distributions described elsewhere in this prospectus).
Dividends
We have not paid any cash
dividends on our shares of common stock to date and do not intend to pay cash dividends prior to the completion of a business combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination
will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings,
if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable
future.
Our Transfer Agent and Warrant Agent
The transfer agent for our
shares of common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We
have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents
and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed or
omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of
the indemnified person or entity.
Our Amended and Restated Certificate of Incorporation
Our amended and restated
certificate of incorporation will contain certain requirements and restrictions relating to this offering that will apply to us until
the completion of our initial business combination. These provisions cannot be amended without the approval of the holders of at least
a majority of our common stock. Our initial stockholders, who will collectively beneficially own 20% of our common stock upon the closing
of this offering (assuming they do not purchase any units in this offering), will participate in any vote to amend our amended and restated
certificate of incorporation and will have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate
of incorporation provides, among other things, that:
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If
we are unable to complete our initial business combination within 15 months (or up to 21
months, as applicable) from the closing of this offering, 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 subject to lawfully available funds therefor, redeem 100%
of the public shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the trust account including interest earned on the funds held in the trust
account and not previously released to us to pay our taxes (less up to $100,000 of interest
to pay dissolution expenses), divided by the number of then outstanding public shares, which
redemption will completely extinguish public stockholders’ rights as stockholders (including
the right to receive further liquidating distributions, if any), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and
the requirements of other applicable law;
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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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Although
we do not intend to enter into an initial business combination with a target business that
is affiliated with our sponsor, our directors or our officers, we are not prohibited from
doing so. In the event we enter into such a transaction, we, or a committee of independent
directors, will obtain an opinion from an independent investment banking firm or another
independent firm that commonly renders valuation opinions that such an initial business combination
is fair to our stockholders from a financial point of view;
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If
a stockholder vote on our initial business combination is not required by law and we do not
decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem
our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and
will file tender offer documents with the SEC prior to completing our initial business combination
which contain substantially the same financial and other information about our initial business
combination and the redemption rights as is required under Regulation 14A of the Exchange
Act; whether or not we maintain our registration under the our Exchange Act or our listing
on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public
shares by one of the two methods listed above;
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So
long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require
that we must complete one or more business combinations having an aggregate fair market value
of at least 80% of the value of the assets held in the trust account (excluding taxes payable
on the interest earned on the trust account) at the time of our signing a definitive agreement
in connection with our initial business combination;
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If
our stockholders approve an amendment to our amended and restated certificate of incorporation
(i) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combination or to redeem 100% of our public shares if we do not
complete our initial business combination within 15 months (or up to 21 months, as applicable)
from the closing of this offering or (ii) with respect to any other provision relating to
stockholders’ rights or pre-business combination activity, we will provide our public
stockholders with the opportunity to redeem all or a portion of their shares of common stock
upon such approval 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 taxes, divided by the number of then
outstanding public shares;
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We
will not effectuate our initial business combination with another blank check company or
a similar company with nominal operations; and
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We
will not effect our initial business combination unless our sponsor approves of such transaction.
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In addition, our amended
and restated certificate of incorporation will provide that we may only redeem our public shares so long as our net tangible assets are
at least $5,000,001 either immediately prior to or upon consummation of our initial business combination and after payment of underwriters’
fees and commissions.
Certain Anti-Takeover Provisions of Delaware
Law and our Certificate of Incorporation and By-Laws
Our
amended and restated certificate of incorporation will provide that our board of directors will be classified into two classes of directors.
As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at two or
more annual meetings.
We have opted out of Section 203
of the Delaware General Corporate Law, or the DGCL. However, our amended and restated certificate of incorporation contains similar provisions
providing that we may not engage in certain “business combinations” with any “interested stockholder” for a three-year
period following the time that the stockholder became an interested stockholder, unless:
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prior
to such time, our board of directors approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;
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upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of our voting stock outstanding at the time
the transaction commenced, excluding certain shares; or
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at
or subsequent to that time, the business combination is approved by our board of directors
and by the affirmative vote of holders of at least 66 2/3% of the outstanding voting stock
that is not owned by the interested stockholder.
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Generally, a “business
combination” includes a merger, asset or stock sale or certain other transactions resulting in a financial benefit to the interested
stockholder. Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s
affiliates and associates, owns, or within the previous three years owned, 20% or more of our voting stock.
Under certain circumstances,
this provision will make it more difficult for a person who would be an “interested stockholder” to effect various business
combinations with a corporation for a three-year period. This provision may encourage companies interested in acquiring our company to
negotiate in advance with our board of directors because the stockholder approval requirement would be avoided if our board of directors
approves either the business combination or the transaction which results in the stockholder becoming an interested stockholder. These
provisions also may have the effect of preventing changes in our board of directors and may make it more difficult to accomplish transactions
which stockholders may otherwise deem to be in their best interests.
Our amended and restated
certificate of incorporation provides that our sponsor and its respective affiliates, any of their respective direct or indirect transferees
of at least 20% of our outstanding common stock and any group as to which such persons are party to, do not constitute “interested
stockholders” for purposes of this provision.
Special Meeting of Stockholders
Our bylaws provide that special
meetings of our stockholders may be called only by a majority vote of our board of directors.
Advance Notice Requirements For Stockholder
Proposals And Director Nominations
Our bylaws provide that stockholders
seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual
meeting of stockholders must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to
be delivered to our principal executive offices not later than the close of business on the 90th day nor earlier than the opening of
business on the 120th day prior to the scheduled date of the annual meeting of stockholders. Our bylaws also specify certain requirements
as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before
our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
Action by Written Consent
Subsequent
to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected by a duly
called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.
Authorized But Unissued Shares
Our authorized but unissued
common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety
of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence
of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain
control of us by means of a proxy contest, tender offer, merger or otherwise.
Exclusive Forum for Certain Lawsuits
Our
amended and restated certificate of incorporation will require, subject to certain exceptions and unless we consent in writing to the
selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf,
(b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, employee, agent
to us or out stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, the amended and restated
certificate of incorporation or bylaws, or (d) any action asserting a claim governed by the internal affairs doctrine shall be the
Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction over such action
or proceeding, then another court of the State of Delaware or, if no court of the State of Delaware has jurisdiction, then the United
States District Court for the District of Delaware).
Although we believe this
forum provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it
applies, a court may determine that this provision is unenforceable, and to the extent it is enforceable, the provision may have the
effect of discouraging lawsuits against our directors and officers, although our stockholders will not be deemed to have waived our compliance
with federal securities laws and the rules and regulations thereunder. If any action, the subject matter of which is within the scope
the forum provisions of our amended and restated certificate of incorporation, is filed in a court other than a court of the State of
Delaware, such action we refer to as a foreign action, in the name of any stockholder, such stockholder shall be deemed to have consented
to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought
in such court to enforce the forum provisions, such action we refer to as an enforcement action, and (ii) having service of process made
upon such stockholder in any such enforcement action by service upon such stockholder’s counsel in the foreign action as agent
for such stockholder.
In addition, our amended
and restated certificate of incorporationwill state that unless we consent in writing to the selection of an alternative forum, the federal
district courts of the United States of America shall be the exclusive forum for resolution of any complaint asserting a cause of action
arising under the Securities Act. Section 22 of the Securities Act creates a concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
However, our amended and
restated certificate of incorporation does not purport to require suits brought to enforce a duty or liability created by the Exchange
Act to be brought in the Court of Chancery of the State of Delaware or another court of the State of Delaware. Section 27 of the
Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange
Act or the rules and regulations thereunder.
Securities Eligible For Future Sale
Immediately after this consummation
of this offering, we will have 12,500,000 shares of common stock issued and outstanding, or 14,375,000 shares of common stock if the
over-allotment option is exercised in full. Of these shares, the 10,000,000 shares sold in this offering, or 11,500,000 shares if the
over-allotment option is exercised in full, will be freely tradable without restriction or further registration under the Securities
Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the
remaining 2,500,000 (or 2,875,000 if the underwriters’ over-allotment is exercised in full) shares are restricted securities under
Rule 144, in that they were issued in private transactions not involving a public offering. All of those shares will not be transferable
except in limited circumstances described elsewhere in this prospectus, but these restricted securities will be entitled to registration
rights as more fully described below under “—Registration Rights.”
Rule 144
Pursuant to Rule 144,
a person who has beneficially owned restricted shares of common stock or warrants for at least six months would be entitled to sell their
securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during
the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three
months before the sale. Persons who have beneficially owned restricted shares of common stock for at least six months but who are our
affiliates at the time of, or any time during the three months preceding, a sale, would be subject to additional restrictions, by which
such person would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:
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1%
of the number of shares of common stock then issued and outstanding, which will equal 125,000
shares immediately after this offering (or 143,750 if the over-allotment option is exercised
in full); and
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the
average weekly trading volume of the shares of common stock during the four calendar weeks
preceding the filing of a notice on Form 144 with respect to the sale.
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Sales under Rule 144
are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Restrictions on the Use of Rule 144
by Shell Companies or Former Shell Companies
Rule 144 is not available for the resale
of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been
at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following
conditions are met:
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the
issuer of the securities that was formerly a shell company has ceased to be a shell company;
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the
issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act;
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the
issuer of the securities has filed all Exchange Act reports and materials required to be
filed, as applicable, during the preceding 12 months (or such shorter period that the issuer
was required to file such reports and materials), other than Current Reports on Form 8-K;
and
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at
least one year has elapsed from the time that the issuer filed current Form 10 type
information with the SEC reflecting its status as an entity that is not a shell company.
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As a result, our initial
stockholders will be able to sell their founder shares and private warrants, and the securities underlying the foregoing, as applicable,
pursuant to Rule 144 without registration one year after we have completed our initial business combination.
Registration Rights
The holders of our founder
shares issued and outstanding on the date of this prospectus, as well as the holders of the private warrants (and underlying securities)
will be entitled to registration rights pursuant to an agreement to be signed prior to or on the effective date of this offering. 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 founder 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 warrants (and underlying
securities) 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 a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Chardan
and its related persons may not, with respect to the private warrants purchased by Chardan NexTech 2 Warrant Holdings LLC, (i) have
more than one demand registration right at our expense, (ii) exercise their demand registration rights more than five years from
the effective date of the registration statement of which this prospectus forms a part, and (iii) exercise their “piggy-back”
registration rights more than seven years from the effective date of the registration statement of which this prospectus forms a part,
as long as Chardan or any of its related persons are beneficial owners of private warrants.
Listing of Securities
We have applied to list our
units, common stock and warrants on Nasdaq under the symbols “CNTQU,” “CNTQ” and “CNTQW,” respectively.
We expect that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the
date the shares of our common stock and warrants are eligible to trade separately, we anticipate that the shares of our common stock
and warrants will be listed separately and as a unit on Nasdaq.
U.S.
FEDERAL INCOME TAX CONSIDERATIONS
The
following is a discussion of the material U.S. federal income tax considerations generally applicable to the acquisition, ownership and
disposition of our units, shares of common stock and warrants, which we refer to collectively as our securities. Because once the shares
of common stock and warrants commence separate trading, the components of a unit are separable at the option of the holder, the holder
of a unit generally should be treated, for U.S. federal income tax purposes, as the owner of the underlying common stock and one-half
of one redeemable warrant components of the unit, as the case may be. As a result, the discussion below with respect to actual holders
of common stock and warrants should also apply to holders of units (as the deemed owners of the underlying common stock and warrants
that comprise the units). This discussion applies only to securities that are held as capital assets for U.S. federal income tax purposes
and is applicable only to holders who purchased units in this offering.
This discussion is a summary
only and does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including
but not limited to the alternative minimum tax, the Medicare tax on certain investment income and the different consequences that may
apply if you are subject to special rules that apply to certain types of investors, including but not limited to:
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our
sponsor, officers or directors;
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financial
institutions or financial services entities;
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governments
or agencies or instrumentalities thereof;
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regulated
investment companies;
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real
estate investment trusts;
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expatriates
or former long-term residents of the United States;
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persons
that actually or constructively own five percent or more of our shares by vote or value;
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dealers
or traders subject to a mark-to-market method of accounting with respect to the securities;
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persons
holding the securities as part of a “straddle,” hedge, integrated transaction
or similar transaction;
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U.S.
holders (as defined below) whose functional currency is not the U.S. dollar;
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partnerships
or other pass-through entities for U.S. federal income tax purposes and any beneficial owners
of such entities; and
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If
you are a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes, the U.S. federal
income tax treatment of your partners will generally depend on the status of the partners and your activities.
This discussion is based
on the Internal Revenue Code of 1986, as amended (the “Code”), and administrative pronouncements, judicial decisions and
final, temporary and proposed Treasury regulations as of the date hereof, which are subject to change, possibly on a retroactive basis,
and changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion
does not address any aspect of state, local or non-U.S. taxation, or any U.S. federal taxes other than income taxes (such as gift and
estate taxes).
We have not sought, and will
not seek, a ruling from the Internal Revenue Service (the “IRS”) as to any U.S. federal income tax consequence described
herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance
that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements
in this discussion. You are urged to consult your tax advisor with respect to the application of U.S. federal tax laws to your particular
situation, as well as any tax consequences arising under the laws of any state, local or foreign jurisdiction.
THIS DISCUSSION OF U.S. FEDERAL
INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. WE URGE PROSPECTIVE HOLDERS TO CONSULT THEIR
TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF OUR SECURITIES, AS WELL
AS THE APPLICATION OF ANY, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER TAX CONSIDERATIONS.
Personal Holding Company Status
We would be subject to a
second level of U.S. federal income tax on a portion of our income if we are determined to be a personal holding company (“PHC”)
for U.S. federal income tax purposes. A U.S. corporation generally will be classified as a PHC for U.S. federal income tax purposes in
a given taxable year if (i) at any time during the last half of such taxable year, five or fewer individuals (without regard to
their citizenship or residency and including as individuals for this purpose certain entities such as certain tax-exempt organizations,
pension funds and charitable trusts) own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of
the stock of the corporation by value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined
for U.S. federal income tax purposes, for such taxable year consists of PHC income (which includes, among other things, dividends, interest,
certain royalties, annuities and, under certain circumstances, rents).
Depending
on the date and size of our initial business combination, it is possible that at least 60% of our adjusted ordinary gross income may
consist of PHC income. In addition, depending on the concentration of our stock in the hands of individuals, including the members of
our sponsor and certain tax-exempt organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock
may be owned or deemed owned (pursuant to the constructive ownership rules) by five or fewer such persons during the last half of a taxable
year. Thus, no assurance can be given that we will not be a PHC following this offering or in the future. If we are or were to
become a PHC in a given taxable year, we would be subject to an additional PHC tax, currently 20%, on our undistributed PHC income, which
generally includes our taxable income, subject to certain adjustments.
Allocation of Purchase Price and Characterization
of a Unit
No
statutory, administrative or judicial authority directly addresses the treatment of the unit or instruments similar to the unit
for U.S. federal income tax purposes and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated
for U.S. federal income tax purposes as the acquisition of one share of our common stock and one-half of one warrant to acquire one share
of our common stock. We intend to treat the acquisition of a unit in this manner and, by purchasing a unit, you agree to adopt such treatment
for tax purposes. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder
for such unit between the one share of common stock and the one-half of one warrant based on the relative fair market value of each at
the time of issuance. Under U.S. federal income tax law, each investor must make its own determination of such value based on all the
relevant facts and circumstances. Therefore, we strongly urge each investor to consult its tax advisor regarding the determination of
value for these purposes. The price allocated to each share of common stock and the one-half of one warrant should be the holder’s
initial tax basis in such share or one-half of one warrant, as the case may be. Any disposition of a unit should be treated for U.S.
federal income tax purposes as a disposition of the share of common stock and one-half of one warrant comprising the unit, and the amount
realized on the disposition should be allocated between the common stock and the one-half of one warrant based on their respective relative
fair market values (as determined by each such unit holder on all the relevant facts and circumstances) at the time of disposition. The
separation of shares of common stock and warrants comprising units should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of
the units and a holder’s purchase price allocation are not binding on the IRS or the courts. Because there are no authorities that
directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts will agree with the
characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult its own tax advisors
regarding the tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance of this discussion
assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
U.S. Holders
This section applies to
you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our units, shares of common stock or warrants who
or that is, for U.S. federal income tax purposes:
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an
individual who is a citizen or resident of the United States;
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a
corporation (or other entity taxable as a corporation) organized in or under the laws of
the United States, any state thereof or the District of Columbia;
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an
estate the income of which is includible in gross income for U.S. federal income tax purposes
regardless of its source; or
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a
trust, if (i) a court within the United States is able to exercise primary supervision
over the administration of the trust and one or more U.S. persons (as defined in the Code)
have authority to control all substantial decisions of the trust or (ii) it has a valid
election in effect under Treasury Regulations to be treated as a U.S. person.
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Taxation of Distributions
If
we pay distributions in cash or other property (other than certain distributions of our stock or rights to acquire our stock) to U.S.
holders of shares of our common stock, such distributions generally will constitute dividends for U.S. federal income tax purposes to
the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions
in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce
(but not below zero) the U.S. holder’s adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized
on the sale or other disposition of the common stock and will be treated as described under “U.S. Holders — Gain
or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants” below.
Dividends
we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding
period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment
interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder
may constitute “qualified dividends” that will be subject to tax at the preferential tax rate accorded to long-term
capital gains. It is unclear whether the redemption rights with respect to the common stock described in this prospectus may prevent
a U.S. holder from satisfying the applicable holding period requirements with respect to the dividends received deduction or the preferential
tax rate on qualified dividend income, as the case may be. If the holding period requirements are not satisfied, then a corporation may
not be able to qualify for the dividends received deduction and would have taxable income equal to the entire dividend amount, and non-corporate
holders may be subject to tax on such dividend at regular ordinary income tax rates instead of the preferential rate that applies to
qualified dividend income.
Gain or Loss on Sale, Taxable Exchange
or Other Taxable Disposition of Common Stock and Warrants.
Upon a sale or other taxable
disposition of our common stock or warrants which, in general, would include a redemption of common stock or warrants that is treated
as a sale of such securities as described below, and including as a result of a dissolution and liquidation in the event we do not consummate
an initial business combination within the required time period, a U.S. holder generally will recognize capital gain or loss in an amount
equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in the common stock or warrants so
disposed of. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period
for the common stock or warrants so disposed of exceeds one year. It is unclear, however, whether the redemption rights with respect
to the common stock described in this prospectus may suspend the running of the applicable holding period for this purpose. If the running
of the holding period for the common stock is suspended, then non-corporate U.S. holders may not be able to satisfy the one-year holding
period requirement for long-term capital gain treatment, in which case any gain on a sale or taxable disposition of the shares or warrants
would be subject to short-term capital gain treatment and would be taxed at regular ordinary income tax rates. Long-term capital gains
recognized by non-corporate U.S. holders are currently eligible to be taxed at reduced rates. The deductibility of capital losses is
subject to limitations.
Generally,
the amount of gain or loss recognized by a U.S. holder is equal to the difference between (i) the sum of the amount of cash
and the fair market value of any property received in such disposition (or, if the common stock or warrants are held as part of units
at the time of the disposition, the portion of the amount realized on such disposition that is allocated to the common stock or the warrants
based upon the then fair market values of the common stock and the warrants included in the units) and (ii) the U.S. holder’s
adjusted tax basis in its common stock or warrants so disposed of. A U.S. holder’s adjusted tax basis in its common stock or warrants
generally will equal the U.S. holder’s acquisition cost (that is, as discussed above, the portion of the purchase price of a unit
allocated to a share of common stock or one-half of one warrant or, as discussed below,
the U.S. holder’s initial basis for common stock received upon exercise of warrants) less,
in the case of a share of common stock, any prior distributions treated as a return of capital.
Redemption of Common Stock
In
the event that a U.S. holder’s common stock is redeemed pursuant to the redemption provisions described under the section
of this prospectus entitled “Description of Securities — Common Stock” or if we purchase a U.S. holder’s
common stock in an open market transaction (each of which we refer to as a “redemption”), the treatment of the transaction
for U.S. federal income tax purposes will depend on whether the redemption qualifies as a sale or exchange of the common stock under
Section 302 of the Code. If the redemption qualifies as a sale or exchange of common stock, the U.S. holder will be treated as described
under “U.S. Holders — Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants”
above. If the redemption does not qualify as a sale or exchange of common stock, the U.S. holder will be treated as receiving a corporate
distribution with the tax consequences described above under “U.S. Holders — Taxation of Distributions”. Whether
a redemption qualifies for sale or exchange treatment will depend largely on the total number of shares of our stock treated as owned
by the U.S. holder (including any stock constructively owned by the U.S. holder described in the following paragraph) relative to all
of our shares outstanding both before and after the redemption. The redemption of common stock generally will be treated as a sale of
the common stock (rather than as a corporate distribution) if the redemption (i) is “substantially disproportionate”
with respect to the U.S. holder, (ii) results in a “complete termination” of the U.S. holder’s interest in us
or (iii) is “not essentially equivalent to a dividend” with respect to the U.S. holder. These tests are explained more
fully below.
In determining whether any
of the foregoing tests are satisfied, a U.S. holder takes into account not only stock actually owned by the U.S. holder, but also shares
of our stock that are constructively owned by it. A U.S. holder may constructively own, in addition to stock owned directly, stock
owned by certain related individuals and entities in which the U.S. holder has an interest or that have an interest in such U.S. holder,
as well as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include common stock
which could be acquired pursuant to the exercise of the warrants. In order to meet the substantially disproportionate test, the percentage
of our outstanding voting stock actually and constructively owned by the U.S. holder immediately following the redemption of common stock
must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned
by the U.S. holder immediately before the redemption. There will be a complete termination of a U.S. holder’s interest if either
(i) all of the shares of our stock actually and constructively owned by the U.S. holder are redeemed or (ii) all of the shares
of our stock actually owned by the U.S. holder are redeemed and the U.S. holder is eligible to waive, and effectively waives in accordance
with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively own any other
shares of our stock (including any stock constructively owned by the U.S. holder as a result of owning warrants). The redemption of the
common stock will not be essentially equivalent to a dividend with respect to a U.S. holder if the redemption results in a “meaningful
reduction” of the U.S. holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction
in a U.S. holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated
in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder in a publicly held corporation
who exercises no control over corporate affairs may constitute such a “meaningful reduction.” A U.S. holder should consult
with its own tax advisors as to the tax consequences of a redemption.
If none of the foregoing
tests is satisfied, then the redemption will be treated as a corporate distribution and the tax effects will be as described under “U.S.
Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S.
holder in the redeemed common stock will be added to the U.S. holder’s adjusted tax basis in its remaining shares, or, if it has
none, to the U.S. holder’s adjusted tax basis in its warrants or possibly in other stock constructively owned by it.
Exercise or Lapse of a Warrant
Except
as discussed below with respect to the cashless exercise of a warrant, a U.S. holder generally will not recognize taxable gain or loss
on the acquisition of common stock upon exercise of a warrant for cash. The U.S. holder’s tax basis in the share of our common
stock received upon exercise of the warrant generally will be an amount equal to the sum of the U.S. holder’s initial investment
in the warrant (i.e., the portion of the U.S. holder’s purchase price for the units that is allocated to the warrant, as described
above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such warrant.
It is unclear whether the U.S. holder’s holding period for the common stock received upon exercise of the warrants will
begin on the date following the date of exercise or on the date of exercise of the warrants; in either case, the holding period will
not include the period during which the U.S. holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. holder generally
will recognize a capital loss equal to such holder’s tax basis in the warrant.
The
tax consequences of a cashless exercise of a warrant are not clear under current tax law. A cashless exercise may be tax-free, either
because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax
purposes. In either tax-free situation, a U.S. holder’s tax basis in the common stock received generally should equal the
holder’s tax basis in the warrants exercised therefor. If the cashless exercise were treated as not being a realization event (and
not a recapitalization), it is unclear whether a U.S. holder’s holding period for the common stock would be treated as commencing
on the date following the date of exercise or on the date of exercise of the warrant; in either case, the holding period would not include
the period during which the U.S. holder held the warrants. If the cashless exercise were treated as a recapitalization, the holding period
of the common stock would include the holding period of the warrants exercised therefor.
It is also possible that
a cashless exercise could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder
could be deemed to have surrendered a number of warrants having an aggregate fair market value equal to the exercise price for the total
number of warrants to be exercised. The U.S. holder would recognize capital gain or loss in an amount equal to the difference between
the fair market value of the common stock received in respect of the warrants deemed surrendered and the U.S. holder’s adjusted
tax basis in such warrants. Such gain or loss would be long-term or short-term, depending on the U.S. holder’s holding period
in the warrants deemed surrendered. In this case, a U.S. holder’s tax basis in the common stock received would equal the sum of
the U.S. holder’s tax basis in the warrants exercised (i.e., the portion of the U.S. holder’s purchase price for the
units that is allocated to the warrants, as described above under “— Allocation of Purchase Price and Characterization of
a Unit”) and the exercise price of such warrants. It is unclear whether a U.S. holder’s holding period for the common stock
would commence on the date following the date of exercise or on the date of exercise of the warrants; in either case, the holding period
would not include the period during which the U.S. holder held the warrants.
Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. holder’s holding period would commence with
respect to the common stock received, there can be no assurance which, if any, of the alternative tax consequences and holding periods
described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding
the tax consequences of a cashless exercise.
