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As filed with the Securities and Exchange Commission on April 1, 2021

Registration No. 333-252712

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

APEX TECHNOLOGY ACQUISITION CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware    6770    83-4461709

(State or other jurisdiction of

incorporation or organization)

  

(Primary Standard Industrial

Classification Code Number)

  

(I.R.S. Employer

Identification Number)

533 Airport Blvd

Suite 400

Burlingame, CA 94010

(619) 736-6855

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Apex Technology Acquisition Corporation

533 Airport Blvd

Suite 400

Burlingame, CA 94010

(619) 736-6855

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Joshua M. Dubofsky

Brian D. Paulson

Latham & Watkins LLP

140 Scott Drive

Menlo Park, CA 94025

(650) 328-4600

 

John T. McKenna

Brian F. Leaf

David I. Silverman

Cooley LLP

3175 Hanover Street

Palo Alto, CA 94304

(650) 843-5000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Business Combination Agreement to consummate the proposed merger are satisfied or waived.

If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, 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, 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, a smaller reporting company, or emerging growth 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.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

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.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

 

    Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

  

    Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

  

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered(1)

 

Proposed

maximum

offering price

per share

 

Proposed

maximum

aggregate

offering price(2)

 

Amount of

registration fee(3)

Common Stock, par value $0.0001 per share

  162,267,638   N/A   $6,782.00   $0.74(4)

 

 

(1)

Based on the maximum number of common stock, par value $0.0001 per share (“Apex Common Stock”), of the registrant (“Apex”) estimated to be issued in connection with the mergers described herein (the “Mergers”). This number is based on 162,267,638 shares of Apex Common Stock, the maximum potential number of shares issuable as Merger consideration.

(2)

Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended (the “Securities Act”). AvePoint, Inc., a Delaware corporation (“AvePoint”) is a private company, no market exists for its securities, and AvePoint has an accumulated deficit. Therefore, the proposed maximum aggregate offering price is one-third of the aggregate par value of the AvePoint securities expected to be exchanged in the Merger, including AvePoint securities issuable upon the exercise of options.

(3)

Calculated pursuant to Rule 457 of the Securities Act by calculating the product of (i) the proposed maximum aggregate offering price and (ii) 0.0001091.

(4)

Paid with the initial filing of this registration statement.

 

 

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, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective.

 

PRELIMINARY PROXY STATEMENT AND PROSPECTUS

SUBJECT TO COMPLETION, DATED APRIL 1, 2021

APEX TECHNOLOGY

ACQUISITION CORPORATION

533 Airport Blvd

Suite 400

Burlingame, CA 94010

 

 

Dear Apex Technology Acquisition Corporation Stockholders:

Apex Technology Acquisition Corporation, a Delaware corporation (“Apex”), Athena Technology Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Apex (“Merger Sub 1”), Athena Technology Merger Sub 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Apex (“Merger Sub 2” and, together with Merger Sub 1, “Merger Subs” and each, a “Merger Sub”), and AvePoint, Inc., a Delaware corporation (“AvePoint”), have entered into a Business Combination Agreement and Plan of Reorganization, dated as of November 23, 2020, as amended on December 30, 2020 and March 8, 2021 (the “Business Combination Agreement”) pursuant to which Merger Sub 1 will be merged with and into AvePoint (the “First Merger”), with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex, and promptly following the First Merger, AvePoint will be merged with and into Merger Sub 2 (the “Second Merger,” together with the First Merger, the “Mergers” and, collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”), with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of Apex (the “Combined Company”). At the closing of the Business Combination, based on AvePoint’s capitalization table as of February 23, 2021, the aggregate consideration to be paid to AvePoint’s equityholders will be (i) an amount in cash of approximately $262 million, assuming AvePoint stockholders elect to receive the maximum cash consideration, subject to a deduction for fees and (ii) 143,261,093 shares of Apex’s common stock, which includes shares of Apex common stock that may be issuable pursuant to the exercise of exchanged AvePoint stock options (calculated using the treasury stock method, subject to an adjustment for an additional number of shares of Apex common stock if AvePoint’s stockholders elect to receive less than the maximum cash consideration of approximately $262 million or if there is not sufficient available cash to pay such maximum cash consideration). Apex determined the composition and structure of the aggregate consideration to be paid to AvePoint’s equityholders after due and careful consideration of AvePoint’s liquidity needs, transaction fees, and liquidation preferences for existing AvePoint equityholders.

The maximum cash consideration payable will remain consistent even in a scenario in which Apex’s Public Stockholders exercise their maximum redemption rights with respect to their Apex shares. Pro forma for the transaction, the Combined Company will have sufficient balance sheet cash if Apex’s Public Stockholders redeem up to the maximum amount possible while still satisfying the $300 million minimum cash proceeds condition in the Business Combination Agreement, Apex will have sufficient remaining funds to be able to satisfy the maximum amount of cash consideration payable to AvePoint equityholders of approximately $262 million. See the section titled “Questions and Answers about the Business Combination — What consideration will AvePoint equityholders receive upon consummation of the Business Combination?” on page xviii of the attached proxy statement/prospectus for examples of the indicative quantum of cash and Apex common stock shares an AvePoint equityholder could receive per share based on such equityholder’s cash election percentage (up to approximately 12.678% of total consideration).

Upon consummation of the Business Combination, each share of AvePoint’s common stock, convertible preferred stock, and preferred stock will be converted into approximately 8.6851 shares of Apex common stock based on the determined exchange ratio described in the Business Combination Agreement. See pages 2 and 3 of the section titled “Summary of the Proxy Statement/Prospectus —The Business Combination – The Business Combination Agreement” of the attached proxy statement/prospectus for further information on the amount of cash and Apex shares an AvePoint stockholder could receive.

On November 23, 2020, Apex executed subscription agreements with certain investors for the sale of an aggregate of 14,000,000 shares of Apex’s common stock in a private placement transaction at a purchase price of $10.00 per share for gross aggregate proceeds of $140 million. The closing of the sale of these shares will occur concurrently with the consummation of the Business Combination. See the section titled “The Business Combination” on page 96 of the attached proxy statement/prospectus for further information on the consideration being paid to the stockholders of AvePoint and the private placement transaction.

Apex’s units, Class A common stock and warrants are currently listed on the Nasdaq Capital Market under the symbols “APXTU,” “APXT,” and “APXTW,” respectively. Apex has applied to list the shares of common stock and the warrants of the Combined Company on the Nasdaq Capital Market under the symbols “AVPT” and “AVPTW,” respectively, upon the closing of the Business Combination. At the closing of the Business Combination, each Apex Unit will be separated into its components, which consists of one share of Class A common stock and one-half of one warrant, and such units will no longer exist. Upon closing, Apex intends to change its name from “Apex Technology Acquisition Corporation” to “AvePoint, Inc.”.

Apex is holding a special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Apex special meeting of stockholders, which will be held on                      , 2021, at 10:00 a.m., Eastern time, via live webcast at the following address:                     , unless postponed or adjourned to a later date, Apex will ask its stockholders to adopt the Business Combination Agreement, thereby approving the Business Combination, and approve the other proposals described in this proxy statement/prospectus.

After careful consideration, Apex’s board of directors has unanimously approved the Business Combination Agreement and the other proposals described in this proxy statement/prospectus, and Apex’s board of directors has determined that it is advisable to consummate the Business Combination. The board of directors of Apex recommends that its stockholders vote “FOR” the proposals described in this proxy statement/prospectus.

 

 

More information about Apex, AvePoint and the Business Combination is contained in this proxy statement/prospectus. Apex and AvePoint urge you to read the accompanying proxy statement/prospectus, including the financial statements and annexes and other documents referred to herein, carefully and in their entirety. IN PARTICULAR, YOU SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISK FACTORS” BEGINNING ON PAGE 24 OF THIS PROXY STATEMENT/ PROSPECTUS.

On behalf of our board of directors, I thank you for your support and look forward to the successful completion of the Business Combination.

 

Sincerely,
Jeff Epstein
Co-Chief Executive Officer

            , 2021

The accompanying proxy statement/prospectus is dated                     , 2021 and is first being mailed to the stockholders of Apex on or about that date.

Your vote is very important. Whether or not you plan to attend the special meeting of Apex stockholders online, please submit your proxy by completing, signing, dating, and mailing the enclosed proxy card in the pre-addressed postage paid envelope or by using the telephone or Internet procedures provided to you by your broker or bank. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares or, if you wish to attend the special meeting of Apex stockholders and vote online, you must obtain a proxy from your broker or bank.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE BUSINESS COMBINATION DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, OR PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION.


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APEX TECHNOLOGY

ACQUISITION CORPORATION

533 Airport Blvd

Suite 400

Burlingame, CA 94010

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON    , 2021

To the Stockholders of Apex Technology Acquisition Corporation:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “special meeting”) of Apex Technology Acquisition Corporation, a Delaware corporation (“Apex,” “we,” “our” or “us”), will be held on                     , 2021, at 10:00 a.m., Eastern time, via live webcast at the following address:                     . You are cordially invited to attend the special meeting for the following purposes:

 

   

The “Business Combination Proposal” — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement, dated as of November 23, 2020, as amended on December 30, 2020 and March 8, 2021 (as may be further amended from time to time, the “Business Combination Agreement”), by and among Apex, AvePoint, Inc., a Delaware corporation (“AvePoint”), Athena Technology Merger Sub, Inc., a Delaware corporation (“Merger Sub 1”), and Athena Technology Merger Sub 2, LLC, a Delaware limited liability company (“Merger Sub 2” and, together with Merger Sub 1, “Merger Subs” and each, a “Merger Sub”) and the transactions contemplated thereby, pursuant to which Apex will issue shares of common stock of Apex, par value $0.0001 per share (“Apex Common Stock”) to holders of common stock of AvePoint, par value $0.001 per share (“AvePoint Common Stock”) and holders of preferred stock of AvePoint, par value $0.001 per share (“AvePoint Preferred Stock”), and Merger Sub 1 will be merged with and into AvePoint (the “First Merger”), with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex, and promptly following the First Merger, AvePoint will be merged with and into Merger Sub 2 (the “Second Merger,” together with the First Merger, the “Mergers” and, collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”), with Merger Sub 2 surviving the Business Combination as a wholly-owned subsidiary of Apex (the “Combined Company”).

 

   

The “Charter Proposals” — To consider and vote upon a proposal to amend Apex’s amended and restated certificate of incorporation (the “Existing Certificate of Incorporation”). The proposed amendments detailed below will be voted on separately and are collectively referred to as the “Charter Proposals.”

 

   

Name Change Charter Amendment — To change Apex’s name to “AvePoint, Inc.”;

 

   

Authorized Share Charter Amendment — To increase the number of authorized shares of our common stock and “blank check” preferred stock;

 

   

Actions by Stockholders Charter Amendment — To require that stockholders only act at annual and special meeting of the corporation and not by written consent;

 

   

Corporate Opportunity Charter Amendment — To eliminate the current limitations in place on the corporate opportunity doctrine;

 

   

Voting Thresholds Charter Amendment — To increase the required vote thresholds for stockholders approving amendments to the certificate of incorporation and bylaws to 66 2/3%; and

 

   

Additional Charter Amendment — To approve all other changes, including eliminating certain provisions related to special purpose acquisition corporations that will no longer be relevant following the consummation of the Business Combination (the “Closing”).

 

   

The “Incentive Plan Proposal”— To consider and vote upon a proposal to approve the AvePoint, Inc. 2021 Equity Incentive Plan (the “2021 Plan”), to assist the Combined Company in securing and retaining the services of employees, directors and consultants, to provide incentives for such persons to


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exert maximum efforts for the success of the Combined Company and its affiliates and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the common stock of the Combined Company through the granting of awards under the 2021 Plan.

 

   

The “ESPP Proposal”— To consider and vote upon a proposal to approve the AvePoint, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”), to assist the Combined Company in aligning the long-term financial interests of its employees with the financial interests of its stockholders, as well as attracting, retaining and motivating employees and encouraging them to devote their best efforts to the Combined Company’s business and financial success.

 

   

The “Nasdaq Proposals”— To consider and vote upon proposals to (a) issue Apex Common Stock to AvePoint’s equityholders in connection with the Mergers pursuant to the Business Combination Agreement, and (b) issue Apex Common Stock to the investors in the PIPE (as defined herein).

 

   

The “Adjournment Proposal”— A proposal to adjourn the special meeting of Apex’s stockholders to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote at such special meeting.

Only holders of record of Apex Capital Stock (as defined herein) at the close of business on                      , 2021 (the “Record Date”) are entitled to notice of and to vote at the special meeting and any adjournments or postponements of the special meeting.

In light of the ongoing health concerns relating to the COVID-19 pandemic and to best protect the health and welfare of Apex’s stockholders and personnel, the special meeting will be held completely virtually, conducted only via webcast at the following address:              . There will be no physical meeting location. Stockholders are nevertheless urged to submit their proxies by completing, signing, dating, and returning the enclosed proxy card in the accompanying pre-addressed postage paid envelope.

Pursuant to the Existing Certificate of Incorporation, Apex is providing the holders of shares of Apex Class A Common Stock originally sold as part of the units issued in our initial public offering (the “IPO,” such shares, the “Public Shares,” and such holders, the “Public Stockholders”) with the opportunity to redeem, upon the Closing, the Public Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit as of two business days prior to the Closing, in the trust account (the “Trust Account”) that holds the proceeds (including interest not previously released to Apex to pay its income taxes or any other taxes payable) from the IPO. For illustrative purposes, based on the fair value of cash and marketable securities held in the Trust Account as of December 31, 2020 of approximately $351.9 million, the estimated per share redemption price would have been approximately $10.05. Public stockholders may elect to redeem their shares whether or not they are holders as of the Record Date and whether or not they vote for the Business Combination Proposal. Holders of Apex’s outstanding warrants sold in the IPO, which are exercisable for shares of Apex Common Stock under certain circumstances, do not have redemption rights in connection with the Business Combination. Apex Technology Sponsor LLC, as the initial stockholder of Apex (the “Sponsor”) has agreed to waive its redemption rights in connection with the Closing with respect to its shares, and the Sponsor’s shares will be excluded from the pro rata calculation used to determine the per share redemption price. As of the Record Date, the Sponsor owned approximately         % of outstanding Apex Capital Stock.

Apex may not consummate the Business Combination unless the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals are approved at the special meeting, each of which is conditioned upon all such proposals having been approved at the special meeting. The approval of the Charter Proposals requires the affirmative vote (virtually in person or by proxy) of holders of (i) a majority of the outstanding shares of Apex Capital Stock, voting together as a single class and (ii) a majority of the outstanding shares of Apex Class B Common Stock voting separately as a single class. The approval of each of the Business Combination Proposal, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals requires the affirmative vote (virtually in person or by proxy) of the holders of a majority of the shares of Apex Capital Stock that are voted at the special meeting of stockholders. The Sponsor owns all of


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the outstanding shares of Apex Class B Common Stock and has agreed to vote all shares of Apex Capital Stock owned by it, including the Apex Class B Common Stock, in favor of the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals. The Adjournment Proposal is not conditioned on the approval of any other Stockholder Proposal (as defined herein) set forth in the accompanying proxy statement/prospectus.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the financial statements and annexes attached thereto) for a more complete description of the proposed Business Combination and related transactions and each of our proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call our proxy solicitor, MacKenzie Partners, Inc., at (800) 322-2885.

 

By Order of the Board of Directors,
Jeff Epstein
Co-Chief Executive Officer

                    , 2021

 


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TABLE OF CONTENTS

 

     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     iii  

CERTAIN DEFINED TERMS

     iv  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

     xi  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     1  

SELECTED HISTORICAL FINANCIAL INFORMATION OF AVEPOINT

     16  

SELECTED HISTORICAL FINANCIAL INFORMATION OF APEX

     18  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     19  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     21  

RISK FACTORS

     24  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     76  

COMPARATIVE SHARE INFORMATION

     87  

CAPITALIZATION

     89  

THE SPECIAL MEETING OF APEX STOCKHOLDERS

     90  

PROPOSALS TO BE CONSIDERED BY APEX’S STOCKHOLDERS

     96  

PROPOSAL NO. 1 — THE BUSINESS COMBINATION PROPOSAL

     96  

THE BUSINESS COMBINATION

     96  

THE BUSINESS COMBINATION AGREEMENT

     106  

CERTAIN AGREEMENTS RELATED TO THE BUSINESS COMBINATION

     121  

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE REDEMPTION RIGHTS

     123  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS

     129  

PROPOSAL NO. 2 — THE CHARTER PROPOSALS

     133  

PROPOSAL NO. 3 — THE INCENTIVE PLAN PROPOSAL

     140  

PROPOSAL NO. 4 — THE ESPP PROPOSAL

     149  

PROPOSAL NO. 5 — THE NASDAQ PROPOSALS

     154  

PROPOSAL NO. 6 — THE ADJOURNMENT PROPOSAL

     156  

INFORMATION ABOUT AVEPOINT

     157  

AVEPOINT’S EXECUTIVE COMPENSATION

     188  

AVEPOINT MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     200  

INFORMATION ABOUT APEX

     225  

APEX MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     235  

 

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     Page  

CERTAIN APEX RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     244  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     247  

DESCRIPTION OF APEX’S SECURITIES

     253  

SHARES ELIGIBLE FOR FUTURE SALE

     261  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     263  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     268  

ADDITIONAL INFORMATION

     269  

WHERE YOU CAN FIND MORE INFORMATION

     271  

TRADEMARK NOTICE

     271  

INDEX TO FINANCIAL STATEMENTS

     F-1  

Annex A - Business Combination Agreement

     A-1  

Annex A-1 - Amendment No. 1 to the Business Combination Agreement

     A-1-1  

Annex A-2 - Amendment No. 2 to the Business Combination Agreement

     A-2-1  

Annex B - Amended and Restated Certificate of Incorporation of the Combined Company

     B-1  

Annex C - Form of Avepoint 2021 Equity Incentive Plan

     C-1  

Annex D - Form of Avepoint 2021 Employee Stock Purchase Plan

     D-1  

 

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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form S-4 filed with the SEC, by Apex (File No. 333-252712) (the “Registration Statement”), constitutes a prospectus of Apex under Section 5 of the Securities Act, with respect to the shares of Apex Common Stock to be issued if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement/prospectus under Section 14(a) of the Exchange Act with respect to the special meeting of Apex stockholders at which Apex stockholders will be asked to consider and vote upon a proposal to approve the Business Combination by the approval and adoption of the Business Combination Agreement, among other matters.

 

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CERTAIN DEFINED TERMS

In this document:

“Adjournment Proposal” means a proposal to adjourn the special meeting of the stockholders of Apex to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote at such special meeting.

“Aggregate Cash Amount” means the sum of (a) the Baseline Cash Amount and (b) the Aggregate Option Exercise Price.

“Aggregate Cash Consideration” means the sum of (a) (i) the AvePoint Preferred Stock Cash Amount, minus (ii) the Preferred PIPE Fees (as defined in the Business Combination Agreement) plus (b) the Available Named Executive Cash Amount (as defined in the Business Combination Agreement) plus (c) (i) the Final Cash Election Consideration (as defined herein), minus (ii) the Common Stockholder PIPE Fees (as defined in the Business Combination Agreement).

“Aggregate Cash Election Amount” means the aggregate amount of cash consideration elected by all electing AvePoint stockholders, prior to any adjustment.

“Aggregate Option Exercise Price” means the aggregate exercise price of all AvePoint Options.

“Aggregate Preferred Stock Consideration” means a number of shares of Apex Common Stock equal to (a) an amount equal to (i) the AvePoint Preferred Stock Converted Shares multiplied by the Per Share Amount, minus (ii) the AvePoint Preferred Stock Cash Amount, divided by (b) $10.00.

“Aggregate Option Consideration” means a number of shares of Apex Common Stock equal to (a) (i) Per Share Amount, divided by (ii) $10.00, multiplied by (b) the number of shares of AvePoint Common Stock issuable upon exercise of all AvePoint Options (other than Named Executive Cash-Settled Options).

“Aggregate Stock Consideration” means a number of shares of Apex Common Stock equal to (a) the Aggregate Preferred Stock Consideration, plus (b) an amount equal to (i) the Named Executive Stock-Settled Shares (as defined in the Business Combination Agreement) multiplied by the Per Share Amount, divided by (ii) $10.00 plus (c) the Final Stock Election Consideration (as defined herein).

“Apex” means Apex Technology Acquisition Corporation, a Delaware corporation.

“Apex Capital Stock” means, collectively, Apex Class A Common Stock and Apex Class B Common Stock.

“Apex Class A Common Stock” means Apex’s Class A common stock, par value $0.0001 per share, prior to the filing of the Amended and Restated Apex Certificate of Incorporation (as defined in the Business Combination Agreement).

“Apex Class B Common Stock” means Apex’s Class B common stock, par value $0.0001 per share, prior to the filing of the Amended and Restated Apex Certificate of Incorporation.

“Apex Common Stock” means Apex’s common stock, par value $0.0001 per share, after the filing of the Amended and Restated Apex Certificate of Incorporation.

“Apex Initial Stockholder” means the Sponsor.

“Apex Transaction Expenses” means the following out-of-pocket fees and expenses paid or payable by Apex or its affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the transactions contemplated by the Business Combination Agreement:

 

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(i) all reasonable and documented fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers other than any Ineligible Apex IPO Underwriting Fees (as defined in the Business Combination Agreement), (ii) Apex’s allocated shares of the fees and expenses as set forth in Section 7.01(a), Section 7.12 and Section 7.13 of the Business Combination Agreement in connection with the transactions contemplated thereby and (iii) repayment of any Working Capital Loans (as defined in the Business Combination Agreement), in each case of clauses (i) through (iii) solely to the extent such fees and expenses are incurred and unpaid as of 11:59 p.m. (New York time) on the day immediately preceding the Closing Date.

“Apex Unit” means one share of Apex Class A Common Stock and one half of an Apex Warrant.

“Apex Warrant Agreement” means that certain warrant agreement, dated September 16, 2019, by and between Apex and Continental Stock Transfer & Trust Company.

“Apex Warrants” means whole warrants to purchase shares of Apex Class A Common Stock as contemplated under the Apex Warrant Agreement, with each whole warrant exercisable for one share of Apex Class A Common Stock at an exercise price of $11.50.