If
we redeem warrants for cash or if we purchase warrants in an open market transaction, such redemption or purchase generally will be treated
as a taxable disposition to the U.S. holder, taxed as described above under “— Gain or Loss on Sale, Taxable Exchange or
Other Taxable Disposition of Common Stock and Warrants.” The tax consequences of an exercise of a warrant occurring after our giving
notice of an intention to redeem the warrant for $0.01 as described in the section of this prospectus entitled “Description of
Securities — Redeemable Warrants — Public Warrants” are unclear under current law. In the case of a cashless exercise,
the exercise may be treated either as if we redeemed such warrant for common stock or as an exercise of the warrant. If the cashless
exercise of a warrant for common stock is treated as a redemption, then such redemption generally should be treated as a tax-deferred
recapitalization for U.S. federal income tax purposes, in which case a U.S. holder should not recognize any gain or loss on such redemption,
and accordingly, a U.S. holder’s basis in the common stock received should equal the U.S. holder’s basis in the warrant and
the holding period of the shares of common stock would include the holding period of the warrant. If the cashless exercise of a warrant
is treated as such, the tax consequences generally should be as described under the heading “U.S. Holders — Exercise, Lapse
or Redemption of a Warrant.” In the case of an exercise of a warrant for cash, the tax treatment generally should be as described
above under the heading “U.S. Holders — Exercise, Lapse or Redemption of a Warrant.” Due to the lack of clarity under
current law regarding the treatment of an exercise of a warrant after our giving notice of an intention to redeem the warrant for $0.01,
there can be no assurance as to which, if any, of the alternative tax consequences described above would be adopted by the IRS or a court
of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of the exercise of a warrant occurring
after our giving notice of an intention to redeem the warrant as described above.
Possible Constructive Distributions
The
terms of each warrant provide for an adjustment to the number of shares of common stock for which the warrant may be exercised or to
the exercise price of the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities —
Redeemable Warrants — Public Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable.
The U.S. holders of the warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment
to the number of such shares or to such exercise price increases the warrant holders’ proportionate interest in our assets
or earnings and profits (e.g., through an increase in the number of shares of common stock that would be obtained upon exercise or through
a decrease in the exercise price of the warrant) as a result of a distribution of cash or other property, such as other securities, to
the holders of shares of our common stock, or as a result of the issuance of a stock dividend to holders of shares of our common stock,
in each case which is taxable to the U.S. holders of such shares as a distribution (as described under “U.S. Holders — Taxation
of Distributions” above). Such constructive distribution would be subject to tax as described under that section in the same
manner as if the U.S. holders of the warrants received a cash distribution from us equal to the fair market value of such increased interest.
Information Reporting and Backup Withholding
In general, information reporting
requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our units, shares of
common stock and warrants, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder
fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject
to backup withholding (and such notification has not been withdrawn).
Backup withholding is not
an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S.
holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS. All U.S. holders should
consult their tax advisors regarding the application of information reporting and backup withholding to them.
Non-U.S. Holders
This
section applies to you if you are a “Non-U.S. holder.” As used herein, the term “Non-U.S. holder” means a beneficial
owner of our units, common stock or warrants who or that is for U.S. federal income tax purposes a non-resident alien individual
(other than certain former citizens and residents of the United States subject to U.S. federal income tax as expatriates), a foreign
corporation, or an estate or trust that is not a U.S. holder, but generally does not include an individual who is present in the United
States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor
regarding the U.S. federal income tax consequences of the acquisition, ownership or sale or other disposition of our securities.
Taxation of Distributions
In general, any distributions
(including constructive distributions) we make to a Non-U.S. holder of shares of our common stock, to the extent paid out of our current
or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal
income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a
trade or business within the United States (and are not attributable to a U.S. permanent establishment under an applicable treaty),
we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for
a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such
reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). In the case of any constructive dividend, it is possible
that this tax would be withheld from any amount owed to a Non-U.S. holder by the applicable withholding agent, including cash distributions
on other property or sale proceeds from warrants or other property subsequently paid or credited to such holder. Any distribution not
constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares
of our common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from
the sale or other disposition of the common stock, which will be treated as described under “Non-U.S. Holders — Gain
on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants” below. In addition, if we determine that we
are likely to be classified as a “U.S. real property holding corporation” (see “Non-U.S. Holders — Gain
on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants” below), we will withhold 15% of any distribution
that exceeds our current and accumulated earnings and profits, including a distribution in redemption of shares of our common stock. See
also “Non-U.S. Holders — Possible Constructive Distributions” for potential U.S. federal tax consequences with respect
to constructive distributions.
The
withholding tax does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends
are effectively connected with such Non-U.S. holder’s conduct of a trade or business within the United States (or, if an income
tax treaty applies, are attributable to a U.S. permanent establishment or fixed base maintained by the non-U.S. holder). Instead, the
effectively connected dividends will generally be subject to regular U.S. federal income tax as if the Non-U.S. holder were
a U.S. resident, subject to an applicable income tax treaty providing otherwise. A Non-U.S. corporation receiving effectively connected
dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).
Gain on Sale, Taxable Exchange or Other
Taxable Disposition of Common Stock and Warrants
Subject
to the discussion of FATCA and backup withholding below, a Non-U.S. holder generally will not be subject to U.S. federal income or withholding
tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our common stock, which would include a
dissolution and liquidation in the event we do not complete an initial business combination within the required period of time, or warrants
(including an expiration or redemption of our warrants), in each case without regard to whether those securities were held as part of
a unit, unless:
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|
·
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the
gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder
within the United States (and, under certain income tax treaties, is attributable to
a United States permanent establishment or fixed base maintained by the Non-U.S. holder);
or
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|
|
·
|
we
are or have been a “U.S. real property holding corporation” for U.S. federal
income tax purposes at any time during the shorter of the five-year period ending on the
date of disposition or the period that the Non-U.S. holder held our common stock, and, in
the case where shares of our common stock are regularly traded on an established securities
market, the Non-U.S. holder has owned, directly or constructively (including through ownership
of warrants), more than 5% of our common stock at any time within the shorter of the five-year
period preceding the disposition or such Non-U.S. holder’s holding period for the shares
of our common stock. There can be no assurance that our common stock will be treated as regularly
traded on an established securities market for this purpose.
|
Unless
an applicable income tax treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally
applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet
point above of a Non-U.S. holder that is a foreign corporation may also be subject to an additional “branch profits tax”
at a 30% rate (or lower treaty rate).
If
the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition
of our common stock or warrants will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of
our common stock or warrants from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized
upon such disposition. We cannot determine whether we will be a U.S. real property holding corporation in the future until we
complete an initial business combination. We will be classified as a U.S. real property holding corporation if the fair market value
of our “U.S. real property interests” equals or exceeds 50 percent of the sum of the fair market value of our worldwide real
property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.
Redemption of Common Stock
The
characterization for U.S. federal income tax purposes of the redemption of a Non-U.S. holder’s common stock pursuant to
the redemption provisions described in the section of this prospectus entitled “Description of Securities — Common Stock”
generally will correspond to the U.S. federal income tax characterization of such a redemption of a U.S. holder’s common stock,
as described under “U.S. Holders — Redemption of Common Stock” above, and the consequences of the redemption to
the Non-U.S. holder will be as described above under “Non-U.S. Holders — Taxation of Distributions” and “Non-U.S.
Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of Common Stock and Warrants,” as applicable.
Exercise, Lapse or Redemption of a Warrant
The U.S. federal income tax
treatment of a Non-U.S. holder’s exercise of a warrant, or the lapse of a warrant held by a Non-U.S. holder, generally will correspond
to the U.S. federal income tax treatment of the exercise or lapse of a warrant by a U.S. holder, as described under “U.S. holders —
Exercise, Lapse or Redemption of a Warrant” above, although to the extent a cashless exercise results in a taxable exchange, the
consequences would be similar to those described above in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other
Taxable Disposition of Common Stock and Warrants.” The U.S. federal income tax treatment for a Non-U.S. holder of a redemption
of warrants for common stock will correspond to the U.S. federal income tax treatment for a U.S. holder of a redemption of warrants for
common stock, as described above in “U.S. Holders — Exercise, Lapse or Redemption of a Warrant.” The U.S. federal income
tax treatment for a Non-U.S. holder of a redemption of warrants for cash (or if we purchase warrants in an open market transaction) would
be similar to that described above in “Non-U.S. Holders — Gain on Sale, Taxable Exchange or Other Taxable Disposition of
Common Stock and Warrants.”
Possible Constructive Distributions
The terms of each warrant
provide for an adjustment to the number of shares of common stock for which the warrant may be exercised or to the exercise price of
the warrant in certain events, as discussed in the section of this prospectus entitled “Description of Securities —
Redeemable Warrants — Public Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable.
Nevertheless, the Non-U.S. holders of the warrants would be treated as receiving a constructive distribution from us if, for example,
the adjustment to the number of such shares or to such exercise price increases the warrant holders’ proportionate interest in
our assets or earnings and profits (e.g., through an increase in the number of shares of common stock that would be obtained upon exercise
or through a decrease in the exercise price of the warrant) as a result of a distribution of cash or other property, such as other securities,
to the holders of shares of our common stock, or as a result of the issuance of a stock dividend to holders of shares of our common stock,
in each case which is taxable to the holders of such shares as a distribution (as described under “Non-U.S. Holders — Taxation
of Distributions” above). Such constructive distribution would be subject to tax in the same manner as if the Non-U.S. holders
of the warrants received a cash distribution from us equal to the fair market value of such increased interest resulting from the adjustment.
Information Reporting and Backup Withholding
Information returns will
be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our units, shares
of common stock and warrants. A Non-U.S. holder may have to comply with certification procedures to establish that it is not a United States
person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a
reduced rate of withholding under a treaty generally will satisfy the certification requirements necessary to avoid the backup withholding
as well.
Backup withholding is not
an additional tax. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such
holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely
furnished to the IRS. All Non-U.S. holders should consult their tax advisors regarding the application of information reporting and backup
withholding to them.
FATCA Withholding Taxes
Provisions commonly referred
to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) on our common stock
or warrants to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment
vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally
relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied by, or an exemption applies
to, the payee (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). The IRS has issued proposed
regulations (on which taxpayers may rely until final regulations are issued) that would generally not apply these withholding requirements
to gross proceeds from sales or other disposition proceeds from our securities. Foreign financial institutions located in jurisdictions
that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Under certain
circumstances, a Non-U.S. holder might be eligible for refunds or credits of such withholding taxes, and a Non-U.S. holder might
be required to file a U.S. federal income tax return to claim such refunds or credits. Prospective investors should consult their
tax advisers regarding the effects of FATCA on their investment in our securities.
THE U.S. FEDERAL INCOME TAX
DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S PARTICULAR
SITUATION. HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP
AND DISPOSITION OF OUR COMMON STOCK AND WARRANTS, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, ESTATE, NON-U.S. AND OTHER
TAX LAWS AND TAX TREATIES AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. OR OTHER TAX LAWS.
UNDERWRITING
(CONFLICTS OF INTEREST)
We intend to offer our securities
described in this prospectus through the underwriters named below. Chardan is the representative for the underwriters. We have entered
into an underwriting agreement with the representative. Subject to the terms and conditions of the underwriting agreement, each of the
underwriters has severally agreed to purchase from us the number of units listed next to its name in the following table:
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Underwriter
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Number
of
Units
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Chardan Capital Markets, LLC
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Total
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10,000,000
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A copy of the underwriting
agreement has been filed as an exhibit to the registration statement of which this prospectus forms a part.
Listing of our Securities
We have applied to list our
units, common stock and warrants on Nasdaq under the symbols “CNTQU,” “CNTQ” and “CNTQW,” respectively.
We expect that our units will be listed on Nasdaq on or promptly after the effective date of the registration statement. Following the
date the shares of our common stock and warrants are eligible to trade separately, we anticipate that the shares of our common stock
and warrants will be listed separately and as a unit on Nasdaq.
Over-allotment Option
We have granted the underwriters
an option to buy up to 1,500,000 additional units. The underwriters may exercise this option solely for the purpose of covering over-allotments,
if any, made in connection with this offering. The underwriters have 45 days from the date of this prospectus to exercise this option.
If the underwriters exercise this option, they will each purchase additional units approximately in proportion to the amounts specified
in the table above.
Commissions and Discounts
Units sold by the underwriters
to the public will initially be offered at the offering price set forth on the cover of this prospectus. The underwriters will be entitled
to a cash underwriting discount of $500,000. The aggregate amount of the fee paid to the underwriters will remain constant at $500,000,
even if the over-allotment option is exercised. B. Riley Securities, Inc. will receive $100,000 from the total underwriting discount
for acting as a qualified independent underwriter. Any units sold by the underwriters to securities dealers may be sold at a discount
of up to $ per unit
from the public offering price. Any of these securities dealers may resell any units purchased from the underwriters to other brokers
or dealers at a discount of up to $ per
unit from the public offering price. If all of the units are not sold at the initial public offering price, the representative may change
the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase
the units at the prices and upon the terms stated therein, and, as a result, will thereafter bear any risk associated with changing the
offering price to the public or other selling terms.
The following table shows
the per unit and total underwriting discounts and commissions we will pay to the underwriters assuming both no exercise and full exercise
of the underwriters’ over-allotment option to purchase up to an additional 1,500,000 units.
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Per Unit
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|
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Without
Over-allotment
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With
Over-allotment
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|
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Public offering price
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$
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10.00
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|
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$
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100,000,000
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|
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$
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115,000,000
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|
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Discount and qualified independent underwriter fees
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|
$
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0.005
|
(1)
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$
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500,000
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|
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$
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500,000
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|
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Proceeds
before expenses(2)
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|
$
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9.995
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|
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$
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99,500,000
|
|
|
$
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114,500,000
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|
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(1)
|
The
aggregate amount of the fee paid to the underwriters (including the amount payable to the
qualified independent underwriter) remains constant at $500,000, even if the over-allotment
option is exercised.
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(2)
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The
offering expenses are estimated at $575,000.
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Pricing of Securities
We have been advised by the
representative that the underwriters propose to offer the units to the public at the offering price set forth on the cover page of
this prospectus.
Prior to this offering there
has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated
between us and the representative. Factors considered in determining the prices and terms of the units, including the shares of common
stock and warrants underlying the units, include:
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·
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the
history and prospects of companies whose principal business is the acquisition of other companies;
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·
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prior
offerings of those companies;
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·
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our
prospects for acquiring an operating business at attractive values;
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·
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the
per share amount of net proceeds being placed into the trust account;
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·
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an
assessment of our management and their experience in identifying operating companies;
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·
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general
conditions of the securities markets at the time of the offering; and
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·
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other
factors as were deemed relevant.
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However, although these factors
were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in
a particular industry since the underwriters are unable to compare our financial results and prospects with those of public companies
operating in the same industry.
Regulatory Restrictions on Purchase of Securities
Rules of the SEC may
limit the ability of the underwriters to bid for or purchase our units before the distribution of the units is completed. However, the
underwriters may engage in the following activities in accordance with the rules:
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·
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Stabilizing
Transactions. The underwriters may make bids or purchases for the purpose of preventing
or retarding a decline in the price of our units, as long as stabilizing bids do not exceed
the offering price of $10.00 and the underwriters comply with all other applicable rules.
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·
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Over-Allotments
and Syndicate Coverage Transactions. The underwriters may create a short position in
our units by selling more of our units than are set forth on the cover page of this
prospectus up to the amount of the over-allotment option. This is known as a covered short
position. The underwriters may also create a short position in our units by selling more
of our units than are set forth on the cover page of this prospectus and the units allowed
by the over-allotment option. This is known as a naked short position. If the underwriters
create a short position during the offering, the representative may engage in syndicate covering
transactions by purchasing our units in the open market. The representative may also elect
to reduce any short position by exercising all or part of the over-allotment option. Determining
what method to use in reducing the short position depends on how the units trade in the aftermarket
following the offering. If the unit price drops following the offering, the short position
is usually covered with shares purchased by the underwriters in the aftermarket. However,
the underwriters may cover a short position by exercising the over-allotment option even
if the unit price drops following the offering. If the unit price rises after the offering,
then the over-allotment option is used to cover the short position. If the short position
is more than the over-allotment option, the naked short must be covered by purchases in the
aftermarket, which could be at prices above the offering price.
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·
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Penalty
Bids. The representative may reclaim a selling concession from a syndicate member when
the units originally sold by the syndicate member are purchased in a stabilizing or syndicate
covering transaction to cover syndicate short positions.
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Stabilization and syndicate
covering transactions may cause the price of our securities to be higher than they would be in the absence of these transactions. The
imposition of a penalty bid might also have an effect on the prices of our securities if it discourages resales of our securities.
We have been advised by the
representative of the underwriters that it does not intend to make a market in our public units.
Neither we nor the underwriters
make any representation or prediction as to the effect that the transactions described above may have on the price of our securities.
These transactions may occur on the Nasdaq, in the over-the-counter market or on any trading market. If any of these transactions are
commenced, they may be discontinued without notice at any time.
Private Placement
Chardan
NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed, pursuant to a written agreement, to purchase an aggregate
of 5,238,461 (or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised)
warrants at a price of $0.65 per warrant ($3,405,000 (or up to $3,555,000 depending on the
extent to which the underwriters’ over-allotment option is exercised)) in a private placement
that will occur simultaneously with the closing of this offering. The private warrants have terms and provisions that are identical to
the public warrants sold in this offering except as described under “Description of Securities — Redeemable Warrants —
Private Warrants.” The private warrants will be considered underwriting compensation in connection with this offering. Such
private warrants will be subject to lock-up restrictions, as required by FINRA Rule 5110(e)(1) and may not be sold during the
offering, or sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or
call transaction that would result in the effective economic disposition of such securities by any person for a period of 180 days immediately
following the date of effectiveness of the registration statement of which this prospectus forms a part or commencement of sales of the
offering, except as provided in FINRA Rule 5110(e)(2). We have granted our sponsor the registration rights as described under the
section “Description of our Securities — Registration Rights.” The demand and piggyback registration
rights being granted to our sponsor are subject to FINRA Rule 5110(g) and will be in compliance with FINRA Rule 5110.05.
Business Combination Marketing Agreement
We
have engaged Chardan as an advisor in connection with our business combination to assist us in holding meetings with our stockholders
to discuss the potential business combination and the target business’ attributes, introduce us to potential investors that are
interested in purchasing our securities, assist us in obtaining stockholder approval for the business combination and assist us with
our press releases and public filings in connection with the business combination. We will pay Chardan a cash fee for such services upon
the consummation of our initial business combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of this offering.
As a result, Chardan will not be entitled to such fee unless we consummate our initial business combination.
Right of First Refusal
We
have agreed to provide Chardan Capital Markets, LLC with a right of first refusal to participate as lead book running manager for any
public or private securities offerings for a period of 24 months following the consummation of our
initial business combination, with at least 30% of the economics for any such offering. In accordance with FINRA Rule 5110(g)(6), such
right of first refusal shall not have a duration of more than three years from the effective date of the registration statement of which
this prospectus forms a part.
Conflicts of Interest
Our sponsor is an affiliate
of Chardan, the representative of the underwriters in this offering, and certain of our officers and directors are affiliated with Chardan.
As a result, Chardan is deemed to have a “conflict of interest” within the meaning of FINRA Rule 5121.
Accordingly, this offering
is being made in compliance with the applicable requirements of Rule 5121. Rule 5121 requires that a “qualified independent
underwriter,” as defined in Rule 5121, participate in the preparation of the registration statement and prospectus and exercise
the usual standards of due diligence with respect thereto. B. Riley Securities, Inc. has agreed to act as a “qualified independent
underwriter” for this offering. B. Riley Securities, Inc. will receive $100,000 from the total underwriting discount for acting
as a qualified independent underwriter. We have agreed to indemnify B. Riley Securities, Inc. against certain liabilities incurred
in connection with acting as a “qualified independent underwriter,” including liabilities under the Securities Act. In addition,
no underwriter with a conflict of interest will confirm sales to any account over which it exercises discretionary authority without
the specific prior written approval of the account holder.
Other Terms
Except as set forth above,
we are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering, and
have no present intent to do so. However, any of the underwriters may, among other things, introduce us to potential target businesses
or assist us in raising additional capital, as needs may arise in the future. If any underwriter provides services to us after this offering,
we may pay the underwriter fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided
that no agreement will be entered into with the underwriter and no fees for such services will be paid to the underwriter prior to the
date which is 90 days after the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s
compensation in connection with this offering.
Indemnification
We have agreed to indemnify
the underwriters against some liabilities, including civil liabilities under the Securities Act, or to contribute to payments the underwriters
may be required to make in this respect.
Resale Restrictions
We intend to distribute
our securities in the Province of Ontario, Canada (the “Canadian Offering Jurisdiction”) by way of a private placement and
exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in such Canadian Offering
Jurisdiction. Any resale of our securities in Canada must be made under applicable securities laws that will vary depending on the relevant
jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Canadian resale restrictions in some circumstances may apply to resales of
interests made outside of Canada. Canadian purchasers are advised to seek legal advice prior to any resale of our securities. We may
never be a “reporting issuer”, as such term is defined under applicable Canadian securities legislation, in any province
or territory of Canada in which our securities will be offered and there currently is no public market for any of the securities in Canada,
and one may never develop. Canadian investors are advised that we have no intention to file a prospectus or similar document with any
securities regulatory authority in Canada qualifying the resale of the securities to the public in any province or territory in Canada.
Notice to Prospective Investors in Canada
Representations of Purchasers
A Canadian purchaser will
be required to represent to us and the dealer from whom the purchase confirmation is received that:
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·
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the
purchaser is entitled under applicable provincial securities laws to purchase our securities
without the benefit of a prospectus qualified under those securities laws;
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|
|
·
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where
required by law, that the purchaser is purchasing as principal and not as agent;
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|
|
·
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the
purchaser has reviewed the text above under Resale Restrictions; and
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|
·
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the
purchaser acknowledges and consents to the provision of specified information concerning
its purchase of our securities to the regulatory authority that by law is entitled to collect
the information.
|
Rights of Action — Ontario Purchasers
Only
Under Ontario securities
legislation, certain purchasers who purchase a security offered by this prospectus during the period of distribution will have a statutory
right of action for damages, or while still the owner of our securities, for rescission against us in the event that this prospectus
contains a misrepresentation without regard to whether the purchaser relied on the misrepresentation. The right of action for damages
is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the
cause of action and three years from the date on which payment is made for our securities. The right of action for rescission is exercisable
not later than 180 days from the date on which payment is made for our securities. If a purchaser elects to exercise the right of action
for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action
exceed the price at which our securities were offered to the purchaser and if the purchaser is shown to have purchased the securities
with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all
or any portion of the damages that are proven to not represent the depreciation in value of our securities as a result of the misrepresentation
relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario
purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete
text of the relevant statutory provisions.
Enforcement of Legal Rights
All of our directors and
officers as well as the experts named herein are located outside of Canada and, as a result, it may not be possible for Canadian purchasers
to effect service of process within Canada upon us or those persons. All of our assets and the assets of those persons are located outside
of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment
obtained in Canadian courts against us or those persons outside of Canada.
Collection of Personal Information
If a Canadian purchaser is
resident in or otherwise subject to the securities laws of the Province of Ontario, the Purchaser authorizes the indirect collection
of personal information pertaining to the Canadian purchaser by the Ontario Securities Commission (the “OSC”) and each Canadian
purchaser will be required to acknowledge and agree that the Canadian purchaser has been notified by us (i) of the delivery to the
OSC of personal information pertaining to the Canadian purchaser, including, without limitation, the full name, residential address and
telephone number of the Canadian purchaser, the number and type of securities purchased and the total purchase price paid in respect
of the securities, (ii) that this information is being collected indirectly by the OSC under the authority granted to it in securities
legislation, (iii) that this information is being collected for the purposes of the administration and enforcement of the securities
legislation of Ontario, and (iv) that the title, business address and business telephone number of the public official in Ontario
who can answer questions about the OSC’s indirect collection of the information is the Administrative Assistant to the Director
of Corporate Finance, the Ontario Securities Commission, Suite 1903, Box 5520, Queen Street West, Toronto, Ontario, M5H 3S8,
Telephone: (416) 593-8086, Facsimile: (416) 593-8252.
LEGAL
MATTERS
Reed Smith LLP, is acting
as United States counsel in connection with the registration of the offer and sale of our securities under the Securities Act and will
pass on the validity of the securities offered in the prospectus. Greenberg Traurig, LLP, is acting as counsel for the underwriters in
this offering.
EXPERTS
The financial statements
of Chardan NexTech Acquisition 2 Corp. as of December 31, 2020, and for the period from June 23, 2020 (inception) through December 31,
2020, appearing in this prospectus have been audited by WithumSmith+Brown, PC, independent registered public accounting firm, as set
forth in their report thereon, appearing elsewhere in this prospectus, and are included in reliance on such report given on the authority
of such firm as an experts in auditing and accounting.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC
a registration statement on Form S-1, which includes exhibits, schedules and amendments, under the Securities Act, with respect
to this offering of our securities. Although this prospectus, which forms a part of the registration statement, contains all material
information included in the registration statement, parts of the registration statement have been omitted as permitted by rules and
regulations of the SEC. We refer you to the registration statement and its exhibits for further information about us, our securities
and this offering. The registration statement and its exhibits, as well as our other reports filed with the SEC, can be inspected and
copied at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information about
the operation of the public reference room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a web site at http://www.sec.gov
which contains the Form S-1 and other reports, proxy and information statements and information regarding issuers that file
electronically with the SEC.
CHARDAN NEXTECH ACQUISITION 2 CORP.
INDEX
TO FINANCIAL STATEMENTS
|
Report
of Independent Registered Public Accounting Firm
|
|
F-2
|
|
Balance Sheets
as of March 31, 2021 (unaudited) and December 31, 2020
|
|
F-3
|
|
Statements
of Operations for the three months ended March 31, 2021 (unaudited) and for the period from June 23, 2020 (inception) through
December 31, 2020
|
|
F-4
|
|
Statements
of Changes in Stockholder’s Equity for the three months ended March 31, 2021 (unaudited) and for the period from June
23, 2020 (inception) through December 31, 2020
|
|
F-5
|
|
Statements
of Cash Flows for the three months ended March 31, 2021 (unaudited) and for the period from June 23, 2020 (inception) through
December 31, 2020
|
|
F-6
|
|
Notes
to Financial Statements
|
|
F-7
– F-17
|
Report of Independent Registered
Public Accounting Firm
To the Stockholder and the Board of Directors
of
Chardan NexTech Acquisition 2 Corp.