“Available Apex Cash” means the total cash and cash equivalents of Apex at the Effective Time, including (a)(i) the funds remaining in the Trust Account, plus (ii) the proceeds under the Subscription Agreements (as further described herein) entered into as of the date of the Business Combination Agreement (as amended in accordance with the Business Combination Agreement) and any additional Subscription Agreements entered into after such date in accordance with the Business Combination Agreement, plus (iii) the proceeds with respect to any Additional Equity Amount (as defined in the Business Combination Agreement) actually purchased in accordance with the Business Combination Agreement, minus (b) the sum of (i) the amount required to satisfy the Redemption Rights (as defined in the Business Combination Agreement) plus (ii) any taxes due on any accrued interest on the Trust Account, plus (iii) any unpaid AvePoint Transaction Expenses.

“Available AvePoint Common Stock Cash Amount means (a) the AvePoint Common Stock Cash Amount, minus (b) the AvePoint Common Stock Cash Cutback.

“AvePoint” means AvePoint, Inc., a Delaware corporation.

“AvePoint Certificate of Incorporation” means the Third Amended and Restated Certificate of Incorporation of the Company dated December 26, 2019, as amended by the Certificate of Amendment thereto dated November 23, 2020.

“AvePoint Common Stock” means AvePoint’s common stock, par value $0.001 per share.

“AvePoint Common Stock Cash Amount” means $94,500,000.

“AvePoint Common Stock Cash Cutback” means an amount in cash equal to (a) the Cash Consideration Shortfall Amount (as defined in the Business Combination Agreement), multiplied by (b) the quotient equal to (i) the AvePoint Common Stock Cash Amount, divided by (ii) the sum of (A) $35.0 million, plus (B) the AvePoint Common Stock Cash Amount, plus (C) $90.0 million rounded to the nearest dollar

“AvePoint Option” means all unexpired and unexercised options to purchase shares of AvePoint Common Stock, whether or not exercisable and whether or not vested, immediately prior to the Effective Time under either AvePoint Option Plan or otherwise.

“AvePoint Outstanding Shares” means the sum of (a) total number of shares of AvePoint Common Stock outstanding immediately prior to the Effective Time (including the Named Executive Shares (as defined in the

 

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Business Combination Agreement)), plus (b) the number of AvePoint Preferred Stock Converted Shares, plus (c) the number of shares of AvePoint Common Stock issuable upon the exercise of all AvePoint Options (other than Unvested Exchanged Options (as defined in the Business Combination Agreement) held by a holder of AvePoint Options who does not remain in continuous service to Apex or one of its subsidiaries as of the date of the applicable Contingent Milestone (as defined in the Business Combination Agreement)).

“AvePoint Preferred Stock” means the AvePoint Series C Preferred Stock.

“AvePoint Preferred Stock Cash Amount” means $135.0 million.

“AvePoint Preferred Stock Converted Shares” means the total number of shares of AvePoint Common Stock that would be issuable upon the conversion of the outstanding shares of AvePoint Preferred Stock immediately prior to the Effective Time.

“AvePoint Requisite Approval” means the affirmative vote of (i) the holders of at least a majority of the outstanding shares of AvePoint Common Stock and AvePoint Preferred Stock (on an as-converted basis), voting together as a single class and (ii) the holders of at least a majority of the outstanding AvePoint Series C Preferred Stock (on an as-converted basis), voting together as a single class.

“AvePoint Series C Preferred Stock” means the shares of the Preferred Stock of AvePoint, par value $0.001 per share, designated as Series C Preferred Stock in the AvePoint Certificate of Incorporation.

“AvePoint Transaction Expenses” means the following out-of-pocket fees and expenses paid or payable by AvePoint or its subsidiaries (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the transactions contemplated by the Business Combination Agreement: (i) all reasonable and documented fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers, (ii) change-in-control payments, transaction bonuses, retention payments, severance or similar compensatory payments payable by AvePoint or any of its subsidiaries to any current or former employee (including any amounts due under any consulting agreement with any such former employee), independent contractor, officer, or director of AvePoint or its subsidiaries as a result of the transactions contemplated by the Business Combination Agreement (and not tied to any subsequent event or condition such as a termination of employment), including the employer portion of payroll taxes arising therefrom, but in each case excluding any payments in respect of the Named Executive Cash-Settled Options (as defined in the Business Combination Agreement), (iii) AvePoint’s allocated share of the fees and expenses as set forth in Section 7.01(a), Section 7.12 and Section 7.13 of the Business Combination Agreement in connection with the transactions contemplated thereby and (iv) repayment of loans made to AvePoint by any affiliate of AvePoint (other than a wholly-owned subsidiary of AvePoint), in each case of clauses (i) through (iv) solely to the extent such fees and expenses are incurred and unpaid as of 11:59 p.m. (New York time) on the day immediately preceding the Closing Date.

“Balance Sheet Cash Amount” means $90,000,000.

“Baseline Cash Amount” means $261,026,922.09.

“Baseline Share Amount” means $1,433,660,775.

“Broker non-vote” means the failure of an Apex stockholder, who holds his or her shares in “street name” through a broker or other nominee, to give voting instructions to such broker or other nominee.

“Business Combination” means the transactions contemplated by the Business Combination Agreement.

“Business Combination Agreement” means the Business Combination Agreement and Plan of Reorganization, dated as of November 23, 2020, as amended on December 30, 2020 and March 8, 2021, and as may be further amended from time to time, by and among Apex, AvePoint and Merger Subs.

 

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“Business Combination Proposal” means the proposal to approve the adoption of the Business Combination Agreement and the Business Combination.

“Cash Consideration Shortfall Amount” means the amount, if any, by which (a) the sum of (i) the Company Preferred Stock Cash Amount plus (ii) the Named Executive Cash Amount plus (iii) the Aggregate Cash Election Amount plus (iv) the Balance Sheet Cash Amount, exceeds (b) the sum of (i) the Aggregate Available Cash (as defined in the Business Combination Agreement), plus (ii) the PIPE Fees (as defined in the Business Combination Agreement); provided that such amount shall be deemed to be zero if it is a negative number.

“Charter Proposals” means the proposal to consider and vote upon the amendments to the Existing Certificate of Incorporation in connection with the Business Combination.

“Cash Election Percentage” means the percentage of the Gross Merger Consideration that electing AvePoint stockholders other than certain AvePoint stockholders that agreed to a certain Election Percentage in the Stockholder Support Agreement elect to receive in cash.

“Citi” means Citigroup Global Markets Inc., financial advisor to AvePoint and a placement agent for the PIPE.

“Closing” means the consummation of the Business Combination.

“Closing Date” means the date on which the Closing occurs.

“Closing Price” means, for each Trading Day, the closing price (based on such Trading Day) of shares of Apex Common Stock on the Trading Market, as reported on Nasdaq.com.

“Code” means the Internal Revenue Code of 1986, as amended.

“Combined Company” means Apex, immediately upon consummation of the Business Combination.

“Combined Company Common Stock” means the Apex Common Stock, immediately upon consummation of the Business Combination.

“Combined Company Stockholders” means the holders of Apex Common Stock, immediately upon consummation of the Business Combination.

“Company Preferred Stock Cash Amount” means $135,000,000.

“DGCL” means the Delaware General Corporation Law.

“Effective Time” means the time of filing of a certificate of merger with the Secretary of State of the State of Delaware, in accordance with the relevant provisions of the DGCL and mutually agreed by the parties, or such later time as may be agreed by the parties and specified in such certificate of merger for consummation of the First Merger.

“ESPP Proposal” means the proposal to approve the adoption of the ESPP.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Exchange Ratio” means the following ratio (rounded to four decimal places): the quotient obtained by dividing (i) the Per Share Amount by (ii) $10.00.

“Evercore” means Evercore Inc., a placement agent for the PIPE.

“Fully Diluted Number” means the sum of (i) total number of shares of AvePoint Common Stock outstanding immediately prior to the Effective Time (including the Named Executive Shares) plus (ii) the number of shares of AvePoint Common Stock issuable upon the conversion of the AvePoint Preferred Stock Converted Shares that are outstanding immediately prior to the Effective Time, plus (iii) the number of shares of AvePoint Common Stock issuable upon exercise of all AvePoint Options that are outstanding immediately prior to the Effective Time.

 

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“GAAP” means United States generally accepted accounting principles.

“Goldman” means Goldman Sachs & Co. LLC, financial advisor to AvePoint and a placement agent for the PIPE.

“Gross Merger Consideration” means (a) the Baseline Share Amount, plus (b) the Aggregate Cash Amount.

“Incentive Plan Proposal” means the proposal to approve the adoption of the 2021 Plan.

“Initial Stockholder Units” means the 657,500 Apex Units initially purchased by the Apex Initial Stockholder in a private placement in connection with the IPO.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“IPO” means Apex’s initial public offering of units, consummated on September 19, 2019.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

“Mergers” means, collectively, the merger of Merger Sub 1 with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex, and promptly following such merger, the merger of AvePoint with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of Apex.

“Merger Sub 1” means Athena Technology Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Apex.

“Merger Sub 2” means Athena Technology Merger Sub 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Apex.

“Merger Sub Common Stock” means Merger Sub 1’s common stock, par value $0.00001 per share.

“Named Executive Cash Amount” means $35,000,000.

“Nasdaq” means the Nasdaq Capital Market.

“Nasdaq Proposals” means the proposals to consider and vote to (a) issue Apex Common Stock to AvePoint’s equityholders in connection with the Mergers pursuant to the Business Combination Agreement, (b) issue Apex Common Stock to the PIPE Subscribers.

“PCAOB” means the Public Company Accounting Oversight Board.

“PCAOB Audited Financials” means the audited consolidated balance sheets of AvePoint as of December 31, 2020 and 2019, and the related audited consolidated statements of operations and comprehensive loss and cash flows of AvePoint for each of the three years in the period ended December 31, 2020, each audited in accordance with the auditing standards of PCAOB.

“Per Share Contingent Consideration” means a number of shares of Apex Common Stock equal to: (a) the applicable Contingent Consideration (as defined herein) divided by (b) the AvePoint Outstanding Shares.

“Per Share Preferred Cash Consideration” means (a)(i) the AvePoint Preferred Stock Cash Amount, minus (ii) the Preferred PIPE Fees, divided by (b) the AvePoint Preferred Stock Converted Shares, rounded down to the nearest cent.

“Per Share Preferred Stock Consideration” means a number of shares of Apex Common Stock equal to: (a) the Aggregate Preferred Stock Consideration (as defined in the Business Combination Agreement), divided by (b) the AvePoint Preferred Stock Converted Shares.

 

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“Per Share Amount” means (a) an amount equal to the Gross Merger Consideration, divided by (b) the Fully Diluted Number.

“PIPE” means that certain private placement in the aggregate amount of $140 million, to be consummated immediately prior to the consummation of the Business Combination, pursuant to those certain Subscription Agreements with Apex, and subject to the conditions set forth therein, the PIPE Subscribers will purchase 14,000,000 shares of Apex Common Stock at a purchase price of $10.00 per share.

“PIPE Commitment” means an aggregate of $140 million committed pursuant to the PIPE.

“PIPE Shares” means an aggregate of 14,000,000 shares of Apex Common Stock to be issued to PIPE Subscribers in the PIPE.

“PIPE Subscribers” means the purchasers of the PIPE Shares.

“PRC Options” means all AvePoint Options granted to eligible individuals in the People’s Republic of China.

“Private Warrants” means the warrants to purchase shares of Apex Common Stock purchased in a private placement in connection with the IPO.

“Proposed Certificate of Incorporation” means the amended and restated certificate of incorporation of Apex, giving effect to the Charter Proposals.

“Proposed Transactions” means the Business Combination and the transactions related thereto.

“Public Shares” means shares of Apex Common Stock issued as a component of the Apex Units sold in the IPO (whether such Offering Shares were purchased in the IPO or in the secondary market following the IPO).

“Public Stockholders” means the holders of shares of the Public Shares.

“Public Warrants” means the warrants included as a component of the Apex units sold in the IPO, each of which is exercisable for one share of Apex Common Stock, in accordance with its terms.

“SEC” means the U.S. Securities and Exchange Commission.

“Second Effective Time” means the time of filing of a certificate of merger with the Secretary of State of the State of Delaware, in accordance with the relevant provisions of the DGCL and mutually agreed by the parties, or such later time as may be agreed by the parties and specified in such certificate of merger for consummation of the Second Merger.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Stockholder Proposals” means, individually or collectively as context requires, the Business Combination Proposal, the Charter Proposals, the Director Proposal, the Incentive Plan Proposal, the ESPP Proposal, the Nasdaq Proposals and/or the Adjournment Proposal.

“Subscription Agreement” means the agreements pursuant to which the PIPE Subscribers agreed to purchase, and Apex agreed to sell, 14,000,000 shares of Apex Common Stock at a purchase price of $10.00 per share in a private placement transaction, which will be consummated concurrently with the Business Combination.

 

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“Subsequent Transaction” means any transaction or series of related transactions, including any sale, merger, liquidation, exchange offer or other similar transaction, that is consummated after the Effective Time that results (a) in any person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) acquiring beneficial ownership of 50% or more of the outstanding voting securities of the Combined Company (or any successor to the Combined Company), directly or indirectly, immediately following such transaction, provided that any transaction or series of related transactions which results in at least 50% of the combined voting power of the then outstanding shares of Apex Common Stock (or at least 50% of the combined voting power of the then outstanding shares of any successor to the Combined Company or any parent company of the Combined Company issued in exchange for Apex Common Stock) immediately following the closing of such transaction (or series of related transactions) being beneficially owned, directly or indirectly, by individuals and entities who were the beneficial owners of at least 50% of the shares of Apex Common Stock outstanding immediately prior to such transaction (or series of related transactions), shall not be deemed a “Subsequent Transaction” or (b) a sale or disposition of all or substantially all of the assets of the Combined Company and its subsidiaries on a consolidated basis.

“Surviving Corporation” means the entity surviving the First Merger as a wholly-owned subsidiary of Apex.

“Surviving Entity” means the entity surviving the Second Merger.

“Trading Day” means any day on which shares of Apex Common Stock are actually traded on the Trading Market.

“Trading Market” means the stock market on which shares of Apex Common Stock shall be trading at the time of determination of the Closing Price.

“Trust Account” means the trust account that holds a portion of the proceeds of the IPO and the concurrent sale of the Private Warrants.

“Written Consent” means the irrevocable written consent, in form and substance reasonably acceptable to Apex, of holders of the AvePoint Requisite Approval (including the Key Company Stockholders (as defined in the Business Combination Agreement)) in favor of the approval and adoption of the Business Combination Agreement and the Mergers and all other Proposed Transactions.

 

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QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the special meeting of stockholders, including with respect to the proposed Business Combination. The following questions and answers may not include all the information that is important to Apex’s stockholders. Stockholders are urged to read carefully this proxy statement/prospectus in its entirety, including the financial statements and annexes attached hereto and the other documents referred to herein.

 

  Q.

Why am I receiving this proxy statement/prospectus?

 

  A.

Apex has entered into the Business Combination Agreement with AvePoint and Merger Subs pursuant to which Merger Sub 1 will merge with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex and, promptly following the First Merger, AvePoint will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of Apex. A copy of the Business Combination Agreement is attached to this proxy statement/prospectus as Annex A, and Apex encourages its stockholders to read it in its entirety. Apex’s stockholders are being asked to consider and vote upon the Business Combination Proposal to approve and adopt the Business Combination Agreement, among other Stockholder Proposals. See the section titled “Proposal No.1 — The Business Combination Proposal.”

The Apex Common Stock, Apex Warrants and Apex Units are currently listed on Nasdaq under the symbols “APXT,” “APXTW” and “APXTU,” respectively. Apex has applied to list the shares of common stock and the warrants of the Combined Company on the Nasdaq Capital Market under the symbols “AVPT” and “AVPTW,” respectively, upon the Closing. All outstanding Apex Units will be separated into their component securities immediately prior to the Closing. Accordingly, Apex will no longer have any Apex Units following consummation of the Business Combination, and therefore Apex will instruct Nasdaq to remove the listing of the Apex Units immediately following the consummation of the Business Combination. Upon the Closing, Apex intends to change its name from “Apex Technology Acquisition Corporation” to “AvePoint, Inc.”

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the proposals to be acted upon at the special meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety. This document also constitutes a prospectus of Apex with respect to the Apex Common Stock issuable in connection with the Business Combination.

 

  Q.

What matters will stockholders consider at the special meeting?

 

  A.

At the Apex special meeting of stockholders, Apex will ask its stockholders to vote in favor of the following Stockholder Proposals:

 

  1.

The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Business Combination Agreement and effect the Business Combination.

 

  2.

The Charter Proposals — To consider and vote upon a proposal to amend Apex’s amended and restated certificate of incorporation (the “Existing Certificate of Incorporation”). The proposed amendments detailed below will be voted on separately and are collectively referred to as the “Charter Proposals.”

 

   

Name Change Charter Amendment — To change Apex’s name to “AvePoint, Inc.”;

 

   

Authorized Share Charter Amendment — To increase the number of authorized shares of Apex Common Stock and “blank check” preferred stock;

 

   

Actions by Stockholders Charter Amendment — To require that stockholders only act at annual and special meeting of the corporation and not by written consent;

 

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Corporate Opportunity Charter Amendment — To eliminate the current limitations in place on the corporate opportunity doctrine;

 

   

Voting Thresholds Charter Amendment — To increase the required vote thresholds for approving amendments to the certificate of incorporation and bylaws to 66 2/3%; and

 

   

Additional Charter Amendment — To approve all other changes, including eliminating certain provisions related to special purpose acquisition corporations that will no longer be relevant following the Closing.

 

  3.

The Incentive Plan Proposal — To consider and vote upon a proposal to approve the 2021 Plan, to assist the Combined Company in securing and retaining the services of employees, directors and consultants, to provide incentives for such persons to exert maximum efforts for the success of the Combined Company and its affiliates and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the Combined Company Common Stock through the granting of awards under the 2021 Plan.

 

  4.

The ESPP Proposal —To consider and vote upon a proposal to approve the ESPP, to assist the Combined Company in aligning the long-term financial interests of its employees with the financial interests of its stockholders, as well as attracting, retaining and motivating employees and encouraging them to devote their best efforts to the Combined Company’s business and financial success.

 

  5.

The Nasdaq Proposals — To consider and vote upon proposals to (a) issue Apex Common Stock to AvePoint’s equityholders in connection with the Mergers pursuant to the Business Combination Agreement and (b) issue Apex Common Stock to the PIPE Subscribers.

 

  6.

The Adjournment Proposal — A proposal to adjourn the special meeting of Apex’s stockholders to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are not sufficient votes to approve one or more proposals presented to stockholders for vote at such special meeting.

Apex may not consummate the Business Combination unless the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals are approved at the special meeting, each of which is conditioned upon all such proposals having been approved at the special meeting. The approval of the Charter Proposals requires the affirmative vote (virtually in person or by proxy) of a majority of outstanding shares of Apex Capital Stock as of the Record Date voting together as a single class and a majority of the outstanding voting power of the Apex Class B Common Stock voting together as a single class. The approval of the Business Combination Proposal, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals requires the affirmative vote (virtually in person or by proxy) of holders of a majority of the shares of Apex Capital Stock that are voted at the special meeting of stockholders. The Adjournment Proposal is not conditioned on the approval of any other Stockholder Proposal set forth in the accompanying proxy statement/prospectus.

Apex will hold a special meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the special meeting. Stockholders should read it carefully.

The vote of stockholders is important. Stockholders are encouraged to vote by submitting their proxy as soon as possible after carefully reviewing this proxy statement/prospectus.

 

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  Q.

I am an Apex warrant holder. Why am I receiving this proxy statement/prospectus?

 

  A.

Upon consummation of the Business Combination, the Apex Warrants shall, by their terms, entitle the holders to purchase 17,905,000 shares of Combined Company Common Stock in lieu of 17,905,000 shares of Apex Class A Common Stock at a purchase price of $11.50 per share. This proxy statement/prospectus includes important information about AvePoint and the business of Combined Company following the consummation of the Business Combination. Apex and AvePoint urge you to read the information contained in this proxy statement/prospectus carefully.

 

  Q.

Are any of the proposals conditioned on one another?

 

  A.

Apex may not consummate the Business Combination unless the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals are approved at the special meeting, each of which is conditioned upon all such proposals having been approved at the special meeting. The approval of the Charter Proposals requires the affirmative vote (virtually in person or by proxy) of a majority of the outstanding shares of Apex Capital Stock voting together as a single class and a majority of the outstanding voting power of the Apex Class B Common Stock voting together as a single class. The approval of the Business Combination Proposal, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals requires the affirmative vote (virtually in person or by proxy) of holders of a majority of the shares of Apex Capital Stock that are voted at the special meeting of stockholders. The Adjournment Proposal is not conditioned on the approval of any other Stockholder Proposal set forth in this proxy statement/prospectus.

It is important for you to note that in the event the Business Combination Proposal is not approved, then Apex will not consummate the Business Combination. If Apex does not consummate the Business Combination and fails to complete an initial business combination by September 19, 2021 or obtain the approval of Apex stockholders to extend the deadline for Apex to consummate an initial business combination, then Apex will be required to dissolve and liquidate.

 

  Q.

What will happen upon the consummation of the Business Combination?

 

  A.

On the Closing Date, Merger Sub 1 will merge with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex and, promptly following the First Merger, AvePoint will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of Apex. The Mergers will have the effects specified under Delaware law. At the Closing, based on AvePoint’s capitalization table as of February 23, 2021, the aggregate consideration to be paid to AvePoint’s equityholders will be (i) the Aggregate Cash Consideration, which equals an amount in cash of approximately $262 million assuming AvePoint stockholders elect to receive the maximum cash consideration, subject to a deduction for PIPE Fees and (ii) the Aggregate Stock Consideration and Aggregate Option Consideration, which equals 143,261,093 shares of Apex Common Stock, which includes shares of Apex Common Stock that may be issuable pursuant to the exercise of Exchanged Options (as defined in the Business Combination Agreement) (calculated using the treasury stock method), subject to an adjustment for an additional number of shares of Apex common stock if AvePoint’s stockholders elect to receive less than the maximum cash consideration of approximately $262 million or if there is not sufficient available cash to pay such maximum cash consideration. In addition, on the Closing Date, the PIPE will be consummated, and the net proceeds will be released to the Combined Company. The foregoing summary is based on a number of assumptions, including that none of the Public Stockholders exercise their redemption rights, a maximum Cash Election Percentage of 12.678% and that AvePoint does not issue any additional equity securities prior to the Mergers. If the actual facts differ from our assumptions, the number of shares and percentage interests set forth above will be different.