Opinion on the Financial Statements
We have audited the accompanying balance sheet
of Chardan NexTech Acquisition 2 Corp. (the “Company”) as of December 31, 2020, the related statements of operations, changes
in stockholder’s equity and cash flows for the period from June 23, 2020 (inception) through December 31, 2020, and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash
flows for the period from June 23, 2020 (inception) through December 31, 2020, in conformity with accounting principles generally accepted
in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ WithumSmith+Brown, PC
We have served as the Company's auditor since 2021.
New York, New York
June 4, 2021
CHARDAN NEXTECH
ACQUISITION 2 CORP.
BALANCE
SHEETS
|
|
|
March
31, 2021
(unaudited)
|
|
|
December
31,
2020
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets – cash
|
|
$
|
72,882
|
|
|
$
|
25,000
|
|
|
Deferred offering
costs
|
|
|
77,118
|
|
|
|
—
|
|
|
TOTAL ASSETS
|
|
$
|
150,000
|
|
|
$
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
1,000
|
|
|
$
|
1,000
|
|
|
Promissory
note – related party
|
|
|
125,000
|
|
|
|
—
|
|
|
Total Liabilities
|
|
|
126,000
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder’s Equity
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.0001 par value; 5,000,000 shares authorized; 2,875,000 issued and outstanding (1)
|
|
|
288
|
|
|
|
288
|
|
|
Additional paid-in capital
|
|
|
24,712
|
|
|
|
24,712
|
|
|
Accumulated deficit
|
|
|
(1,000
|
)
|
|
|
(1,000
|
)
|
|
Total Stockholder’s
Equity
|
|
|
24,000
|
|
|
|
24,000
|
|
|
TOTAL LIABILITIES AND STOCKHOLDER’S
EQUITY
|
|
$
|
150,000
|
|
|
$
|
25,000
|
|
(F) Includes up to 375,000
shares of common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see
Note 5). On March 4, 2021, the Company effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock outstanding
(see Note 5). All share and per-share amounts have been retroactively restated to reflect the stock split.
The accompanying notes are an integral part
of the financial statements.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
STATEMENTS
OF OPERATIONS
|
|
|
|
For
the three
months ended
March 31, 2021
(unaudited)
|
|
|
|
|
For
the
Period from
June 23, 2020
(inception) Through
December 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Formation
and operating costs
|
|
$
|
—
|
|
|
|
$
|
1,000
|
|
|
Net
loss
|
|
$
|
—
|
|
|
|
$
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding, basic and diluted (1)
|
|
|
2,500,000
|
|
|
|
|
2,500,000
|
|
|
Basic
and diluted net loss per common share
|
|
$
|
0.00
|
|
|
|
$
|
(0.00
|
)
|
(F) Excludes up to 375,000
shares of common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see
Note 5). On March 4, 2021, the Company effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock outstanding
(see Note 5). All share and per-share amounts have been retroactively restated to reflect the stock split.
The accompanying notes are an integral part
of the financial statements.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
STATEMENTS
OF CHANGES IN STOCKHOLDER’S EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021
(UNAUDITED) AND FOR THE PERIOD FROM JUNE 23, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020
|
|
|
Common Stock
|
|
|
Additional
Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholder’s
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance at June 23, 2020 (inception)
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock to Sponsor (1)
|
|
|
2,875,000
|
|
|
|
288
|
|
|
|
24,712
|
|
|
|
—
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,000
|
)
|
|
|
(1,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020
|
|
|
2,875,000
|
|
|
$
|
288
|
|
|
$
|
24,712
|
|
|
$
|
(1,000
|
)
|
|
$
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2021 (unaudited)
|
|
|
2,875,000
|
|
|
$
|
288
|
|
|
$
|
24,712
|
|
|
$
|
(1,000
|
)
|
|
$
|
24,000
|
|
(F) Includes up to 375,000
shares of common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see
Note 5). On March 4, 2021, the Company effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock outstanding
(see Note 5). All share and per-share amounts have been retroactively restated to reflect the stock split.
The accompanying notes are an integral part
of the financial statements.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
STATEMENTS
OF CASH FLOWS
|
|
|
For
the three months ended March 31, 2021 (unaudited)
|
|
|
For
the Period from June 23, 2020 (inception) Through December 31, 2020
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
—
|
|
|
$
|
(1,000
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Deferred offering
costs
|
|
|
(77,118
|
)
|
|
|
1,000
|
|
|
Net cash
provided by (used in) operating activities
|
|
|
(77,118
|
)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from promissory note
|
|
|
125,000
|
|
|
|
—
|
|
|
Proceeds from issuance of common stock
to Sponsor
|
|
|
—
|
|
|
|
25,000
|
|
|
Net cash
provided by financing activities
|
|
|
125,000
|
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash
|
|
|
47,882
|
|
|
|
25,000
|
|
|
Cash - Beginning of period
|
|
|
25,000
|
|
|
|
—
|
|
|
Cash - End of period
|
|
$
|
72,882
|
|
|
$
|
25,000
|
|
The accompanying notes are an integral part
of the financial statements.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES
TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Chardan NexTech Acquisition 2 Corp (the “Company”)
is a blank check company incorporated in Delaware on June 23, 2020. The Company was formed for the purpose of effectuating a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses
(the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the
risks associated with emerging growth companies.
As of March 31, 2021, the Company had not
commenced any operations. All activity for the period from June 23, 2020 (inception) through March 31, 2021 relates to the Company’s
formation and the proposed initial public offering (“Proposed Public Offering”). 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 Proposed Public Offering.
The
Company’s ability to commence operations is contingent upon obtaining adequate financial resources through a Proposed Public Offering
of 10,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units being offered, the
“Public Shares”) at $10.00 per Unit (or 11,500,000 Units if the underwriters’ over-allotment option is exercised in
full), which is discussed in Note 3, and the sale of 5,238,461 warrants (or 5,469,230 warrants if the underwriters’ over-allotment
option is exercised in full) (the “Private Warrants”), at a price of $0.65 per Private Warrant, in a private placement to
Chardan NexTech 2 Warrant Holdings LLC, an affiliate of Chardan NexTech Investments 2 LLC (the “Sponsor”), that will close
simultaneously with the Proposed Public Offering.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Proposed Public Offering and the sale of the Private Warrants, 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. Nasdaq rules provide that the Business Combination
must be with one or more target businesses that together have a fair market value equal to at least 80% of the value of the Trust Account
(as defined below) (excluding taxes payable on the income earned on the Trust Account) at the time of the signing of a definitive agreement
to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns
or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment
Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing
of the Proposed Public Offering, management has agreed that $10.10 per Unit sold in the Proposed Public Offering, including the proceeds
from the sale of the Private Warrants, will be held in a trust account (“Trust Account”) and 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 185 days or less,
or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the
distribution of the funds in the Trust Account to the Company’s stockholders, as described below.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
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 $10.10 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 tax obligations). The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity
upon the completion of the Proposed Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity.
The Company will proceed with a Business Combination
only if the Company has net tangible assets of at least $5,000,001 either prior to or 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 reasons, the Company will,
pursuant to its 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 other 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. If the Company seeks stockholder approval in connection with a Business Combination,
the Sponsor has agreed to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after the Proposed
Public Offering in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public
Shares irrespective of whether they vote for or against the proposed transaction.
Notwithstanding the above, 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 15% or more of the Public Shares, without the prior consent of the Company.
The Company will have 15 months from the closing
of the initial public offering (or up to 18 months from the closing of the initial public offering if we have executed a definitive agreement
and filed a proxy statement for an initial business combination within 15 months from the closing of the initial public offering) to
consummate an initial business combination. In addition, if the Company anticipates that it may not be able to consummate an initial
business combination within 15 months and the Company has not entered into a definitive agreement and filed a proxy statement for an initial
business combination by such date (or 18 months if we have executed a definitive agreement and filed a proxy statement for an initial
business combination within 15 months from the closing of this offering), the Company’s insiders or their affiliates may, but are
not obligated to, extend the period of time to consummate a business combination up to two times by an additional three months each time
(for a total of up to 21 months to complete a business combination). If the Company is unable to consummate an initial business combination
within the above time period, the Company will distribute the aggregate amount then on deposit in the trust account, pro rata to the
Company’s public stockholders, by way of the redemption of their shares and thereafter cease all operations except for the purposes
of winding up of the Company’s affairs. In such event, the warrants will expire and be worthless.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
The initial stockholders have agreed to waive
their redemption rights with respect to any shares they own in connection with the consummation of the initial business combination,
including their founder shares and public shares that they purchase during or after the offering, if any. In addition, the initial stockholders
have agreed to waive their rights to liquidating distributions with respect to their founder shares if the Company fails to consummate
an initial business combination within 21 months (assuming both of the three-month extensions were executed) from the closing of this
offering. However, if the initial stockholders acquire public shares in or after the initial public offering, they will be entitled to
receive liquidating distributions with respect to such public shares if the Company fails to consummate an initial business combination
within the required time period.
In order to protect the amounts held in the
Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (other than the Company’s
independent registered accounting firm) 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 (1) $10.10
per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust
Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay the Company’s
taxes, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver
of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims
under the Company’s indemnity of the underwriters of the Proposed Public Offering against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”). The Company will seek to reduce the possibility that
the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers
(except for the Company’s independent registered public accounting firm), 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.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying financial statements are presented
in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the
rules and regulations of the SEC.
The Company does not have sufficient liquidity
to meet its anticipated obligations over the next year from the issuance of these financial statements. In connection with the Company’s
assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, Disclosures
of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management has determined that the Company has access
to funds from the Sponsor, and the Sponsor has the financial wherewithal to fund the Company, that are sufficient to fund the working
capital needs of the Company until the earlier of the consummation of the Proposed Public Offering or one year from the issuance of these
financial statements.
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 statements with another public company, which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
Use of Estimates
The preparation of financial statements in
conformity with GAAP requires 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 expenses during
the reporting periods.
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 March 31, 2021 and December 31, 2020.
Deferred Offering Costs
Deferred offering costs consist of legal,
accounting and other expenses incurred through the balance sheet date that are directly related to the Proposed Public Offering. The
offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in
equity at the time of the Proposed Public Offering. Offering costs for equity contracts that are classified as assets and liabilities
are expensed at the time of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, all deferred
costs, as well as additional expenses incurred, will be charged to operations. The Company had $77,118 and $0 of deferred offering costs
at March 31, 2021 and December 31, 2020, respectively.
Income Taxes
The Company complies with the accounting and
reporting requirements of ASC Topic 740, Income Taxes, which requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases
of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to
the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to
reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed to be de minimis as of March 31, 2021
and December 31, 2020.
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 March 31, 2021 and December 31, 2020. 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.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
The provision for income taxes was deemed
to be de minimis for the period from June 23, 2020 (inception) through December 31, 2020, and for the three months ended March 31,
2021.
Net Loss Per Common Share
Net loss per share of common stock is computed
by dividing net loss by the weighted average number of common shares outstanding during the period, excluding shares of common stock
subject to forfeiture. Weighted average shares were reduced for the effect of an aggregate of 375,000 shares of common stock that are
subject to forfeiture if the over-allotment option is not exercised by the underwriter (see Note 5). At March 31, 2021 and December 31,
2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common
stock and then share in the earnings of the Company. As a result, diluted loss per common share is the same as basic loss per common
share for the periods presented.
Risks and Uncertainties
Management continues to evaluate the impact
of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative
effect on the Company’s financial position, results of its operations, close of the Proposed Public Offering, and/or search for
a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Depository Insurance Corporation coverage limit of $250,000. At March 31, 2021 and December 31, 2020, the Company had not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under FASB ASC Topic 820, Fair Value Measurement ("ASC 820"),
approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
The Company applies ASC 820, which establishes
a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as
an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal
or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established
in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed
based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions
based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or
liability and are to be developed based on the best information available in the circumstances.
Level 1 — Assets and liabilities with
unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted
prices in active markets for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement
are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable
inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement
are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets
or liabilities.
Warrant Liabilities
The Company accounts
for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms
and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815,
Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments
pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for
equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other
conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant
issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet
all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital
at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are
required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated
fair value of the warrants will be recognized as a non-cash gain or loss on the statements of operations.
The Company will
account for the Private Placement Warrants issued concurrently in connection with the Initial Public Offering in accordance with Accounting
Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC
815”), under which the Private Placement Warrants will not meet the criteria for equity classification and must be recorded as
liabilities. As the Private Placement Warrants meet the definition of a derivative as contemplated in ASC 815, the Private Placement
Warrants will be measured at fair value at inception and at each reporting date in accordance with ASC 820, Fair Value Measurement,
with changes in fair value recognized in the statements of operations in the period of change.
The Public Warrants
are not precluded from equity classification, and will be accounted for as such on the date of issuance, and each balance sheet date
thereafter.
Recent Accounting Standards
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial
statements.
NOTE 3. PROPOSED PUBLIC OFFERING
Pursuant to the Proposed Public Offering,
the Company will offer for sale up to 10,000,000 Units (or 11,500,000 Units if the underwriters’ over-allotment option is exercised
in full) at a purchase price of $10.00 per Unit. Each Unit will consist of one share of common stock, $0.0001 par value, and one-half
of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase one share of common
stock at an exercise price of $11.50 per whole share (see Note 7).
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
NOTE 4. PRIVATE PLACEMENT
Chardan
NexTech 2 Warrant Holdings LLC has agreed to purchase an aggregate of 5,238,461 (or up to 5,469,230 depending on the extent to
which the underwriters’ over-allotment option is exercised) Private Warrants at a price of $0.65 per Private Warrant, for an aggregate
purchase price of $3,405,000, (or up to $3,555,000 if the underwrites) in a private placement that will occur simultaneously with the
closing of the Proposed Public Offering. Each of the Private Warrants is exercisable to purchase one share of common stock at a price
of $11.50 per share, subject to adjustment (see Note 7). The proceeds from the sale of the Private Warrants will be added to the net
proceeds from the Proposed Public Offering to be 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 Warrants will be used to fund the redemption of the Public Shares (subject
to the requirements of applicable law) and the Private Warrants will expire worthless. The Company classifies the outstanding Private
Placement Warrants as warrant liabilities on the Balance Sheet in accordance with the guidance contained in ASC 815-40.
The warrant liability will be initially measured
at fair value upon the closing of the Initial Public Offering and subsequently re-measured at each reporting period using a Monte Carlo
Simulation Pricing model.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On June 23, 2020, the Company issued
1,000,000 shares of common stock for an aggregate price of $25,000 (the “Founder Shares”). On March 4, 2021, the Company
effected a 2.875-for-1 stock split of its issued and outstanding shares of Common Stock, resulting in an aggregate of 2,875,000 shares
of Common Stock issued and outstanding (see Note 8). Shares and the associated amounts have been retroactively restated in these financial
statements to reflect the stock split. The Founder Shares include an aggregate of up to 375,000 shares of common stock subject to forfeiture
by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part, so that the initial stockholders
will collectively own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Proposed Public Offering
(assuming the Sponsor does not purchase any Public Shares in the Proposed Public Offering).
With
certain limited exceptions, 50% of the Founder Shares will not
be transferred, assigned, sold or released from escrow until the earlier
of (i) six
months after the date of the
consummation of a Business Combination or (ii) the
date on which the closing price of the Company’s shares
of common stock equals or exceeds $12.50 per share (as adjusted
for stock splits 6 months after the date of the consummation of a Business
Combination, or earlier, in either case, if, subsequent to a Business Combination,
the Company consummates a subsequent liquidation, merger, stock
exchange or other similar transaction which results in all of the stockholders
having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note – Related Party
On July 23, 2020, the Sponsor agreed to loan
the Company an aggregate of up to $250,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the
“Promissory Note”). The Promissory note is non-interest bearing and payable on the earlier of (i) June 30, 2021 or (ii) the
consummation of the Proposed Public Offering. As of March 31, 2021 and December 31, 2020, there were $125,000 and $0 of borrowings outstanding
under the Promissory Note, respectively.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
Administrative Support Agreement
The Company intends to enter into an agreement
to the Sponsor, a total of $10,000 per month for office space, administrative, and shared personnel support services. Upon the completion
of an initial Business Combination, the Company will cease paying these monthly fees.
Related Party Loans
In order to finance transaction costs in connection
with an intended initial Business Combination, the Company’s initial stockholders, officers and directors or any of their respective
affiliates may, but are not obligated to, loan the Company funds as may be required 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 be paid upon consummation
of an initial Business Combination, without interest. Loans made by Chardan Capital Markets, LLC or any of its related persons will not
be convertible into any of the Company’s securities and Chardan Capital Markets, LLC and its related persons will have no recourse
with respect to their ability to convert their loans into any of the Company’s securities. As of March 31, 2021 and December 31,
2020, the Company had no working capital loans outstanding.
NOTE 6. COMMITMENTS
Registration and Stockholder Rights Agreement
The holders of the Founder Shares and Private
Warrants (and any shares of common stock issuable upon the exercise of the Private Warrants) will be entitled to registration rights
pursuant to an agreement to be signed prior to or on the effective date of the Proposed Public Offering. The holders of a 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 these shares
of common stock are to be released from escrow. The holders of a majority of the Private Warrants (and underlying securities) can elect
to exercise these registration rights at any time after 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 will grant the underwriter a 45-day
option to purchase up to 1,500,000 additional Units to cover over-allotments at the Proposed Public Offering price, less the underwriting
discounts and commissions.
The underwriters will be entitled to a cash
underwriting discount and qualified independent underwriter fees in the aggregate of $500,000.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
Business Combination Marketing Agreement
The Company has engaged Chardan Capital Markets,
LLC as an advisor in connection with the Company's Business Combination to assist the Company in holding meetings with the stockholders
to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors
that are interested in purchasing the Company's securities, assist the Company in obtaining stockholder approval for the Business Combination
and assist the Company with press releases and public filings in connection with the Business Combination. The Company will pay Chardan
Capital Markets, LLC a cash fee for such services upon the consummation of the Company's initial Business Combination in an amount equal
to, in the aggregate, 3.5% of the gross proceeds of the Proposed Public Offering. As a result, Chardan Capital Markets, LLC will not
be entitled to such fee unless the Company consummates the initial Business Combination.
NOTE 7. WARRANTS
As of March 31, 2021 and December 31, 2020,
there are no warrants outstanding. Each whole Public Warrant will entitle the holder to purchase one share of common stock at an exercise
price of $11.50 per whole share. The Sponsor, Chardan NexTech Investments 2 LLC, has agreed to purchase an aggregate of 5,238,461 (or
up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised) Private Warrants at a price
of $0.65 per Private Warrant, for an aggregate purchase price of $3,405,000 (or up to $3,555,000 depending on the extent to which the
underwriters’ over-allotment option is exercised), in a private placement that will occur simultaneously with the closing of the
Proposed Public Offering. Each of the Private Warrants is exercisable to purchase one share of common stock at a price of $11.50 per
share, subject to adjustment. The proceeds from the sale of the Private Warrants will be added to the net proceeds from the Proposed
Public Offering to be 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 Warrants will be used to fund the redemption of the Public Shares (and the Private Warrants
will expire worthless). The Warrants provide for a cashless exercise which the Company’s management determined to be a net settlement
feature with no obligation to settle in cash. The net shares issued in a cashless exercise are based on the fair value of the Company’s
common stock at the time the Warrants are exercised.
Each Warrant shall, when countersigned by
the Warrant Agent, entitle the Registered Holder to purchase from the Company the number of shares of Common Stock at $11.50 per share.
The Public Warrants may only be exercised for a whole number of Warrant Shares by a Registered Holder. No fractional shares will be issued.
A Warrant may be exercised only during the
period (“Exercise Period”) commencing 30 days after the completion of the Company’s initial business combination and
terminating at 5:00 p.m., New York City time, on the earlier to occur of (i) (A) five years following the completion of the Company’s
initial business combination with respect to the Public Warrants, and (B) five years from the effective date of the Registration Statement
with respect to the Private Warrants purchased by Chardan NexTech 2 Warrant Holdings LLC, provided that once the Private Warrants are
not beneficially owned, directly or indirectly, by Chardan Capital Markets, LLC or any of its related persons anymore, the Private Warrants
may not be exercised five years following the completion of the Company’s initial business combination, and (ii) the date fixed
for redemption of the Warrants as provided in Section 6 of this Warrant Agreement (“Expiration Date”). Except with respect
to the right to receive the Redemption Price, each Warrant not exercised on or before the Expiration Date shall become void, and all
rights thereunder and all rights shall cease at the close of business on the Expiration Date. The Company may extend the duration of
the Warrants by delaying the Expiration Date; provided, however, that the Company (i) may not extend the duration of the Private Warrants
by delaying the Expiration Date and (ii) will provide written notice of not less than 10 days to Registered Holders of such extension
and that such extension shall be identical in duration among all of the then outstanding Warrants.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
The Company is not required to issue any fraction
of a Warrant Share in connection with the exercise of Warrants, and in any case where the Registered Holder would be entitled under the
terms of the Warrants to receive a fraction of a Warrant Share upon the exercise of such Registered Holder’s Warrants, issue or
cause to be issued only the largest whole number of Warrant Shares issuable on such exercise (and such fraction of a Warrant Share will
be disregarded); provided, that if more than one Warrant certificate is presented for exercise at the same time by the same Registered
Holder, the number of whole Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares issuable on exercise of all such Warrants.
The Private Warrants: (i) will be
exercisable either for cash or on a cashless basis at the holders option and (ii) will not be redeemable by the Company, in either
case as long as the Private Warrants are held by the initial purchasers or any of their permitted transferees (as prescribed in the
Subscription Agreement). The Private Warrants may not be sold, transferred, assigned, pledged or hypothecated, or be the subject of
any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of, the
Private Warrants (or any securities underlying the Private Warrants) for a period of one hundred eighty (180) days following the
effective date of the Registration Statement to anyone other than any member participating in the Public Offering and the officers
or partners thereof, if all securities so transferred remain subject to the lock-up restriction for the remainder of the time
period.
All (and not less than all) of the outstanding
Warrants may be redeemed, in whole and not in part, at the option of the Company, at any time from and after the Warrants become exercisable,
and prior to their expiration, at the office of the Warrant Agent, at the price of $.01 per Warrant (“Redemption Price”);
provided that the last sales price of the Common Stock has been equal to or greater than $16.00 per share (subject to adjustment for
splits, dividends, recapitalizations and other similar events) (the “Redemption Trigger Price”), for any ten (10) trading
days within a thirty (30) trading day period ending on the third business day prior to the date on which notice of redemption is given
and provided further that there is a current registration statement in effect with respect to the shares of Common Stock underlying the
Warrants for each day in the aforementioned 30-day trading period and continuing each day thereafter until the Redemption Date. For avoidance
of doubt, if and when the warrants become redeemable by the Company, the Company may exercise its redemption right, even if it is unable
to register or qualify the Warrant Shares for sale under all applicable state securities laws.
The
Company will account for the 5,238,461 (or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment
option is exercised) private placement warrants to be issued in connection with the Proposed Public Offering (assuming the underwriters’
over-allotment option is not exercised) in accordance with the guidance contained in ASC 815-40. Such guidance provides that because
the private placement warrants do not meet the criteria for equity treatment thereunder, each private placement warrant must be recorded
as a liability.
The
Public Warrants are not precluded from equity classification. Equity-classified contracts are initially measured at fair
value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in
equity.
The accounting treatment of derivative financial
instruments requires that the Company record the private placement warrants as derivative liabilities at fair value upon the closing
of the Proposed Public Offering. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement,
the warrant liability will be adjusted to its current fair value, with the change in fair value recognized in the Company’s statement
of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of
events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
CHARDAN NEXTECH
ACQUISITION 2 CORP.
NOTES TO FINANCIAL
STATEMENTS
NOTE 8. STOCKHOLDER’S EQUITY
Common
stock — The Company is authorized to issue 5,000,000 shares of common stock with a par value of $0.0001 per share.
On March 31, 2021 and December 31, 2020, there were 2,875,000 shares of common stock issued and outstanding. Of the 2,875,000 shares
of common stock outstanding, up to 375,000 shares are subject to forfeiture to the Company by the Sponsor for no consideration to the
extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the initial stockholders will
collectively own 20% of the Company’s issued and outstanding common stock after a planned public offering.
The Company intends to file an Amended and
Restated Certificate of Incorporation prior to the closing date of the Proposed Public Offering such that the Company will be authorized
to issue 50,000,000 shares of common stock with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value
of $0.0001.
Common stockholders of record are entitled
to one vote for each share held on all matters to be voted on by stockholders. Unless specified in the Amended and Restated Certificate
of Incorporation or bylaws, or as required by applicable law or stock exchange rules, the affirmative vote of a majority of the Company’s
shares of common stock that are voted is required to approve any such matter voted on by the Company’s stockholders (other than
the election of directors).
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events
and transactions that occurred after the balance sheet dates up to June 4, 2021, the date that the financial statements were
available to be issued. Based on this review, other than as described below, the Company did not identify any subsequent events that
would have required adjustment or disclosure in the financial statements.
On
March 4, 2021, the Company effected a 2.875-for-1 stock split, resulting in 2,875,000 shares of common stock outstanding (see
Note 5). All share and per-share amounts have been retroactively restated to reflect the stock split.
On April 12, 2021, the Staff of the SEC issued
a statement with respect to the accounting for warrants issued by special purchase acquisition companies. In light of this statement,
the Company has determined that the fair value of the private placement warrants should be classified as a warrant liability on the Company’s
balance sheet as of the closing of the Proposed Offering that will be filed on Form 8-K. Subsequent changes to the fair value of the
warrants will be recorded in the Company’s statement of operations.
In May and
June 2021, our sponsor transferred 20,000 Founder Shares to each of Messrs. Biele,
Boyle, Hardamon, Thakrar and Thomson and Ms. Jardins, for an aggregate of 120,000 Founder Shares transferred.
Subsequent to December 31, 2020, the Company borrowed $125,000
under the Promissory Note.
$100,000,000
Chardan NexTech Acquisition 2 Corp.
10,000,000 Units
PRELIMINARY PROSPECTUS
Sole Book-Running Manager
Chardan
, 2021
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The estimated expenses payable
by us in connection with the offering described in this registration statement (other than the underwriting discount and commissions)
will be as follows:
|
Initial Trustees’ fee
|
|
$
|
11,000
|
|
|
SEC Registration Fee
|
|
|
19,761
|
|
|
FINRA filing fee
|
|
|
27,669
|
|
|
Accounting fees and expenses
|
|
|
40,000
|
|
|
Nasdaq listing and filing fees (excluding deferred
fees)
|
|
|
75,000
|
|
|
Printing and engraving expenses
|
|
|
20,000
|
|
|
Legal fees and expenses
|
|
|
250,000
|
|
|
Transfer agent
|
|
|
35,000
|
|
|
Miscellaneous
|
|
|
96,570
|
|
|
Total
|
|
$
|
575,000
|
|
Item 14. Indemnification of Directors and
Officers.
Our certificate of incorporation
provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the fullest
extent permitted by Section 145 of the Delaware General Corporation Law.
Section 145 of the Delaware
General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.
Section 145. Indemnification
of officers, directors, employees and agents; insurance.
|
|
(a)
|
A corporation shall have power
to indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation) by reason of
the fact that the person is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action, suit or proceeding
if the person acted in good faith and in a manner the person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the person’s conduct
was unlawful.
|
|
|
(b)
|
A corporation shall have power
to indemnify any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys’ fees)
actually and reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
|
|
|
(c)
|
To the extent that a present or
former director or officer of a corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection therewith.
|
|
|
(d)
|
Any indemnification under subsections
(a) and (b) of this section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that indemnification of the
present or former director, officer, employee or agent is proper in the circumstances because
the person has met the applicable standard of conduct set forth in subsections (a) and
(b) of this section. Such determination shall be made, with respect to a person who
is a director or officer at the time of such determination, (1) by a majority vote of
the directors who are not parties to such action, suit or proceeding, even though less than
a quorum, or (2) by a committee of such directors designated by majority vote of such
directors, even though less than a quorum, or (3) if there are no such directors, or
if such directors so direct, by independent legal counsel in a written opinion, or (4) by
the stockholders.
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(e)
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Expenses (including attorneys’
fees) incurred by an officer or director in defending any civil, criminal, administrative
or investigative action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such director or officer to repay such amount if it shall ultimately be determined
that such person is not entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys’ fees) incurred by former officers and
directors or other employees and agents may be so paid upon such terms and conditions, if
any, as the corporation deems appropriate.
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(f)
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The indemnification and advancement
of expenses provided by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking indemnification or advancement
of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person’s official capacity and as
to action in another capacity while holding such office. A right to indemnification or to
advancement of expenses arising under a provision of the certificate of incorporation or
a bylaw shall not be eliminated or impaired by an amendment to such provision after the occurrence
of the act or omission that is the subject of the civil, criminal, administrative or investigative
action, suit or proceeding for which indemnification or advancement of expenses is sought,
unless the provision in effect at the time of such act or omission explicitly authorizes
such elimination or impairment after such action or omission has occurred.
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(g)
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A corporation shall have power
to purchase and maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of such person’s status as such,
whether or not the corporation would have the power to indemnify such person against such
liability under this section.
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(h)
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For purposes of this section,
references to “the corporation” shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a constituent) absorbed in a consolidation
or merger which, if its separate existence had continued, would have had power and authority
to indemnify its directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under this section with respect to the resulting or surviving
corporation as such person would have with respect to such constituent corporation if its
separate existence had continued.
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(i)
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For purposes of this section,
references to “other enterprises” shall include employee benefit plans; references
to “fines” shall include any excise taxes assessed on a person with respect to
any employee benefit plan; and references to “serving at the request of the corporation”
shall include any service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and a person who
acted in good faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner “not opposed to the best interests of the corporation” as referred
to in this section.
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(j)
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The indemnification and advancement
of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
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(k)
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The Court of Chancery is hereby
vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses
or indemnification brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily determine a
corporation’s obligation to advance expenses (including attorneys’ fees).
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Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the
foregoing provisions, or otherwise, the Company has been advised that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to the court of
appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
In accordance with Section 102(b)(7) of
the DGCL, our certificate of incorporation, will provide that no director shall be personally liable to us or any of our stockholders
for monetary damages resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption
from liability is not permitted under the DGCL unless they violated their duty of loyalty to the Company or its stockholders, acted in
bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful
redemptions, or derived improper personal benefit from their actions as directors. The effect of this provision of our certificate of
incorporation is to eliminate our rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to
recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from
negligent or grossly negligent behavior, except, as restricted by Section 102(b)(7) of the DGCL. However, this provision does
not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission,
in the event of a breach of a director’s duty of care.
If the DGCL is amended to
authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with our certificate of incorporation,
the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent authorized by the DGCL,
as so amended. Any repeal or amendment of provisions of our certificate of incorporation limiting or eliminating the liability of directors,
whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise
required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or eliminate the
liability of directors on a retroactive basis.
Our certificate of incorporation
will also provide that we will, to the fullest extent authorized or permitted by applicable law, indemnify our current and former officers
and directors, as well as those persons who, while directors or officers of our corporation, are or were serving as directors, officers,
employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in connection
with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense,
liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts
paid in settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing,
a person eligible for indemnification pursuant to our certificate of incorporation will be indemnified by us in connection with a proceeding
initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to
indemnification.
The right to indemnification
conferred by our certificate of incorporation is a contract right that includes the right to be paid by us the expenses incurred in defending
or otherwise participating in any proceeding referenced above in advance of its final disposition, provided, however, that if the DGCL
requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or director of our corporation)
will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all amounts so advanced
if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our certificate of incorporation
or otherwise.
The rights to indemnification
and advancement of expenses will not be deemed exclusive of any other rights which any person covered by our certificate of incorporation
may have or hereafter acquire under law, our certificate of incorporation, our bylaws, an agreement, vote of stockholders or disinterested
directors, or otherwise.
Any repeal or amendment of
provisions of our certificate of incorporation affecting indemnification rights, whether by our stockholders or by changes in law, or
the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except to the
extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not in any
way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent
provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.
Our certificate of incorporation will also permit us, to the extent and in the manner authorized or permitted by law, to indemnify and
to advance expenses to persons other that those specifically covered by our certificate of incorporation.
Our bylaws, which we intend
to adopt immediately prior to the closing of this offering, include the provisions relating to advancement of expenses and indemnification
rights consistent with those set forth in our certificate of incorporation. In addition, our bylaws provide for a right of indemnity
to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period
of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee
or agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would
have the power to indemnify such person against such expense, liability or loss under the DGCL.
Any repeal or amendment of
provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or by changes in applicable
law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective only, except
to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will not
in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission occurring prior
to such repeal or amendment or adoption of such inconsistent provision.
We will enter into indemnity
agreements with each of our officers and directors a form of which is filed as Exhibit 10.5 to this Registration Statement. These
agreements will require us to indemnify these individuals to the fullest extent permitted under Delaware law and to advance expenses
incurred as a result of any proceeding against them as to which they could be indemnified.
Pursuant to the Underwriting
Agreement filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriters and the Underwriters
have agreed to indemnify us against certain civil liabilities that may be incurred in connection with this offering, including certain
liabilities under the Securities Act.
Item 15. Recent Sales of Unregistered Securities.
On July 23, 2020, our
sponsor purchased 1,000,000 shares of common stock for an aggregate purchase price of $25,000. On March 4, 2021, we effected a 2.875-for-1
stock split, resulting in 2,875,000 shares of common stock being held by our sponsor. Such shares include an aggregate of up to 375,000
founder shares that are subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full
or in part. Because these offers and sales were made to a single purchaser in a transaction not involving a public offering, the shares
were issued in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act.
In
addition, Chardan NexTech 2 Warrant Holdings LLC, an affiliate of our sponsor, has committed to purchase from us an aggregate of 5,238,461
warrants (or up to 5,469,230 warrants depending on the extent to which the underwriters’ over-allotment option is exercised) at
a price of $0.65 per warrant ($3,405,000 (or up to $3,555,000 depending on the extent to which the underwriters’ over-allotment
option is exercised)), with each warrant exercisable for one share of common stock at an exercise price of $11.50 per share. These purchases
will take place on a private placement basis simultaneously with the consummation of this offering. Because this offer and sale is being
made to a single purchaser, the sale does not involve a public offering and is being made in reliance on the exemption from registration
contained in Section 4(a)(2) of the Securities Act.
No underwriting discounts
or commissions were paid with respect to such sales.
Item 16. Exhibits and Financial Statement
Schedules.
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(a)
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Exhibits. The following
exhibits are filed as part of this registration statement:
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(b)
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Financial Statements. See
page F-1 for an index to the financial statements and schedules included in the
registration statement.
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Item 17. Undertakings.
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(a)
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The undersigned registrant hereby
undertakes to provide to the underwriters at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by the underwriter
to permit prompt delivery to each purchaser.
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(b)
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Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
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(c)
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The undersigned registrant hereby
undertakes that:
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(1)
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For purposes of determining any
liability under the Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
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(2)
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For the purpose of determining any
liability under the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(3)
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For the purpose of determining liability
under the Securities Act to any purchaser, if the registrant is subject to Rule 430C,
each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or
other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of
and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document immediately prior
to such date of first use.
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(4)
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For the purpose of determining liability
of a registrant under the Securities Act to any purchaser in the initial distribution of
the securities, the undersigned registrant undertakes that in a primary offering of securities
of an undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold
to such purchaser by means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
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(i)
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Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
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(ii)
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Any free writing prospectus relating
to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by an undersigned registrant;
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(iii)
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The portion of any other free
writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that
is an offer in the offering made by the undersigned registrant to the purchaser.
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SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 13th of July, 2021.
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CHARDAN NEXTECH ACQUISITION 2 CORP.
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By:
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/s/
Jonas Grossman
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Name:
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Jonas Grossman
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Title:
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Chief Executive Officer
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Pursuant to the requirements
of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and
on the dates indicated.
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Name
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Position
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Date
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/s/
Jonas Grossman
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Chief
Executive Officer, President,
Secretary, Treasurer and Director
(Principal executive officer)
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July 13,
2021
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Jonas Grossman
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/s/
Alex Weil
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Chief
Financial Officer
(Principal financial and accounting officer)
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July 13,
2021
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Alex Weil
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Exhibit 1.1
10,000,000 Units
Chardan NexTech Acquisition 2 Corp.
UNDERWRITING AGREEMENT
[●], 2021
Chardan Capital Markets, LLC
17 State Street, Suite 2100
New York, New York 10004
As Representative of the Underwriters named on Schedule A hereto
Ladies and Gentlemen:
The undersigned, Chardan NexTech Acquisition 2
Corp., a Delaware corporation (“Company”), hereby confirms its agreement with Chardan Capital Markets, LLC (hereinafter
referred to as “you”, “Chardan”, or as the “Representative”) and with the other underwriters
named on Schedule A hereto for which you are acting as representative (the Representative and the other Underwriters being collectively
referred to herein as the “Underwriters” or, individually, an “Underwriter”), as follows:
1.
Purchase and Sale of Securities.
1.1
Firm Securities.
1.1.1 Purchase
of Firm Units. On the basis of the representations and warranties herein contained, but subject to the terms and conditions set
forth herein, the Company agrees to issue and sell, severally and not jointly, to the several Underwriters, an aggregate of
10,000,000 units (the “Firm Units”) of the Company at a purchase price (net of discounts and commissions) of
$9.995 per Firm Unit. The Underwriters, severally and not jointly, agree to purchase from the Company the number of Firm Units set
forth opposite their respective names on Schedule A attached hereto and made a part hereof at a purchase price (net of
discounts and commissions) of $9.995 per Firm Unit. The Firm Units (and the Option Units (as hereinafter defined), if any) are to be
offered initially to the public (the “Offering”) at the offering price of $10.00 per Firm Unit, it being
understood that the offering price is not in excess of the price recommended by the QIU (as hereinafter defined). Each Firm Unit
consists of one (1) share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”),
and one-half of one (1) redeemable warrant (the “Warrant(s)”), each whole Warrant entitling the holder thereof
to purchase one share of Common Stock. The shares of Common Stock and the Warrants included in the Firm Units will not be separately
transferable until the earlier of the 90th day after the date that the Registration Statement (as defined below) becomes
effective (the “Effective Date”) or the announcement by the Company of the Representative’s decision to
allow earlier trading, subject, however, to the Company filing a Current Report on Form 8-K (“Form 8-K”) with the
Commission (as defined below) containing an audited balanced sheet reflecting the Company’s receipt of the gross proceeds of
the Offering and issuing a press release announcing when such separate trading will begin.
In no event will the Company
allow separate trading until (i) the preparation of an audited balance sheet of the Company reflecting receipt by the Company of the proceeds
of the Offering and the filing of such audited balance sheet with the Commission (as defined below) on a Form 8-K or similar form by the
Company which includes such balance sheet and (ii) the issuance of a press release announcing when such separate trading shall begin.
Each whole Warrant entitles the holder to purchase one share of Common Stock at a price of $11.50 per share during the period commencing
thirty (30) days after the closing of a Business Combination (as defined below) and terminating on the fifth (5th) anniversary of the
Effective Date. As used herein, the term “Business Combination” shall mean any merger, share exchange, asset acquisition,
stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities by the
Company. The Company has the right to redeem the Warrants, upon not less than thirty (30) days written notice at a price of $0.01 per
Warrant at any time after the Warrants become exercisable; so long as the last sales price of the Common Stock has been at least $16.00
per share for any twenty (20) trading days within a thirty (30) trading day period ending on the third (3rd) Business Day prior to
the day on which notice is given. As used herein, the term “Business Day” shall mean any day other than a Saturday,
Sunday or any day on which national banks in New York, New York are not open for business.
1.1.2
Payment and Delivery. Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York time, on the second (2nd)
Business Day following the Effective Date of the Registration Statement (or the third (3rd) Business Day following the
Effective Date, if the Registration Statement is declared effective on or after 4:00 p.m.) or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of the Representative or at such other place as shall be agreed upon by the
Representative and the Company. The closing of the public offering contemplated by this Agreement is referred to herein as the “Closing”
and the hour and date of delivery and payment for the Firm Units is referred to herein as the “Closing Date.” Payment
for the Firm Units shall be made on the Closing Date at the Representative’s election by wire transfer in Federal (same day) funds
or by certified or bank cashier’s check(s) in New York Clearing House funds. $101,000,000 ($116,150,000 if the Over-allotment Option
(as defined in Section 1.2) is exercised in full), or $10.10 per Unit, of the proceeds received by the Company for the Firm Units
and from the Private Placement (as defined in Section 1.4) shall be deposited in the trust account established by the Company for
the benefit of the public stockholders as described in the Registration Statement (the “Trust Account”) pursuant to
the terms of an investment management trust agreement (the “Trust Agreement”) by and between the Company and Continental
Stock Transfer & Trust Company. The proceeds (less commissions, expense allowance and actual expense payments or other fees payable
pursuant to this Agreement) shall be paid to the order of the Company upon delivery to the Representative of certificates (in form and
substance satisfactory to the Underwriters) representing the Firm Units (or through the facilities of the Depository Trust Company (“DTC”))
for the account of the Underwriters. The Firm Units shall be registered in such name or names and in such authorized denominations as
the Representative may request in writing at least two (2) Business Days prior to the Closing Date. The Company will permit the Representative
to examine and package the Firm Units for delivery, at least one (1) full Business Day prior to the Closing Date. The Company shall not
be obligated to sell or deliver the Firm Units except upon tender of payment by the Representative for all the Firm Units.
1.2
Over-Allotment Option.
1.2.1
Option Units. For the purpose of covering any over-allotments in connection with the distribution and sale of the Firm
Units, the Underwriters are hereby granted, severally and not jointly, an option to purchase up to an additional 1,500,000 units from
the Company (the “Over-allotment Option”). Such additional 1,500,000 units shall be identical in all respects to the
Firm Units and are hereinafter referred to as “Option Units.” The Firm Units and the Option Units are hereinafter
collectively referred to as the “Units,” and the Units, the shares of Common Stock and Warrants included in the Units
and the shares of Common Stock issuable upon exercise of such Warrants are hereinafter referred to collectively as the “Public
Securities.” The purchase price to be paid for the Option Units will be $10.00 per Option Unit. The Option Units are to be
offered initially to the public at the offering price of $10.00 per Option Unit.
1.2.2
Exercise of Option. The Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time) of the Option Units within forty-five (45) days after the
Effective Date. The Underwriters will not be under any obligation to purchase any Option Units prior to the exercise of the Over-allotment
Option. The Over-allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative,
which must be confirmed in writing by overnight mail, facsimile transmission or e-mail transmission setting forth the number of Option
Units to be purchased and the date and time for delivery of and payment for the Option Units, which will not be later than five (5) Business
Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of
the Representative or at such other place or in such other manner as shall be agreed upon by the Company and the Representative. If such
delivery and payment for the Option Units does not occur on the Closing Date, the date and time of the closing for such Option Units
will be as set forth in the notice (hereinafter the “Option Closing Date”). Upon exercise of the Over-allotment Option,
the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters
will become obligated to purchase, the number of Option Units specified in such notice.
1.2.3
Payment and Delivery. Delivery and payment for the Option Units shall be made at 10:00 AM, New York time, on the Option
Closing Date or at such earlier time as shall be agreed upon by the Representative and the Company at the offices of the Representative
or at such other place as shall be agreed upon by the Representative and the Company. Payment for the Option Units shall be made at the
Representative’s election by wire transfer in Federal (same day) funds or by certified or bank cashier’s check(s) in New
York Clearing House funds, by deposit of the sum of $10.10 per Option Unit in the Trust Account pursuant to the Trust Agreement upon
delivery to the Representative of certificates (in form and substance satisfactory to the Underwriters) representing the Option Units
(or through the facilities of DTC) for the account of the Underwriters. The Option Units shall be registered in such name or names and
in such authorized denominations as the Representative may request not less than two (2) Business Days prior to the Closing Date or the
Option Closing Date, as the case may be, and will be made available to the Representative for inspection, checking and packaging at the
aforesaid office of the Company’s transfer agent or correspondent not less than one (1) full Business Day prior to such Closing
Date or Option Closing Date.
1.3
[Reserved.]
1.4
Private Placement. Simultaneously with the Closing, Chardan NexTech 2 Warrant Holdings LLC ("Holdings") shall purchase from
the Company, pursuant to the Subscription Agreement (as defined in Section 2.24.2 hereof) an aggregate of 5,238,461 warrants
(or up to 5,469,230 warrants depending on the extent to which the underwriters’ over-allotment option is exercised) (the “Placement
Warrants”) at a purchase price of $0.65 per Placement Warrant in a private placement (the “Private Placement”).
The Placement Warrants and the shares of Common Stock underlying the Placement Warrants are hereinafter referred to collectively as the
“Placement Securities,” and the Public Securities and the Placement Securities are hereinafter referred to collectively
as the “Securities.” Each Placement Warrant shall be identical to the Warrants sold in the Offering except that the
Placement Warrants (a) shall be non-redeemable by the Company, (b) may not, subject to certain limited exceptions, be transferred, assigned
or sold by the initial purchaser until thirty (30) days after the completion of the Company’s initial business combination
and (c) may be exercised for cash or on a cashless basis, as described in the Prospectus, in each case so long as the Placement Warrants
continue to be held by the initial purchasers of the Placement Warrants or their permitted transferees (as described in the Subscription
Agreements and the Warrant Agreement (as defined in Section 2.22 hereof)). There will be no placement agent in the Private Placement
and no party shall be entitled to a placement fee or expense allowance from the sale of the Placement Securities. Pursuant to Rule 5110(g)(1)
of FINRA’s (as defined below) Rules, the Placement Warrants are subject to a lock-up for a period of 180 days immediately following
the Effective Date of the Registration Statement or the commencement of sales in the Offering and, for that 180 day period following
the Effective Date, may not be sold, transferred, assigned, pledged or hypothecated, or be subject of any hedging, short sale,
derivative or put or call transaction that would result in the economic disposition of the securities. Pursuant to Rule 5110(g)(8) of
FINRA’s Rules, Chardan Capital Markets, LLC and its related persons may not, with respect to the Placement Warrants (and the shares
that are issuable upon exercise of the Placement Warrants) purchased by Holdings, (i) have more than one demand registration right at
the Company’s expense, (ii) exercise their demand registration rights more than five (5) years from the effective date of the Registration
Statement, and (iii) exercise their “piggy-back” registration rights more than seven (7) years from the effective date
of the Registration Statement, as long as Chardan Capital Markets, LLC or any of its related persons are beneficial owners of Placement
Warrants.
1.5 Qualified
Independent Underwriter. The Company hereby confirms its engagement of [●] (“[●]”) as, and
[●] hereby confirms its agreement with the Company to render services as, the “qualified independent underwriter,”
within the meaning of Rule 5121 of the Financial Industry Regulatory Authority, Inc. (“FINRA”) with
respect to the offering and sale of the Public Securities. [●], solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the “QIU.” As compensation for services rendered, on the
Closing Date, the Company shall pay to the QIU, by wire transfer of immediately available funds on the Closing Date, a fee of
$[100,000] from the total underwriting discount. [●] hereby consents to the reference to it as set forth under the heading
“Underwriting (Conflicts of Interest)” in the Preliminary Prospectus and the Prospectus (as defined herein) and any
amendment or supplement thereto.
2.
Representations and Warranties of the Company. The Company represents and warrants to the Underwriters and the QIU as follows:
2.1
Filing of Registration Statement.
2.1.1
Pursuant to the Act. The Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement and an amendment or amendments thereto, on Form S-1 (File No. 333-254010), including any related preliminary
prospectus (the “Preliminary Prospectus”, including any prospectus that is included in the Registration Statement
immediately prior to the effectiveness of the Registration Statement), for the registration of the Public Securities under the Securities
Act of 1933, as amended (the “Act”), which registration statement and amendment or amendments have been prepared by
the Company in conformity in all material respects with the requirements of the Act, and the rules and regulations (the “Regulations”)
of the Commission under the Act. The conditions for use of Form S-1 to register the Offering under the Act, as set forth in the General
Instructions to such Form, have been satisfied in all material respects. Except as the context may otherwise require, such registration
statement, as amended, on file with the Commission at the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a part thereof or incorporated therein and all information
deemed to be a part thereof as of such time pursuant to Rule 430A of the Regulations), is hereinafter called the “Registration
Statement,” and the form of the final prospectus dated the Effective Date included in the Registration Statement (or, if applicable,
the form of final prospectus containing information permitted to be omitted at the time of effectiveness by Rule 430A of the Regulations
filed with the Commission pursuant to Rule 424 of the Regulations), is hereinafter called the “Prospectus.” For purposes
of this Agreement, “Time of Sale”, as used in the Act, means [●] p.m., New York City time, on the date of this
Agreement. If the Company has filed, or is required pursuant to the terms hereof to file, a registration statement pursuant to Rule 462(b)
under the Securities Act registering the Public Securities (a “Rule 462(b) Registration Statement”), then, unless
otherwise specified, any reference herein to the term “Registration Statement” shall be deemed to include such Rule
462(b) Registration Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other
document with respect to the Registration Statement has heretofore been filed with the Commission. All of the Public Securities have
been registered under the Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement is filed, will be
duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement. The Registration Statement has been
declared effective by the Commission on the date hereof. If, subsequent to the date of this Agreement, the Company or the Representative
has determined that at the Time of Sale the Prospectus included an untrue statement of a material fact or omitted a statement of material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and have agreed
to provide an opportunity to purchasers of the Units to terminate their old purchase contracts and enter into new purchase contracts,
the Prospectus will be deemed to include any additional information available to purchasers at the time of entry into the first such
new purchase contract.
2.1.2
Pursuant to the Exchange Act. The Company has filed with the Commission a Form 8-A (Registration No. 001-[●]), providing
for the registration under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the Units, the
Common Stock and the Warrants. The registration of the Units, Common Stock and Warrants under the Exchange Act will be declared effective
by the Commission on or prior to the Effective Date.
2.2
No Stop Orders, Etc. Neither the Commission nor, to the best of the Company’s knowledge, any state regulatory authority
has issued any order or threatened to issue any order preventing or suspending the use of any Preliminary Prospectus or has instituted
or, to the best of the Company’s knowledge, threatened to institute any proceedings with respect to such an order.
2.3
Disclosures in Registration Statement.
2.3.1
10b-5 Representation. At the time the Registration Statement became effective, upon the filing or first use (within
the meaning of the Regulations) of the Prospectus and at the Closing Date and the Option Closing Date, if any, the Registration Statement
and the Prospectus contained or will contain all material statements that are required to be stated therein in accordance with the Act
and the Regulations, and did or will in all material respects conform to the requirements of the Act and the Regulations. Neither the
Registration Statement nor any Preliminary Prospectus or the Prospectus, nor any amendment or supplement thereto, on their respective
dates, did or will contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Preliminary Prospectus and the Prospectus, in light of the circumstances
under which they were made), not misleading. When any Preliminary Prospectus was first filed with the Commission (whether filed as part
of the Registration Statement for the registration of the Public Securities or any amendment thereto or pursuant to Rule 424(a) of the
Regulations) or first used (within the meaning of the Regulations) and when any amendment thereof or supplement thereto was first filed
with the Commission or first used (within the meaning of the Regulations), such Preliminary Prospectus and any amendments thereof and
supplements thereto complied or will have been corrected in the Prospectus to comply in all material respects with the applicable provisions
of the Act and the Regulations and did not and will not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. The representation and warranty made in this Section 2.3.1 does not apply to statements made or
statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Underwriters
by the Representative expressly for use in the Registration Statement or Prospectus or any amendment thereof or supplement thereto. It
is understood that the following identified statements set forth in the Prospectus under the heading “Underwriting” constitute,
for the purposes of this Agreement, information furnished by the Representative with respect to the Underwriters: (i) the table of underwriters
in the first paragraph of “Underwriting”, (ii) the first paragraph of the Underwriting subsection “Pricing of this
Offering,” (iii) the Underwriting subsection “Regulatory Restrictions on Purchase of Securities” and (iv) the Underwriting
subsection “Resale Restrictions.”