 

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  Q.

Why is Apex proposing the Business Combination Proposal?

 

  A.

Apex was organized for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more

  businesses or entities. Apex is not limited to a particular industry or geographic region, but focused its search within the software and internet technology industries.

Apex received $350.0 million from its IPO. In accordance with the Existing Certificate of Incorporation, Public Stockholders may redeem the Public Shares then held by them for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the Closing upon the consummation of the Business Combination. See the question titled “What happens to the funds held in the Trust Account upon consummation of the Business Combination?” for more information.

There are currently 35,810,000 shares of Apex Class A Common Stock issued and outstanding and 8,750,000 shares of Apex Class B Common Stock issued and outstanding. In addition, there are currently 17,905,000 Apex Warrants issued and outstanding, consisting of 17,500,000 Public Warrants and 405,000 Private Warrants. Each Apex Warrant entitles the holder thereof to purchase one share of Apex Common Stock at a price of $11.50 per share. The Apex Warrants will become exercisable 30 days after the completion of a business combination, and expire at 5:00 p.m., New York City time, five years after the completion of a business combination or earlier upon redemption or liquidation.

Under the Existing Certificate of Incorporation, all Public Stockholders have the opportunity to redeem their Public Shares upon the consummation of a business combination. The Public Warrants are non-redeemable. The Private Warrants are non-redeemable so long as they are held by their initial purchasers or their permitted transferees.

 

  Q.

Did Apex’s board of directors obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination?

 

  A.

Apex’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. In analyzing the Business Combination, Apex’s board of directors and management conducted due diligence on AvePoint and researched the industry in which AvePoint operates and concluded that the Business Combination was in the best interest of Apex’s stockholders. In reaching this conclusion, Apex’s board of directors considered a number of factors and a broad range of information, including publicly-available information, information provided by AvePoint and information provided by Evercore. Apex’s board of directors believes that based upon the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders. Apex’s board of directors also determined, without seeking a valuation from a financial advisor, that AvePoint’s fair market value was at least 80% of Apex’s net assets, excluding any taxes payable on interest earned. Accordingly, investors will be relying on the judgment of Apex’s board of directors, as described above, in valuing AvePoint’s business and assuming the risk that Apex’s board of directors may not have properly valued such business. For a complete discussion of the factors utilized by Apex’s board of directors in approving the Business Combination, see the section titled, “The Business Combination — Apex’s Board of Directors’ Reasons for the Approval of the Business Combination.

 

  Q.

Do I have redemption rights?

 

  A.

If you are a Public Stockholder, you may redeem your Public Shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account, which holds the proceeds of the IPO, as of two business days prior to the Closing, including interest earned on the funds held in the Trust Account and not previously released to Apex to pay its income taxes or any other taxes payable, upon the Closing. The per share amount Apex will distribute to holders who properly redeem their shares will not be reduced by the deferred underwriting commissions Apex will pay to the underwriters of its IPO if the Business Combination is consummated. Holders of the outstanding Public Warrants do not

 

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  have redemption rights with respect to such warrants in connection with the Business Combination. The Apex Initial Stockholder has agreed to waive its redemption rights with respect to its shares and any Public Shares that it may have acquired during or after the IPO in connection with the completion of Apex’s business combination. The shares of Apex Capital Stock purchased by the Apex Initial Stockholder Apex Initial Stockholder and shares purchased by Cantor Fitzgerald & Co. (“Cantor”) in connection with our IPO will be excluded from the pro rata calculation used to determine the per share redemption price. For illustrative purposes, based on funds in the Trust Account of approximately $351.9 million on December 31, 2020, the estimated per share redemption price would have been approximately $10.05. Additionally, Public Shares properly tendered for redemption will only be redeemed if the Business Combination is consummated; otherwise, holders of such shares will only be entitled to a pro rata portion of the Trust Account, including interest (which interest shall be net of taxes payable by Apex), in connection with the liquidation of the Trust Account.

 

  Q.

Will how I vote affect my ability to exercise redemption rights?

 

  A.

No. You may exercise your redemption rights whether you vote your Public Shares for or against the Business Combination Proposal and other Stockholder Proposals or do not vote your shares. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their Public Shares and no longer remain stockholders, leaving stockholders who choose not to redeem their Public Shares holding shares in a company with a less liquid trading market, fewer stockholders, less cash, and the potential inability to meet the listing standards of Nasdaq.

 

  Q.

How do I exercise my redemption rights?

 

  A.

In order to exercise your redemption rights, you must, prior to 4:30 p.m. Eastern time on                , 2021 (two business days before the special meeting of stockholders), (i) submit a written request to Apex’s transfer agent that you request to redeem your Public Shares for cash, and (ii) deliver your stock to Apex’s transfer agent physically or electronically through The Depository Trust Company (“DTC”). For the address of Continental Stock Transfer & Trust Company, Apex’s transfer agent, see the question “Who can help answer my questions?” below. Apex requests that any requests for redemption include the identity as to the beneficial owner making such request. Electronic delivery of your shares generally will be faster than delivery of physical stock certificates.

A physical stock certificate will not be needed if your stock is delivered to Apex’s transfer agent electronically. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and Apex’s transfer agent will need to act to facilitate the request. It is Apex’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because Apex does not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. Under Apex’s bylaws, Apex is 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. Accordingly, if it takes longer than anticipated for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a stockholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem Public Shares, its shares may not be redeemed.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with Apex’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares to Apex’s transfer agent for redemption and decide within the required timeframe not to exercise your redemption rights, you may request that Apex’s transfer agent return the shares (physically or electronically). You may make such request by contacting Apex’s transfer agent at the phone number or address listed under the question, “Who can help answer my questions?”.

 

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  Q.

What are the U.S. federal income tax consequences of exercising my redemption rights?

 

  A.

The U.S. federal income tax consequences of exercising your redemption rights depend on your particular facts and circumstances. See the section titled “Material U.S. Federal Income Tax Considerations of the Redemption Rights.” You are urged to consult your tax advisor regarding the tax consequences of exercising your redemption rights.

 

  Q.

If I hold Apex Warrants, can I exercise redemption rights with respect to my warrants?

 

  A.

No. Holders of Apex Warrants have no redemption rights with respect to the Apex Warrants, however, if such Holders choose to redeem their shares of Apex Capital Stock to which the Apex Warrants entitle them, those Holders may still exercise their Apex Warrants if the Business Combination is consummated.

 

  Q.

Do I have appraisal rights if I object to the proposed Business Combination?

 

  A.

No. There are no appraisal rights available to holders of shares of Apex Capital Stock in connection with the Business Combination.

 

  Q.

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

  A.

If the Business Combination is consummated, the funds held in the Trust Account will be released to pay (i) Apex stockholders who properly exercise their redemption rights and (ii) certain expenses incurred by AvePoint and Apex in connection with the Business Combination, to the extent not otherwise paid prior to the Closing. The remaining funds available for release from the Trust Account will be used for general corporate purposes of the Combined Company following the Business Combination.

 

  Q.

Will Apex obtain new financing in connection with the Business Combination?

 

  A.

PIPE Subscribers have committed to purchase an aggregate of 14,000,000 shares of Apex Common Stock in the PIPE at a purchase price of $10.00 per share, for an aggregate purchase price of $140 million.

 

  Q.

What happens to the proceeds from the PIPE upon consummation of the Business Combination?

 

  A.

The PIPE is expected to close concurrently with the Closing. Upon the closing of both the Business Combination and the PIPE, the proceeds from the PIPE will be released to Apex and will be used for general corporate purposes of the Combined Company following the Business Combination.

 

  Q.

What happens if a substantial number of public stockholders vote in favor of the Business Combination Proposal and exercise their redemption rights?

 

  A.

Public Stockholders may vote in favor of the Business Combination and still exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of redemptions by Public Stockholders.

In no event will Apex redeem Public Shares in an amount that would cause its net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 after giving effect to the exercise of redemption rights. If enough Public Stockholders exercise their redemption rights such that Apex cannot satisfy the net tangible asset requirement, Apex would not proceed with the redemption of our Public Shares and the Business Combination, and instead may search for an alternate business combination.

 

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As a result of redemptions, the trading market for the Combined Company Common Stock may be less liquid than the market for Apex Capital Stock was prior to the Business Combination and the Combined Company may not be able to meet the listing standards of a national securities exchange.

Additionally, with fewer funds available from the Trust Account, the capital infusion from the Trust Account into the Combined Company will be reduced and it may not be able to achieve its business plan and may require additional financing sooner than currently anticipated.

 

  Q.

What happens if the Business Combination is not consummated?

 

  A.

There are certain circumstances under which the Business Combination Agreement may be terminated.

See the section titled “The Business Combination Agreement — Termination” for information regarding the parties’ specific termination rights.

If Apex does not complete the proposed Business Combination with AvePoint for whatever reason, Apex would search for another business combination partner with which to complete a business combination. If Apex does not complete a business combination with AvePoint or another business combination partner by September 19, 2021, Apex must redeem 100% of the outstanding Public Shares, at a per share price, payable in cash, equal to the amount then held in the Trust Account divided by the number of then outstanding Public Shares. The Apex Initial Stockholder has no redemption rights in the event a business combination is not consummated in the required time period, and, accordingly, its shares of Apex Capital Stock will be worthless. Additionally, in the event of such a liquidation, as described above, there will be no distribution with respect to outstanding Apex Warrants and, accordingly, the Apex Warrants will expire and be worthless.

 

  Q.

What is AvePoint?

 

  A.

AvePoint is a digital collaboration innovator and has been for nearly two decades. AvePoint develops products and helps organizations realize the value of modern, digital collaboration that lets users work together from anywhere, thanks to the power of the cloud. For more information, see the section titled “Information About AvePoint.

 

  Q.

What equity stake will current Apex stockholders and AvePoint stockholders have in the Combined Company after the Closing?

 

  A.

It is anticipated that, based on AvePoint’s capitalization table as of February 23, 2021, upon the consummation of the Business Combination the ownership of the Combined Company will be as follows:

 

Assuming No Public Stockholder Redemption    Assuming Maximum Public Stockholder
Redemption
The equityholders of AvePoint will own 143,261,093 shares of Combined Company Common Stock, representing approximately 71.0% of the total shares outstanding, which includes shares of Combined Company Common Stock that may be issuable pursuant to the exercise of Exchanged Options (calculated using the treasury stock method)    The equityholders of AvePoint will own 143,261,093 shares of Combined Company Common Stock, representing approximately 76.9% of the total shares outstanding, which includes shares of Combined Company Common Stock that may be issuable pursuant to the exercise of Exchanged Options (calculated using the treasury stock method)
   
The PIPE Subscribers will own 14,000,000 shares of Combined Company Common Stock, representing approximately 6.9% of the total shares outstanding    The PIPE Subscribers will own 14,000,000 shares of Combined Company Common Stock, representing approximately 7.5% of the total shares outstanding
   
The Public Stockholders will own 35,000,000 shares of Combined Company Common Stock, representing approximately 17.3% of the total shares outstanding    The Public Stockholders will own 19,430,384 shares of Combined Company Common Stock, representing approximately 10.4% of the total shares outstanding

 

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Assuming No Public Stockholder Redemption    Assuming Maximum Public Stockholder
Redemption
   
The Sponsor and its affiliates and advisors will own 9,560,000 shares of Combined Company Common Stock (which includes 2,916,700 shares deposited into escrow and subject to vesting), representing approximately 4.7% of the total shares outstanding, excluding 100,000 shares of Combined Company Common Stock held by such holders and their affiliates purchased in the PIPE    The Sponsor and its affiliates and advisors will own 9,560,000 shares of Combined Company Common Stock (which includes 2,916,700 shares deposited into escrow and subject to vesting), representing approximately 5.1% of the total shares outstanding, excluding 100,000 shares of Combined Company Common Stock held by such holders and their affiliates purchased in the PIPE

The number of shares and percentage interests set forth above are based on a number of assumptions, including scenarios under which (a) no Apex Public Shares are redeemed and (b) approximately 44% of all Apex Public Shares are redeemed, which is the maximum amount which may be redeemed while still satisfying the $300 million minimum cash proceeds condition in the business Combination Agreement and under both scenarios (i) a maximum Cash Election Percentage (as defined below) of 12.678% and (ii) that AvePoint does not issue any additional equity securities prior to the Mergers. If the actual facts differ from our assumptions, the number of shares and percentage interests set forth above will be different. In addition, the number of shares and percentage interests set forth above do not take into account potential future exercises of Apex Warrants or additional potential future exercises of AvePoint Options prior to the Closing.

 

  Q.

What consideration will AvePoint equityholders receive upon consummation of the Business Combination?

 

  A.

The aggregate consideration to be paid to AvePoint’s equityholders will be (i) an amount in cash of approximately $262 million, subject to a deduction for fees and (ii) 143,261,093 shares of Apex’s common stock, which includes shares of Apex common stock that may be issuable pursuant to the exercise of exchanged AvePoint stock options (calculated using the treasury stock method, subject to an adjustment for an additional number of shares of Apex common stock if AvePoint’s stockholders elect to receive less than the maximum cash consideration of approximately $262 million, or if there is not sufficient available cash to pay such maximum cash consideration).

Unless an AvePoint equityholder elects otherwise prior to the Election Deadline (as defined in the Business Combination Agreement), each AvePoint equityholder will automatically receive all of the consideration payable to it in the form of shares of Apex common stock. The following examples are indicative of what an AvePoint equityholder owning 1,000 AvePoint shares prior to the Effective Date could receive based on their chosen Election Percentage:

 

AvePoint shares held (pre-Closing)

     1,000       1,000       1,000       1,000  

Election percentage

     0.0     3.0     6.0     12.678

Cash received

   $ 0.00     $ 2,605.93     $ 5,211.87     $ 11,012.68  

Apex shares received

     8,685       8,424       8,164       7,584  

 

  Q.

Who will be the officers and directors of the Combined Company if the Business Combination is consummated?

 

  A.

The Business Combination Agreement provides that, upon the Closing, the board of directors of the Combined Company (the “Combined Company Board”) will be comprised of Xunkai Gong, Tianyi Jiang, Brian Brown, Jeff Epstein, Stephen CuUnjieng, Jeff Teper and John Ho. Immediately following the consummation of the Business Combination, we expect that the following will be the officers of the Combined Company: Xunkai Gong as Executive Chairman, Tianyi Jiang as Chief Executive Officer,

 

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  Brian Brown as Chief Operating Officer and General Counsel, Sophia Wu as Chief Financial Officer, and Andy Yong as Chief Investment Officer. See the section titled “Management After the Business Combination.”

 

  Q.

What conditions must be satisfied to consummate the Business Combination?

 

  A.

There are a number of closing conditions in the Business Combination Agreement, including that Apex’s stockholders have approved and adopted the Business Combination Agreement. For a summary of the conditions that must be satisfied or waived prior to the consummation of the Business Combination, see the section titled “The Business Combination Agreement — Conditions to the Closing.”

 

  Q.

What happens if I sell my shares of Apex Capital Stock before the special meeting of stockholders?

 

  A.

The Record Date for the special meeting of stockholders will be earlier than the date that the Business Combination is expected to be completed. If you transfer your shares of Apex Capital Stock after the Record Date, but before the special meeting of stockholders, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the special meeting of stockholders. However, you will not become a Combined Company Stockholder following the Closing because only Apex’s stockholders on the Closing Date will become Combined Company Stockholders.

 

  Q.

What vote is required to approve the proposals presented at the special meeting of stockholders?

 

  A.

The approval of the Charter Proposals requires the affirmative vote (virtually in person or by proxy) of a majority of outstanding shares of Apex Capital Stock voting together as a single class and a majority of the outstanding voting power of the Apex Class B Common Stock voting together as a single class. The class vote of the Apex Class B Common Stock has already been obtained by a written consent. Accordingly, an Apex stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against the Charter Proposals.

The approval of each of the Business Combination Proposal, Incentive Plan Proposal, ESPP Proposal, Nasdaq Proposals and Adjournment Proposal requires the affirmative vote (virtually in person or by proxy) of the holders of a majority of the shares of Apex Capital Stock that are voted at the special meeting of stockholders. Accordingly, an Apex stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting, or a broker non-vote will have no effect on the outcome of any vote on these Stockholder Proposals. The Sponsor owns all of the outstanding shares of Apex Class B Common Stock and has agreed, together with Apex’ executive officers and directors, to vote all shares of Apex Capital Stock owned by it, including the Apex Class B Common Stock, in favor of the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals. Such holders represent     % of the issued and outstanding shares of Apex Capital Stock as of the Record Date. As a result, the affirmative vote of holders of an additional              shares of Apex Capital Stock, representing only     % of the remaining shares of Apex Capital Stock held by the Public Stockholders as of the Record Date, assuming the minimum number of shares required to constitute a quorum are voted at the special meeting, would be required to approve the Business Combination Proposal, the Charter Proposals, the Incentive Plan Proposal, the ESPP Proposal and the Nasdaq Proposals.

 

  Q.

May Apex or Apex’s directors, officers or advisors, or their affiliates, purchase shares in connection with the Business Combination?

 

  A.

In connection with the stockholder vote to approve the proposed Business Combination, Apex’s board of directors, officers, advisors or their affiliates may privately negotiate transactions to purchase shares

 

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  prior to the Closing from stockholders who would have otherwise elected to have their shares redeemed in conjunction with a proxy solicitation pursuant to the proxy rules for a per share pro rata portion of the Trust Account without the prior written consent of AvePoint. None of the directors, officers or advisors, or their respective affiliates, will make any such purchases when they are in possession of any material non-public information not disclosed to the seller of such shares. Such a purchase would include a contractual acknowledgement that such stockholder, although still the record holder of such shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the directors, officers or advisors, or their affiliates, purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. Any such privately negotiated purchases may be effected at purchase prices that are in excess of the per share pro rata portion of the Trust Account. The purpose of these purchases would be to increase the amount of cash available to Apex for use in the Business Combination.

In addition, affiliates of the Apex Initial Stockholder have agreed to purchase an aggregate of 100,000 shares of Apex Common Stock in the PIPE. These shares to be purchased in the PIPE will not be outstanding on the Record Date and will not be entitled to vote at the Apex special meeting of stockholders.

 

  Q.

How many votes do I have at the special meeting of stockholders?

 

  A.

Apex’s stockholders are entitled to one vote at the special meeting for each share of Apex Capital Stock held of record as of the Record Date. As of the close of business on the Record Date, there were shares outstanding of Apex Capital Stock held by holders of record.

 

  Q.

What interests do Apex’s current officers and directors have in the Business Combination?

 

  A.

Apex’s board of directors and executive officers may have interests in the Business Combination that are different from, in addition to, or in conflict with, yours. These interests include:

 

   

the beneficial ownership of Apex’s board of directors and officers of an aggregate of 8,750,000 shares of Apex Capital Stock, 657,500 Initial Stockholder Units, which shares, units, and warrants would become worthless if Apex does not complete a business combination within the applicable time period, as our directors and officers have waived any right to redemption with respect to these shares. Such shares, units, and warrants have an aggregate market value of approximately $                million, $                million, and $                million, respectively, based on the closing price of Apex Common Stock of $                on Nasdaq on                , 2021, the Record Date for the special meeting of stockholders. Based on such market values, Apex’s board of directors and officers will have an unrealized gain of $                on their Apex securities;

 

   

Apex’s officers and directors and their affiliates have agreed to purchase an aggregate of 100,000 shares of Apex Common Stock in the PIPE at a purchase price of $10.00 per share, such purchase is contingent upon the completion of the Business Combination;

 

   

Apex’s board of directors will not receive reimbursement for any out-of-pocket expenses incurred by them on Apex’s behalf incident to identifying, investigating and consummating the Business Combination, to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless the Business Combination is consummated;

 

   

the anticipated continuation of Jeff Epstein as a director of the Combined Company and Brad Koenig’s anticipated role as an observer of the Combined Company Board following the Closing; and

 

   

the continued indemnification of the current directors and officers of Apex following the Business Combination and the continuation of directors’ and officers’ liability insurance following the Business Combination.

 

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These interests may influence Apex’s board of directors in making their recommendation that you vote in favor of the approval of the Stockholder Proposals. You should also read the section titled “The Business Combination — Interests of Apex’s Directors and Officers in the Business Combination.”

 

  Q.

When is the Business Combination expected to be completed?

 

  A.

It is currently anticipated that the Business Combination will be consummated promptly following the special meeting of stockholders, provided that all other conditions to the Closing have been satisfied or waived. For a description of the conditions to the completion of the Business Combination, see the section titled “The Business Combination Agreement — Conditions to the Closing.

 

  Q.

What do I need to do now?

 

  A.

You are urged to carefully read and consider the information contained in this proxy statement/prospectus in its entirety, including the financial statements and annexes attached hereto, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

  Q.

How do I vote?

 

  A.

If you were a holder of record of Apex Capital Stock on                , 2021, the Record Date for the special meeting of stockholders, you may vote on the Stockholder Proposals online at the virtual special meeting of stockholders or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to virtually attend the special meeting of stockholders and vote online, obtain a proxy from your broker, bank or nominee.

 

  Q.

What will happen if I abstain from voting or fail to vote at the special meeting?

 

  A.

At the special meeting of stockholders, Apex will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present.

The approval of the Charter Proposals requires the affirmative vote (virtually in person or by proxy) of a majority of outstanding shares of the common stock voting together as a single class and a majority of the outstanding voting power of the Apex Class B Common Stock voting together as a single class. Accordingly, an Apex stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting or a broker non-vote will have the same effect as a vote against these proposals. The approval of each of the Business Combination Proposal, Incentive Plan Proposal, ESPP Proposal, Nasdaq Proposals and Adjournment Proposal requires the affirmative vote (virtually in person or by proxy) of the holders of a majority of the shares of Apex Capital Stock that are voted at the special meeting of stockholders. Accordingly, an Apex stockholder’s failure to vote by proxy or to vote online at the virtual special meeting of stockholders, an abstention from voting, or a broker non-vote will have no effect on the outcome of any vote on these proposals.

 

  Q.

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

  A.

Signed and dated proxies received by Apex without an indication of how the stockholder intends to vote on a proposal will be voted in favor of each of the Stockholder Proposals.

 

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  Q.

Do I need to attend the special meeting of stockholders to vote my shares?

 

  A.

No. You are invited to virtually attend the special meeting to vote on the proposals described in this proxy statement/prospectus. However, you do not need to attend the special meeting of stockholders to vote your shares. Instead, you may submit your proxy by signing, dating and returning the applicable enclosed proxy card(s) in the pre-addressed postage-paid envelope. Your vote is important. Apex encourages you to vote as soon as possible after carefully reading this proxy statement/prospectus.

 

  Q.

If I am not going to attend the special meeting of stockholders in person, should I return my proxy card instead?

 

  A.

Yes. After carefully reading and considering the information contained in this proxy statement/prospectus, please submit your proxy, as applicable, by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

  Q.

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

  A.

No. If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on any of the Stockholder Proposals. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote.” Broker non-votes will be counted for purposes of determining the presence of a quorum at the special meeting of stockholders. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide. However, in no event will a broker non-vote have the effect of exercising your redemption rights for a pro rata portion of the Trust Account, and therefore no shares as to which a broker non-vote occurs will be redeemed in connection with the proposed Business Combination.

 

  Q.

May I change my vote after I have mailed my signed proxy card?

 

  A.

Yes. You may change your vote by sending a later-dated, signed proxy card to Apex’s secretary at the address listed below prior to the vote at the special meeting of stockholders, or attend the virtual special meeting and vote online. You also may revoke your proxy by sending a notice of revocation to Apex’s secretary, provided such revocation is received prior to the vote at the special meeting. If your shares are held in “street name” by a broker or other nominee, you must contact the broker or nominee to change your vote.

 

  Q.

What happens if I fail to take any action with respect to the special meeting?

 

  A.

If you fail to take any action with respect to the special meeting and the Business Combination is approved by stockholders and consummated, you will become a stockholder of the Combined Company and/or your warrants will entitle you to purchase the Combined Company Common Stock. As a corollary, failure to vote either for or against the Business Combination Proposal means you will not have any redemption rights in connection with the Business Combination to exchange your Public Shares for a pro rata share of the aggregate amount of funds held in the Trust Account as of two business days prior to the Closing, including any interest thereon but net of any income or other taxes payable. If you fail to take any action with respect to the special meeting and the Business Combination is not approved, you will continue to be a stockholder and/or warrant holder of Apex.

 

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  Q.

What should I do if I receive more than one set of voting materials?

 

  A.

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

  Q.

What is the quorum requirement for the special meeting of stockholders?

 

  A.

A quorum of Apex’s stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting of stockholders if a majority of the Apex Capital Stock outstanding and entitled to vote at the meeting is virtually represented in person or by proxy. Abstentions will count as present for the purposes of establishing a quorum.

As of the Record Date for the special meeting,              shares of Apex Capital Stock will be required to achieve a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or your broker, bank or other nominee submits one on your behalf) or if you vote online at the virtual special meeting of stockholders. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the shares represented by stockholders virtually present at the special meeting or by proxy may authorize adjournment of the special meeting to another date.

 

  Q.

What happens to the Apex Warrants I hold if I vote my shares of Apex Capital Stock against approval of the Business Combination Proposal and validly exercise my redemption rights?

 

  A.

Properly exercising your redemption rights as an Apex stockholder does not result in either a vote “FOR” or “AGAINST” the Business Combination Proposal. If the Business Combination is not approved and completed, you will continue to hold your Apex Warrants, and if Apex does not otherwise consummate an initial business combination by September 19, 2021 or obtain the approval of Apex stockholders to extend the deadline for Apex to consummate an initial business combination, Apex will be required to dissolve and liquidate, and your Apex Warrants will expire worthless.

 

  Q.

Who will solicit and pay the cost of soliciting proxies?

 

  A.

Apex will pay the cost of soliciting proxies for the special meeting of stockholders. Apex has engaged MacKenzie Partners, Inc. (“MacKenzie”) to assist in the solicitation of proxies for the special meeting. Apex has agreed to pay MacKenzie a fee of $12,500. Apex will reimburse MacKenzie for reasonable out-of-pocket expenses and will indemnify MacKenzie and its affiliates against certain claims, liabilities, losses, damages and expenses. Apex also will reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Apex Capital Stock for their expenses in forwarding soliciting materials to beneficial owners of Apex Capital Stock and in obtaining voting instructions from such beneficial owners. Apex’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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  Q.

Who can help answer my questions?

 

  A.

If you have questions about the Stockholder Proposals, or if you need additional copies of this proxy statement/prospectus, the proxy card or the consent card you should contact our proxy solicitor at:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, New York 10018

Toll-Free: (800) 322-2885

Call collect: (212) 929-5500

Email: proxy@mackenziepartners.com

You may also contact Apex at:

Apex Technology Acquisition Corporation

533 Airport Blvd, Suite 400

Burlingame, CA 94010

Attention: Secretary

Telephone: (619) 736-6855

To obtain timely delivery, Apex’s stockholders and warrant holders must request the materials no later than five business days prior to the special meeting.

You may also obtain additional information about Apex from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.

If you intend to seek redemption of your Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to Apex’s transfer agent prior to 4:30 p.m., New York time, on the second business day prior to the special meeting of stockholders. If you have questions regarding the certification of your position or delivery of your shares, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attention: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary highlights selected information from this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination Proposal and the other Stockholder Proposals to be considered at the special meeting of stockholders, you should read this proxy statement/prospectus in its entirety carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

Parties to the Business Combination

Apex

Apex is a Delaware corporation and was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities, referred to throughout this proxy statement/prospectus as its initial business combination. Although Apex may pursue its initial business combination in any industry or geographic location, its focus is on opportunities in the software and internet technology industries.

Apex Class A Common Stock, Apex Warrants and Apex Units (each Apex Unit comprised of one share of Apex Class A Common Stock and one-half of one Apex Warrant) are currently listed and trading on Nasdaq under the ticker symbols “APXT,” “APXTW” and “APXTU,” respectively. We have applied to continue the listing of the Apex Common Stock and Apex Warrants on Nasdaq under the symbols “AVPT” and “AVPTW,” respectively, upon Closing. The Apex Units will automatically separate into their component securities (one share of Apex Common Stock and one-half of one Apex Warrant) upon the Closing and, as a result, will no longer exist. Upon the Closing, Apex intends to change its name from “Apex Technology Acquisition Corporation” to “AvePoint, Inc.”.

The mailing address of Apex’s principal executive office is 533 Airport Blvd, Suite 400, Burlingame, CA 94010, and its telephone number is (619) 736-6855.

Merger Subs

Each of the Merger Subs is a wholly-owned subsidiary of Apex. Merger Sub 1 was formed on October 13, 2020, and Merger Sub 2 was formed on November 2, 2020. Merger Subs were each formed to consummate the Business Combination. Following the consummation of the Business Combination, Merger Sub 1 will have merged with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex and, promptly following the First Merger, AvePoint will have merged with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of Apex.

AvePoint

AvePoint is a Delaware corporation formed in 2001. AvePoint is a digital collaboration innovator and has been for nearly two decades. AvePoint develops products and helps organizations realize the value of modern, digital collaboration that lets users work together from anywhere, thanks to the power of the cloud.

The mailing address of AvePoint’s principal executive office is 525 Washington Blvd, Suite 1400, Jersey City, NJ 07310, and its telephone number is (201) 793-1111.

For more information about AvePoint, see the sections titled “Information About AvePoint” and “AvePoint Management’s Discussion and Analysis of Financial Condition and Results of Operations.”



 

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The Business Combination

The Business Combination Agreement

On November 23, 2020, Apex, Merger Subs and AvePoint entered into the Business Combination Agreement, as amended on December 30, 2020 and March 8, 2021, pursuant to which Apex and AvePoint will consummate the Business Combination. Merger Sub 1 will merge with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex and, promptly following the First Merger, AvePoint will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly-owned subsidiary of Apex. The Business Combination Agreement contains customary representations and warranties, covenants, closing conditions and other terms relating to the Mergers and the other transactions contemplated thereby.

The First Merger will become effective as of the Effective Time. The Second Merger will become effective as of the Second Effective Time. The parties will hold the Closing immediately prior to the filing of the certificate of merger in connection with the First Merger with the Secretary of State of the State of Delaware, in accordance with the relevant provisions of the DGCL and mutually agreed by the parties, on the Closing Date.

The Effective Time shall occur as promptly as practicable but in no event later than three business day after the satisfaction or, if permissible, waiver of the conditions to the completion of the Business Combination set forth in the Business Combination Agreement (other than those conditions that by their nature are to be satisfied at Closing, provided that the occurrence of the Closing shall remain subject to the satisfaction or, if permissible, waiver at the Closing).

Upon the consummation of the Mergers, based on AvePoint’s capitalization table as of February 23, 2021, the aggregate consideration to be paid to AvePoint’s equityholders will be (i) the Aggregate Cash Consideration, which equals an amount in cash of approximately $262 million assuming AvePoint stockholders elect to receive the maximum cash consideration, minus a deduction for the PIPE Fees and (ii) the Aggregate Stock Consideration and Aggregate Option Consideration, which equals 143,261,093 shares of Apex Common Stock, which includes shares of Apex Common Stock that may be issuable pursuant to the exercise of exchanged AvePoint stock options (calculated using the treasury stock method, subject to an adjustment for an additional number of shares of Apex common stock if AvePoint’s stockholders elect to receive less than the maximum cash consideration of approximately $262 million or if there is not sufficient available cash to pay such maximum cash consideration). The Aggregate Stock Consideration will be increased by a number of shares of Apex Common Stock equal to the aggregate exercise price of the Exchanged Options divided by $10.00. The Aggregate Cash Consideration may be subject to downward adjustment based on the Cash Election (as defined below) and any cutback due to redemptions by stockholders of Apex and any such adjustment shall be offset by an equivalent increase in the Aggregate Stock Consideration based on a value of $10.00 per share of Apex Common Stock.

At the Effective Time, by virtue of the First Merger and without any action on the part of Apex, Merger Sub 1, AvePoint or the holders of any of AvePoint’s securities:

 

   

Each AvePoint Preferred Stock Converted Share (other than any Dissenting Shares, as defined in the Business Combination Agreement), shall be canceled and converted into the right to receive the following (x) the number of shares of Apex Common Stock equal to the Per Share Preferred Stock Consideration; (y) an amount in cash equal to the Per Share Preferred Cash Consideration; and (z) the number of shares of Apex Common Stock equal to the Per Share Contingent Consideration (if any);

 

   

AvePoint’s stockholders who own shares of AvePoint Series C Preferred Stock will receive an aggregate amount of $135 million in cash (subject to deduction for the Preferred PIPE Fees (as defined in the Business Combination Agreement)) from the Aggregate Cash Consideration and will receive the balance of their transaction consideration in shares of Apex Common Stock from the Aggregate Stock Consideration;



 

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Each share of AvePoint Common Stock issued and outstanding immediately prior to the Effective Time (excluding any Dissenting Shares and Named Executive Shares which shall be treated in accordance with Section 3.05 of the Business Combination Agreement and the terms of the Named Executive Equity Agreements (as defined in the Business Combination Agreement) respectively) with respect to which an Election has been made or deemed to be made pursuant to Section 3.02(c) of the Business Combination Agreement shall be canceled and converted into the right to receive the following: (x) an amount in cash equal to (1) the Per Share Amount, multiplied by (2) the applicable Election Percentage (as defined in the Business Combination Agreement), without interest (the “Cash Election Consideration”) subject to withholding from the Final Cash Election Consideration payable to each Electing Stockholder such Election Holder’s PIPE Pro Rata Share (as defined in the Business Combination Agreement) of the Common Stockholder PIPE Fees (as defined in the Business Combination Agreement); (y) the number of shares of Apex Common Stock equal to (1) (A) the Per Share Amount, multiplied by (B) the difference obtained by subtracting the applicable Election Percentage from one, divided by (2) $10.00 (the “Stock Election Consideration”); provided that if the Aggregate Cash Election Amount (as defined in the Business Combination Agreement) prior to any adjustment pursuant to this proviso exceeds the Available AvePoint Common Stock Cash Amount, the applicable Election Percentage used to determine the Cash Election Consideration and the Stock Election Consideration shall be multiplied by the quotient of (a) the Available AvePoint Common Stock Cash Amount, divided by (b) the Aggregate Cash Election Amount (the Cash Election Consideration and Stock Election Consideration following such adjustment (if any) is referred to as the “Final Cash Election Consideration” and the “Final Stock Election Consideration”); and (z) the number of shares of Apex Common Stock equal to the Per Share Contingent Consideration (if any);

 

   

All holders of AvePoint Common Stock, other than the Named Executives (as defined in the Business Combination Agreement), will receive an aggregate amount of between approximately $75 million and approximately $92 million in cash (subject to deduction for the Common Stockholder PIPE Fees) based on an election (the “Cash Election”) from the balance of the Aggregate Cash Consideration and will receive the remainder of their consideration in shares of Apex Common Stock from the Aggregate Stock Consideration;

 

   

All shares of AvePoint Common Stock and AvePoint Preferred Stock held in the treasury of AvePoint or by Apex shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto;

 

   

Each share of common stock of Merger Sub 1 issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and non-assessable share of common stock, par value $0.001 per share, of the Surviving Corporation;

 

   

Each Named Executive Cash-Settled Option that is outstanding immediately prior to the Effective Time, shall be converted into the right to receive (A) an amount of cash equal to: the product of (1) the number of Named Executive Cash-Settled Options multiplied by (2) the Per Share Amount, minus (y) the aggregate exercise price attributable to such Named Executive Cash-Settled Options; and (B) the contingent right to receive a number of shares Contingent Consideration following the Closing in accordance with Section 3.03 of the Business Combination Agreement;

 

   

The Named Executives will receive an aggregate amount of $35 million in cash (subject to deduction for the Named Executive PIPE Fees (as defined in the Business Combination Agreement)) from the Aggregate Cash Consideration and will receive the balance of their transaction consideration in shares of Apex Common Stock from the Aggregate Stock Consideration;

 

   

Each AvePoint Option that is outstanding immediately prior to the Effective Time, whether vested or unvested (other than the Named Executive Cash-Settled Options and PRC Options), shall be converted into (1) an option to purchase a number of shares of Apex Common Stock (such option, an “Exchanged Option”) equal to the product (rounded down to the nearest whole number) of (x) the number of shares



 

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of AvePoint Common Stock subject to such AvePoint Option immediately prior to the Effective Time and (y) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such AvePoint Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of Apex Common Stock purchasable pursuant to the Exchanged Options shall be determined in a manner consistent with the requirements of Section 409A of the Code (to the extent applicable to an Exchanged Option); provided, further, that in the case of any Exchanged Option to which Section 422 of the Code applies, the exercise price and the number of shares of Apex Common Stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code; provided, further, that, following the Effective Time, each Exchanged Option shall continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former AvePoint Option immediately prior to the Effective Time and (2) the Per Share Contingent Consideration multiplied by the number of shares of AvePoint Common Stock into which such AvePoint Option is exercisable immediately prior to the Effective Time, subject to Section 3.03(c) in respect of Unvested Exchanged Options; and

 

   

The PRC Options will not be continued or assumed by AvePoint, Apex or the Merger Subs as part of the Mergers. The cancelled PRC Options will be replaced and substituted for as of the Effective Time with the award of a new stock option to purchase a number of shares of Apex Common Stock pursuant to the 2021 Plan equal to the product (rounded down to the nearest whole number) of (x) the number of shares of AvePoint Common Stock subject to such PRC Option immediately prior to the Effective Time and (y) the Exchange Ratio, at an exercise price (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such PRC Option prior to the Effective Time divided by (B) the Exchange Ratio. The replacement stock options will be credited with vesting to the same extent as the existing PRC Options being replaced, and the new replacement awards will be subject to same vesting schedule and exercisability provisions. In other respects, the terms and conditions of the replacement stock options will be as set forth in the 2021 Plan and form of option agreement.

At the Second Effective Time, by virtue of the Second Merger and without any action on the part of Apex, Merger Sub 2, the Surviving Corporation or holders of any of the following securities, each share of common stock of the Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall be converted into and become one newly issued, fully paid and non-assessable common membership unit of the Surviving Entity.

Additionally, at the Closing, 14,000,000 shares of Apex Common Stock will be issued to the PIPE Subscribers upon the closing of the PIPE.

Following the Closing, in addition to the Aggregate Cash Consideration and Aggregate Stock Consideration, the holders of AvePoint Preferred Stock, AvePoint Common Stock and AvePoint Options shall be issued additional shares of Apex Common Stock, as follows;

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $12.50 over any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share (the “First Milestone”) (such 1,000,000 shares of Apex Common Stock, the “First Milestone Contingent Consideration”).

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $15.00 over



 

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any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share (the “Second Milestone”) (such 1,000,000 shares of Apex Common Stock, the “Second Milestone Contingent Consideration”).

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $17.50 over any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share (the “Third Milestone”) (such 1,000,000 shares of Apex Common Stock, the “Third Milestone Contingent Consideration” and together with the First Milestone Contingent Consideration and the Second Milestone Contingent Consideration, the “Contingent Consideration”). For the avoidance of doubt, the maximum amount of the Contingent Consideration is 3,000,000 shares of Apex Common Stock, in the aggregate.

Following the consummation of the Business Combination, the Proposed Certificate of Incorporation will be filed with the Secretary of State of the State of Delaware.

For more information about the Business Combination Agreement and the Business Combination, see the sections titled “Proposal No. 1 — The Business Combination Proposal” and “The Business Combination Agreement.

Organizational Structure

The following diagram illustrates the organizational structure of Apex immediately prior to the Business Combination:

LOGO

The following diagram illustrates the organizational structure of AvePoint immediately prior to the Business Combination:

LOGO



 

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The following diagram illustrates the structure of the Combined Company immediately following the Business Combination, including the approximate ownership percentage of each listed stockholder or stockholder group assuming both (1) that no Apex Public Shares are redeemed for a pro rata share of the funds in the Trust Account and (2) that approximately 44% of all Apex Public Shares are redeemed, which is the maximum amount which may be redeemed while still satisfying the $300 million minimum cash proceeds condition in the Business Combination Agreement, and under both scenarios assuming (i) a maximum Cash Election Percentage of 12.678% and (ii) that AvePoint does not issue any additional equity securities prior to the Mergers.

LOGO

Conditions to the Closing

Under the Business Combination Agreement, the consummation of the Business Combination is subject to customary and other conditions, including:

 

   

The AvePoint Requisite Approval in favor of the adoption of the Business Combination Agreement and the Mergers and all other transactions contemplated by the Business Combination Agreement;

 

   

Apex stockholders having approved, among other things, the transactions contemplated by the Business Combination Agreement and the Stockholder Proposals;

 

   

The effectiveness of this Registration Statement and absence of any stop order suspending the effectiveness of this Registration Statement or proceedings for that purpose pending before or threatened by the SEC;

 

   

The absence of any governmental law, rule, regulation, judgment, decree or other order that would prohibit the Business Combination;

 

   

The completion of required filings and expiration of the waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended, the “HSR Act”);

 

   

The consummation of the PIPE in accordance with the terms of the Subscription Agreements;

 

   

Apex having at least the $5,000,001 in net tangible assets following the exercise of redemption rights;

 

   

Apex having submitted the supplemental listing application to the Nasdaq Capital Market for the shares of Apex Common Stock represented by the Aggregate Stock Consideration and the Contingent Consideration;

 

   

The representations and warranties of the parties to the Business Combination Agreement being true and correct, subject to the de minimis, materiality and material adverse effect standards as applicable to certain representations and warranties and as specified in the Business Combination Agreement;



 

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Material compliance by the parties with their respective covenants and agreements;

 

   

The delivery by the parties of customary officers’ certificates as specified in the Business Combination Agreement;

 

   

There having been no Apex Material Adverse Effect or Company Material Adverse Effect (each as defined in the Business Combination Agreement); and

 

   

The Available Apex Cash shall be no less than $300.0 million.

For more information about the Business Combination Agreement, see the section titled “The Business Combination Agreement.

Regulatory Matters

The Business Combination is subject to the requirements of the HSR Act, which prevent Apex and AvePoint from completing the Business Combination until required information and materials are furnished to the Antitrust Division of the Department of Justice (the “DOJ”) and the Federal Trade Commission (the “FTC”) and specified waiting period requirements have been satisfied.

For more information, see the section titled “The Business Combination — Regulatory Approvals Required for the Business Combination.”

Termination Rights

The Business Combination Agreement is subject to termination prior to the Effective Time as follows:

 

   

By the mutual written consent of Apex and AvePoint;

 

   

By Apex or AvePoint, if (i) the Effective Time will not have occurred prior to the date that is 180 days after the date of the Business Combination Agreement (the “Outside Date”); provided, however, that the Business Combination Agreement may not be terminated under this provision by or on behalf of any party that is in breach or violation of any representation, warranty, covenant, agreement or obligation contained in the Business Combination Agreement and such breach or violation is the principal cause of the failure of a condition to the Closing on or prior to the Outside Date, and provided, further, that in the event that any law is enacted after the date of the Business Combination Agreement extending the applicable waiting period under the HSR Act, the Outside Date will be automatically extended by the length of any such extension; or (ii) any governmental authority in the United States has enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and non-appealable and has the effect of making consummation of the Proposed Transactions, including the Mergers, illegal or otherwise preventing or prohibiting the Closing, including the Mergers; or (iii) any of the Stockholder Proposals fail to receive the requisite vote for approval by the Apex stockholders;

 

   

By Apex (i) if AvePoint has failed to deliver the AvePoint Requisite Approval within 48 hours after the Registration Statement becomes effective; or (ii) upon a breach of any representation, warranty, covenant or agreement on the part of AvePoint set forth in the Business Combination agreement, or if any representation or warranty of AvePoint shall have become untrue, in either case such that certain conditions to the Closing would not be satisfied (“Terminating AvePoint Breach”); provided that Apex has not waived such Terminating AvePoint Breach and Apex and Merger Subs are not then in material breach of their representations, warranties, covenants or agreements in the Business Combination Agreement; provided further that, if such Terminating AvePoint Breach is curable by the Company, Apex may not terminate the Business Combination Agreement pursuant to the Business Combination



 

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Agreement for so long as AvePoint continues to exercise its reasonable efforts to cure such breach, unless such breach is not cured within thirty days after notice of such breach is provided by Apex to AvePoint; or

 

   

By AvePoint upon a breach of any representation, warranty or covenant or agreement on the part of Apex or either Merger Sub set forth in the Business Combination Agreement, or if any representation or warrant of Apex and Merger Subs shall have become untrue, in either case such that certain conditions to the Closing would not be satisfied (“Terminating Apex Breach”); provided that AvePoint has not waived such Terminating Apex Breach and AvePoint is not then in material breach of its representations, warranties, covenants or agreements in the Business Combination Agreement; provided, however, that, if such Terminating Apex Breach is curable by Apex and Merger Subs, AvePoint may not terminate the Business Combination Agreement pursuant to the Business Combination Agreement for so long as Apex and Merger Subs continue to exercise their reasonable efforts to cure such breach, unless such breach is not cured within thirty days after notice of such breach is provided by AvePoint to Apex.