2.3.2
Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Preliminary Prospectus
and the Prospectus conform to the descriptions thereof contained therein and there are no agreements or other documents required to be
described in the Registration Statement, the Preliminary Prospectus or the Prospectus or to be filed with the Commission as exhibits
to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or
described) to which the Company is a party or by which its property or business is or may be bound or affected and (i) that is referred
to in the Registration Statement, Preliminary Prospectus or the Prospectus or attached as an exhibit thereto, or (ii) is material to
the Company’s business, has been duly and validly executed by the Company, is in full force and effect in all material respects
and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities
laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in breach or default
thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both,
would constitute a breach or default thereunder. To the Company’s knowledge, performance by the Company of the material provisions
of such agreements or instruments will not result in a material violation of any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or
businesses, including, without limitation, those relating to environmental laws and regulations.
2.3.3
Prior Securities Transactions. No securities of the Company have been sold by the Company or by or on behalf of, or
for the benefit of, any person or persons controlling, controlled by, or under common control with the Company since the date of the
Company’s formation, except as disclosed in the Registration Statement.
2.3.4
Regulations. The disclosures in the Registration Statement, the Preliminary Prospectus and the Prospectus concerning
the effects of Federal, state and local regulation on the Company’s business as currently contemplated fairly summarize, to the
best of the Company’s knowledge, such effects and do not omit to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading.
2.4
Changes After Dates in Registration Statement.
2.4.1 No
Material Adverse Change. Except as contemplated in the Prospectus or specifically stated therein, since the respective dates as
of which information is given in the Registration Statement, any Preliminary Prospectus and/or the Prospectus: (i) there has been no
material adverse change in the condition, financial or otherwise, or business prospects of the Company; (ii) there have been no
material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; (iii) no member of the
Company’s board of directors or management has resigned from any position with the Company and (iv) no event or occurrence has
taken place which materially impairs, or would likely materially impair, with the passage of time, the ability of the members of the
Company’s board of directors or management to act in their capacities with the Company as described in the Registration
Statement and the Prospectus.
2.4.2
Recent Securities Transactions, Etc. Except as contemplated in the Prospectus, subsequent to the respective dates as
of which information is given in the Registration Statement and the Prospectus, and except as may otherwise be indicated or contemplated
herein or therein, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for
borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
2.5
Independent Accountants. To the best of the Company’s knowledge, WithumSmith+Brown, PC (“Withum”),
whose report is filed with the Commission as part of the Registration Statement and included in the Registration Statement, the Preliminary
Prospectus and the Prospectus, are independent accountants as required by the Act and the Regulations and the Public Company Accounting
Oversight Board (including the rules and regulations promulgated by such entity, the “PCAOB”). To the best of the Company’s
knowledge, Withum is duly registered and in good standing with the PCAOB. Withum has not, during the periods covered by the financial
statements included in the Registration Statement and the Prospectus, provided to the Company any non-audit services, as such term is
used in Section 10A(g) of the Exchange Act.
2.6
Financial Statements; Statistical Data.
2.6.1
Financial Statements. The financial statements, including the notes thereto and supporting schedules included in the
Registration Statement, the Preliminary Prospectus and the Prospectus fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such financial statements have been prepared in conformity with
generally accepted accounting principles, consistently applied throughout the periods involved; and the supporting schedules included
in the Registration Statement present fairly the information required to be stated therein. To the best of the Company’s knowledge,
no other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement,
the Preliminary Prospectus or the Prospectus. The Registration Statement, the Preliminary Prospectus and the Prospectus disclose all
material off-balance sheet transactions, arrangements, obligations (including contingent obligations), and other relationships of
the Company with unconsolidated entities or other persons that may have a material current or future effect on the Company’s financial
condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. To the best of the Company’s knowledge, there are no pro forma or as adjusted financial statements
which are required to be included in the Registration Statement and the Prospectus in accordance with Regulation S-X which have not been
included as so required.
2.6.2
Statistical Data. The statistical, industry-related and market-related data included in the Registration Statement,
the Preliminary Prospectus and the Prospectus, if any, are based on or derived from sources which the Company reasonably and in good
faith believes are reliable and accurate, and such data agree with the sources from which they are derived.
2.7
Authorized Capital; Options, Etc. The Company had at the date or dates indicated in the Registration Statement, the Preliminary
Prospectus and the Prospectus, as the case may be, duly authorized, issued and outstanding capitalization as set forth in the Registration
Statement, the Preliminary Prospectus and the Prospectus. Based on the assumptions stated in the Registration Statement, the Preliminary
Prospectus and the Prospectus, the Company will have on the Closing Date the adjusted stock capitalization set forth therein. Except as
set forth in, or contemplated by, the Registration Statement, the Preliminary Prospectus and the Prospectus, on the Effective Date of
the Prospectus and on the Closing Date and the Option Closing Date, if any, there will be no options, warrants, or other rights to purchase
or otherwise acquire any authorized, but unissued shares of Common Stock of the Company or any security convertible into shares of Common
Stock of the Company, or any contracts or commitments to issue or sell shares of Common Stock or any such options, warrants, rights or
convertible securities.
2.8
Valid Issuance of Securities, Etc.
2.8.1
Outstanding Securities. All issued and outstanding securities of the Company (including, without limitation, the Placement
Securities) have been duly authorized and validly issued and are fully paid and non-assessable; the holders thereof have no rights of
rescission with respect thereto, and are not subject to personal liability by reason of being such holders; and none of such securities
were issued in violation of the preemptive rights of any holders of any security of the Company or similar contractual rights granted
by the Company. The Securities conform in all material respects to all statements relating thereto contained in the Registration Statement,
the Preliminary Prospectus and the Prospectus. Subject to the disclosure contained in the Registration Statement, the Preliminary Prospectus
and the Prospectus with respect to the Placement Securities, the offers and sales of the outstanding shares of Common Stock were at all
relevant times either registered under the Act and the applicable state securities or Blue Sky laws or, based in part on the representations
and warranties of the purchasers of such shares, exempt from such registration requirements.
2.8.2
Securities Sold. The Securities have been duly authorized and reserved for issuance and when issued and paid for, will
be validly issued, fully paid and non-assessable; the holders thereof are not and will not be subject to personal liability by reason
of being such holders; the Securities are not and will not be subject to the preemptive rights of any holders of any security of the
Company or similar contractual rights granted by the Company; and all corporate actions required to be taken for the authorization, issuance
and sale of the Securities have been duly and validly taken. The Securities conform in all material respects to all statements with respect
thereto contained in the Registration Statement, the Preliminary Prospectus and the Prospectus, as the case may be.
2.8.3
Placement Securities. The Placement Securities have been duly authorized and reserved for issuance and when issued
and paid for, will be validly issued, fully paid and non-assessable; the Placement Securities are not and will not be subject to the
preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company; and all corporate
actions required to be taken for the authorization, issuance and sale of the Placement Securities have been duly and validly taken. When
issued, the Placement Warrants will constitute valid and binding obligations of the Company to issue and sell, upon exercise thereof
and payment of the exercise price therefor, the number and type of securities of the Company called for thereby in accordance with the
terms thereof, and such Placement Warrants are enforceable against the Company in accordance with their respective terms, except: (i)
as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
(ii) as enforceability of any indemnification or contribution provision may be limited under federal and state securities laws; and (iii)
that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and
to the discretion of the court before which any proceeding therefor may be brought. The shares of Common Stock underlying the Placement
Warrants have been reserved for issuance upon the exercise of the Placement Warrants and, when issued in accordance with the terms of
the Placement Warrants, will be duly and validly authorized, validly issued, fully paid and non-assessable, and the holders thereof are
not and will not be subject to personal liability by reason of being such holders.
2.8.4
No Integration. Subject to the disclosure contained in the Registration Statement, the Preliminary Prospectus and/or
the Prospectus with respect to the Placement Securities, neither the Company nor any of its affiliates has, prior to the date hereof,
made any offer or sale of any securities which are required to be “integrated” pursuant to the Act or the Regulations with
the offer and sale of the Public Securities pursuant to the Registration Statement.
2.9
Registration Rights of Third Parties. Except as set forth in the Registration Statement, the Preliminary Prospectus or the
Prospectus, no holders of any securities of the Company or any rights exercisable for or convertible or exchangeable into securities of
the Company have the right to require the Company to register any such securities of the Company under the Act or to include any such
securities in a registration statement to be filed by the Company.
2.10
Validity and Binding Effect of Agreements. This Agreement, the Warrant Agreement (as defined in Section 2.22
hereof), the Trust Agreement, the Services Agreement (as defined in Section 3.5.2 hereof), the Subscription Agreements (as
defined in Section 2.24.2 hereof), the Registration Rights Agreement (as defined in Section 2.24.3 hereof), the
Business Combination Marketing Agreement (as defined in Section 2.33) and the Escrow Agreement (as defined in Section 2.24.4
hereof) have been duly and validly authorized by the Company and constitute valid and binding agreements of the Company, enforceable against
the Company in accordance with their respective terms, except: (i) as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws; and (iii) that the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may
be brought.
2.11 No
Conflicts, Etc. The execution, delivery, and performance by the Company of this Agreement, the Warrant Agreement, the Business
Combination Marketing Agreement, the Trust Agreement, the Services Agreement, the Subscription Agreements, the Registration Rights
Agreement and the Escrow Agreement, the consummation by the Company of the transactions herein and therein contemplated and the
compliance by the Company with the terms hereof and thereof do not and will not, with or without the giving of notice or the lapse
of time or both: (i) result in a material breach of, or conflict with any of the terms and provisions of, or constitute a material
default under, or result in the creation, modification, termination or imposition of any material lien, charge or encumbrance upon
any property or assets of the Company pursuant to the terms of any agreement or instrument to which the Company is a party; (ii)
result in any violation of the provisions of the amended and restated certificate of incorporation of the Company; or (iii) violate
any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its properties or business.
2.12
No Defaults; Violations. No material default exists in the due performance and observance of any term, covenant or condition
of any material license, contract, indenture, mortgage, deed of trust, note, loan or credit agreement, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or instrument to which the Company is a party or by which
the Company may be bound or to which any of the properties or assets of the Company is subject. The Company is not in violation of any
material agreement, license, permit, applicable law, rule, regulation, judgment or decree of any governmental agency or court, domestic
or foreign, having jurisdiction over the Company or any of its properties or businesses, except for such violations which would not reasonably
be expected to have a material adverse effect on the Company. The Company is not in violation of any term or provision of its amended
and restated certificate of incorporation.
2.13
Corporate Power; Licenses; Consents.
2.13.1
Conduct of Business. The Company has all requisite corporate power and authority, and has all necessary authorizations,
approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies that it needs as of
the date hereof to conduct its business for the purposes described in the Registration Statement, the Preliminary Prospectus and the
Prospectus. The disclosures in the Registration Statement and the Prospectus concerning the effects of federal, state and local regulation
on the Offering and the Company’s business purpose as currently contemplated are correct in all material respects and do not omit
to state a material fact required to be stated therein or necessary in order to make the statements therein (with respect to the Prospectus,
in light of the circumstances under which they were made), not misleading. Since its formation, the Company has conducted no business
and has incurred no liabilities other than in connection with and in furtherance of the Offering.
2.13.2
Transactions Contemplated Herein. The Company has all corporate power and authority to enter into this Agreement and
to carry out the provisions and conditions hereof, and all consents, authorizations, approvals and orders required in connection therewith
have been obtained. No consent, authorization or order of, and no filing with, any court, government agency or other body is required
for the valid issuance, sale and delivery of the Securities and the consummation of the transactions and agreements contemplated by this
Agreement, the Warrant Agreement, the Trust Agreement, the Services Agreement, the Subscription Agreements, the Business Combination
Marketing Agreement and the Registration Rights Agreement and the Escrow Agreement and as contemplated by the Prospectus, except with
respect to applicable federal and state securities laws and the rules and regulations promulgated by FINRA.
2.14 D&O
Questionnaires. To the Company’s knowledge, all information contained in the questionnaires (the
“Questionnaires”) completed by the Company’s stockholders immediately prior to the Offering (the
“Initial Stockholders”) and each of the Company’s officers and directors and provided to the Underwriters
is true and correct and the Company has not become aware of any information which would cause the information disclosed in the
questionnaires completed by the Initial Shareholders and each officer or director, to become inaccurate and incorrect.
2.15
Litigation; Governmental Proceedings. There is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the best of the Company’s knowledge, threatened against, or involving the Company or,
to the best of the Company’s knowledge, the Initial Shareholders, which has not been disclosed in the Registration Statement, the
Questionnaires, the Preliminary Prospectus and the Prospectus.
2.16
Good Standing. The Company has been duly organized, is validly existing and is in good standing under the laws of Delaware
and is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of business requires such qualification, except where the failure to qualify would not have a material adverse
effect on the Company.
2.17
No Contemplation of a Business Combination. Prior to the date hereof, neither the Company, its officers and directors nor
the Initial Shareholders had, and as of the Closing, the Company and such officers and directors and Initial Shareholders will not have
had: (i) any specific Business Combination under consideration or contemplation; or (ii) any substantive interactions or discussions with
any target business regarding a possible Business Combination.
2.18
Transactions Affecting Disclosure to FINRA.
2.18.1
Except as described in the Preliminary Prospectus and/or the Prospectus, there are no claims, payments, arrangements, agreements
or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or the Initial Shareholders
with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the
Company’s knowledge, the Initial Shareholders that may affect the Underwriters’ compensation, as determined by FINRA.
2.18.2
Except as described in the Preliminary Prospectus and/or the Prospectus, the Company has not made any direct or indirect payments
(in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such
person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any
FINRA member; or (iii) to any person or entity that has any direct or indirect affiliation or association with any FINRA member, within
the twelve (12) months prior to the Effective Date, other than payments to the Representative.
2.18.3
Except as described in the Preliminary Prospectus and/or the Prospectus, no officer, director, or beneficial owner of any class
of the Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from
which derived) (any such individual or entity, a “Company Affiliate”) is a member, a person associated, or affiliated
with a member of FINRA.
2.18.4
Except as described in the Preliminary Prospectus and/or the Prospectus, no Company Affiliate is an owner of stock or other securities
of any member of FINRA (other than securities purchased on the open market).
2.18.5
No Company Affiliate has made a subordinated loan to any member of FINRA.
2.18.6
No proceeds from the sale of the Public Securities (excluding underwriting compensation) or the Placement Securities will be paid
to any FINRA member, or any persons associated or affiliated with a member of FINRA, except as specifically authorized herein and in the
Subscription Agreements.
2.18.7
The Company has not issued any warrants or other securities, or granted any options, directly or indirectly to anyone who is a
potential underwriter in the Offering or a related person (as defined by FINRA rules) of such an underwriter within the 180-day period
prior to the initial filing date of the Registration Statement.
2.18.8
Except as described in the Preliminary Prospectus and/or the Prospectus, no person to whom securities of the Company have been
privately issued within the 180-day period prior to the initial filing date of the Registration Statement has any relationship or affiliation
or association with any member of FINRA.
2.18.9
Except as described in the Preliminary Prospectus and/or the Prospectus, no FINRA member intending to participate in the Offering
has a conflict of interest with the Company. For this purpose, a “conflict of interest” exists when a member of FINRA and
its associated persons, parent or affiliates in the aggregate beneficially own 10% or more of the Company’s outstanding subordinated
debt or common equity, or 10% or more of the Company’s preferred equity. “Members participating in the Offering” include
managing agents, syndicate group members and all dealers which are members of FINRA.
2.18.10
Except with respect to the Representative in connection with the Offering, the Company has not entered into any agreement or arrangement
(including, without limitation, any consulting agreement or any other type of agreement) during the 180-day period prior to the initial
filing date of the Registration Statement, which arrangement or agreement provides for the receipt of any item of value and/or the transfer
of any warrants, options, or other securities from the Company to a FINRA member, any person associated with a member (as defined by FINRA
rules), any potential underwriters in the Offering and any related persons.
2.19 Foreign
Corrupt Practices Act. Neither the Company nor the Initial Shareholders or any other person acting on behalf of the Company has,
directly or indirectly, given or agreed to give any money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent of a customer or supplier, or official or employee
of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office
(domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who was, is, or may be in
a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) that:
(i) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (ii) if not
given in the past, might have had a material adverse effect on the assets, business or operations of the Company as reflected in any
of the financial statements contained in the Registration Statement, the Preliminary Prospectus and/or the Prospectus; or (iii) if
not continued in the future, might adversely affect the assets, business, operations or prospects of the Company. The
Company’s internal accounting controls and procedures are sufficient to cause the Company to comply with the Foreign Corrupt
Practices Act of 1977, as amended.
2.20
Patriot Act. Neither the Company nor, to the Company’s knowledge, any officer, director or Initial Shareholder has
violated: (i) the Bank Secrecy Act, as amended; (ii) the Money Laundering Control Act of 1986, as amended; or (iii) the Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, and/or the rules
and regulations promulgated under any such law, or any successor law.
2.21
Officers’ Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative
or to the Representative’s counsel shall be deemed a representation and warranty by the Company to the Underwriters and the QIU
as to the matters covered thereby.
2.22
Warrant Agreement. The Company has entered into a warrant agreement with respect to the Warrants and the Placement Warrants
with Continental Stock Transfer & Trust Company, substantially in the form filed as an exhibit to the Registration Statement (the
“Warrant Agreement”).
2.23
[Reserved.]
2.24
Agreements with Officers, Directors and Initial Shareholders.
2.24.1
Insider Letters. The Company has caused to be duly executed legally binding and enforceable agreements (except: (i)
as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally;
(ii) as enforceability of any indemnification, contribution or non-compete provision may be limited under the federal and state securities
laws; and (iii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor may be brought) annexed as exhibits to the Registration
Statement (the “Insider Letter”), pursuant to which each of the officers, directors and Initial Shareholders of the
Company agree to certain matters.
2.24.2
Subscription Agreements. Holdings has executed and delivered an agreement, the form of which is attached as an exhibit to the Registration
Statement (the “Subscription Agreement”), pursuant to which Holdings, among other things, will purchase an aggregate
of 5,238,461 (or up to 5,469,230 depending on the extent to which the underwriters’ over-allotment option is exercised)
Placement Warrants in the Private Placement. Pursuant to the Subscription Agreement, all of the proceeds from the sale of the Placement
Warrants will be deposited by the Company in the Trust Account in accordance with the terms of the Trust Agreement prior to the Closing.
2.24.3
Registration Rights Agreement. The Company and the Initial Shareholders have entered into a registration rights agreement
(the “Registration Rights Agreement”) substantially in the form annexed as an exhibit to the Registration Statement,
whereby the parties will be entitled to certain registration rights with respect to their securities, as set forth in such Registration
Rights Agreement and described more fully in the Registration Statement.
2.24.4
Escrow Agreement. The Company has caused the Initial Shareholders to enter into an escrow agreement (the “Escrow
Agreement”) with Continental Stock Transfer & Trust Company substantially in the form filed as an exhibit to the Registration
Statement, whereby the shares of Common Stock owned by the Initial Shareholders will be held in escrow during the period in which they
are subject to the transfer restrictions as set forth in the Prospectus. During such escrow period, the Initial Shareholders shall be
prohibited from selling or otherwise transferring such shares (except as otherwise set forth in the Escrow Agreement) but will retain
the right to vote any such shares of Common Stock. To the Company’s knowledge, the Escrow Agreement is enforceable against each
of the Initial Shareholders and will not, with or without the giving of notice or the lapse of time or both, result in a breach of, or
conflict with any of the terms and provisions of, or constitute a default under, any agreement or instrument to which any of the Initial
Shareholders is a party.
2.25
Investment Management Trust Agreement. The Company has entered into the Trust Agreement with respect to certain proceeds
of the Offering and the Private Placement substantially in the form filed as an exhibit to the Registration Statement.
2.26
Covenants Not to Compete. To the Company’s knowledge, the officers and directors of the Company are not subject to
any non-competition agreement or non-solicitation agreement with any employer or prior employer which could materially affect its ability
to be an employee, officer or director of the Company.
2.27
Investments. No more than 45% of the “value” (as defined in Section 2(a)(41) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”)) of the Company’s total assets consist of, and no more
than 45% of the Company’s net income after taxes is derived from, securities other than “Government Securities” (as
defined in Section 2(a)(16) of the Investment Company Act).
2.28
Subsidiaries. The Company does not own an interest in any corporation, partnership, limited liability company, joint venture,
trust or other business entity.
2.29 Related
Party Transactions. No relationship, direct or indirect, exists between or among any of the Company or any Company Affiliate, on
the one hand, and any director, officer, shareholder, customer or supplier of the Company or any Company Affiliate, on the other
hand, which is required by the Act, the Exchange Act or the Regulations to be described in the Registration Statement, the
Preliminary Prospectus and/or the Prospectus which is not so described and described as required. There are no outstanding loans,
advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the
Company to or for the benefit of any of the officers or directors of the Company or any of their respective family members, except
as disclosed in the Registration Statement, the Preliminary Prospectus and/or the Prospectus. The Company has not extended or
maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for
any director or officer of the Company.
2.30
No Influence. The Company has not offered, or caused the Underwriters to offer, the Firm Units to any person or entity with
the intention of unlawfully influencing: (i) a customer or supplier of the Company or any Company Affiliate to alter the customer’s
or supplier’s level or type of business with the Company or such affiliate; or (ii) a journalist or publication to write or publish
favorable information about the Company or any such affiliate.
2.31
Trading of the Public Securities on the Nasdaq Capital Market. As of the Effective Date and the Closing Date, the Public
Securities will have been authorized for listing on the Nasdaq Capital Market and no proceedings have been instituted or threatened which
would effect, and no event or circumstance has occurred as of the Effective Date which is reasonably likely to effect, the listing of
the Public Securities on the Nasdaq Capital Market.
2.32
Definition of “Knowledge”. As used in this Agreement, the term “knowledge of the Company”
(or similar language) shall mean the knowledge of the officers and directors of the Company who are named in the Prospectus, with the
assumption that such officers and directors shall have made reasonable and diligent inquiry of the matters presented.
2.33
The Business Combination Marketing Agreement. The Company has entered into a business combination marketing agreement with
Chardan Capital Markets, LLC substantially in the form filed as an exhibit to the Registration Statement (the “Business Combination
Marketing Agreement”).
3.
Covenants of the Company. The Company covenants and agrees as follows:
3.1
Amendments to Registration Statement. The Company will deliver to the Representative, prior to filing, any amendment or
supplement to the Registration Statement or Prospectus proposed to be filed after the Effective Date and will not file any such amendment
or supplement to which the Representative shall reasonably object in writing.
3.2
Federal Securities Laws.
3.2.1
Compliance. During the time when a Prospectus is required to be delivered under the Act, the Company will use all reasonable
efforts to comply with all requirements imposed upon it by the Act, the Regulations and the Exchange Act and by the regulations under
the Exchange Act, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Public
Securities in accordance with the provisions hereof and the Prospectus. If at any time when a Prospectus relating to the Public Securities
is required to be delivered under the Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company
or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it is necessary during such period to amend the Registration Statement or amend or
supplement the Prospectus to comply with the Act, the Company will notify the Representative promptly and prepare and file with the Commission,
subject to Section 3.1 hereof, an appropriate amendment to the Registration Statement or amendment or supplement to the Prospectus
(at the expense of the Company) so as to correct such statement or omission or effect such compliance.
3.2.2
Filing of Final Prospectus. The Company will file the Prospectus (in form and substance satisfactory to the Representative)
with the Commission pursuant to the requirements of Rule 424 of the Regulations.
3.2.3
Exchange Act Registration. For a period of five (5) years from the Effective Date, or until such earlier time upon
which the Company is required to be liquidated, the Company will use its best efforts to maintain the registration of the Units, Common
Stock and Warrants (until the Business Combination) under the provisions of the Exchange Act. The Company will not deregister the Units,
Common Stock or Warrants prior to the Business Combination without the prior written consent of the Representative.
3.2.4
Sarbanes-Oxley Compliance. As soon as it is legally required to do so, the Company shall take all actions necessary
to obtain and thereafter maintain material compliance with each applicable provision of the Sarbanes-Oxley Act of 2002, as amended, and
the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by any other governmental or
self-regulatory entity or agency with jurisdiction over the Company.
3.2.5
Blue Sky Filing. Unless the Public Securities are listed on the Nasdaq Capital Market or another national securities
exchange, the Company, at its expense, will endeavor in good faith, in cooperation with the Representative, at or prior to the time the
Registration Statement becomes effective, to qualify the Public Securities for offering and sale under the securities laws of such jurisdictions
as the Representative may reasonably designate, provided that no such qualification shall be required in any jurisdiction where,
as a result thereof, the Company would be subject to service of general process or to taxation as a foreign corporation doing business
in such jurisdiction. In each jurisdiction where such qualification shall be effected, the Company will, unless the Representative agrees
that such action is not at the time necessary or advisable, use all reasonable efforts to file and make such statements or reports at
such times as are or may be required by the laws of such jurisdiction.