If the Business Combination Agreement is terminated, the agreement will forthwith become void, and there will be no liability under the Business Combination Agreement on the part of any party to the Business Combination Agreement, except as set forth in the Business Combination Agreement or in the case of termination subsequent to Fraud (as defined in the Business Combination Agreement) or a willful material breach of the Business Combination Agreement by a party thereto.

Except as set forth in the Business Combination Agreement, all expenses incurred in connection with the Business Combination Agreement and the Proposed Transactions shall be paid by the party incurring such expenses, whether or not the Proposed Transactions are consummated. The filing, listing, and registration fees contemplated by the Business Combination Agreement shall be paid one half by each of the parties thereto; provided, that each party shall be responsible for the fees and expenses payable by such party to its respective representatives with respect to such matters. On the Closing Date, Apex shall pay any unpaid AvePoint Transaction Expenses and Apex Transaction Expenses.

For more information about the Business Combination Agreement, see the section titled “The Business Combination Agreement.

Amendments to the Charter

Pursuant to the Business Combination Agreement, at the Effective Time of the Business Combination, the Existing Certificate of Incorporation will be further amended and restated to:

 

   

Change Apex’s name to “AvePoint, Inc.”;

 

   

Authorize the issuance of up to 1,000,000,000 shares of Apex Common Stock;

 

   

Authorize the issuance of up to 20,000,000 shares of “blank check” preferred stock, the rights, preferences and privileges of which may be designated from time to time by the Combined Company Board;

 

   

Require that stockholders only act at annual and special meeting of the corporation and not by written consent;

 

   

Eliminate the current limitations in place on the corporate opportunity doctrine;

 

   

Increase the required vote thresholds for approving amendments to the charter and bylaws to 66 2/3%; and



 

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Make certain other changes to the Existing Certificate of Incorporation, including without limitation the elimination of certain provisions related to Apex’s initial business combination that will no longer be relevant following the Closing.

For more information about these amendments to the Existing Certificate of Incorporation, see the section titled “Proposal No. 2 — The Charter Proposals.”

Other Agreements Related to the Business Combination Agreement

Lock-Up Agreements and Registration Rights

In connection with the Closing, certain key stockholders of AvePoint (the “Key AvePoint Stockholders”) will enter into agreements (the “Lock-Up Agreements”) providing that they will not, subject to certain exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any shares of Apex Common Stock held by them immediately after the Effective Time, any shares of Apex Common Stock issuable upon the exercise of options to purchase shares of Apex Common Stock held by them immediately after the Effective Time, or any securities convertible into or exercisable or exchangeable for Apex Common Stock held by them immediately after the Effective Time (including any shares of Apex Common Stock) (the “Lock-Up Shares”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii) (the actions specified in clauses (i)-(iii), collectively, “Transfer”) until 180 days after the Closing Date (the “Lock-Up Period”).

With respect to certain shares of Apex Common Stock held by Apex Technology Sponsor LLC (“Sponsor”) on behalf of Jeff Epstein and Brad Koenig immediately prior to the Effective Time (“Apex Founder Lock-Up Shares”), each of Jeff Epstein and Brad Koenig will enter into Lock-Up Agreements providing that they will not, subject to certain exceptions, transfer any of their Apex Founder Lock-Up Shares until 12 months after the Closing and 50% of their Apex Founder Lock-Up Shares until 24 months after the Closing (the “Apex Founder Lock-Up Period”).

In connection with the Closing, that certain registration rights agreement dated September 16, 2019 will be amended and restated, and Apex, the Sponsor, Cantor and the Key Company Stockholders (which includes entities affiliated with Sixth Street (the “Sixth Street Holders”)) will enter into that amended and restated registration rights agreement, a form of which is attached as an exhibit to the Business Combination Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Combined Company will agree that, within 15 business days after the Closing, the Combined Company will file with the SEC (at the Combined Company’s sole cost and expense) a registration statement registering the resale of certain securities of the Combined Company held by the Sponsor, the PIPE Subscribers and holders of Apex Warrants (the “Resale Registration Statement”), and the Combined Company shall use commercially reasonable efforts to have the Resale Registration Statement declared effective as soon as practicable after the filing thereof. Each of (i) the Sixth Street Holders and (ii) the other Key Company Stockholders on the one hand, and the Sponsor and Cantor on the other, may demand registration of their registrable securities by the Combined Company up to twice a year. Each such group of demanding holders may request to sell all or any portion of their registrable securities in an underwritten offering as long as the total offering price is expected to exceed, in the aggregate, $10 million. Parties subject to the Registration Rights Agreement will be entitled to unlimited piggyback registration rights. For more information about the Lock-Up Agreement and Registration Rights, see the sections titled “Certain



 

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Agreements Related to the Business Combination — Lock-Up Agreement” and “Certain Agreements Related to the Business Combination — Registration Rights Agreement.”

Stockholder Support Agreement

On November 23, 2020, the Key AvePoint Stockholders entered into the Stockholder Support Agreement (the “Stockholder Support Agreement”) pursuant to which the Key AvePoint Stockholders agreed to vote all of their shares of AvePoint Common Stock and AvePoint Preferred Stock in favor of the approval and adoption of the Business Combination Agreement and the Proposed Transactions. Additionally, the Key AvePoint Stockholders have agreed, among other things, to (i) exercise their drag-along rights pursuant to AvePoint stockholder arrangements, (ii) vote all of their shares of AvePoint Common Stock and AvePoint Preferred Stock in favor of any required consents or approvals sought with respect to the Business Combination Agreement and the Proposed Transactions, except with respect to any adverse amendments, (iii) vote against any merger, purchase of all or substantially all of AvePoint’s assets or other business combination transaction (other than the Business Combination) and (iv) refrain from exercising any dissenters’ rights or rights of appraisal.

Sponsor Support Agreement

On November 23, 2020, the Sponsor entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”) pursuant to which the Sponsor agreed, among other things, to vote all of its shares of Apex Common Stock (i) in favor of all Stockholder Proposals, (ii) against any competing business combination proposal and related proposals or agreements, (iii) against any change in the business, management or Apex’s board of directors (other than as contemplated by the Stockholder Proposals) and (iv) against any proposal that would frustrate any provision of the Business Combination Agreement.

Pursuant to the Sponsor Support Agreement, the Sponsor agreed to deposit 2,916,700 shares of its existing Apex Common Stock (“Sponsor Earn-Out Shares”) into escrow and that such shares will be subject to the vesting provisions set forth below:

 

   

100% of the Sponsor Earn-Out Shares shall vest and be released to the Sponsor if at any time from and after the Closing through the seventh anniversary thereof, the Closing Price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and

 

   

100% of the remaining Sponsor Earn-Out Shares that have not previously vested under the Sponsor Support Agreement shall vest and be released to the Sponsor if at any time from and after the Closing through the seventh anniversary thereof, Apex consummates a Subsequent Transaction.

Subscription Agreements

On November 23, 2020, Apex executed the Subscription Agreements with the PIPE Subscribers for the sale of an aggregate of 14,000,000 shares of Apex Common Stock at a purchase price of $10.00 per share for aggregate gross proceeds of $140.0 million, in the PIPE. The closing of the PIPE will occur contemporaneously with the Closing. Apex will receive net proceeds of $138.0 million after payment of placement fees and before the payment of other expenses related to the PIPE. Citi, Goldman and Evercore acted as placement agents for the PIPE.

Interests of Certain Persons in the Business Combination

In considering the recommendation of Apex’s board of directors to vote in favor of the Business Combination, stockholders should be aware that, aside from their interests as stockholders, our directors and



 

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officers have interests in the Business Combination that are different from, in addition to, or in conflict with those of other stockholders generally. Our directors were aware of and considered these interests, among other matters, in evaluating the Business Combination, and in recommending to stockholders that they approve the Business Combination. Stockholders should take these interests into account in deciding whether to approve the Business Combination. These interests include:

 

   

The beneficial ownership of Apex’s directors and officers of an aggregate of 8,750,000 shares of Apex Capital Stock, 657,500 Initial Stockholder Units, which shares, units, and warrants would become worthless if Apex does not complete a business combination within the applicable time period, as our directors and officers and their affiliates have waived any right to redemption with respect to these shares. Such shares, units, and warrants have an aggregate market value of approximately $                million, $                million, and $                million, respectively, based on the closing price of Apex Common Stock of $                per share on Nasdaq on                 , 2021, the Record Date for the special meeting of stockholders. Based on such market values, Apex’s board of directors and officers will have an unrealized gain of $on their Apex securities;

 

   

Apex’s directors and officers and their affiliates have agreed to purchase an aggregate of 100,000 shares of Apex Common Stock in the PIPE at a purchase price of $10.00 per share, which purchase will not occur if Apex does not complete the Business Combination;

 

   

Apex’s board of directors will not receive reimbursement for any out-of-pocket expenses incurred by them on Apex’s behalf incident to identifying, investigating and consummating the Business Combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless the Business Combination is consummated;

 

   

The anticipated continuation of Jeff Epstein as a director of the Combined Company and Brad Koenig’s anticipated role as an observer of the Combined Company Board following the Closing; and

 

   

The continued indemnification of the current directors and officers of Apex following the Business Combination and the continuation of directors’ and officers’ liability insurance following the Business Combination.

These interests may influence Apex’s board of directors in making their recommendation that you vote in favor of the approval of the Business Combination Proposal and the other Stockholder Proposals.

Reasons for the Approval of the Business Combination

After careful consideration, Apex’s board of directors recommends that Apex stockholders vote “FOR” each Stockholder Proposal being submitted to a vote of the Apex stockholders at the Apex special meeting of stockholders.

For a description of Apex’s reasons for the approval of the Business Combination and the recommendation of our board of directors, see the section titled “The Business Combination — Apex’s Board of Directors’ Reasons for the Approval of the Business Combination.”

Redemption Rights

Under the Existing Certificate of Incorporation, Public Stockholder may elect to have their Public Shares then held by them redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest not previously released to Apex to pay its income taxes or any other taxes payable, by (b) the total number of shares of Public Shares. However, Apex will not



 

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redeem any Public Shares to the extent that such redemption would result in Apex having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. For illustrative purposes, based on funds in the Trust Account of approximately $351.9 million on December 31, 2020, the estimated per share redemption price would have been approximately $10.05.

If a holder exercises its redemption rights, then such holder will be exchanging its Public Shares for cash and will no longer own Public Shares and will not participate in the future growth of the Combined Company, if any. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to Apex’s transfer agent in accordance with the procedures described herein. See the section titled “The Special Meeting of Apex Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

Ownership of the Combined Company After the Closing

It is anticipated that, based on AvePoint’s capitalization table as of February 23, 2021, upon the completion of the Business Combination, the ownership of the Combined Company will be as follows:

 

Assuming No Public Stockholder

Redemption

   Assuming Maximum Public Stockholder
Redemption
   
The equityholders of AvePoint will own 143,261,093 shares of Combined Company Common Stock, representing approximately 71.0% of the total shares outstanding, which includes shares of Combined Company Common Stock that may be issuable pursuant to the exercise of Exchanged Options (calculated using the treasury stock method)    The equityholders of AvePoint will own 143,261,093 shares of Combined Company Common Stock, representing approximately 76.9% of the total shares outstanding, which includes shares of Combined Company Common Stock that may be issuable pursuant to the exercise of Exchanged Options (calculated using the treasury stock method)
   
The PIPE Subscribers will own 14,000,000 shares of Combined Company Common Stock, representing approximately 6.9% of the total shares outstanding    The PIPE Subscribers will own 14,000,000 shares of Combined Company Common Stock, representing approximately 7.5% of the total shares outstanding
   
The Public Stockholders will own 35,000,000 shares of Combined Company Common Stock, representing approximately 17.3% of the total shares outstanding    The Public Stockholders will own 19,430,384 shares of Combined Company Common Stock, representing approximately 10.4% of the total shares outstanding
   
The Sponsor and its affiliates and advisors will own 9,560,000 shares of Combined Company Common Stock (which includes 2,916,700 shares deposited into escrow and subject to vesting), representing approximately 4.7% of the total shares outstanding, excluding 100,000 shares of Combined Company Common Stock held by such holders and their affiliates purchased in the PIPE    The Sponsor and its affiliates and advisors will own 9,560,000 shares of Combined Company Common Stock (which includes 2,916,700 shares deposited into escrow and subject to vesting), representing approximately 5.1% of the total shares outstanding, excluding 100,000 shares of Combined Company Common Stock held by such holders and their affiliates purchased in the PIPE

The number of shares and percentage interests set forth above are based on a number of assumptions, including scenarios under which (a) no Apex Public Shares are redeemed and (b) approximately 44% of all Apex Public Shares are redeemed, which is the maximum amount which may be redeemed while still satisfying the $300 million minimum cash proceeds condition in the Business Combination Agreement, and under both scenarios (i) a maximum Cash Election Percentage of 12.678% and (ii) that AvePoint does not issue any additional equity securities prior to the Mergers. If the actual facts differ from our assumptions, the number of



 

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shares and percentage interests set forth above will be different. In addition, the number of shares and percentage interests set forth above do not take into account potential future exercises of Apex Warrants or additional potential future exercises of AvePoint Options prior to the Closing.

Please see the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

Material U.S. Federal Income Tax Consequences of the Mergers

The Mergers, taken together with the Named Executive Transactions (as defined in the Business Combination Agreement), are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and Apex and AvePoint have agreed to use their reasonable best efforts to cause the Mergers to so qualify. It is not a condition to the completion of the Mergers that either AvePoint or Apex receives an opinion of counsel to the effect that the Mergers will so qualify, and the Mergers may be fully taxable to U.S. holders of AvePoint capital stock for U.S. federal income tax purposes. No ruling has been, or will be, sought by AvePoint or Apex from the IRS with respect to the Mergers and there can be no assurance that the IRS will not challenge the qualification of the Mergers, taken together, as a “reorganization” under Section 368(a) of the Code or that a court would not sustain such a challenge.

If the Mergers qualify as part of a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. Holder (as defined under the section entitled “Material U.S. Federal Income Tax Consequences of the Mergers”) generally will recognize gain (but not loss) in an amount equal to the lesser of: (1) the sum of the amount of cash consideration and the fair market value of the Apex common stock received, minus such holder’s adjusted tax basis in its shares of AvePoint capital stock surrendered in exchange therefor, and (2) the amount of cash consideration received. If the Mergers fail to qualify as part of a “reorganization” within the meaning of Section 368(a) of the Code, a U.S. Holder generally will recognize gain or loss equal to the difference, if any, between: (1) the sum of the amount of cash consideration and the fair market value of the Apex common stock, and (2) such U.S. Holder’s adjusted tax basis in the AvePoint capital stock surrendered in exchange therefor.

For additional information, please read the section entitled “Material U.S. Federal Income Tax Consequences of the Mergers.” The tax consequences to holders of AvePoint Capital Stock of the Mergers will depend on such holder’s particular facts and circumstances. Holders of AvePoint capital stock are urged to consult with their tax advisor as to the tax consequences of the Mergers in such holders’ particular circumstances, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws.

Summary of Risk Factors

In evaluating the Stockholder Proposals, Apex Stockholders should carefully read this proxy statement/prospectus and especially consider the factors discussed in the section titled “Risk Factors.” Some of the risks related to AvePoint’s business and industry, and risks of the Combined Company, are summarized below.

 

   

AvePoint’s success depends on its technology partners. In particular, AvePoint’s technical advantages are highly dependent on its partnership with Microsoft and other major software providers. Should Microsoft or these other providers acquire competitors that heavily overlap with AvePoint’s capabilities, or develop competing features, AvePoint may lose customer acquisition momentum and fail to secure renewals or growth targets.

 

   

AvePoint has a history of operating losses and may not be able to generate sufficient revenue to achieve and sustain profitability.

 

   

AvePoint has experienced strong growth in recent periods, and its recent growth rates may not be indicative of its future growth.



 

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AvePoint’s future revenue and operating results will be harmed if it is unable to acquire new customers, expand sales to its existing customers, or develop new functionality for its products and services that achieves market acceptance.

 

   

AvePoint’s ability to predict the rate of customer subscription renewals and the impact these renewals will have on its revenue or operating results is limited.

 

   

AvePoint’s sales cycle with mid-market and large enterprise customers can be long and unpredictable, and its sales efforts require considerable time and expense.

 

   

If AvePoint experiences competitive pressures in its market or if the prices AvePoint charges for its products and services are unacceptable to its customers, it will need to reduce or change its pricing model to remain competitive and its operating results could be harmed.

 

   

If AvePoint fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, and changing customer needs or preferences, its products and services may become less competitive.

 

   

AvePoint’s success with small- and medium-sized business customers depends in part on its resale and distribution partnerships. AvePoint’s business would be harmed if it fails to maintain or expand partner relationships.

 

   

Unfavorable conditions in AvePoint’s industry or the global economy, or reductions in IT spending, could limit AvePoint’s ability to grow its business and negatively affect AvePoint’s results of operations.

 

   

The estimates of market opportunity and forecasts of market growth included in this prospectus/proxy statement may prove to be inaccurate. Even if the market in which AvePoint competes achieves the forecasted growth, AvePoint’s business could fail to grow at similar rates, if at all.

 

   

The ability to attract, recruit and retain highly qualified employees (such as pre-sales and post sales technical solutions professionals, and customer success professionals or software engineers) is critical to AvePoint’s success and growth.

 

   

Failure to effectively develop and expand AvePoint’s marketing and sales capabilities could harm AvePoint’s ability to increase its customer base and achieve broader market acceptance of its products and services. If AvePoint is not able to generate traffic to its website through digital marketing its ability to attract new customers may be impaired.

 

   

To the extent AvePoint’s security measures are compromised, its products and services may be perceived as not being secure. This may result in customers curtailing or ceasing their use of AvePoint’s products and services, its reputation being harmed, the incurrence of significant liabilities, and harm its results of operations and growth prospects.

 

   

The Combined Company anticipates that its operations will continue to increase in complexity as it grows, which will create management challenges.

 

   

The Combined Company will depend on the continued services of AvePoint’s founders, its senior management team and skilled individual contributors, and the loss of one or more key employees or an inability to attract and retain highly skilled employees could harm the Combined Company’s business.

 

   

Evolving global internet laws, regulations and standards, privacy regulations, cross-border data transfer restrictions, and data localization requirements may limit the use and adoption of the Combined Company’s services, expose it to liability, or otherwise harm its business.



 

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The Combined Company will provide its products and services to businesses in highly regulated industries and to customers with elevated confidentiality, privacy or security requirements, including public sector customers, which will subject it to a number of challenges and risks.

 

   

Significant changes in the contracting or fiscal policies of the public sector, or the Combined Company’s failure to comply with certain laws or regulations, could have a harm the business it does with the public sector.

 

   

If the Mergers, taken together with the Named Executive Transactions (as defined in the Business Combination Agreement), do not qualify as a reorganization under Section 368(a) of the Code, the stockholders of AvePoint may be required to pay substantial U.S. federal income taxes.



 

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL INFORMATION OF AVEPOINT

The following selected historical financial information for AvePoint set forth below should be read in conjunction with “AvePoint Management’s Discussion and Analysis of Financial Condition and Results of Operations” and AvePoint’s consolidated historical financial statements and the related notes thereto contained elsewhere in this proxy statement/prospectus.

The selected consolidated statements of operations data and consolidated statement of cash flows data for the years ended December 31, 2020, 2019 and 2018 and the selected consolidated balance sheet data as of December 31, 2020 and 2019 are each derived from AvePoint’s audited consolidated financial statements appearing elsewhere in this proxy statement/prospectus. The historical results are not necessarily indicative of the results to be expected in the future.

 

     Year Ended December 31,  
     2020     2019     2018  
     (in thousands, except per share
amounts)
 

Consolidated Statements of Operations Data

      

Revenue:

      

Subscription

   $ 91,023     $ 54,729     $ 37,360  

Services

     34,140       26,662       27,228  

License, maintenance and OEM

     26,370       34,708       42,726  
  

 

 

   

 

 

   

 

 

 

Total revenue

     151,533       116,099       107,314  

Cost of revenue:

      

Subscription

     12,980       9,397       5,988  

Services

     26,089       24,727       21,724  

License, maintenance and OEM

     1,221       2,275       3,085  
  

 

 

   

 

 

   

 

 

 

Total cost of revenue

     40,290       36,399       30,797  
  

 

 

   

 

 

   

 

 

 

Gross profit

     111,243       79,700       76,517  

Operating expenses:

      

Sales and marketing

     76,545       61,901       50,269  

General and administrative

     36,872       24,614       19,102  

Research and development

     12,204       11,148       8,244  

Depreciation and amortization

     1,059       1,049       1,209  
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     126,680       98,712       78,824  
  

 

 

   

 

 

   

 

 

 

Loss from operations

     (15,437     (19,012     (2,307

Interest income, net

     41       56       21  

Other income (expense), net

     (511     (604     268  
  

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (15,907     (19,560     (2,018

Income tax expense

     1,062       614       1,930  
  

 

 

   

 

 

   

 

 

 

Net loss

   $ (16,969   $ (20,174   $ (3,948
  

 

 

   

 

 

   

 

 

 

Net income attributable to redeemable noncontrolling interest

     (27     —         —    
  

 

 

   

 

 

   

 

 

 

Net loss attributable to AvePoint, Inc.

   $ (16,996   $ (20,174   $ (3,948

Deemed dividends on preferred stock

     (34,446     (107,469     —    
  

 

 

   

 

 

   

 

 

 

Net loss available to common shareholders

   $ (51,442   $ (127,643   $ (3,948
  

 

 

   

 

 

   

 

 

 

Net loss per share of common stock, basic and diluted

   $ (4.99   $ (14.99   $ (0.47
  

 

 

   

 

 

   

 

 

 

Weighted average of shares used in computing net loss per share of common stock, basic and diluted

     10,313       8,515       8,450  


 

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     As of December 31,  
     2020     2019  
     (in thousands)  

Consolidated Balance Sheet Data:

    

Total assets

   $ 169,054     $ 98,078  

Total liabilities

         148,867           102,129  

Total mezzanine equity

     213,014       194,631  

Total stockholders’ deficiency

     (192,827     (198,682

Total liabilities, mezzanine equity, and stockholders’ deficiency

     169,054       98,078  

 

     Years Ended December 31,  
     2020      2019     2018  
    

(in thousands)

 

Statement of Cash Flows Data:

       

Net cash provided by (used in) operating activities

   $ 19,120      $ (2,051   $ (3,209

Cash provided by (used in) investing activities

     1,368        (1,481     26  

Cash provided by (used in) financing activities

           35,559        (94     17  

Effect of exchange rate on cash

     903        (590     (360
  

 

 

    

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     56,950        (4,216     (3,526

Cash and Cash Equivalents:

       

Cash and cash equivalents beginning of year

     12,162              16,378             19,904  
  

 

 

    

 

 

   

 

 

 

Cash and cash equivalents end of year

   $ 69,112      $ 12,162     $ 16,378  
  

 

 

    

 

 

   

 

 

 


 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF APEX

The following tables show selected historical financial information of Apex for the periods and as of the dates indicated. The selected historical financial information of Apex was derived from the audited historical financial statements of Apex included elsewhere in this proxy statement/prospectus. The following tables should be read in conjunction with “Apex Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Apex’s historical financial statements and the notes and schedules related thereto, included elsewhere in this proxy statement/prospectus.

 

     Year Ended
December 31, 2020
     For the Period from
April 5, 2019
(inception) to
December 31, 2019
 
     (in thousands, except per share amounts)  

Statement of Operations Data:

     

Net income (loss)

   $ (4,251)      $ 901  

Net income per Class A common share – basic and diluted

     0.03       
0.03
 

Statement of Cash Flows Data:

     

Net cash used in operating activities

   $ (2,419)      $ (474

Net cash provided by (used in) investing activities

     1,622        (350,000

Net cash provided by financing activities

     —          351,469  

 

     As of December 31,
2020
 
     (in thousands)  

Balance Sheet Data:

  

Total cash

   $
198
 

Total assets

    
352,608
 

Total liabilities

     17,640  

Total stockholders’ equity

     5,000  

Total liabilities and stockholders’ equity

     352,608  


 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following summary unaudited pro forma condensed combined financial data (the “Summary Pro Forma Data”) gives effect to the Business Combination as contemplated by the Merger Agreement. The Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, the Company will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of AvePoint issuing stock for the net assets of the Company, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of AvePoint. The summary unaudited pro forma condensed combined balance sheet data as of December 31, 2020 gives effect to the Business Combination as if it had occurred on December 31, 2020. The summary unaudited pro forma condensed combined statement of operations data for the year ended December 31, 2020 gives effect to the Business Combination as if it had occurred on January 1, 2020.

The Summary Pro Forma Data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the post-combination company appearing elsewhere in this proxy statement/prospectus and the accompanying notes to the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical consolidated financial statements and related notes of the Company and AvePoint for the applicable periods included in this proxy statement/prospectus. The Summary Pro Forma Data have been presented for informational purposes only and are not necessarily indicative of what the post-combination company’s financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the Summary Pro Forma Data does not purport to project the future financial position or operating results of the post-combination company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of common stock:

 

   

Assuming No Redemptions: This presentation assumes that no Public Stockholders of the Company exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that stockholders holding 15,569,616 Public Shares will exercise their redemption rights for their pro rata share (approximately $10.05 per share as of December 31, 2020) of the funds in the Trust Account. The Business Combination Agreement provides that consummating the Business Combination is conditioned on the Company having a minimum cash condition of $300 million. The minimum cash condition is determined based on the following: (i) the funds remaining in the Trust Account, plus (ii) the proceeds under the Subscription Agreements, plus (iii) the proceeds with respect to any Additional Equity Amount, minus (b) the sum of (i) the amount required to satisfy the Redemption Rights plus (ii) any taxes due on any accrued interest on the Trust Account, plus (iii) any unpaid Apex Transaction Expenses, plus (iv) any unpaid AvePoint Transaction Expenses. This scenario gives effect to Public Share redemptions of approximately 15,569,616 Public Shares (44% of total public shares) for aggregate redemption payments of $156.5 million using a per share redemption price as of December 31, 2020.



 

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    Pro Forma Condensed Combined
(Assuming No Redemptions)
    Pro Forma Condensed Combined
(Assuming Maximum Redemptions)
 
    (in thousands, except share and per share data)  

Summary Unaudited Pro Forma Condensed Combined

 

 

Statement of Operations Data

   

Year Ended December 31, 2020

   

Revenue

  $ 151,533     $ 151,533  

Net loss per share - basic and diluted

    (0.32     (0.35

Weighted-average stock outstanding - basic and diluted

    173,531,404       157,961,788  

Summary Unaudited Pro Forma Condensed Combined

 

 

Balance Sheet Data as of December 31, 2020

   

Total assets

  $ 352,959     $ 209,936  

Total liabilities

    130,602       130,602  

Total mezzanine equity

    3,061       3,061  

Total stockholders’ equity

    219,296       76,273  


 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this proxy statement/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, our management team’s, AvePoint’s and AvePoint’s 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,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus may include, for example, statements about:

 

   

Our ability to consummate the Business Combination;

 

   

The anticipated timing of the Business Combination;

 

   

The expected benefits of the Business Combination;

 

   

The Combined Company’s financial and business performance following the Business Combination, including financial projections and business metrics;

 

   

Changes in AvePoint’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects and plans;

 

   

The implementation, market acceptance and success of AvePoint’s business model and growth strategy;

 

   

AvePoint’s expectations and forecasts with respect to the size and growth of the cloud industry and digital transformation in general and Microsoft’s products and services in particular;

 

   

The ability of AvePoint’s products and services to meet customers’ compliance and regulatory needs;

 

   

AvePoint’s ability to compete with others in the digital transformation industry;

 

   

AvePoint’s ability to grow its market share;

 

   

AvePoint’s ability to attract and retain qualified employees and management;

 

   

AvePoint’s ability to adapt to changes in consumer preferences, perception and spending habits and develop and expand its product offerings and gain market acceptance of its products, including in new geographies;

 

   

AvePoint’s ability to develop and maintain its brand and reputation;

 

   

Developments and projections relating to AvePoint’s competitors and industry;

 

   

The impact of health epidemics, including the COVID-19 pandemic, on AvePoint’s business and the actions AvePoint may take in response thereto;

 

   

The impact of the COVID-19 pandemic on customer demands for cloud services;

 

   

AvePoint’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;

 

   

Expectations regarding the time during which we will be an emerging growth company under the JOBS Act;

 

   

AvePoint’s future capital requirements and sources and uses of cash;



 

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AvePoint’s ability to obtain funding for its operations and future growth; and

 

   

AvePoint’s business, expansion plans and opportunities.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should not place undue reliance on these forward-looking statements in deciding how to vote your proxy or instruct how your vote should be cast on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:

 

   

The occurrence of any event, change or other circumstances that could delay the Business Combination or give rise to the termination of the Business Combination Agreement;

 

   

The outcome of any legal proceedings that may be instituted against Apex following announcement of the proposed Business Combination and transactions contemplated thereby;

 

   

The inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Apex or to satisfy other conditions to the Closing in the Business Combination Agreement;

 

   

The ability to obtain or maintain the listing of Apex Common Stock on Nasdaq following the Business Combination;

 

   

The risk that the proposed Business Combination disrupts current plans and operations of AvePoint as a result of the announcement and consummation of the transactions described herein;

 

   

Our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of AvePoint to grow and manage growth profitably following the Business Combination;

 

   

Costs related to the Business Combination;

 

   

Changes in applicable laws or regulations;

 

   

The effect of the COVID-19 pandemic on AvePoint’s business and the economy in general;

 

   

The ability of AvePoint to execute its business model, including market acceptance of its planned products and services;

 

   

The Combined Company’s ability to raise capital;

 

   

The possibility that Apex or AvePoint may be negatively impacted by other economic, business, and/or competitive factors;

 

   

Any changes to U.S. tax laws; and

 

   

Other risks and uncertainties described in this proxy statement/prospectus, including those under the section titled “Risk Factors.”



 

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In addition, statements that “AvePoint believes” or “Apex believes” and similar statements reflect AvePoint’s or Apex’s beliefs and opinions on the relevant subject. These statements are based upon information available to AvePoint or Apex, as the case may be, as of the date of this prospectus/proxy statement, and while AvePoint or Apex, as the case may be, believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and such statements should not be read to indicate that such party has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.



 

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RISK FACTORS

The Combined Company will face a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement/prospectus, you should carefully consider the material risks described below before deciding how to vote your shares of stock. In addition, you should read and consider the risks associated with the business of Apex because these risks may also affect the Combined Company. You should also read and consider other information in this proxy statement/prospectus.

Risks Related to AvePoint

AvePoint’s success depends on its technology partners. In particular, AvePoint’s technical advantages are highly dependent on its partnership with Microsoft and other major software providers. Should Microsoft or these other providers acquire competitors that heavily overlap with AvePoint’s capabilities, or develop competing features, AvePoint may lose customer acquisition momentum and fail to secure renewals or growth targets.

The significant majority of AvePoint’s customers choose to integrate its products and services with, or as an enhancement of, third-party solutions such as infrastructure, platforms or applications, in particular from Microsoft, Inc. (“Microsoft”). The functionality and popularity of AvePoint’s products and services depend largely on its ability to integrate its platform with third-party solutions, in particular Microsoft’s Azure, SharePoint and Office 365. AvePoint is dependent on technology partner solutions for several major categories of its offerings, including data management, migration, governance, protection and backup. As a result, AvePoint’s customers’ satisfaction with its products is highly dependent on their perception of, and satisfaction with, AvePoint’s third-party providers and their respective offerings. AvePoint will continue to depend on various third-party relationships to sustain and grow its business. Third-party providers may change the features of their solutions, alter their governing terms, or end the solutions’ availability altogether. They may restrict AvePoint’s ability to add, customize or integrate systems, functionality and customer experiences. Any such changes could limit or terminate AvePoint’s ability to use these third-party solutions and provide its customers with the full range of its products and services. AvePoint’s business would be negatively impacted if it fails to retain these relationships for any reason, including due to third parties’ failure to support or secure their technology or AvePoint’s integrations; errors, bugs, or defects in their technology; or changes in AvePoint’s products and services. Any such failure, as well as a prolonged disruption, a cybersecurity event or any other negative event affecting AvePoint’s third-party providers and leading to customer dissatisfaction, could harm AvePoint’s relationship with its customers, its reputation and brand, its revenue, its business, and its results of operations.

Strategic technology partners and third parties may not be successful in building integrations, co-marketing AvePoint’s products and services to provide significant volume and quality of lead referrals, or continue to work with AvePoint as their respective products evolve. Identifying, negotiating and documenting relationships with additional strategic technology partners require significant resources. Integrating third-party technology can be complex, costly and time-consuming. Third parties may be unwilling to build integrations. AvePoint may be required to devote additional resources to develop integrations for its own products. Strategic technology partners or providers of solutions with which AvePoint has integrations may decide to compete with AvePoint or enter into arrangements with AvePoint’s competitors, resulting in such partners or providers withdrawing support for AvePoint’s integrations. AvePoint’s agreements with its partners are generally non-exclusive, meaning its partners may offer products from several different companies to their customers. Specifically, Microsoft and other major platform providers could end partnerships, cease marketing AvePoint’s offerings, with limited or no notice and with little or no penalty, or decide to purchase strong competition, or incorporate AvePoint’s capabilities into native solutions. Any of these developments would negatively impact AvePoint’s business.

Microsoft, as well as other cloud platform providers like Salesforce, may furthermore introduce functionality that competes with AvePoint’s products and services, as a result of an acquisition, or their own

 

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development. Additionally, AvePoint relies heavily on its early access to preview Microsoft technology, which enables its product strategy and development teams to anticipate future opportunities as well as validate its current direction.

In the last year, Microsoft has acquired a migration vendor whose functions overlap with AvePoint’s migration platform and has historically incorporated some of AvePoint’s capabilities into core platform offerings.

While Microsoft introduces competitive features as a premium option, some customers will choose a simpler first-party solution to their problem, even at a greater cost to them. Microsoft and other cloud providers may also choose to make it difficult for third party providers like AvePoint to continue making the necessary application programming interface (“API”) calls to provide their solutions, as illustrated by an increase in API “throttling” in recent years or API quotas provided by Salesforce.

Although AvePoint typically receives significant advance notice of new product releases from Microsoft, Microsoft does not always preview its technology with AvePoint or other partners and, as a result, it is possible that AvePoint may not receive advance notice of changes in features and functionality of new technologies with which its products will need to interoperate. If this was to happen, there could be an increased risk of product incompatibility. Any failure of AvePoint’s products and services to operate effectively with solutions could reduce the demand for its products and services, resulting in customer dissatisfaction and harm to AvePoint’s business. If AvePoint is unable to respond to these changes or failures in a cost-effective manner, its products and services may become less marketable, less competitive, or obsolete, and its results of operations may be negatively impacted.

AvePoint has a strategic technology partnership with Microsoft for the collaboration to co-sell and co-market AvePoint products and services to new customers. If its relationships with its strategic technology partners, such as Microsoft, are disrupted or if the co-sell and co-market program was ended for any reason, AvePoint may receive less revenue and incur costs to form other revenue-generating strategic technology partnerships. If Microsoft were to acquire a competitor of AvePoint, it could harm AvePoint’s relationship with its customers, its reputation and brand, and its business and results of operations.

The COVID-19 pandemic could harm AvePoint’s business, financial condition and results of operations.

While AvePoint was able to deliver a significant growth in 2020 despite of the COVID-19 pandemic, the measures attempting to contain and mitigate the effects of the COVID-19 pandemic, including stay-at-home, business closure, and other restrictive orders, and the resulting changes in businesses’ behaviors, have disrupted its normal operations and impacted its employees, suppliers, partners, and customers. AvePoint expects these disruptions and impacts to continue for the foreseeable future. In response to the COVID-19 pandemic, AvePoint took a number of actions that have impacted and continue to impact its business, including transitioning employees across all its offices (including its corporate headquarters) to remote work-from-home arrangements, imposing travel and related restrictions, and reducing operational expenditures significantly, including a reduction of approximately 10% of AvePoint’s global workforce during the first half of 2020. Given the continued spread of COVID-19 and the resulting personal, economic, and governmental reactions, AvePoint may have to take additional actions in the future that could harm its business, financial condition and results of operations. While AvePoint has a distributed workforce and its employees are accustomed to working remotely or with other remote employees, its workforce has not historically been fully remote. Prior to the COVID-19 pandemic, certain of AvePoint’s employees traveled frequently to establish and maintain relationships with one another and with its customers and partners. AvePoint continues to monitor the situation and may adjust its current policies as more information and guidance become available. Suspending travel and doing business in-person on a long-term basis could negatively impact AvePoint’s marketing efforts, its ability to enter into customer contracts in a timely manner, its international expansion efforts and its ability to recruit employees across the organization. These changes could negatively impact its sales and marketing in particular, which could have longer-term effects on its sales pipeline, or create operational or other challenges as its workforce remains

 

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predominantly remote, any of which could harm its business. In addition, AvePoint’s management team has spent, and will likely continue to spend, significant time, attention, and resources monitoring the COVID-19 pandemic and associated global economic uncertainty and seeking to manage its effects on AvePoint’s business and workforce.

The degree to which COVID-19 will affect AvePoint’s business and results of operations will depend on future developments that are highly uncertain and cannot currently be predicted. These developments include, but are not limited to, the duration, extent and severity of the COVID-19 pandemic, actions taken to contain the COVID-19 pandemic, the impact of the COVID-19 pandemic and related restrictions on economic activity in domestic market and international trade, and the extent of the impact of these and other factors on AvePoint’s employees, suppliers, partners and customers. The COVID-19 pandemic and related restrictions could limit AvePoint’s customers’ ability to continue to operate, such as by limiting their abilities to obtain inventory, generate sales, or make timely payments to AvePoint. It could disrupt or delay the ability of employees to work because they become sick or are required to care for those who become sick, or for dependents for whom external care is not available. It could cause delays or disruptions in services provided by key suppliers and vendors, increase vulnerability of AvePoint and its partners and service providers to security breaches, denial of service attacks or other hacking or phishing attacks, or cause other unpredictable effects.

The COVID-19 pandemic also has caused heightened uncertainty in the global economy. If economic conditions further deteriorate, consumers and business clients may not have the financial means to make purchases from AvePoint’s customers and may delay or reduce discretionary purchases, negatively impacting AvePoint’s customers and, as a consequence, AvePoint’s results of operations. Uncertainty from the pandemic may cause prospective or existing customers to defer investment in the areas covered by AvePoint’s products and services or to reduce the value or duration of subscription contracts and may also require AvePoint to provide larger pricing discounts or extended payment terms. AvePoint’s SMB customers may be more susceptible to general economic conditions than larger businesses, which may have greater liquidity and access to capital. Since the impact of COVID-19 is ongoing and because of AvePoint’s subscription-based business model, the effect of the COVID-19 pandemic and the related impact on the global economy may not be fully reflected in AvePoint’s results of operations until future periods. Some of AvePoint’s customers have experienced, and may continue to experience, financial hardships that could result in delayed or even uncollectible payments in the future.

Further, to the extent there is a sustained general economic downturn and AvePoint’s software and services are perceived by its existing and potential customers as costly or too difficult to deploy or migrate to, its revenue may be disproportionately affected by delays or reductions in general information technology spending. Competitors, many of whom are larger and more established than AvePoint is, may respond to market conditions by lowering prices and attempting to lure away AvePoint’s customers. AvePoint cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally, or within any particular industry. If the economic conditions of the general economy or markets in which AvePoint operates worsen from present levels, its business, results of operations and financial condition could be harmed.

AvePoint has a history of operating losses and may not be able to generate sufficient revenue to achieve and sustain profitability.

AvePoint has a history of incurring operating losses. It incurred net losses of $17.0 million, $20.2 million and $3.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, AvePoint had an accumulated deficit of $299.8 million. While AvePoint has experienced significant revenue growth over recent years, it may not be able to sustain or increase its growth or achieve profitability in the future. AvePoint intends to continue to invest in sales and marketing efforts, research and development, and expansion into new geographies. In addition, AvePoint expects to incur significant additional legal, accounting, and other expenses related to being a public company following the Business Combination as compared to when it was a private company. While its revenue has grown in recent years, if its revenue declines or fails to grow at a rate faster than these increases in its operating expenses, it will not be able to achieve and maintain profitability

 

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in future periods. As a result, AvePoint may generate losses in future periods. AvePoint cannot assure investors that it will achieve profitability in the future or that, if it does become profitable, it will be able to sustain profitability. Additionally, it may encounter unforeseen operating expenses, difficulties, complications, delays, and other unknown factors that may result in losses in future periods. If these losses exceed its expectations or its revenue growth expectations are not met in future periods, AvePoint’s financial performance will be harmed.

AvePoint has experienced strong growth in recent years, and its recent growth rates may not be indicative of its future growth.

AvePoint has experienced strong growth in recent years. AvePoint’s revenue was $151.5 million, $116.1 million and $107.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. In future periods, AvePoint may not be able to sustain revenue growth consistent with recent history, or at all. AvePoint believes its revenue growth and its ability to manage such growth depend on several factors, including, but not limited to, its ability to do the following:

 

   

Effectively recruit, integrate, train and motivate a large number of new employees, including its sales force, technical solutions professionals, customer success managers and engineers, while retaining existing employees, maintaining the beneficial aspects of its corporate culture and effectively executing its business plan;

 

   

Attract new customers and retain and increase sales to existing customers;

 

   

Maintain and expand its relationships with its partners, including effectively managing existing channel partnerships and expand to new ones;

 

   

Successfully implement its products and services, increase its existing customers’ use of its products and services, and provide its customers with excellent customer support and the ability of its partners to do the same;

 

   

Increase the number of its partners;

 

   

Develop its existing products and services and introduce new products or new functionality to its products and services;

 

   

Expand into new market segments and internationally;

 

   

Earn revenue share and customer referrals from its partner ecosystem;

 

   

Improve its key business applications and processes to support its business needs;

 

   

Enhance information and communication systems to ensure that its employees and offices around the world are well-coordinated and can effectively communicate with each other and its growing customer base, particularly in light of the COVID-19 pandemic and the long-term effects thereof;

 

   

Enhance its internal controls to ensure timely and accurate reporting of all of its operations and financial results;

 

   

Protect and further develop its strategic assets, including its intellectual property rights; and

 

   

Make sound business decisions considering the scrutiny associated with operating as a public company.

AvePoint may not accomplish any of these objectives and, as a result, it is difficult for AvePoint to forecast its future revenue or revenue growth. If AvePoint’s assumptions are incorrect or change in reaction to changes in its market, or if AvePoint is unable to maintain consistent revenue or revenue growth, its stock price could be volatile, and it may be difficult to achieve and maintain profitability. You should not rely on its revenue for any prior periods as any indication of its future revenue or revenue growth. In particular, the catalyst for AvePoint’s revenue growth rate acceleration during the year ended December 31, 2020 was subscription-based revenue, which increased by approximately 66.3% compared to the prior year. AvePoint may not be able to sustain such revenue growth rates in the future.