3.2.6
Delivery to Underwriters of Prospectuses. The Company will deliver to each of the several Underwriters, without charge,
from time to time during the period when the Prospectus is required to be delivered under the Act or the Exchange Act such number of
copies of each Preliminary Prospectus and Prospectus and all amendments and supplements to such documents as such Underwriters may reasonably
request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to the Representative
two original executed Registration Statements, including exhibits, and all post-effective amendments thereto and copies of all exhibits
filed therewith or incorporated therein by reference and all original executed consents of certified experts.
3.3 Effectiveness
and Events Requiring Notice to the Representative. The Company will use all reasonable efforts to cause the Registration
Statement to remain effective and will notify the Representative immediately and confirm the notice in writing: (i) of the
effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement, or any post-effective amendment thereto or preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or of the initiation, or the threatening, of any proceeding for that purpose;
(iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Public
Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or
Prospectus; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the
happening of any event during the period described in Section 3.4 hereof that, in the judgment of the Company, makes any
statement of a material fact made in the Registration Statement, the Preliminary Prospectus and/or the Prospectus untrue or that
requires the making of any changes in the Registration Statement, the Preliminary Prospectus and/or the Prospectus in order to make
the statements therein, (with respect to the Prospectus, in light of the circumstances under which they were made), not misleading.
If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company
will make every reasonable effort to obtain promptly the lifting of such order.
3.4
Review of Financial Statements. Until the earlier of five (5) years from the Effective Date, or until such earlier date
upon which the Company is required to be liquidated, the Company, at its expense, shall cause its regularly engaged independent certified
public accountants to review (but not audit) the Company’s financial statements for each of the first three fiscal quarters prior
to the announcement or filing of quarterly financial information, if any.
3.5
Affiliated Transactions.
3.5.1
Business Combinations. The Company will not consummate a Business Combination with any entity which is affiliated with
the Initial Shareholders or an officer or director of the Company unless the Company obtains an opinion from an independent investment
banking firm or another independent firm that commonly renders valuation opinions stating the Business Combination is fair to the Company’s
shareholders from a financial perspective.
3.5.2. Administrative
Services. The Company has entered into an administrative services agreement (the “Services Agreement”) with [●]
in the form filed as an exhibit to the Registration Statement pursuant to which the Company has made and will continue to make available
to the Company general and administrative services including office space and utilities for the Company’s use for $10,000 per month
until the consummation of a Business Combination.
3.5.3
Compensation. Except (a) as set forth in the Registration Statement, the Preliminary Prospectus or the Prospectus or
(b) as set forth in this Section 3.5,, the Company shall not pay any officer, director or Initial Shareholder, or any of their
affiliates, any fees or compensation from the Company, for services rendered to the Company prior to, or in connection with, the Offering
or the consummation of a Business Combination.
3.6 Secondary
Market Trading. In the event the Public Securities are not listed on the Nasdaq Capital Market or another national securities
exchange, the Company will (i) apply to be included in Mergent, Inc. Manual for a period of five (5) years from the consummation of
a Business Combination, (ii) take such commercially reasonable steps as may be necessary to obtain a secondary market trading
exemption for the Company’s securities in such jurisdictions and (iii) take such other action as may be reasonably
requested by the Representative to obtain a secondary market trading exemption in such other states as may be requested by the
Representative; provided that no qualification shall be required in any jurisdiction where, as a result thereof, the Company
would be subject to service of general process or to taxation as a foreign entity doing business in such jurisdiction.
3.7
Financial Public Relations Firm. Promptly after the execution of a definitive agreement for a Business Combination, the
Company shall retain a financial public relations firm reasonably acceptable to the Representative for a term to be agreed upon by the
Company and the Representative.
3.8
Reports to the Representative.
3.8.1
Periodic Reports, Etc. For a period of five (5) years from the Effective Date or until such earlier time upon which
the Company is dissolved, the Company will furnish to the Representative and its counsel copies of such financial statements and other
periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities, and promptly
furnish to the Representative: (i) a copy of each periodic report the Company shall be required to file with the Commission; (ii) a copy
of every press release and every news item and article with respect to the Company or its affairs which was released by the Company;
(iii) a copy of each Form 8-K or Schedules 13D, 13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five (5) copies of each
Registration Statement; and (v) such additional documents and information with respect to the Company and the affairs of any future subsidiaries
of the Company as the Representative may from time to time reasonably request; provided that the Representative shall sign, if
requested by the Company, a Regulation FD compliant confidentiality agreement which is reasonably acceptable to the Representative and
its counsel in connection with the Representative’s receipt of such information. Documents filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) shall be deemed to have been delivered to the
Representative pursuant to this section.
3.8.2
Transfer Sheets. For a period of five (5) years following the Effective Date or until such earlier time upon which
the Company is dissolved, the Company shall retain a transfer and warrant agent acceptable to the Representative (the “Transfer
Agent”). In the event the Public Securities are not listed on the Nasdaq Capital Market or another national securities exchange,
the Company will furnish to the Underwriters at the Company’s sole cost and expense such transfer sheets of the Company’s
securities as the Representative may request, including the daily and monthly consolidated transfer sheets of the Transfer Agent and
DTC. Continental Stock Transfer & Trust Company is an acceptable Transfer Agent to the Representative.
3.8.3
Trading Reports. If the Public Securities are quoted on the OTC Bulletin Board (or any successor trading market) or
a market operated by the OTC Market Group Inc. (or similar publisher of quotations), then during such time the Company shall provide
to the Representative, at its expense, such reports published by the OTC Bulletin Board or the OTC Market Group Inc. relating to price
trading of the Public Securities, as the Representative shall reasonably request. In addition to the requirements of the preceding sentence,
if the Public Securities are not listed on the Nasdaq Capital Market or such other national securities exchange for a period of two (2)
years from the Closing Date, the Company, at its expense, shall provide Chardan a subscription to the Company’s weekly Depository
Transfer Company Security Position Reports.
3.9
Disqualification of Form S-1. For a period equal to seven (7) years from the date hereof, the Company will not take any
action or actions which may prevent or disqualify the Company’s use of Form S-1 (or other appropriate form) for the registration
of the Warrants under the Act.
3.10
Payment of Expenses. The Company hereby agrees to pay on each of the Closing Date and the Option Closing Date, if any, to
the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement,
including, but not limited to: (i) the Company’s legal and accounting fees and disbursements; (ii) the costs of preparing, printing,
mailing (including the payment of postage with respect to such mailing) and delivering the Registration Statement, the Preliminary Prospectus
and final Prospectus contained therein and amendments thereto, post-effective amendments and supplements thereto, this Agreement and related
documents, including the cost of all copies thereof and any amendments thereof or supplements thereto supplied to the Underwriters in
quantities as may be required by the Underwriters; (iii) the printing, engraving, issuance and delivery of the Units and the shares of
Common Stock and Warrants included in the Units, including any transfer or other taxes payable thereon; (iv) if the Public Securities
are not listed on the Nasdaq Capital Market or such other national securities exchange, the qualification of the Public Securities under
state or foreign securities or Blue Sky laws specified by Representative, including the costs of printing and mailing the “Preliminary
Blue Sky Memorandum,” and all amendments and supplements thereto, and fees and disbursements for counsel of Representative’s
choice retained for such purpose; (v) filing fees (including SEC filing fees), costs and expenses (including third party expenses and
disbursements) incurred in registering the Offering; (vi) filing fees incurred in registering the Offering with FINRA; (vii) fees and
disbursements of the registrar and transfer and rights and warrant agent; (viii) the Company’s expenses associated with “due
diligence” meetings arranged by the Representative (none of which will be received or paid on behalf of an “underwriter and
related person” as such term is defined in Rule 5110 of FINRA’s Rules); (ix) all costs and expenses associated with “road
show” marketing and “due diligence” trips for the Company’s management to meet with prospective investors, including
without limitation, all travel, food and lodging expenses associated with such trips; (x) the preparation of leather bound volumes and
lucite cube mementos in such quantities as the Underwriter may reasonably request and (xi) all other reasonable costs and expenses incident
to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 3.10 that
the Underwriters have notified the Company about on or prior to the Closing Date.
3.11
Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent
with the application described under the caption “Use of Proceeds” in the Prospectus.
3.12 Delivery
of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth (15th) full calendar month following the Effective Date, an earnings
statement (which need not be certified by independent public or independent certified public accountants unless required by the Act
or the Regulations, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Act) covering a period of
at least twelve (12) consecutive months beginning after the Effective Date.
3.13
Notice to FINRA.
3.13.1
Business Combination. In the event any person or entity (regardless of any FINRA affiliation or association) is engaged
to assist the Company in its search for a merger candidate or to provide any other merger and acquisition services, the Company will
provide the following to FINRA and the Representative prior to the consummation of the Business Combination: (i) complete details of
all services and copies of agreements governing such services; and (ii) justification as to why the person or entity providing the merger
and acquisition services should not be considered an “underwriter and related person” (as such term is defined in Rule 5110
of FINRA’s Rules) with respect to the Offering. The Company also agrees that proper disclosure of such arrangement or potential
arrangement will be made in any proxy or tender offer statement which the Company files in connection with the Business Combination.
3.13.2
Broker/Dealer. In the event the Company intends to register as a broker/dealer, merge with or acquire a registered
broker/dealer, or otherwise become a member of FINRA, it shall promptly notify FINRA.
3.14
Stabilization. Neither the Company, nor, to its knowledge, any of its employees, directors or stockholders (without the
consent of the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that
might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Units.
3.15
Internal Controls. The Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded
as necessary in order to permit preparation of financial statements in accordance with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
3.16
Accountants. For a period of five (5) years from the Effective Date or until such earlier time upon which the Company is
required to be liquidated, the Company shall retain Withum or other independent public accountants reasonably acceptable to the Representative.
3.17 Form
8-K. The Company shall, on the date hereof, retain its independent public accountants to audit the financial statements of the
Company as of the Closing Date (the “Audited Financial Statements”) reflecting the receipt by the Company of the
proceeds of the Offering and the Private Placement, as well as the proceeds from the exercise of the Over-Allotment if such exercise
has occurred on the date of the Prospectus. Within four (4) Business Days of the Closing Date, the Company will file a Current
Report on Form 8-K with the Commission, which Report shall contain the Audited Financial Statements.
3.18
FINRA. The Company shall advise FINRA if it is aware that any 5% or greater stockholder of the Company becomes an affiliate
or associated person of a FINRA member participating in the distribution of the Company’s Public Securities.
3.19
Corporate Proceedings. All corporate proceedings and other legal matters necessary to carry out the provisions of this Agreement
and the transactions contemplated hereby shall have been done to the reasonable satisfaction to counsel for the Underwriters.
3.20
Investment Company. The Company shall cause the proceeds of the Offering to be held in the Trust Account to be invested
only in “government securities” with specific maturity dates or in money market funds meeting certain conditions under Rule
2a-7 promulgated under the Investment Company Act as set forth in the Trust Agreement and disclosed in the Prospectus. The Company will
otherwise conduct its business in a manner so that it will not become subject to the Investment Company Act. Furthermore, once the Company
consummates a Business Combination, it will be engaged in a business other than that of investing, reinvesting, owning, holding or trading
securities.
3.21
Business Combination Announcement. Within four (4) Business Days following the consummation by the Company of a Business
Combination, the Company shall cause an announcement (“Business Combination Announcement”) to be issued by a press
release service announcing the consummation of the Business Combination and indicating that the Representative was one of the co-managing
underwriters in the Offering and also indicating the name and location of any other financial advisors engaged by the Company as a merger
and acquisitions advisor. The Company shall supply the Representative with a draft of the Business Combination Announcement and provide
the Representative with a reasonable advance opportunity to comment thereon. The Company will not issue the Business Combination Announcement
without the final approval of the Representative, which approval will not be unreasonably withheld.
3.22
Press Releases. The Company agrees that it will not issue press releases or engage in any other publicity, without Chardan’s
prior written consent (not to be unreasonably withheld), for a period of twenty-five (25) days after the Effective Date.
3.23 Electronic
Prospectus. The Company shall cause to be prepared and delivered to the Representative, at its expense, within one (1) Business
Day from the Effective Date, an Electronic Prospectus to be used by the Underwriters in connection with the Offering. As used
herein, the term “Electronic Prospectus” means a form of prospectus, and any amendment or supplement thereto,
that meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representative,
that may be transmitted electronically by the other Underwriters to offerees and purchasers of the Units for at least the period
during which a Prospectus relating to the Units is required to be delivered under the Act; (ii) it shall disclose the same
information as the paper prospectus and prospectus filed pursuant to EDGAR, except to the extent that graphic and image material
cannot be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic prospectus
with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it shall be in
or convertible into a paper format or an electronic format, satisfactory to the Representative, that will allow recipients thereof
to store and have continuously ready access to the prospectus at any future time, without charge to such recipients (other than any
fee charged for subscription to the Internet as a whole and for on-line time). The Company hereby confirms that it has included or
will include in the Prospectus filed pursuant to EDGAR or otherwise with the Commission and in the Registration Statement at the
time it was declared effective an undertaking that, upon receipt of a request by an investor or his or her representative within the
period when a prospectus relating to the Units is required to be delivered under the Securities Act, the Company shall transmit or
cause to be transmitted promptly, without charge, a paper copy of the Prospectus.
3.24
Reservation of Shares. The Company will reserve and keep available that maximum number of its authorized but unissued securities
which are issuable upon exercise of the Warrants and the Placement Warrants outstanding from time to time.
3.25
Private Placement Proceeds. Immediately upon establishment of the Trust Account and prior to the Closing, the Company shall
deposit all of the proceeds from the Private Placement in the Trust Account and shall provide the Representative with evidence of the
same.
3.26
No Amendment to Charter.
3.26.1
Prior to the closing of a Business Combination, the Company covenants and agrees it will not seek to amend or modify its amended
and restated certificate of incorporation without the prior approval of its Board of Directors and the affirmative vote of at least a
majority of the voting power of the outstanding shares of Common Stock.
3.26.2
The Company acknowledges that the purchasers of the Firm Units and Option Units in this Offering shall be deemed to be third party
beneficiaries of this Section 3.26.
3.26.3
The Representative and the Company specifically agree that this Section 3.26 shall not be modified or amended in any
way without the approval of at least a majority of the voting power of the outstanding shares of Common Stock.
3.27
Financial Printer. The Company shall retain a financial printer, reasonably acceptable to the Representative, for the purpose
of facilitating the Company’s EDGAR filings and the printing of the Preliminary Prospectus and Prospectus.
3.28
Listing on the Nasdaq Capital Market. The Company will use commercially reasonable efforts to maintain the listing of the
Public Securities on the Nasdaq Capital Market or another national securities exchange until the earlier of five (5) years from the Effective
Date or until the Public Securities are no longer registered under the Exchange Act.
4.
Conditions of Underwriters’ Obligations. The obligations of the QIU and the several Underwriters to purchase and pay
for the Units, as provided herein, shall be subject to the continuing accuracy of the representations and warranties of the Company as
of the date hereof and as of each of the Closing Date and the Option Closing Date, if any, to the accuracy of the statements of officers
of the Company made pursuant to the provisions hereof and to the performance by the Company of its obligations hereunder and to the following
conditions:
4.1
Regulatory Matters.
4.1.1
Effectiveness of Registration Statement. The Registration Statement shall have become effective not later than 5:00
P.M., New York time, on the date of this Agreement or such later date and time as shall be consented to in writing by the Representative,
and, at each of the Closing Date and the Option Closing Date, no stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for the purpose shall have been instituted or shall be pending or contemplated by the Commission
and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction
of Greenberg Traurig, LLP.
4.1.2
FINRA Clearance. By the Effective Date, the Representative shall have received clearance from FINRA as to the amount
of compensation allowable or payable to the Underwriters as described in the Registration Statement.
4.1.3
No Commission Stop Order. At each of the Closing Date and the Option Closing Date, the Commission has not issued any
order or threatened to issue any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or any part thereof,
and has not instituted or threatened to institute any proceedings with respect to such an order.
4.1.4
No Blue Sky Stop Orders. No order suspending the sale of the Units in any jurisdiction designated by the Representative
pursuant to Section 3.3 hereof, if any, shall have been issued on either the Closing Date or the Option Closing Date, and
no proceedings for that purpose shall have been instituted or shall be contemplated.
4.1.5
The Nasdaq Capital Market. By the Effective Date, the Securities shall have been approved for trading on the Nasdaq
Capital Market.
4.2
Company Counsel Matters.
4.2.1
Closing Date Opinion of Counsel. On the Closing Date, the Representative shall have received the favorable opinion
of Reed Smith LLP (“Reed Smith”), counsel to the Company, dated the Closing Date, addressed to the Representative
and the other Underwriters and in form and substance reasonably satisfactory to the Representative. The opinion of counsel shall further
include a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company and representatives of the Underwriters at which the contents of
the Registration Statement, final Preliminary Prospectus, the Prospectus and related matters were discussed and although such counsel
is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in
the Registration Statement, final Preliminary Prospectus and the Prospectus (except as otherwise set forth in such opinion), no facts
have come to the attention of such counsel which lead them to believe that either the Registration Statement, final Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, as of the date of such opinion contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such counsel need express no opinion with respect to the financial
statements and related notes and schedules and other financial and statistical data included in the Registration Statement, final Preliminary
Prospectus or the Prospectus or matters relating to the sale of securities in any jurisdiction outside the U.S.). The opinion of counsel
shall state that such counsel is not opining as to the Placement Securities with respect to any rights to rescind or the effect any exercise
of such rights will have on any other securities of the Company or on the Offering.
4.2.2
Option Closing Date Opinion of Counsel. On each Option Closing Date, if any, the Representative shall have received
the favorable opinion of Reed Smith, dated each Option Closing Date, addressed to the Representative and in form and substance reasonably
satisfactory to counsel to the Representative, confirming as of each Option Closing Date, the statements made by Reed Smith in its opinion
delivered on the Closing Date.
4.2.3
Reliance. In rendering such opinion, such counsel may rely: (i) as to matters involving the application of laws other
than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent
specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to the Representative)
of other counsel reasonably acceptable to the Representative, familiar with the applicable laws; and (ii) as to matters of fact, to the
extent they deem proper, on certificates or other written statements of officers of the Company and officers of departments of various
jurisdictions having custody of documents respecting the corporate existence or good standing of the Company, provided that copies
of any such statements or certificates shall be delivered to the Underwriters’ counsel if requested. The opinion of counsel for
the Company and any opinion relied upon by such counsel for the Company shall include a statement to the effect that it may be relied
upon by counsel for the Underwriters in its opinion delivered to the Underwriters.
4.3
Cold Comfort Letter. At the time this Agreement is executed, and at each of the Closing Date and the Option Closing Date,
if any, the Representative shall have received a letter, addressed to the Representative and in form and substance satisfactory in all
respects (including the nature of the changes or decreases, if any, referred to in Section 4.3.3 below) to the Representative
from Withum dated, respectively, as of the date of this Agreement and as of the Closing Date and the Option Closing Date, if any:
4.3.1
Confirming that they are an independent registered public accounting firm with respect to the Company within the meaning of the
Act and the applicable Regulations;
4.3.2
Stating that in their opinion the financial statements of the Company included in the Registration Statement, the Preliminary Prospectus
and the Prospectus comply as to form in all material respects with the applicable accounting requirements of the Act and the Regulations
thereunder;
4.3.3 Stating
that, on the basis of limited procedures which included a reading of the latest available minutes of the stockholders and board of
directors and the various committees of the board of directors, consultations with officers and other employees of the Company
responsible for financial and accounting matters and other specified procedures and inquiries, nothing has come to their attention
which would lead them to believe that: (a) at a date not later than five (5) days prior to the Effective Date, Closing Date or
Option Closing Date, as the case may be, there was any change in the capital stock or long-term debt of the Company, or any decrease
in the stockholders’ equity of the Company as compared with amounts shown in the December 31, 2020 balance sheet included in
the Registration Statement, the Preliminary Prospectus and the Prospectus, other than as set forth in or contemplated by the
Registration Statement, the Preliminary Prospectus and the Prospectus, or, if there was any decrease, setting forth the amount of
such decrease; and (c) during the period from December 31, 2020 (balance sheet date) to a specified date not later than five (5)
days prior to the Effective Date, Closing Date or Option Closing Date, as the case may be, there was any decrease in net earnings or
net earnings per share of Common Stock, in each case as compared with the Statement of Operations for the period from June 23, 2020
(inception) to December 31, 2020 included in the Registration Statement and the Prospectus, or, if there was any such decrease,
setting forth the amount of such decrease;
4.3.4
Stating they have compared specific dollar amounts, numbers of shares, percentages of earnings, statements and other financial
information pertaining to the Company set forth in the Registration Statement, the Preliminary Prospectus and the Prospectus in each case
to the extent that such amounts, numbers, percentages, statements and information may be derived from the general accounting records,
including work sheets, of the Company and excluding any questions requiring an interpretation by legal counsel, with the results obtained
from the application of specified readings, inquiries and other appropriate procedures (which procedures do not constitute an examination
in accordance with the standards of the PCAOB) set forth in the letter and found them to be in agreement; and
4.3.5
Statements as to such other matters incident to the transaction contemplated hereby as the Representative may reasonably request.
4.4
Officers’ Certificates.
4.4.1
Officers’ Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative shall
have received a certificate of the Company signed by the Chief Executive Officer or the President and the Secretary or Assistant Secretary
of the Company, dated the Closing Date or the Option Closing Date, as the case may be, respectively, to the effect that the Company has
performed all covenants and complied with all conditions required by this Agreement to be performed or complied with by the Company prior
to and as of the Closing Date, or the Option Closing Date, as the case may be, and that the conditions set forth in Section 4
hereof have been satisfied as of such date and that, as of Closing Date and the Option Closing Date, as the case may be, the representations
and warranties of the Company set forth in Section 2 hereof are true and correct. In addition, the Representative will have
received such other and further certificates of officers of the Company as the Representative may reasonably request.
4.4.2
Secretary’s Certificate. At each of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or Assistant Secretary of the Company, dated the Closing Date
or the Option Closing Date, as the case may be, certifying: (i) that the amended and restated certificate of incorporation of the Company
are true and complete, have not been modified and are in full force and effect; (ii) that the resolutions relating to the Offering are
in full force and effect and have not been modified; (iii) all correspondence between the Company or its counsel and the Commission;
(iv) all correspondence between the Company or its counsel and the Nasdaq Stock Market; and (v) as to the incumbency of the officers
of the Company. The documents referred to in such certificate shall be attached to such certificate.
4.5
No Material Changes. Prior to and on each of the Closing Date and the Option Closing Date, if any: (i) there shall have
been no material adverse change or development that is likely to result in a material adverse change in the condition or prospects or
the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration
Statement and Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company
or the Initial Shareholders before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the
Company, except as set forth in the Registration Statement, the Preliminary Prospectus and Prospectus; (iii) no stop order shall have
been issued under the Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration
Statement, the Preliminary Prospectus and the Prospectus and any amendments or supplements thereto shall contain all material statements
which are required to be stated therein in accordance with the Act and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and neither the Registration Statement, the Preliminary Prospectus nor the Prospectus nor
any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which
they were made), not misleading.
4.6
Delivery of Agreements.
4.6.1
Effective Date Deliveries. On the Effective Date, the Company shall have delivered to the Representative executed copies
of the Trust Agreement, the Warrant Agreement, the Business Combination Marketing Agreement, all of the Insider Letters, the Subscription
Agreements, the Registration Rights Agreement and the Escrow Agreement.
5.
Indemnification.
5.1
Indemnification of Underwriters.
5.1.1
General. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each of the Underwriters
and each dealer selected by the Representative that participates in the offer and sale of the Units (each a “Selected Dealer”)
and each of their respective directors, officers and employees and each person, if any, who controls any such Underwriter (“Controlling
Person”) within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against any and all loss,
liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred
in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out
of any action between any of the Underwriters and the Company or between any of the Underwriters and any third party or otherwise) to
which they or any of them may become subject under the Act, the Exchange Act or any other federal, state or local statute, law, rule,
regulation or ordinance or at common law or otherwise or under the laws, rules and regulation of foreign countries, arising out of or
based upon any untrue statement or alleged untrue statement of a material fact contained in: (i) any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time each may be amended and supplemented); or (ii) any application or other document or
written communication (in this Section 5, collectively called “Application”) executed by the Company or
based upon written information furnished by the Company in any jurisdiction in order to qualify the Units under the securities laws thereof
or filed with the Commission, any state securities commission or agency, the Nasdaq Stock Market or any securities exchange; or the omission
or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to an Underwriter by or on behalf of such Underwriter expressly for use
in any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement thereof. With respect to
any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, the indemnity agreement
contained in this paragraph shall not inure to the benefit of any Underwriter to the extent that any loss, liability, claim, damage or
expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the person asserting any such
loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such person as required by the
Act and the Regulations, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver
the Prospectus was a result of non-compliance by the Company with its obligations under Section 3.2 hereof. The Company
agrees to promptly notify the Representative of the commencement of any litigation or proceedings against the Company or any of its officers,
directors or Controlling Persons in connection with the issue and sale of the Securities or in connection with the Preliminary Prospectus,
the Registration Statement, or the Prospectus.
5.1.2
Indemnification of the QIU. Without limitation of and in addition to its obligations under the other paragraphs of
this Section 5, the Company agrees to indemnify, defend and hold harmless the QIU, its directors, officers, employees and
each Controlling Person of the QIU, if any, and the successors and assigns of all of the foregoing persons, from and against any loss,
damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the QIU or any such
person may incur, insofar as such loss, damage, expense, liability or claim arises out of or is based upon the QIU’s acting as
a “qualified independent underwriter” (within the meaning of FINRA Rule 5121) in connection with the offering contemplated
by this Agreement, and the Company agrees to advance and reimburse each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such loss, damage, expense, liability or claim; provided,
however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the QIU specifically for use in the Registration Statement or Prospectus.