 

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Furthermore, these activities will require significant investments and allocation of valuable management and employee resources, and AvePoint’s growth will continue to place significant demands on its management and its operational and financial infrastructure. There are no guarantees AvePoint will be able to grow its business in an efficient or timely manner, or at all. Moreover, if AvePoint does not effectively manage the growth of its business and operations, the quality of its software could suffer, which could negatively affect AvePoint’s brand, results of operations and overall business.

AvePoint’s quarterly and annual operating results may be harmed due to seasonality and a variety of other factors, which could make its future results difficult to predict.

AvePoint’s revenue and other results of operations have fluctuated from quarter to quarter in the past and can continue to fluctuate in the future. AvePoint’s revenue depends in part on the conversion of enterprises that have installed an evaluation license for its software into paying customers. In this regard, most of AvePoint’s sales are typically made during the last three weeks of every quarter. AvePoint may fail to meet market expectations for that quarter if it is unable to close the number of transactions that it expects during this short period and closings are deferred to a subsequent quarter.

In addition, AvePoint’s sales cycle from initial contact to delivery of and payment for the software license generally becomes longer and less predictable with respect to large transactions and often involves multiple meetings or consultations at a substantial cost and time commitment to AvePoint. Although AvePoint tries to minimize the potential impact of large transactions on its quarterly results of operations, the closing of a large transaction in a particular quarter may make it more difficult for it to meet market expectations in subsequent quarters and its failure to close a large transaction may adversely impact its revenue in a particular quarter.

Furthermore, AvePoint bases its current and future expense levels on its revenue forecasts and operating plans, and its expenses are relatively fixed in the short term. Accordingly, AvePoint will likely not be able to reduce its costs sufficiently to compensate for an unexpected shortfall in revenue and even a relatively small decrease in revenue could disproportionately impact its financial results for such quarter.

The variability and unpredictability of these and other factors could result in AvePoint failing to meet or exceed financial expectations for a given period and could adversely impact its share price.

There are also significant seasonal factors that may cause financial statement fluctuations in some quarters compared with others. AvePoint believes this variability is largely due to its customers’ budgetary and spending patterns, as many customers spend the unused portions of their discretionary budgets prior to fiscal year ends. Historically, AvePoint’s fourth quarter has been typically its quarter with the largest bookings, which impacts revenue, unbilled revenue, deferred revenue, accounts receivable and amortized commissions in future periods.

AvePoint’s future revenue and operating results will be harmed if it is unable to acquire new customers, expand sales to its existing customers, or develop new functionality for its products and services that achieves market acceptance.

To continue to grow AvePoint’s business, it is important that it continues to acquire new customers to purchase and use its products and services. AvePoint’s success in adding new customers depends on numerous factors, including its ability to: (1) offer compelling products and services, (2) execute its sales and marketing strategy, (3) attract, effectively train and retain new sales, marketing, professional services, and support personnel in the markets it pursues, (4) develop or expand relationships with partners, IT consultants, systems integrators resellers and other third parties, strengthening its network, (5) expand into new geographies, including internationally, and market segments, (6) efficiently onboard new customers on to its product offerings, and (7) provide additional paid services that fulfill the needs and complement the capabilities of its customers and their partners.

 

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AvePoint’s future success also depends, in part, on its ability to sell additional products, more functionality and/or adjacent services to its current customers, and the success rate of such endeavors is difficult to predict, especially during the ongoing COVID-19 pandemic and with regard to any new products or lines of business that AvePoint may introduce from time to time. AvePoint’s ability to increase sales to existing customers depends on several factors, including their experience with implementing and using AvePoint’s products and services, their ability to integrate AvePoint’s products and services with other technologies, and AvePoint’s pricing model. Sales to existing customers may require increasingly costly marketing and sales efforts that are targeted at senior management, and if these efforts are not successful, AvePoint’s business and operating results may suffer.

As the markets for AvePoint’s products mature, or as new competitors introduce new products or services that compete with AvePoint’s, AvePoint may be unable to attract new customers at the same price or based on the same pricing model as it has used historically. From time to time, AvePoint may also change its pricing structure, which could adversely impact demand for its products and services. Moreover, large customers, which are a material focus of its sales efforts, have continued, and may continue, to demand greater price concessions and delayed payment terms. AvePoint’s customers may also increasingly defer purchasing decisions, demand price concessions and delayed payment terms, and request other terms and conditions if the COVID-19 pandemic worsens or is prolonged. As a result, in the future AvePoint may be required to reduce its prices or accept onerous terms and conditions, including delayed payment terms, which could harm AvePoint’s revenue, profitability, financial position, and cash flows in any given period.

AvePoint’s ability to generate revenue may be inconsistent across its small- and medium-sized business (“SMB”), mid-market (“MM”), and large enterprise customer segments. AvePoint classifies customers in these segments based on whether they have annual revenue of more or less than $2.5 billion and whether they have user seats of less than 500, between 500 and 5,000, or more than 5,000. If AvePoint experiences limited or inconsistent growth in any of these customer sets, particularly its MM and large enterprise customers, its business, financial condition, and operating results could be harmed.

If AvePoint is unable to provide enhancements, new features, or keep pace with current technological developments, its business could be harmed. If AvePoint’s new functionality and services initiatives do not continue to achieve acceptance in the market, its competitive position may be impaired, and its potential to generate new revenue or to sustain existing revenue could be diminished. The harm to AvePoint’s financial results may be particularly acute because of the significant research, development, marketing, sales, and other expenses it will have incurred in connection with the new functionality and services.

In addition, as an increasing amount of AvePoint’s business may move to its cloud-based products and services and the use of consumption-based pricing models may represent a greater share of AvePoint’s revenue, its revenue may be less predictable or more variable than its historical revenue from perpetual or time period-based subscription pricing models. Moreover, a consumption-based subscription pricing model may ultimately result in lower total cost to AvePoint’s customers over time, or may cause its customers to limit usage in order to stay within the limits of their existing subscriptions, reducing overall revenue or making it more difficult for AvePoint to compete in its markets.

AvePoint’s ability to predict the rate of customer subscription renewals and the impact these renewals will have on its revenue or operating results is limited.

AvePoint’s ability to maintain or increase revenue also depends in part on its ability to retain existing customers, in particular that its customers renew their subscriptions with AvePoint on the same or more favorable terms to AvePoint. AvePoint’s customers have no obligation to renew their subscriptions for AvePoint products after the expiration of either the initial or renewed subscription period, and in the normal course of business, some customers have elected not to renew. AvePoint’s customers may renew for fewer elements of AvePoint’s products, for shorter renewal terms or on different pricing terms, including lower-cost offerings of AvePoint’s products. AvePoint’s customers’ renewal rates may decline or fluctuate as a result of a number of factors,

 

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including their level of satisfaction with AvePoint’s pricing or AvePoint’s products and their ability to continue their operations and spending levels, mix of customer base, decreases in the number of users at the customers, competition, pricing increases or changes and deteriorating general economic conditions, including as a result of the COVID-19 pandemic. If AvePoint’s customers do not renew their subscriptions for AvePoint’s products on similar pricing terms, AvePoint’s revenue may decline and AvePoint’s business could suffer. In addition, over time the average term of AvePoint’s contracts could change based on renewal rates or for other reasons. Further, acquisitions of AvePoint’s customers have continued, and may continue, to lead to cancellation of AvePoint’s contracts with such customers or by the acquiring companies, thereby reducing the number of AvePoint’s existing and potential customers.

AvePoint recognizes revenue from SaaS subscriptions to its products over the terms of these subscriptions. Consequently, increases or decreases in new sales may not be immediately reflected in AvePoint’s results of operations and may be difficult to discern.

AvePoint recognizes revenue from software as a service (“SaaS”) subscriptions to AvePoint’s products ratably over the terms of these subscriptions. As a result, a portion of the revenue AvePoint reports in each quarter is derived from the recognition of deferred revenue relating to SaaS subscriptions entered into during previous quarters. Consequently, a decline in new or renewed SaaS subscriptions in any single quarter may have a small impact on the revenue that AvePoint recognizes for such quarter. However, such a decline will negatively affect AvePoint’s revenue in future quarters. Accordingly, the effect of significant downturns in sales and potential changes in AvePoint’s pricing policies or rate of customer expansion or retention may not be fully reflected in AvePoint’s results of operations until future periods. In addition, a significant portion of AvePoint’s costs are expensed as incurred, while revenue is recognized over the term of the SaaS subscription. As a result, growth in the number of new customers and hosts has continued, and can continue, to result in AvePoint’s recognition of higher costs and lower revenue in the earlier periods of its SaaS subscriptions. Finally, AvePoint’s SaaS subscription-based revenue model also makes it difficult for AvePoint to rapidly increase its revenue through additional sales in any period, as revenue from new customers or existing customers that increase their use of AvePoint’s products or upgrade to higher-priced products or product tiers must be recognized over the applicable SaaS subscription term.

AvePoint’s sales cycle with MM and large enterprise customers can be long and unpredictable, and its sales efforts require considerable time and expense.

The timing of AvePoint’s sales with its MM and large enterprise customers and related revenue recognition is difficult to predict because of the length and unpredictability of the sales cycle for these customers. MM and large enterprise customers, particularly those in highly regulated industries and those requiring customized offerings, may have a lengthy sales cycle for the evaluation and implementation of AvePoint’s products and services. If these customers maintain work-from-home arrangements for a significant period of time, it may cause a lengthening of these sales cycles. This may cause a delay between increasing operating expenses for such sales efforts and, upon successful sales, the generation of corresponding revenue. AvePoint is often required to spend significant time and resources to better educate its potential MM and large enterprise customers and familiarize them with its products and services. The length of AvePoint’s sales cycle for these customers, from initial evaluation to contract execution, is generally three to nine months but can vary substantially. On occasion, some customers will negotiate their contracts to include financial terms that negatively affect AvePoint’s revenue, such as a trial period, delayed payment or a number of months on a promotional basis. As the purchase and launch of AvePoint’s products and services can be dependent upon customer initiatives, infrequently, AvePoint’s sales cycle can extend to up to twelve months. As a result, much of AvePoint’s revenue is generated from the recognition of contract liabilities from contracts entered into during previous periods. Customers often view a subscription to AvePoint’s products and services as a strategic decision with significant investment. As a result, customers frequently require considerable time to evaluate, test, and qualify AvePoint’s products and services prior to entering into or expanding a subscription. During the sales cycle, AvePoint expends significant

 

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time and money on sales and marketing and contract negotiation activities, which may not result in a sale. Additional factors that may influence the length and variability of AvePoint’s sales cycle include:

 

   

The effectiveness of AvePoint’s sales force as it hires and trains its new salespeople to sell to MM and large enterprise customers;

 

   

The discretionary nature of purchasing and budget cycles and decisions;

 

   

The obstacles placed by customers’ procurement process;

 

   

Economic conditions and other factors impacting customer budgets;

 

   

Customers’ integration complexity;

 

   

Customers’ familiarity with the types of products and services AvePoint offers, in particular SaaS solutions;

 

   

Customers’ evaluation of competing products during the purchasing process; and

 

   

Evolving customer demands.

Given these factors, it is difficult to predict whether and when a sale will be completed, and when revenue from a sale will be recognized. Consequently, a shortfall in demand for AvePoint’s products and services or a decline in new or renewed contracts in a given period may not significantly reduce AvePoint’s revenue for such period but could negatively affect AvePoint’s revenue in future periods.

AvePoint faces competition from established as well as emerging companies offering solutions and related applications. AvePoint may lack sufficient financial or other resources to maintain or improve its competitive position, which may harm its ability to add new customers, retain existing customers, and grow its business.

While there are some companies that offer certain features similar to those embedded in AvePoint’s products, as well as others with whom AvePoint competes in certain tactical use cases, AvePoint believes that AvePoint does not currently compete with a company that offers the same breadth of functionalities that AvePoint offers in a single integrated solution. Nevertheless, AvePoint does compete against a select group of software vendors that provide standalone solutions similar to those found in AvePoint’s comprehensive software suite in the specific markets in which AvePoint operates. AvePoint also faces direct competition with respect to certain of its products, specifically Backup and Recovery as well as Migration Services to Office 365. In the future, as customer requirements evolve and new technologies are introduced, AvePoint may experience increased competition if established or emerging companies develop solutions that address the data management, migration and protection market. Furthermore, because AvePoint operates in a relatively new and evolving area, AvePoint anticipates that competition will increase based on customer demand for these types of products. This could harm AvePoint’s ability to increase sales, maintain or increase renewals, and maintain its prices.

AvePoint faces competition from other legacy backup or security vendors that may offer related solutions and services. AvePoint’s competitors include larger companies that have acquired solution and/or service providers in recent years. AvePoint also competes with custom software internally developed and services internally provided within companies that are potential customers. In addition, AvePoint faces competition from niche companies that offer point products that attempt to address certain of the problems that AvePoint’s products and services solve.

Merger and acquisition activity in the technology industry could increase the likelihood that AvePoint will compete with other large technology companies. Some of AvePoint’s existing competitors have, and AvePoint’s potential competitors could have, substantial competitive advantages such as greater name recognition, longer operating histories, larger sales and marketing budgets and resources, greater customer support resources, lower labor and development costs, larger and more mature intellectual property portfolios, and substantially greater financial, technical and other resources.

 

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Some of AvePoint’s larger competitors also have substantially broader product lines and market focus and may therefore in some cases be less susceptible to downturns in a particular market. Conditions in AvePoint’s market could change rapidly and significantly as a result of technological advancements, partnering by AvePoint’s competitors, or continuing market consolidation.

New start-up companies that innovate and large companies that are making significant investments in research and development may invent similar or superior products and technologies that compete with AvePoint’s products and services.

In addition, some of AvePoint’s competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with agency partners, technology, application, software and service providers in complementary categories, or other parties. Furthermore, new technological developments, up to massive and disruptive changes in areas that are covered by AvePoint’s products and services could reduce customer needs for AvePoint’s products and services. Any such consolidation, acquisition, alliance or cooperative relationship could lead to pricing pressure, a loss of market share, or a smaller addressable share of the market. It could also result in a competitor with greater financial, technical, marketing, service, and other resources, all of which could harm AvePoint’s ability to compete.

In addition, AvePoint’s current or prospective partners may establish cooperative relationships with any future competitors. These relationships may allow future competitors to rapidly gain significant market share. These developments could also limit AvePoint’s ability to obtain revenue from existing and new customers.

If AvePoint experiences competitive pressures in its market or if the prices AvePoint charges for its products and services are unacceptable to its customers, it will need to reduce or change its pricing model to remain competitive and its operating results could be harmed.

Some of AvePoint’s larger competitors use broader product offerings to compete, including by selling at zero or negative margins or by bundling their product with other solutions. Potential customers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. Also, potential customers may be more willing to incrementally add solutions to their existing infrastructure from competitors than to replace their existing infrastructure with AvePoint’s products and services. These competitive pressures in AvePoint’s market, or AvePoint’s failure to compete effectively, may result in price reductions, fewer orders, reduced revenue and gross margins, increased net losses, and loss of market share. Any failure to meet and address these factors could harm AvePoint’s business, results of operations, and financial condition. AvePoint’s ability to compete successfully in its market will also depend on a number of factors, including ease and speed of product deployment and use, the quality and reliability of AvePoint’s customer service and support, total cost of ownership, return on investment and brand recognition. Any failure by AvePoint to successfully address current or future competition in any one of these or other areas may reduce the demand for its products and harm AvePoint’s business, results of operations and financial condition.

Furthermore, AvePoint prices its products and services based on different factors, such as order volume, number of users, data volume and feature functionality of the specific offerings. As the market for AvePoint’s products and services matures, or as new or existing competitors introduce new products and services that compete with AvePoint or if those competitors reduce their prices, AvePoint may experience pricing pressure and be unable to renew its agreements with existing customers or attract new customers at prices that are consistent with AvePoint’s current pricing model and operating budget. AvePoint also must determine the appropriate price to enable AvePoint to compete effectively internationally. MM and large enterprise customers may demand substantial price discounts as part of the negotiation of sales contracts. Pricing decisions may also impact the mix of adoption among AvePoint’s licensing and subscription models, and negatively impact AvePoint’s overall revenue. If AvePoint is, for any reason, required to reduce its prices or otherwise change its pricing model, its revenue, gross margin, profitability, operating results, financial position and cash flow may be harmed.

 

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If AvePoint fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, and changing customer needs or preferences, its products and services may become less competitive.

The market in which AvePoint operates is characterized by the exponential growth in data generated and managed by enterprises, rapid technological advances, changes in customer requirements, including customer requirements driven by changes to legal, regulatory and self-regulatory compliance mandates, frequent new product introductions and enhancements and evolving industry standards in computer hardware and software technology. As a result, AvePoint must continually change and improve its products in response to changes in operating systems, application software, computer and communications hardware, networking software, data center architectures, programming tools and computer language technology. Moreover, the technology in AvePoint’s products is especially complex because it needs to effectively identify and respond to a user’s data retention, security and governance needs, while minimizing the impact on database and file system performance. If AvePoint is unable to develop and sell new technology, features, and functionality for its products and services that satisfy its customers and that keep pace with rapid technological and industry change, its revenue and operating results could be harmed. If new technologies emerge that deliver competitive solutions at lower prices, more efficiently, more conveniently, or more securely, they could adversely impact AvePoint’s ability to compete.

AvePoint’s products and services must also integrate with a variety of network, hardware, mobile, and software platforms and technologies. AvePoint needs to continuously modify and enhance its platform to adapt to changes and innovation in these technologies. If businesses widely adopt new technologies in areas covered by AvePoint’s products and services, AvePoint would have to develop new functionality for its products and services to work with such new technologies. This development effort may require significant engineering, marketing and sales resources, all of which would affect AvePoint’s business and operating results.

Any failure of AvePoint’s products and services to operate effectively with future technologies could reduce the demand for AvePoint’s products and services. AvePoint cannot guarantee that it will be able to anticipate future market needs and opportunities, extend its technological expertise and develop new products or expand the functionality of its current products in a timely and cost-effective manner, or at all. Even if AvePoint can anticipate, develop and introduce new products and expand the functionality of its current products, there can be no assurance that enhancements or new products will achieve widespread market acceptance.

If AvePoint fails to anticipate market requirements or stay abreast of technological changes, AvePoint may be unable to successfully introduce new products, expand the functionality of its current products or convince its existing and potential customers of the value of its products in light of new technologies. Accordingly, AvePoint’s business, results of operations and financial condition could be harmed.

AvePoint’s success with SMB customers depends in part on its resale and distribution partnerships. AvePoint’s business would be harmed if it fails to maintain or expand partner relationships.

AvePoint leverages the sales and referral resources of resale and referral partners through a variety of programs and relies on distribution partners especially for its SMB market acquisition. AvePoint expects that sales to partners will account for a substantial portion of its revenue for the foreseeable future. AvePoint’s ability to achieve revenue growth and expand its SMB acquisition in the future will depend in part on its success in maintaining successful relationships with its partners. AvePoint’s agreements with its partners are generally non-exclusive, meaning its partners may offer customers the products of several different companies. If AvePoint’s partners do not effectively market and sell its software, choose to use greater efforts to market and sell their own products or those of others, or fail to meet the needs of AvePoint’s customers, AvePoint’s ability to grow its business, sell its software and maintain its reputation may be harmed. AvePoint’s contracts with its partners generally allow them to terminate their agreements for any reason. The loss of a substantial number of AvePoint’s partners, its possible inability to replace them, the failure to recruit additional partners or the removal of AvePoint’s products and services from several major distribution partner’s resale platforms could harm AvePoint’s results of operations.

 

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If AvePoint is unable to effectively utilize, maintain and expand these relationships, AvePoint’s revenue growth would slow, AvePoint would need to devote additional resources to the development, sales, and marketing of its products and services, and its financial results and future growth prospects would be harmed.

Unfavorable conditions in AvePoint’s industry or the global economy, or reductions in IT spending, could limit AvePoint’s ability to grow its business and negatively affect its results of operations.

AvePoint’s results of operations may vary based on the impact of changes in its industry or the global economy on it or its customers. The revenue growth and potential profitability of AvePoint’s business depend on its current and prospective customers’ ability and willingness to invest money in information technology services, which in turn is dependent upon their overall economic health. Current or future economic uncertainties or downturns could harm its business and results of operations. Negative conditions in the global economy or individual markets, including changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, warfare and terrorist attacks on the United States, Europe, Australia, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on IT and negatively affect AvePoint’s business. Continuing uncertainty in the global economy, particularly in Europe, which accounts for a significant portion of AvePoint’s revenue, makes it extremely difficult for AvePoint’s customers and AvePoint to forecast and plan future business activities accurately, and could cause its customers to reevaluate decisions to purchase its products and services or to delay their purchasing decisions, which could lengthen its sales cycles.

To the extent AvePoint’s products and services are perceived by its existing and potential customers as costly, or too difficult to launch or migrate to, it would negatively affect its growth. AvePoint’s revenue may be disproportionately affected by delays or reductions in general IT spending. Competitors may respond to market conditions by lowering prices and attempting to lure away AvePoint’s customers. In addition, consolidation in certain industries may result in reduced overall spending on AvePoint’s products and services. AvePoint has a significant number of customers in the financial services, the public sector and the pharmaceutical and manufacturing industries. A substantial downturn in any of these industries, or a reduction in public sector spending, may cause enterprises to react to worsening conditions by reducing their capital expenditures in general or by specifically reducing their spending on information technology. Customers may delay or cancel information technology projects, choose to focus on in-house development efforts or seek to lower their costs by renegotiating maintenance and support agreements. To the extent purchases of licenses for AvePoint’s software are perceived by its existing and potential customers to be discretionary, its revenue may be disproportionately affected by delays or reductions in general information technology spending. AvePoint cannot predict the timing, strength, or duration of any economic slowdown, instability or recovery, generally or within any particular industry. If the economic conditions of the general economy or markets in which AvePoint operates worsen from present levels, its business, results of operations and financial condition could be harmed.

The estimates of market opportunity and forecasts of market growth included in this prospectus/proxy statement may prove to be inaccurate. Even if the market in which AvePoint competes achieves the forecasted growth, AvePoint’s business could fail to grow at similar rates, if at all.