5.1.3
Procedure. If any action is brought against an Underwriter, the QIU or a Controlling Person in respect of which indemnity
may be sought against the Company pursuant to Section 5.1.1, such Underwriter or the QIU shall promptly notify the Company
in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees
of counsel (subject to the reasonable approval of such Underwriter or the QIU) and payment of actual expenses. Such Underwriter, the
QIU or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Underwriter, the QIU or such Controlling Person unless: (i) the employment of such counsel at
the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action within
reasonable time under the circumstances; (ii) the Company shall not have employed counsel to have charge of the defense of such action;
or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are
different from or additional to those available to the Company, or another conflict of interest or conflict as to legal representation
exists (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by the Underwriter,
the QIU and/or Controlling Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if the Underwriter,
the QIU or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve
the terms of any settlement of such action which approval shall not be unreasonably withheld.
5.2
Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company,
its directors, officers and employees and agents who control the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company
to the several Underwriters, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions
made in any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement thereto, or in any Application,
in reliance upon, and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or on
behalf of the Underwriter expressly for use in such Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment
or supplement thereto or in any such Application, which furnished written information, it is expressly agreed, consists solely of the
information described in the last sentence of Section 2.3.1. In case any action shall be brought against the Company or any
other person so indemnified based on any Preliminary Prospectus, the Registration Statement, or the Prospectus, or any amendment or supplement
thereto or any Application, and in respect of which indemnity may be sought against any Underwriter, such Underwriter shall have the rights
and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the several
Underwriters by the provisions of Section 5.1.2.
5.3
Contribution.
5.3.1 Contribution
Rights. In order to provide for just and equitable contribution under the Act in any case in which: (i) any person entitled to
indemnification under this Section 5 makes a claim for indemnification pursuant hereto but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial
of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides
for indemnification in such case; or (ii) contribution under the Act, the Exchange Act or otherwise may be required on the part
of any such person in circumstances for which indemnification is provided under this Section 5, then, and in each such
case, the Company and the Underwriters shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the
nature contemplated by said indemnity agreement incurred by the Company and the Underwriters, as incurred, in such proportions that
the Underwriters are responsible for that portion represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided,
that, no person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 5.3.1,
no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Public
Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses. For purposes of
this Section, each director, officer and employee of an Underwriter or the Company, as applicable, and each person, if any, who
controls an Underwriter or the Company, as applicable, within the meaning of Section 15 of the Act shall have the same rights
to contribution as the Underwriters or the Company, as applicable. The QIU, in its capacity as “qualified independent
underwriter” (within the meaning of FINRA Rule 5121), shall in no event be required to contribute any amount in excess of
the amount the compensation received by the QIU for acting in such capacity exceeds the amount of any damage which the QIU has
otherwise been required to pay by reason of the QIU’s acting in such capacity in connection with the offering contemplated by
this Agreement.
5.3.2
Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice
of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against
another party (“Contributing Party”), notify the Contributing Party of the commencement thereof, but the omission to
so notify the Contributing Party will not relieve it from any liability which it may have to any other party other than for contribution
hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a Contributing Party or its
representative of the commencement thereof within the aforesaid fifteen (15) days, the Contributing Party will be entitled to participate
therein with the notifying party and any other Contributing Party similarly notified. Any such Contributing Party shall not be liable
to any party seeking contribution on account of any settlement of any claim, action or proceeding effected by such party seeking contribution
on account of any settlement of any claim, action or proceeding effected by such party seeking contribution without the written consent
of such Contributing Party. The contribution provisions contained in this Section are intended to supersede, to the extent permitted by
law, any right to contribution under the Act, the Exchange Act or otherwise available. The Underwriters’ obligations to contribute
pursuant to this Section 5.3 are several and not joint.
6.
Default by an Underwriter.
6.1 Default
Not Exceeding 10% of Firm Units or Option Units. If any Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the Over-allotment Option is exercised, hereunder, and if the number of the Firm
Units or Option Units with respect to which such default relates does not exceed in the aggregate 10% of the number of Firm Units or
Option Units that all Underwriters have agreed to purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion to their respective commitments hereunder.
6.2
Default Exceeding 10% of Firm Units or Option Units. In the event that the default addressed in Section 6.1
above relates to more than 10% of the Firm Units or Option Units, the Representative may in its discretion arrange for itself or for another
party or parties to purchase such Firm Units or Option Units to which such default relates on the terms contained herein. If, within one
(1) Business Day after such default relating to more than 10% of the Firm Units or Option Units, the Representative does not arrange for
the purchase of such Firm Units or Option Units, then the Company shall be entitled to a further period of one (1) Business Day within
which to procure another party or parties satisfactory to the Company and the Representative to purchase said Firm Units or Option Units
on such terms. In the event neither the Company nor the Representative arranges for the purchase of the Firm Units or Option Units to
which a default relates as provided in this Section 6, this Agreement may be terminated by the Company without liability on
the part of the Company (except as provided in Sections 3.10 and 5 hereof) or the several Underwriters (except as provided
in Section 5 hereof); provided, however, that if such default occurs with respect to the Option Units, this
Agreement will not terminate as to the Firm Units; and provided further that nothing herein shall relieve a defaulting Underwriter of
its liability, if any, to the other several Underwriters and to the Company for damages occasioned by its default hereunder.
6.3
Postponement of Closing Date. In the event the Firm Units or Option Units to which the default relates are to be purchased
by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representative or the Company
shall have the right to postpone the Closing Date or Option Closing Date for a reasonable period, but not in any event exceeding five
(5) Business Days, in order to effect whatever changes may thereby be made necessary in the Registration Statement, the Preliminary Prospectus
and/or the Prospectus, as the case may be, or in any other documents and arrangements, and the Company agrees to file promptly any amendment
to, or to supplement, the Registration Statement, the Preliminary Prospectus and/or the Prospectus, as the case may be, that in the opinion
of counsel for the Underwriters may thereby be made necessary. The term “Underwriter” as used in this Agreement shall
include any party substituted under this Section 6 with like effect as if it had originally been a party to this Agreement
with respect to such Securities.
7.
Additional Covenants.
7.1
Additional Shares or Options. The Company hereby agrees that until the Company consummates a Business Combination, it shall
not issue any shares of Common Stock or any options or other securities convertible into shares of Common Stock, or any class of shares
which participate in any manner in the Trust Account or which vote as a class with the Common Stock on a Business Combination.
7.2
Trust Account Waiver Acknowledgments. The Company hereby agrees that it will not commence its due diligence investigation of any operating
business or businesses which the Company seeks to acquire (each, a “Target Business”) unless and until such Target
Business acknowledges in writing, whether through a letter of intent, memorandum of understanding or other similar document (and subsequently
acknowledges the same in any definitive document replacing any of the foregoing), that: (i) it has read the Prospectus and understands
that the Company has established the Trust Account, initially in an amount of $101,000,000 for the benefit of the public stockholders,
and that (ii) for and in consideration of the Company agreeing to evaluate such Target Business for purposes of consummating a Business
Combination with it, such Target Business agrees that it does not have any right, title, interest or claim of any kind in or to any monies
of the Trust Account (“Claim”) and waives any Claim it may have in the future as a result of, or arising out of, any
negotiations, contracts or agreements with the Company and will not seek recourse against the Trust Account for any reason whatsoever.
The Company further agrees that it will use all reasonable efforts, prior to obtaining the services of any vendor, to obtain a written
acknowledgment from such vendor, whether through a letter of intent, memorandum of understanding or other similar document (and subsequently
acknowledges the same in any definitive document replacing any of the foregoing), that: (i) such vendor has read the Prospectus and understands
that the Company has established the Trust Account, initially in an amount of $101,000,000 for the benefit of the public stockholders,
and that (ii) for and in consideration of the Company agreeing to engage the services of the vendor, such vendor agrees that it does
not have any Claim and waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements
with the Company and will not seek recourse against the Trust Account for any reason whatsoever. The foregoing letters shall substantially
be in the form attached hereto as Exhibit A and B, respectively.
7.3
Insider Letters. The Company shall not take any action or omit to take any action which would cause a breach of any of the
Insider Letters executed among the Initial Shareholders, the officers and directors of the Company, and the Company or the Subscription
Agreements and will not allow any amendments to, or waivers of, such Insider Letters or the Subscription Agreements without the prior
written consent of the Representative.
7.4
Certificate of Incorporation. The Company shall not take any action or omit to take any action that would cause the Company
to be in breach or violation of its amended and restated certificate of incorporation. Except as provided in Section 3.26,
prior to the consummation of a Business Combination, the Company will not amend its amended and restated certificate of incorporation,
without the prior written consent of the Representative.
7.5
Tender Offer Documents, Proxy Materials and Other Information. The Company shall provide counsel to the Representative with
copies of all tender offer documents or proxy information and all related material filed with the Commission in connection with a Business
Combination concurrently with such filing with the Commission. In addition, the Company shall furnish any other State in which the Offering
was registered, such information as may be required by such State.
7.6
Acquisition/Liquidation Procedure. The Company agrees that it will comply with its amended and restated certificate of incorporation
in connection with the consummation of a Business Combination or the failure to consummate a Business Combination within 15 months (or
up to 21 months, as applicable) from the Closing Date.
7.7 Rule
419. The Company agrees that it will use its best efforts to prevent the Company from becoming subject to Rule 419 under the Act
prior to the consummation of any Business Combination, including, but not limited to, using its best efforts to prevent any of the
Company’s outstanding securities from being deemed to be a “penny stock” as defined in Rule 3a-51-1 under
the Exchange Act during such period.
7.8
Presentation of Potential Target Businesses. The Company shall cause the Company’s officers, directors and Initial
Shareholders to agree that, in order to minimize potential conflicts of interest which may arise from multiple affiliations, the Company’s
officers, directors and Initial Shareholders will present to the Company for its consideration, prior to presentation to any other person
or company, any suitable opportunity to acquire an operating business, until the earlier of the consummation by the Company of a Business
Combination or the liquidation of the Company, subject to any pre-existing fiduciary obligations the Initial Shareholders might have.
7.9
Right of First Refusal. The Company agrees that if the Firm Units are sold in accordance with the terms of this Underwriting
Agreement, and for a period of twenty-four (24) months from the date of the consummation of a Business Combination, the Company shall
grant the Representative a right of first refusal to act as a lead underwriter or co-manager with at least 30% of the economics, for any
and all future public and private equity and debt offerings of the Company or any successor to or any subsidiary of the Company during
such twenty-four (24) month period. The Representative’s failure to exercise its right of first refusal with respect to any particular
proposal shall not affect its right of first refusal relative to future proposals. Notwithstanding the foregoing, the Representative’s
right of first refusal under this Section 7.9 shall expire upon the third anniversary of the Effective Date.
8.
Representations and Agreements to Survive Delivery. Except as the context otherwise requires, all representations, warranties
and agreements contained in this Agreement shall be deemed to be representations, warranties and agreements at the Closing Date or the
Option Closing Date, if any, and such representations, warranties and agreements of the Underwriters and the Company, including the indemnity
agreements contained in Section 5 hereof, shall remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, the Company or any Controlling Person, and shall survive termination of this Agreement or the
issuance and delivery of the Units to the several Underwriters until the earlier of the expiration of any applicable statute of limitations
and the seventh anniversary of the later of the Closing Date or the Option Closing Date, if any, at which time the representations, warranties
and agreements shall terminate and be of no further force and effect.
9.
Effective Date of This Agreement and Termination Thereof.
9.1
Effective Date. This Agreement shall become effective on the Effective Date at the time the Registration Statement is declared
effective by the Commission.
9.2 Termination.
The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date: (i) if any domestic or
international event or act or occurrence has materially disrupted, or in the Representative’s opinion will in the immediate
future materially disrupt, general securities markets in the United States; or (ii) if trading on the New York Stock Exchange, the
NYSE American, the Nasdaq Stock Market or on the OTC Bulletin Board (or successor trading market) shall have been suspended, or
minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities shall have been required on the OTC Bulletin Board or by order of the Commission or any
other government authority having jurisdiction; or (iii) if the United States shall have become involved in a war or an initiation
or increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or
(v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States
securities markets; or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the
Representative’s opinion, make it inadvisable to proceed with the delivery of the Units; or (vii) if any of the
Company’s representations, warranties or covenants hereunder are breached; or (viii) if the Representative shall have become
aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such material
adverse change in general market conditions, including, without limitation, as a result of terrorist activities after the date
hereof, as in the Representative’s judgment would make it impracticable to proceed with the offering, sale and/or delivery of
the Units or to enforce contracts made by the Underwriters for the sale of the Units.
9.3
Expenses. In the event this Agreement shall not be carried out for any reason whatsoever, except as a result of the Representative’s
or any Underwriters’ breach or default with respect to any of its material obligations pursuant to this Agreement, within the time
specified herein or any extensions thereof pursuant to the terms herein, the obligations of the Company to pay the out-of-pocket expenses
actually incurred by the Representative related to the transactions contemplated herein shall be governed by Section 3.10
hereof.
9.4
Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination
of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Section 5 shall not be in
any way affected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.
10.
Miscellaneous.
10.1
Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and shall be
mailed, delivered by hand or reputable overnight courier or delivered by facsimile transmission (with printed confirmation of receipt)
and confirmed, or by electronic transmission via PDF, and shall be deemed given when so mailed, delivered, or faxed or transmitted (or
if mailed, three days after such mailing):
If to the Representative:
Chardan Capital Markets, LLC
17 State Street, Suite 2100
New York, New York 10004
Attn.: George Kaufman
Email: gkaufman@chardan.com
Fax: (646) 465-9036
Copy to (which copy shall not be deemed to constitute notice to the
Representative):
Greenberg Traurig, LLP
1750 Tysons Boulevard, Suite 1000
McLean, Virginia 22102
Attn: Jason Simon
Email: simonj@gtlaw.com
Fax: (703) 714-8386
If to the Company:
Chardan NexTech Acquisition
2 Corp.
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman, Chief Executive Officer
Email: jgrossman@chardancm.com
Copy to (which copy shall not be deemed to constitute
notice to the Company):
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman, Esq.
Email: aedelman@reedsmith.com
Fax: (212) 521-5450
If to the QIU:
[●]
10.2
Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit
or affect the meaning or interpretation of any of the terms or provisions of this Agreement.
10.3
Amendment. This Agreement may only be amended by a written instrument executed by each of the parties hereto.
10.4
Entire Agreement. This Agreement (together with the other agreements and documents being delivered pursuant to or in connection
with this Agreement) constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof, and
supersede all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.
10.5 Binding
Effect. This Agreement shall inure solely to the benefit of and shall be binding upon the Representative, the Underwriters, the
QIU, the Company and the Controlling Persons, directors and officers referred to in Section 5 hereof, and their
respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provisions herein contained.
10.6
Governing Law, Venue, Etc.
10.6.1
This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving
effect to the conflict of laws principles thereof. Each of the Representative and the Company (and any individual signatory hereto): (i)
agrees that any legal suit, action or proceeding arising out of or relating to this Agreement and/or the transactions contemplated hereby
shall be instituted exclusively in New York Supreme Court, County of New York, or in the United States District Court for the Southern
District of New York; (ii) waives any objection which such party may have or hereafter have to the venue of any such suit, action or proceeding;
and (iii) irrevocably and exclusively consents to the jurisdiction of the New York Supreme Court, County of New York, and the United States
District Court for the Southern District of New York in any such suit, action or proceeding.
10.6.2
Each of the Representative and the Company (and any individual signatory hereto) further agrees to accept and acknowledge service
of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New York, or
in the United States District Court for the Southern District of New York and agrees that service of process upon the Company or any such
individual mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process upon
the Company or any such individual in any such suit, action or proceeding, and service of process upon the Representative mailed by certified
mail to the Representative’s addresses shall be deemed in every respect effective service process upon the Representative, in any
such suit, action or proceeding.
10.6.3
THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT, THE REGISTRATION STATEMENT AND THE PROSPECTUS.
10.6.4
The Company agrees that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all
of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation
therefor.
10.7
Execution in Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to
each of the other parties hereto. Delivery of a signed counterpart of this Agreement by fax or email/.pdf transmission shall constitute
valid and sufficient delivery thereof.
10.8
Waiver, Etc. The failure of any of the parties hereto to at any time enforce any of the provisions of this Agreement shall
not be deemed or construed to be a waiver of any such provision, nor to in any way effect the validity of this Agreement or any provision
hereof or the right of any of the parties hereto to thereafter enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance
or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.
10.9
No Fiduciary Relationship. The Company hereby acknowledges that the Underwriters are acting solely as underwriters, and
the QIU is acting solely as a “qualified independent underwriter” within the meaning of FINRA Rule 5121, in connection
with the Offering. The Company further acknowledges that the Underwriters and the QIU are acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm’s length basis and in no event do the parties intend that the Underwriters
or the QIU act or be responsible as a fiduciary to the Company, its management, stockholders, creditors or any other person in connection
with any activity that the Underwriters or the QIU may undertake or have undertaken in furtherance of the Offering, either before or after
the date hereof. The Underwriters and the QIU hereby expressly disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company, the Underwriters and the QIU agree that they are each responsible
for making their own independent judgments with respect to any such transactions, and that any opinions or views expressed by the Underwriters
or the QIU to the Company regarding such transactions, including but not limited to any opinions or views with respect to the price or
market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company hereby waives and releases,
to the fullest extent permitted by law, any claims that the Company may have against the Underwriters or the QIU with respect to any breach
or alleged breach of any fiduciary or similar duty to the Company in connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing correctly sets forth the understanding
among the Underwriters, the QIU and the Company, please so indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement between us.
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Very truly yours,
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CHARDAN NEXTECH ACQUISITION 2 CORP.
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By:
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Name:
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Title:
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Agreed to and accepted on the date first above
written.
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CHARDAN CAPITAL MARKETS, LLC,
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as Representative of the several Underwriters
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By:
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Name:
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Title:
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[●],
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as Qualified Independent Underwriter
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By:
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Name:
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Title:
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[Signature Page of the Underwriting Agreement]
SCHEDULE A
CHARDAN NEXTECH ACQUISITION 2 CORP.
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Underwriter
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Number of Firm
Units to be
Purchased
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Chardan Capital Markets, LLC
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TOTAL
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10,000,000
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EXHIBIT A
Form of Target Business Letter
Chardan NexTech Acquisition 2 Corp.
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman, Chief Executive Officer
Gentlemen:
Reference is made to the Final Prospectus of Chardan
NexTech Acquisition 2 Corp. (the “Company”), dated [●], 2021 (the “Prospectus”). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand
that the Company has established a “trust account”, initially in an amount of at least $101,000,000 for the benefit
of the “public shareholders” and the underwriters of the Company’s initial public offering (the “Underwriters”)
and that, except for interest earned on the trust account that may be released to the Company to pay any taxes it incurs, proceeds in
the trust account will not be released until (a) the consummation of a Business Combination, or (b) the dissolution and liquidation of
the Company if it is unable to consummate a Business Combination within the allotted time.
For and in consideration of the Company agreeing
to evaluate the undersigned for purposes of consummating a business combination or other form of acquisition with it, the undersigned
hereby agrees that it does not have any right, title, interest or claim of any kind in or to any monies in the trust account (the “Claim”)
and hereby waives any Claim it may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with
the Company and will not seek recourse against the trust account for any reason whatsoever.
Print Name of Target Business
Authorized Signature of Target Business
EXHIBIT B
Form of Vendor Letter
Chardan NexTech Acquisition 2 Corp.
17 State Street, 21st Floor
New York, NY 10004
Attn: Jonas Grossman, Chief Executive Officer
Gentlemen:
Reference is made to the Final Prospectus of Chardan
NexTech Acquisition 2 Corp. (the “Company”), dated [●], 2021 (the “Prospectus”). Capitalized terms used
and not otherwise defined herein shall have the meanings assigned to them in the Prospectus.
We have read the Prospectus and understand
that the Company has established a “trust account”, initially in an amount of at least $101,000,000 for the benefit of the
“public shareholders” and the underwriters of the Company’s initial public offering (the “Underwriters”)
and that, except for interest earned on the trust account that may be released to the Company to pay any taxes it incurs, proceeds in
the trust account will not be released until (a) the consummation of a Business Combination, or (b) the dissolution and liquidation of
the Company if it is unable to consummate a Business Combination within the allotted time.
For and in consideration of the Company agreeing
to use the products or services of the undersigned, the undersigned hereby agrees that it does not have any right, title, interest or
claim of any kind in or to any monies in the trust account (the “Claim”) and hereby waives any Claim it may have in the future
as a result of, or arising out of, any negotiations, contracts or agreements with the Company and will not seek recourse against the trust
account for any reason whatsoever.
Print Name of Vendor
Authorized Signature of Vendor
Exhibit 4.4
WARRANT AGREEMENT
This Warrant Agreement (“Warrant Agreement”)
is made as of [●], 2021, by and between Chardan NexTech Acquisition 2 Corp., a Delaware corporation (the “Company”),
and Continental Stock Transfer & Trust Company (the “Warrant Agent”).
WHEREAS, the Company is engaged in a public offering
(the “Public Offering”) of 10,000,000 units (the “Units”) of the Company (and up to 1,500,000 additional
Units if the underwriters’ over-allotment option is exercised in full), each Unit consisting of one share of common stock, par value
$0.0001 per share (the “Common Stock”) and one-half of one warrant (each whole warrant a “Public Warrant”),
each Public Warrant entitling its holder to purchase one share of Common Stock (the “Public Warrant Shares”);
WHEREAS,
the Company has received a binding commitment from Chardan NexTech 2 Warrant Holdings LLC, to purchase 5,238,461 private placement
warrants (or up to 5,469,230 private warrants depending on the extent to which the underwriters’ over-allotment option is exercised)
pursuant the Subscription Agreement, dated as of [●], 2021, and in connection therewith, will issue and deliver up to 5,238,461
private placement warrants (or up to 5,469,230 private warrants depending on the extent to which the underwriters’ over-allotment
option is exercised) (the “Private Warrants”), each whole Private Warrant entitling its holder to purchase one share
of Common Stock (together with the Public Warrant Shares, the “Warrant Shares”);
WHEREAS, the Company may issue additional warrants
to purchase shares of Common Stock hereunder from time to time (the “Additional Warrants”, and together with the Public
Warrants and Private Warrants, the “Warrants”), which shall have the same terms and be in the same form as the Private Warrants;
WHEREAS, the Company has filed with the Securities
and Exchange Commission (the “SEC”) a Registration Statement on Form S-1, No. 333-254010, as amended (the “Registration
Statement”), for the registration, under the Securities Act of 1933, as amended (the “Act”) of, among other
securities, the Public Warrants;
WHEREAS, the Company desires the Warrant Agent
to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer,
exchange, redemption and exercise of the Warrants;
WHEREAS, the Company desires to provide for the
form, terms and provisions of the Warrants, including the terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights and immunities of the Company, the Warrant Agent and the holders of the Warrants; and
WHEREAS, all acts and things have been done and
performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant
Agent, as provided herein, the legally valid and binding obligations of the Company, and to authorize the execution and delivery of this
Warrant Agreement.
NOW, THEREFORE, in consideration of the mutual
agreements herein contained, the parties hereto agree as follows:
1. Appointment of Warrant Agent. The Company
hereby appoints the Warrant Agent to act as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment
and agrees to perform the same in accordance with the terms and conditions set forth in this Warrant Agreement.
2. Warrants.
2.1 Form of Warrant.
Each Public Warrant shall be: (a) issued in registered form only, (b) in substantially the form of Exhibit A hereto, the provisions
of which are incorporated herein and (c) signed by, or bear the facsimile signature of, the Chairman of the Board, the Chief Executive
Officer or the Chief Financial Officer of the Company. In the event the person whose facsimile signature has been placed upon any Warrant
shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with
the same effect as if he or she had not ceased to be such at the date of issuance.
2.2 Effect of Countersignature.
Unless and until countersigned by the Warrant Agent pursuant to this Warrant Agreement, a Warrant shall be invalid and of no effect and
may not be exercised by the holder thereof.
2.3 Registration.
2.3.1 Warrant Register.
The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of the original issuance and
transfers of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by
the Company.
2.3.2 Registered Holder.
Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person
in whose name such Warrant shall be registered upon the Warrant Register (“Registered Holder”) as the absolute owner
of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant certificate
made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.
2.4 Detachability of Warrants.
Each of the Common Stock and the Public Warrants comprising the Units will begin to trade separately on (i) the 90th day after the effectiveness
of the Registration Statement, or (ii) such earlier date as Chardan Capital Markets, LLC, as representative of the underwriters (the “Representative”),
shall determine is acceptable (such date, the “Detachment Date”). In no event will separate trading of the securities
comprising the Units commence until the Company (i) files a Current Report on Form 8-K with the SEC including audited balance sheet reflecting
the Company’s receipt of the gross proceeds of the Public Offering and (ii) issues a press release announcing when such separate
trading will begin.
2.5 Private
Warrants. The Private Warrants will be issued substantially in the form of Exhibit B hereto, and they (i) will be
exercisable either for cash or on a cashless basis at the holder’s option pursuant to Section 3.3 hereof and (ii) will
not be redeemable by the Company, in either case as long as the Private Warrants are held by the initial purchasers or any of their
permitted transferees (as prescribed in the Subscription Agreement). The Private Warrants may not be sold, transferred, assigned,
pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the
effective economic disposition of, the Private Warrants (or any securities underlying the Private Warrants) for a period of one
hundred eighty (180) days following the effective date of the Registration Statement to anyone other than any member participating
in the Public Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up
restriction set forth above for the remainder of the time period.
3. Terms and Exercise of Warrants.
3.1 Warrant Price.
Each Warrant shall, when countersigned by the Warrant Agent, entitle the Registered Holder thereof, subject to the provisions of such
Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at $11.50 per
whole share, subject to the adjustments provided in Section 4 hereof. The term “Warrant Price” as used in this
Warrant Agreement refers to the price per whole share at which shares of Common Stock may be purchased at the time such Warrant is exercised.
The Public Warrants may only be exercised for a whole number of Warrant Shares by a Registered Holder. No fractional shares will be issued.
3.2 Duration of Warrants.
A Warrant may be exercised only during the period (“Exercise Period”) commencing 30 days after the completion of the
Company’s initial business combination and terminating at 5:00 p.m., New York City time, on the earlier to occur of (i) (A) five
years following the completion of the Company’s initial business combination with respect to the Public Warrants, and (B) five years
from the effective date of the Registration Statement with respect to the Private Warrants purchased by Chardan NexTech 2 Warrant Holdings
LLC, provided that once the Private Warrants are not beneficially owned, directly or indirectly, by Chardan Capital Markets, LLC
or any of its related persons anymore, the Private Warrants may not be exercised five years following the completion of the Company’s
initial business combination, and (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Warrant Agreement
(“Expiration Date”). Except with respect to the right to receive the Redemption Price (as set forth in Section 6
hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in
respect thereof under this Warrant Agreement shall cease at the close of business on the Expiration Date. The Company may extend the duration
of the Warrants by delaying the Expiration Date; provided, however, that the Company (i) may not extend the duration of the Private Warrants
by delaying the Expiration Date and (ii) will provide written notice of not less than 20 days to Registered Holders of such extension
and that such extension shall be identical in duration among all of the then outstanding Warrants.
3.3 Exercise of Warrants.
3.3.1 Cash Exercise.
Subject to the provisions of the Warrant and this Warrant Agreement, a Warrant, when countersigned by the Company, may be exercised by
the Registered Holder thereof by surrendering it at the office of the Warrant Agent, or at the office of its successor as Warrant Agent,
currently being:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attn: Compliance Department
with the subscription form, as set forth in the
Warrant, duly executed, and by paying in full, in lawful money of the United States, by certified or bank cashier’s check payable
to the order of the Warrant Agent or by wire transfer to the Warrant Agent’s bank account, the Warrant Price for each whole Warrant
Share as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange
of the Warrant for the Warrant Shares, and the issuance of the Warrant Shares (such exercise, a “Cash Exercise”). A
Cash Exercise in accordance with this Section 3.3.1 is available to the Registered Holder only during such times that there is
an effective registration statement registering the Warrant Shares, with the prospectus contained therein being available for the resale
of the Warrant Shares.
3.3.2 Cashless Exercise.
Subject to Section 2.4, notwithstanding anything contained herein to the contrary, if there is no effective registration statement
registering the Warrant Shares on any day the Registered Holder desires to exercise the Warrants and more than 120 days have passed since
the Company complete its initial business combination, the Registered Holder may exercise the Warrants in whole or in part in lieu of
making a cash payment for whole numbers of Warrant Shares, by providing notice to the Chief Financial Officer of the Company in a subscription
form of its election to utilize cashless exercise, in which event the Company shall issue to the Registered Holder the number of Warrant
Shares determined as follows:
X = Y [(A-B)/A]
where:
X = the number of Warrant Shares to be issued to the Registered
Holder.
Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.
A = the fair market value of one share of Common Stock.
B = the Warrant Price.
The Registered Holder may not exercise any Warrants
in the absence of a registration statement except pursuant to this Section 3.3.2. For purposes of this Section 3.3.2 and
Section 4.1, the fair market value of one share of Common Stock is defined as follows:
(i) if the Company’s shares of
Common Stock are listed and traded on the NASDAQ Capital Market (the “Trading Market”), the fair market value shall
be deemed to be the average of the closing price on such Trading Market for the 10 trading day ending on the third trading day immediately
prior to the date the subscription form is submitted to the Company in connection with the exercise of the Warrant; or
(ii) if the Company’s shares of
Common Stock are not listed on the Trading Market, but is traded in the over-the-counter market, the fair market value shall be deemed
to be the average of the bid price on the Trading Market for the 10 trading days ending on the third trading day immediately prior to
the date the subscription form is submitted in connection with the exercise of the Warrant; or
(iii) if there is no active public market
for the Company’s shares of Common Stock, the fair market value of the shares of Common Stock shall be determined in good faith
by the Company’s board of directors.
3.3.3 Fractional Shares.
Notwithstanding any provision to the contrary contained in this Warrant Agreement, the Company shall not be required to issue any fraction
of a Warrant Share in connection with the exercise of Warrants, and in any case where the Registered Holder would be entitled under the
terms of the Warrants to receive a fraction of a Warrant Share upon the exercise of such Registered Holder’s Warrants, issue or
cause to be issued only the largest whole number of Warrant Shares issuable on such exercise (and such fraction of a Warrant Share will
be disregarded); provided, that if more than one Warrant certificate is presented for exercise at the same time by the same Registered
Holder, the number of whole Warrant Shares which shall be issuable upon the exercise thereof shall be computed on the basis of the aggregate
number of Warrant Shares issuable on exercise of all such Warrants.
3.3.4 Issuance of Certificates.
No later than three (3) business days following the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price
pursuant to Section 3.3.1 or cashless exercise pursuant to Section 3.3.2, the Company shall issue, or cause to be issued,
to the Registered Holder of such Warrant a certificate or certificates representing (or at the option of the Registered Holder, deliver
electronically through the facilities of the Depository Trust Corporation) the number of full shares of Common Stock to which he, she
or it is entitled, registered in such name or names as may be directed by him, her or it, and, if such Warrant shall not have been exercised
or surrendered in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised or
surrendered. Notwithstanding the foregoing, the Company shall not deliver, or cause to be delivered, any securities without applicable
restrictive legend pursuant to the exercise of a Warrant unless (a) a registration statement under the Act with respect to the shares
of Common Stock issuable upon exercise of such Warrants is effective and a current prospectus relating to the shares of Common Stock issuable
upon exercise of the Warrants is available for delivery to the Registered Holder of the Warrant or (b) in the opinion of counsel to the
Company, the exercise of the Warrants is exempt from the registration requirements of the Act and such securities are qualified for sale
or exempt from qualification under applicable securities laws of the states or other jurisdictions in which the Registered Holder resides.
Warrants may not be exercised by, or securities issued to, any Registered Holder in any state in which such exercise or issuance would
be unlawful. In addition, in no event will the Company be obligated to pay such Registered Holder any cash consideration upon exercise
or otherwise “net cash settle” the Warrant.
3.3.5 Valid Issuance.
All shares of Common Stock issued upon the proper exercise or surrender of a Warrant in conformity with this Warrant Agreement shall be
validly issued, fully paid and non-assessable.
3.3.6 Date of Issuance.
Each person or entity in whose name any such certificate for shares of Common Stock is issued shall, for all purposes, be deemed to have
become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business
on the next succeeding date on which the stock transfer books are open.
3.3.7 Maximum Percentage.
A holder of a Warrant may notify the Company in writing in the event it elects to be subject to the provisions contained in this Section
3.3.7; however, no holder of a Warrant shall be subject to this Section 3.3.7 unless he, she or it makes such election. If the election
is made by a holder, the Warrant Agent shall not effect the exercise of the holder’s Warrant, and such holder shall not have the
right to exercise such Warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 9.99% (the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by such person and its affiliates shall include the number of shares of
Common Stock issuable upon exercise of the Warrant with respect to which the determination of such sentence is being made, but shall exclude
the shares of Common Stock that would be issuable upon (x) exercise of the remaining, unexercised portion of the Warrant beneficially
owned by such person and its affiliates and (y) exercise or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by such person and its affiliates (including, without limitation, any convertible notes or convertible
preferred shares or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For purposes of the Warrant, in determining
the number of outstanding shares of Common Stock, the holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company’s most recent annual report on Form 10-K, quarterly report on Form 10-Q, current report on Form 8-K or other
public filing with the SEC as the case may be, (2) a more recent public announcement by the Company, or (3) any other notice by the Company
or the Warrant Agent setting forth the number of shares of Common Stock outstanding. For any reason at any time, upon the written request
of the holder of the Warrant, the Company shall, within two (2) business days, confirm orally and in writing to such holder the number
of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of equity securities of the Company by the holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to the Company, the holder of a Warrant may from time to
time increase or decrease the Maximum Percentage applicable to such holder to any other percentage specified in such notice; provided,
however, that any such increase shall not be effective until the sixty-first (61st) day after such notice is delivered to the Company.
4. Adjustments.
4.1 Stock Dividends, Splits.
If, after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding shares of Common Stock
is increased by a stock dividend payable in shares of Common Stock, or by a forward or reverse split of shares of Common Stock, or other
similar event, then, on the effective date of such stock dividend, split or similar event, the number of shares of Common Stock issuable
on exercise of each Warrant shall be increased or decreased in proportion to such increase or decrease in outstanding shares of Common
Stock. A rights offering to all holders of the shares of Common Stock entitling holders to purchase shares of Common Stock at a price
less than the fair market value shall be deemed a stock dividend of a number of shares of Common Stock equal to the product of (i) the
number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights
offering that are convertible into or exercisable for the shares of Common Stock) multiplied by (ii) one (1) minus the quotient of (x)
the price per share of Common Stock paid in such rights offering divided by (y) the fair market value. For purposes of this subsection
4.1, if the rights offering is for securities convertible into or exercisable for shares of Common Stock, in determining the price payable
for the shares of Common Stock, there shall be taken into account any consideration received for such rights, as well as any additional
amount payable upon exercise or conversion.
4.2 Aggregation of Shares.
If, after the date hereof, and subject to the provisions of Section 4.5, the number of outstanding shares of Common Stock is decreased
by a consolidation, combination or reclassification of shares of Common Stock or other similar event, then, on the effective date of such
consolidation, combination, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant
shall be decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 Extraordinary Dividends.
If the Company, at any time while the Warrants (or rights to purchase the Warrants) are outstanding and unexpired, shall pay a dividend
or make a distribution in cash, securities or other assets to the holders of the Common Stock on account of such Common Stock (or other
shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in Section 4.1 above,
(b) Ordinary Cash Dividends (as defined below), (c) to satisfy the conversion rights of the holders of the Common Stock in connection
with a proposed initial business combination or vote to extend the time period to complete an initial business combination, (d) as a result
of the repurchase of Common Stock by the Company in connection with an initial business combination or as otherwise permitted by the Investment
Management Trust Agreement between the Company and the Warrant Agent dated of even date herewith or (e) in connection with the Company’s
liquidation and the distribution of its assets upon its failure to consummate a business combination (any such non-excluded event being
referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately
after the effective date of such Extraordinary Dividend, by the amount of cash and the fair market value (as determined by the Company’s
board of directors, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary
Dividend. For purposes of this Section 4.3, “Ordinary Cash Dividends” means any cash dividend or cash distribution which,
when combined on a per share basis with the per share amounts of all other cash dividends and cash distributions paid on the Common Stock
during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any
of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted
in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed
$0.50 (being 5% of the offering price of the Units in the Public Offering). The foregoing adjustment shall not apply to the Private Warrants.
Further, the holders of the Private Warrants that are beneficially owned by Chardan Capital Markets, LLC or any of its related persons
may not receive or accrue any cash dividends prior to the exercise or conversion of such Private Warrants, as required by FINRA Rule 5110(f)(2)(G)(vii).
4.4 Adjustments in Exercise
Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections
4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price, immediately
prior to such adjustment, by a fraction, (a) the numerator of which shall be the number of shares of Common Stock purchasable upon the
exercise of the Warrants immediately prior to such adjustment, and (b) the denominator of which shall be the number of shares of Common
Stock so purchasable immediately thereafter.
4.5 Replacement of Securities
upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than
a change covered by Sections 4.1 or 4.2 hereof or one that solely affects the par value of such shares of Common Stock),
or, in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in
which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding
shares of Common Stock), or, in the case of any sale or conveyance to another corporation or entity of the assets or other property of
the Company as an entirety or substantially as an entirety, in connection with which the Company is dissolved, the Registered Holders
shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and
in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights
represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Registered Holder would have
received if such Registered Holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification
also results in a change in shares of Common Stock covered by Sections 4.1 or 4.2, then such adjustment shall be made pursuant to Sections
4.1, 4.2, 4.3 and Section 4.4. The provisions of this Section 4.5 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
4.6 Notices of Changes
in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall
give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase
or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections
4.1 – 4.5 the Company shall give written notice to each Registered Holder, at the last address set forth for such Registered
Holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such event.
4.7 Form of
Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants
issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially
issued pursuant to this Warrant Agreement. However, the Company may, at any time, in its sole discretion, make any change in the
form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter
issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so
changed.
4.8 Notice of Certain Transactions.
In the event that the Company shall (a) offer to holders of all its shares of Common Stock rights to subscribe for or to purchase any
securities convertible into shares of Common Stock or shares of stock of any class or any other securities, rights or options, (b) issue
any rights, options or Warrants entitling all the holders of shares of Common Stock to subscribe for shares of Common Stock, or (c) make
a tender offer, redemption offer or exchange offer with respect to the shares of Common Stock, the Company shall send to the Registered
Holders a notice of such action or offer. Such notice shall be mailed to the Registered Holders at their addresses as they appear in the
Warrant Register, which shall specify the record date for the purposes of such dividend, distribution or rights, or the date such issuance
or event is to take place and the date of participation therein by the holders of shares of Common Stock, if any such date is to be fixed,
and shall briefly indicate the effect of such action on the shares of Common Stock and on the number and kind of any other shares of stock
and on other property, if any, and the number of shares of Common Stock and other property, if any, issuable upon exercise of each Warrant
and the Warrant Price after giving effect to any adjustment pursuant to this Section 4 which would be required as a result of such
action. Such notice shall be given as promptly as practicable after the Company has taken any such action.
5. Transfer and Exchange of Warrants.
5.1 Transfer of Warrants.
Prior to the Detachment Date, the Warrants may be transferred or exchanged only together with the Unit in which such Warrant is included,
and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit. Furthermore, each transfer of a Unit
on the register relating to such Units shall operate also to transfer the Warrants included in such Unit. From and after the Detachment
Date, this Section 5.1 will have no further force and effect.
5.2 Registration of Transfer.
The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant into the Warrant Register, upon surrender
of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer.
Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be
cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon
the Company’s request.
5.3 Procedure for Surrender
of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and, thereupon,
the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the Registered Holder of the Warrants so surrendered,
representing an equal aggregate number of Warrants; provided, however, that, in the event a Warrant surrendered for transfer bears a restrictive
legend, the Warrant Agent shall not cancel such Warrant and shall issue new Warrants in exchange therefor until the Warrant Agent has
received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also
bear a restrictive legend.
5.4 Fractional Warrants.
The Warrant Agent shall not be required to effect any registration of transfer or exchange that will result in the issuance of a Warrant
certificate for a fraction of a Warrant.
5.5 Service Charges.
No service charge shall be made for any exchange or registration of transfer of Warrants.
5.6 Warrant Execution and
Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Warrant
Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required
by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption. Subject
to the second sentence of this Section 6.1, all (and not less than all) of the outstanding Warrants may be redeemed, in whole and
not in part, at the option of the Company, at any time from and after the Warrants become exercisable, and prior to their expiration,
at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $0.01 per Warrant (“Redemption
Price”); provided that the last sales price of the Common Stock has been equal to or greater than $16.00 per share (subject
to adjustment for splits, dividends, recapitalizations and other similar events), for any twenty (20) trading days within a thirty (30)
trading day period ending on the third business day prior to the date on which notice of redemption is given and provided further that
there is a current registration statement in effect with respect to the shares of Common Stock underlying the Warrants for each day in
the aforementioned 30-day trading period and continuing each day thereafter until the Redemption Date (defined below). For avoidance of
doubt, if and when the Warrants become redeemable by the Company under this Section 6.1, the Company may exercise its redemption
right, even if it is unable to register or qualify the Warrant Shares for sale under all applicable state securities laws.
6.2 Date Fixed for, and
Notice of, Redemption. In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption
(the “Redemption Date”). Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company
not less than 30 days prior to the date fixed for redemption to the Registered Holders of the Warrants to be redeemed at their last addresses
as they shall appear on the Warrant Register. Any notice mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the Registered Holder received such notice.
6.3 Exercise After Notice
of Redemption. The Warrants may be exercised in accordance with Section 3 of this Warrant Agreement at any time after notice
of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the Redemption Date; provided that
the Company may require the Registered Holder who desires to exercise the Warrant to elect cashless exercise as set forth under Section
3.3.2, and such Registered Holder must exercise the Warrants on a cashless basis if the Company so requires. On and after the Redemption
Date, the Registered Holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption
Price.
6.4 No Other Rights to
Cash Payment. Except for a redemption in accordance with this Section 6, no Registered Holder of any Warrant shall be entitled
to any cash payment whatsoever from the Company in connection with the ownership, exercise or surrender of any Warrant under this Warrant
Agreement.
7. Other Provisions Relating to Rights of Registered
Holders of Warrants.
7.1 No Rights as Stockholder.
A Warrant does not entitle the Registered Holder thereof to any of the rights of a stockholder of the Company, including, without limitation,
the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders
in respect of the meetings of stockholders or the election of directors of the Company or any other matter.
7.2 Lost, Stolen Mutilated
or Destroyed Warrants. If any Warrant is lost, stolen, mutilated or destroyed, the Company and the Warrant Agent may, on such terms
as to indemnity or otherwise as they may in their discretion impose (which terms shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination, tenor and date as the Warrant so lost, stolen, mutilated or destroyed. Any
such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
7.3 Reservation of shares
of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Warrant Agreement.
7.4 Registration of shares
of Common Stock. The Company agrees it shall use its best efforts to maintain with the SEC an effective registration statement for
the registration under the Act of the shares of Common Stock issuable upon exercise of the Warrants, and a current prospectus relating
thereto, until the expiration of the Warrants in accordance with the provisions of this Warrant Agreement. In addition, the Company agrees
to use its best efforts to register the shares of Common Stock issuable upon exercise of the Warrants under state blue sky laws, to the
extent an exemption is not available.
8. Concerning the Warrant Agent and Other Matters.
8.1 Payment of Taxes.
The Company will, from time to time, promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect
of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any
transfer taxes in respect of the Warrants or such shares.
8.2 Resignation, Consolidation,
or Merger of Warrant Agent.
8.2.1 Appointment of Successor
Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further
duties and liabilities hereunder after giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent
becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint, in writing, a successor Warrant Agent in place
of the Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing
of such resignation or incapacity by the Warrant Agent or by the Registered Holder of the Warrant (who shall, with such notice, submit
his, her or its Warrant for inspection by the Company), then the Registered Holder of any Warrant may apply to the Supreme Court of the
State of New York for the County of New York for the appointment of a successor Warrant Agent. Any successor Warrant Agent, whether appointed
by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing
and having its principal office in the Borough of Manhattan, City and State of New York, and be authorized under such laws to exercise
corporate trust powers and subject to supervision or examination by federal or state authorities. After appointment, any successor Warrant
Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with
like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but, if for any reason it becomes necessary
or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to
such successor Warrant Agent all the authority, powers, and rights of such predecessor Warrant Agent hereunder; and, upon request of any
successor Warrant Agent, the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and
effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties and obligations.
8.2.2 Notice of Successor
Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor
Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.
8.2.3 Merger or Consolidation
of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation
resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this
Warrant Agreement without any further act on the part of the Company or the Warrant Agent.
8.3 Fees and Expenses of
Warrant Agent.
8.3.1 Remuneration. The
Company agrees to pay the Warrant Agent reasonable remuneration for its services as Warrant Agent hereunder and will reimburse the Warrant
Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.
8.3.2 Further Assurances.
The Company agrees to perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and delivered, all such
further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing
of the provisions of this Warrant Agreement.
8.4 Liability of Warrant
Agent.
8.4.1 Reliance on
Company Statement. Whenever, in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a statement signed by the Chief Executive Officer, Chief Financial Officer or Chairman of the
Board of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or
suffered in good faith by it pursuant to the provisions of this Warrant Agreement.
8.4.2 Indemnity. The
Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify
the Warrant Agent and hold it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything
done or omitted by the Warrant Agent in the execution of this Warrant Agreement, except as a result of the Warrant Agent’s gross
negligence, willful misconduct or bad faith.
8.4.3 Exclusions. The
Warrant Agent shall have no responsibility with respect to the validity of this Warrant Agreement or with respect to the validity or execution
of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition
contained in this Warrant Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions
of Section 4 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment; nor shall it, by any act hereunder, be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Warrant Agreement or any Warrant or
as to whether any shares of Common Stock will when issued be valid and fully paid and non-assessable.
8.5 Acceptance of Agency.
The Warrant Agent hereby accepts the agency established by this Warrant Agreement and agrees to perform the same upon the terms and conditions
herein set forth and, among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account
for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s Common Stock through
the exercise of Warrants.
8.6 Waiver. The Warrant
Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”) in or to
any distribution of the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of the date hereof,
by and between the Company and the Warrant Agent as trustee thereunder) and hereby agrees not to seek recourse, reimbursement, payment
or satisfaction for any Claim against the Trust Account for any reason whatsoever.
9. Miscellaneous Provisions.
9.1 Successors. All
the covenants and provisions of this Warrant Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns.
9.2 Notices. Any notice,
statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the Registered Holder of any Warrant
to or on the Company shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until
another address is filed in writing by the Company with the Warrant Agent) as follows:
Chardan NexTech Acquisition 2 Corp.
17 State Street, 21st Floor,
New York, NY 10004
with a copy (which shall not constitute notice) to:
Reed Smith LLP
599 Lexington Avenue
New York, New York 10022
Attn: Ari Edelman, Esq.
Any notice, statement or demand authorized by
this Warrant Agreement to be given or made by the Registered Holder of any Warrant or by the Company to or on the Warrant Agent shall
be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Any notice, sent pursuant to this Warrant Agreement
shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent by overnight courier, on
the next business day of the delivery to the courier, and if sent by registered or certified mail on the third day after registration
or certification thereof.
9.3 Applicable Law and
Exclusive Forum.
9.3.1 The validity, interpretation,
and performance of this Warrant Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York,
without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.
The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Warrant Agreement,
including under the Securities Act, shall be brought and enforced in the courts of the State of New York or the United States District
Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive forum
for any such action, proceeding or claim. The Company hereby waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Notwithstanding the foregoing, the provisions of this paragraph will not apply to suits brought to enforce
any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America
are the sole and exclusive forum.
9.3.2 Any person or entity purchasing
or otherwise acquiring any interest in the Warrants shall be deemed to have notice of and to have consented to the forum provisions in
this Section 9.3. If any action, the subject matter of which is within the scope the forum provisions above, is filed in a
court other than a court located within the State of New York or the United States District Court for the Southern District of New York
(a “foreign action”) in the name of any Warrant holder, such Warrant holder shall be deemed to have consented to: (x)
the personal jurisdiction of the state and federal courts located within the State of New York or the United States District
Court for the Southern District of New York in connection with any action brought in any such court to enforce the forum provisions (an
“enforcement action”), and (y) having service of process made upon such Warrant holder in any such enforcement action
by service upon such Warrant holder’s counsel in the foreign action as agent for such Warrant holder.
Any such process or summons
to be served upon the Company or the Warrant Agent may be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the party receiving such service in any action, proceeding, or claim.
9.4 Persons Having Rights
under this Warrant Agreement. Nothing in this Warrant Agreement expressed and nothing that may be implied from any of the provisions
hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the
Registered Holders of the Warrants and, for the purposes of Sections 2.5 hereof, the Representative and the underwriters, any right,
remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.
All covenants, conditions, stipulations, promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive
benefit of the parties hereto and their successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination of the
Warrant Agreement. A copy of this Warrant Agreement shall be available at all reasonable times at the office of the Warrant Agent
in the Borough of Manhattan, City and State of New York, for inspection by the Registered Holder of any Warrant. The Warrant Agent may
require any such Registered Holder to submit his, her or its Warrant for inspection.
9.6 Counterparts- Facsimile
Signatures. This Warrant Agreement may be executed in any number of counterparts, and each of such counterparts shall, for all purposes,
be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Facsimile signatures shall
constitute original signatures for all purposes of this Warrant Agreement.
9.7 Effect of Headings.
The section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation
thereof.
9.8 Amendments. This
Warrant Agreement and any Warrant certificate may be amended by the parties hereto by executing a supplemental warrant agreement, without
the consent of any of the Warrant holders, for the purpose of (i) curing any ambiguity, or curing, correcting or supplementing any defective
provision contained herein, or making any other provisions with respect to matters or questions arising under this Warrant Agreement that
is not inconsistent with the provisions of this Warrant Agreement or the Warrant certificates, (ii) evidencing the succession of another
corporation to the Company and the assumption by any such successor of the covenants of the Company contained in this Warrant Agreement
and the Warrants, (iii) evidencing and providing for the acceptance of appointment by a successor Warrant Agent with respect to the Warrants,
(iv) adding to the covenants of the Company for the benefit of the Registered Holders or surrendering any right or power conferred upon
the Company under this Warrant Agreement, or (v) amending this Warrant Agreement and the Warrants in any manner that the Company may deem
to be necessary or desirable and that will not adversely affect the interests of the Registered Holders in any material respect. All other
modifications or amendments to this Warrant Agreement, including any amendment to increase the Warrant Price or shorten the Exercise Period,
shall require the written consent of the Registered Holders of a majority of the then outstanding Public Warrants, and with respect to
any amendment to the terms of only the Private Warrants, shall require the vote or written consent of the registered Holders of a majority
of the then outstanding Private Warrants, as applicable. Notwithstanding the foregoing, the Company may extend the duration of the Exercise
Period in accordance with Section 3.2 without such consent.
9.9 Severability. This
Warrant Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the
validity or enforceability of this Warrant Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Warrant Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this Warrant Agreement has
been duly executed by the parties hereto as of the day and year first above written.
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CHARDAN NEXTECH ACQUISITION 2 CORP.
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By:
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Name:
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Jonas Grossman
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Title:
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President and Chief Executive Officer
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CONTINENTAL STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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[Signature Page to Warrant Agreement]