The market for Software as a Service (SaaS) offerings, which includes some of AvePoint’s most relevant products and services is relatively new and will experience changes over time. Customer demands for AvePoint’s products and services, customer retention and expansion rates, the size and growth rate of the market, the entry of competitive products, or the success of existing competitive products are difficult to predict and based on assumptions and estimates that may be inaccurate. In order for AvePoint to market and sell its products and services, it must successfully demonstrate to enterprise IT and business personnel the potential value of its offerings and persuade them to devote a portion of their budgets to the different products and services that AvePoint offers to manage, migrate and protect their data. AvePoint cannot provide any assurance that enterprises will recognize the need for AvePoint products and services or, if they do, that they will decide that they need a solution that offers the range of functionalities that AvePoint offers. Software solutions focused on

 

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managing, migrating and protecting data may not yet be viewed as a necessity by enterprises or enterprises may determine that the stock functionality by existing technology providers may be sufficient, and accordingly, AvePoint’s sales effort is and will be focused in large part on explaining the need for, and value offered by, AvePoint’s offerings. AvePoint’s addressable market depends on a number of factors, including businesses’ desire to differentiate themselves through AvePoint’s products and services, partnership opportunities, changes in the competitive landscape, technological changes, data security or privacy concerns, customer budgetary constraints, changes in business practices, changes in the regulatory environment, and changes in economic conditions. AvePoint’s estimates and forecasts relating to the size and expected growth of AvePoint’s market may prove to be inaccurate and AvePoint’s ability to produce accurate estimates and forecasts may be impacted by the economic uncertainty associated with the COVID-19 pandemic. Even if the market in which AvePoint competes meets the size estimates and growth forecasted in this prospectus/proxy statement, its business could fail to grow at similar rates, if at all.

If AvePoint fails to manage its growth effectively, it may be unable to execute its business plan, maintain high levels of service and customer satisfaction or adequately address competitive challenges.

AvePoint may continue to experience rapid growth and organizational change, which may continue to place significant demands on its management and its operational and financial resources. AvePoint has also experienced growth in the number of customers, the average revenue size per customer, and the amount of data that the used hosting infrastructure supports. AvePoint’s success will depend in part on its ability to manage this growth effectively. AvePoint will require significant investment expenditure and valuable management resources to grow without undermining its culture of agility, passion and teamwork, which has been central to its growth so far. If AvePoint fails to manage its anticipated growth and change in a manner that preserves its corporate culture, it could negatively affect its reputation and ability to retain and attract customers and employees.

AvePoint intends to expand its international operations in the future, including in additional countries where AvePoint has not previously had a presence, and AvePoint intends to make direct and substantial investments to continue its expansion efforts. AvePoint’s expansion will continue to place a significant strain on its managerial, administrative, financial, and other resources. If AvePoint is unable to manage its growth successfully, its business and results of operations could suffer.

It is important that AvePoint maintains a high level of customer service and satisfaction as it expands its business. As AvePoint’s customer base continues to grow, it will need to expand its account management, customer service, solutions professionals and other personnel. Failure to manage growth could result in difficulty or delays in launching its products and services, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties. Any of these could adversely impact its business performance and results of operations.

The ability to attract, recruit and retain highly qualified employees (such as pre-sales and post sales technical solutions professionals, customer success professionals or software engineers) is critical to AvePoint’s success and growth.

AvePoint’s future success and growth depend, in part, on its ability to continue to recruit and retain highly skilled personnel, particularly pre-sales and post-sales technical solutions professionals, customer success professionals or software engineers. Any of AvePoint’s employees may terminate their employment at any time and competition for highly skilled personnel is usually intense. Moreover, to some extent, when AvePoint hires personnel from certain companies, it may be subject to allegations that they have been improperly solicited or divulged proprietary or other confidential information. If AvePoint is unable to attract or retain qualified employees, its ability to innovate, introduce new products and compete would be adversely impacted, and its financial condition and results of operations may suffer.

 

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A failure to hire and integrate additional sales and marketing personnel or maintain their productivity could harm AvePoint’s results of operations and growth prospects.

AvePoint’s business requires intensive sales and marketing activities. AvePoint’s sales and marketing personnel are essential to attracting new customers and expanding sales to existing customers, both of which are key to AvePoint’s future growth. AvePoint faces several challenges in successfully expanding its sales force. AvePoint must locate and hire a significant number of qualified individuals, and competition for such individuals is intense. In addition, as AvePoint expands into new markets with which it has less familiarity, it will need to recruit individuals who are multilingual or who have skills particular to a certain geography, and it may be difficult to find candidates with those qualifications. AvePoint plans to significantly increase its headcount in the short term, but may be unable to achieve its hiring or integration goals due to a number of factors, including, but not limited to, challenges in finding individuals with the correct background due to increased competition for such hires and increased attrition rates among new hires. AvePoint invests significant time and resources in training new members of its sales force and may be unable to achieve its target performance levels with new sales personnel as rapidly as it has done in the past due to larger numbers of hires or lack of experience training sales personnel to operate in new jurisdictions. AvePoint’s failure to hire enough qualified individuals, or to integrate new sales force members within the time periods AvePoint has achieved historically, may materially impact its projected growth rate.

Failure to effectively develop and expand AvePoint’s marketing and sales capabilities could harm AvePoint’s ability to increase its customer base and achieve broader market acceptance of its products and services. If AvePoint is not able to generate traffic to its website through digital marketing, its ability to attract new customers may be impaired.

AvePoint’s ability to increase its customer base and achieve broader market acceptance of its products and services will depend on its ability to expand its marketing and sales operations. AvePoint plans to continue expanding its sales force and strategic partners, both domestically and internationally. AvePoint also has dedicated, and plans to further dedicate, significant resources to sales and marketing programs, including search engine and other online advertising. The effectiveness of its online advertising may continue to vary due to competition for key search terms, changes in search engine use, and changes in search algorithms used by major search engines and other digital marketing platforms. Another major investment is in marketing technology to better connect AvePoint’s systems and data among sales, product, and marketing, in order to create a more seamless user experience. AvePoint’s business and operating results will be harmed if its sales and marketing efforts do not generate a corresponding increase in revenue. AvePoint may not achieve anticipated revenue growth from expanding its sales force if it is unable to hire, develop, and retain talented sales personnel, if its new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if its sales and marketing programs are not effective.

If the cost of marketing AvePoint’s products and services over search engines or other digital marketing platforms increases, AvePoint’s business and operating results could be harmed. Competitors also may bid on the search terms that AvePoint uses to drive traffic to AvePoint’s website. Such actions could increase AvePoint’s marketing costs and result in decreased traffic to AvePoint’s website. Furthermore, search engines and digital marketing platforms may change their advertising policies from time to time. If these policies delay or prevent AvePoint from advertising through these channels, it could result in reduced traffic to AvePoint’s website and subscriptions to AvePoint’s products and services. New search engines and other digital marketing platforms may develop, particularly in certain jurisdictions, that reduce traffic on existing search engines and digital marketing platforms. If AvePoint is not able to achieve prominence through advertising or otherwise, it may not achieve significant traffic to its website through these new platforms and its business and operating results could be harmed.

 

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To the extent AvePoint’s security measures are compromised, its products and services may be perceived as not being secure. This may result in customers curtailing or ceasing their use of AvePoint’s products and services, its reputation being harmed, the incurrence of significant liabilities, and harm to its results of operations and growth prospects.

AvePoint’s operations may, in some cases, involve the storage, transmission and other processing of customer data or information. Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based platform providers of services are expected to continue to be targeted. Threats include traditional computer “hackers”, malicious code (such as viruses and worms), phishing attacks, employee theft or misuse and denial-of-service attacks. Sophisticated nation-states and nation-state supported actors now engage in such attacks, including advanced persistent threat intrusions. While AvePoint has security measures in place designed to protect it and its customers’ confidential and sensitive information and prevent data loss, such measures cannot provide absolute security and may not be effective to prevent a security breach, including as a result of employee error, theft, misuse or malfeasance, third-party actions, unintentional events or deliberate attacks by cyber criminals, any of which may result in someone obtaining unauthorized access to AvePoint’s customers’ data, AvePoint’s data, AvePoint’s intellectual property and/or AvePoint’s other confidential or sensitive business information. In addition, third parties may attempt to fraudulently induce employees, contractors or users to disclose information, including user names and passwords, to gain access to AvePoint’s customers’ data, AvePoint’s data or other confidential or sensitive information, and AvePoint may be the target of email scams that attempt to acquire personal information or its assets.

Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until successfully launched against a target, AvePoint may be unable to anticipate these techniques, react in a timely manner or implement adequate preventative measures. AvePoint devotes significant financial and personnel resources to implement and maintain security measures; however, such resources may not be sufficient, and as cyber-security threats develop, evolve and grow more complex over time, it may be necessary to make significant further investments to protect AvePoint’s data and infrastructure. If AvePoint’s security measures are compromised as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials, or otherwise, AvePoint’s reputation and business could be damaged and AvePoint could incur significant liability.

As AvePoint relies on third-party and public-cloud infrastructure, it depends in part on third-party security measures to protect against unauthorized access, cyberattacks, and the mishandling of customer data. A cybersecurity event could have significant costs, including regulatory enforcement actions, litigation, litigation indemnity obligations, remediation costs, network downtime, increases in insurance premiums, and reputational damage. Many companies that provide cloud-based services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic.

AvePoint depends on third-party data hosting and transmission services. Increases in cost, interruptions in service, latency, or poor service from AvePoint’s third-party data center providers could impair the delivery of its platform. This could result in customer dissatisfaction, damage to its reputation, loss of customers, limited growth, and reduction in revenue.

AvePoint currently serves the majority of its SaaS offerings from third-party data center hosting facilities in different geographical locations that are operated by Microsoft. AvePoint’s products and services, in particular SaaS offerings, are deployed to multiple data centers within these geographies, with additional geographies available for disaster recovery. AvePoint’s operations depend, in part, on its third-party providers’ protection of these facilities from natural disasters, power or telecommunications failures, criminal acts, or similar events. If any third-party facility’s arrangement is terminated, or its service lapses, AvePoint could experience interruptions in AvePoint’s platform, latency, as well as delays and additional expenses in arranging new facilities and services.

 

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A significant portion of AvePoint’s operating cost is from AvePoint’s third-party data hosting and transmission services. If the costs for such services increase due to vendor consolidation, regulation, contract renegotiation or otherwise, AvePoint may not be able to increase the fees for its products and services to cover the changes. As a result, AvePoint’s operating results may be significantly worse than forecasted. AvePoint’s failure to achieve or maintain sufficient and performant data transmission capacity could significantly reduce demand for AvePoint’s products and services.

Seasonal or singular events may significantly increase the traffic on AvePoint’s own and the used third-party’s servers and the usage volume of AvePoint’s products. Despite precautions taken at the used data centers, spikes in usage volume, a natural disaster, an act of terrorism, vandalism or sabotage, closure of a facility without adequate notice, or other unanticipated problems (such as the COVID-19 pandemic) could result in lengthy interruptions or performance degradation of AvePoint’s platform. Any damage to, or failure of, the systems of AvePoint’s third-party providers could result in interruptions to AvePoint’s products and services. Even with current and planned disaster recovery arrangements, AvePoint’s business could be harmed. If AvePoint experiences damage or interruption, its insurance policies may not adequately compensate it for any losses that it may incur. These factors in turn could further reduce AvePoint’s revenue, subject AvePoint to liability, cause AvePoint to issue credits, or cause customers to terminate their subscriptions, any of which could harm AvePoint’s business. If AvePoint incurs such losses or liabilities, AvePoint might be unable to recover significant amounts from its third-party providers (even if they were primarily or solely responsible) because of restrictive liability and indemnification terms.

Interruptions or performance problems associated with AvePoint’s website or support website may harm its business.

AvePoint’s continued growth depends in part on the ability of its existing and potential customers to quickly access its website and support website. Access to AvePoint’s support website is also imperative to its daily operations and interaction with customers, as it allows customers to download AvePoint’s software, fixes and patches, as well as open and respond to support tickets and register license keys for evaluation or production purposes. AvePoint has experienced, and may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including natural disasters, infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of users accessing AvePoint’s website simultaneously and denial of service or fraud or security attacks. In some instances, AvePoint may not be able to identify the cause or causes of these website performance problems within an acceptable period of time. It may become increasingly difficult to maintain and improve the performance of AvePoint’s websites, especially during peak usage times and as AvePoint’s software becomes more complex and its user traffic increases. If AvePoint’s websites are unavailable or if AvePoint’s users are unable to download its software, patches or fixes within a reasonable amount of time, or at all, AvePoint may suffer reputational harm and its business would be negatively affected.

If there are interruptions or performance problems associated with AvePoint’s technology or infrastructure, its existing customers may experience service outages, and its new customers may experience delays in using its products and services.

AvePoint’s continued growth depends, in part, on the ability of its existing and potential customers to access AvePoint’s products and services 24 hours a day, seven days a week, without interruption or performance degradation. AvePoint has experienced, and may in the future experience, disruptions, outages, and other performance problems with its infrastructure. These can be due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, denial-of-service attacks, or other security-related incidents, any of which may be recurring. As AvePoint continues to add customers, expand geographically, and enhance its products’ and/or services’ functionality, the additional scale may increase complexity and its average uptime for future periods may decrease. AvePoint may not be able to identify the cause or causes of these performance problems promptly. If AvePoint’s products and services are

 

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unavailable or if AvePoint’s customers are unable to access its products and services within a reasonable amount of time, AvePoint’s business would be harmed. Any outage of AvePoint’s products and services would impair the ability of AvePoint’s customers to engage in their own business operations, which would negatively impact AvePoint’s brand, reputation and customer satisfaction. AvePoint provides service credits to its customers for downtime they experience using its SaaS products. Any downtime or malfunction could require AvePoint to issue a significant amount of service credits to customers. Issuing a significant amount of service credits would negatively impact AvePoint’s financial position.

AvePoint depends on services from various third parties to maintain AvePoint’s infrastructure and any disruptions to these services, including from causes outside AvePoint’s control, would significantly impact AvePoint’s products and services. In the future, these services may not be available to AvePoint on commercially reasonable terms, or at all. Loss of any of these services could decrease AvePoint’s products’ and/or services’ functionality until AvePoint develops equivalent technology or, if equivalent technology is available from another party, AvePoint identifies, obtains and integrates it into AvePoint’s infrastructure. If AvePoint does not accurately predict its infrastructure capacity requirements, AvePoint’s customers could experience service shortfalls. AvePoint may also be unable to address capacity constraints, upgrade its systems, and develop its technology and network architecture to accommodate actual and anticipated technology changes.

Any of the above circumstances or events may harm AvePoint’s reputation, cause customers to terminate their agreements with AvePoint, impair AvePoint’s ability to grow its customer base, subject AvePoint to financial liabilities, and otherwise harm AvePoint’s business, results of operations, and financial condition.

AvePoint’s ability to use its net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2020, AvePoint had accumulated U.S. federal, and state and local net operating loss (“NOL”) carryforwards of $1.2 million and $12.2 million, respectively. The substantial majority of the U.S. federal NOL carryforwards expire in 2037 and the state and local NOL carryforwards begin to expire in 2027. AvePoint had foreign NOL carryforwards of approximately $23.2 million, which will expire beginning 2024. NOL carryforward periods vary from 6 years to an indefinite period. AvePoint recorded a valuation allowance relating to certain foreign NOLs.

The Combined Company’s ability to utilize AvePoint’s NOLs and other tax attributes could be limited if it undergoes an ownership change within the meaning of Section 382 of the Code. An ownership change is generally defined as a greater than 50 percentage point increase in equity ownership by 5% stockholders in any three-year period. If an ownership change occurs as a result of the sale of AvePoint’s Common Stock pursuant to the Mergers, is deemed to result from future changes in ownership of the Combined Company, or results from the cumulative effect of such transactions, the Combined Company may not be able to fully realize the benefits of these NOLs. Also, the cash tax benefit from AvePoint’s NOLs is dependent upon the Combined Company’s ability to generate sufficient taxable income.

Legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the “TCJA”), generally eliminates the ability to carry back any NOLs to prior taxable years, while allowing NOLs generated in tax periods beginning after December 31, 2017, to be carried forward indefinitely. Under the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the amount of NOLs that the Combined Company is permitted to deduct in any taxable year beginning after December 31, 2020, is limited to 80% of its taxable income in such year, where taxable income is determined without regard to the NOL deduction itself. It is uncertain if and to what extent various states will conform to the TCJA or the CARES Act. The changes in the carryforward/carryback periods as well as the limitation on use of NOLs in the taxable years beginning after December 31, 2020 may affect the Combined Company’s ability to fully utilize AvePoint’s available NOLs. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

 

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Examinations by relevant tax authorities may result in material changes in reserves for tax positions taken in previously filed tax returns or may impact the valuation of certain deferred income tax assets, such as NOL carryforwards.

Based on the outcome of examinations by relevant tax authorities, or as a result of the expiration of statutes of limitations for specific jurisdictions, it is possible that the reserves for tax positions taken in previously filed tax returns will materially change from those recorded in AvePoint’s financial statements. In addition, the outcome of examinations may impact the valuation of certain deferred income tax assets (such as NOL carryforwards) in future periods. It is not possible to estimate the impact of such changes, if any, to such reserves for uncertain tax positions.

If the Mergers, taken together with the Named Executive Transactions (as defined in the Business Combination Agreement), do not qualify as a reorganization under Section 368(a) of the Code, the stockholders of AvePoint may be required to pay substantial U.S. federal income taxes.

The Mergers, taken together with the Named Executive Transactions (as defined in the Business Combination Agreement), are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and Apex and AvePoint have agreed to use their reasonable best efforts to cause the Mergers to so qualify. There is no condition to the completion of the Mergers that either AvePoint or Apex receives an opinion of counsel dated as of the closing date to the effect that the Mergers will so qualify, and the Mergers will occur even if they do not so qualify. No ruling has been, or will be, sought by AvePoint or Apex from the IRS with respect to the Mergers and there can be no assurance that the IRS will not challenge the qualification of the Mergers, taken together, as a “reorganization” under Section 368(a) of the Code or that a court would not sustain such a challenge. If the IRS or a court determines that the Mergers, taken together, should not be treated as a “reorganization,” a holder of AvePoint capital stock would recognize gain or loss upon the taxable exchange of AvePoint capital stock for consideration pursuant to the Mergers. See the section entitled “Material U.S. Federal Income Tax Consequences of the Mergers.”

Risks Related to the Combined Company

Unless the context otherwise requires, all references to “we,” “us,” or “our” in this subsection titled “Risks Related to the Combined Company” refer to Apex.

Risks Related to the Operations of the Combined Company

The Combined Company anticipates that its operations will continue to increase in complexity as it grows, which will create management challenges.

AvePoint’s business has experienced strong growth and is complex. Following the Business Combination, this growth is expected to continue, and the Combined Company’s operations will become increasingly complex. To manage this growth, the Combined Company will make substantial investments to improve its operational, financial, and management controls as well as its reporting systems and procedures. The Combined Company may not be able to implement and scale improvements to its systems and processes in a timely or efficient manner or in a manner that does not negatively affect its operating results. For example, the Combined Company may not be able to effectively monitor certain extraordinary contract requirements or individually negotiated provisions as the number of customers continues to grow. The Combined Company’s systems and processes may not prevent or detect all errors, omissions, or fraud. The Combined Company may have difficulty managing improvements to its systems, processes and controls or in connection with third-party software. This could impair the Combined Company’s ability to provide its products and services to its customers, causing it to lose customers, limiting products and services to less significant updates, or increasing technical support costs. If the Combined Company is unable to manage this complexity, its business, operations, operating results and financial condition may suffer.

 

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As the Combined Company’s customer base continues to grow, it will need to expand its services and other personnel, and maintain and enhance its partnerships to provide a high level of customer service. Extended stay-at-home, business closure, and other restrictive orders may impact its ability to identify, hire, and train new personnel. The Combined Company will also need to manage its sales processes as its sales personnel and partner network continue to grow and become more complex, and as it continues to expand into new geographies and market segments. If the Combined Company does not effectively manage this increasing complexity, the quality of its platform and customer service could suffer, and it may not be able to adequately address competitive challenges. These factors could impair the ability to attract and retain customers and expand customers’ use of the Combined Company’s products and services.

The Combined Company will depend on the continued services of AvePoint’s founders, its senior management team and skilled individual contributors, and the loss of one or more key employees or an inability to attract and retain highly skilled employees could harm the Combined Company’s business.

AvePoint’s success and future performance has depended largely upon the continued services of its founders and other executive officers. AvePoint has relied on its leadership team to execute on its business plan, for research and development, marketing, sales, provision, maintenance and support of its products and services, and general and administrative functions, and on mission-critical individual contributors. This leadership team will become the senior management of the Combined Company following the Business Combination. From time to time, the Combined Company’s executive management team and the groups of skilled individual contributors may change from the hiring or departure of executive officers or such contributors, which could disrupt its business. The employment agreements with AvePoint’s executive officers and other key personnel to be in effect following the Business Combination will not require them to continue to work for the Combined Company for any specified period; therefore, they could terminate their employment with the Combined Company at any time. The loss of one or more of AvePoint’s executive officers or key employees (including any limitation on the performance of their duties or short-term or long-term absences as a result of COVID-19) could significantly delay or prevent the achievement of the Combined Company’s development and strategic objectives. The Combined Company maintains key-person insurance on AvePoint’s founders Mr. Gong and Dr. Jiang; however, there is no assurance that the amount of any such insurance would likely be sufficient to compensate for the impact of losing their services.

To execute its growth plan, the Combined Company must attract and retain highly qualified personnel. Competition for these personnel is intense, especially for experienced software engineers and senior sales executives. If the Combined Company is unable to attract such personnel in cities where its offices are located, the Combined Company may need to hire in other locations, which may add to the complexity and costs of its business operations. The Combined Company expects to continue to experience difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which the Combined Company will compete for experienced personnel have greater resources. If the Combined Company hires employees from competitors or other companies, their former employers may attempt to assert that these employees or the Combined Company have breached legal obligations, resulting in a diversion of management’s time and resources. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived value of stock awards declines, it may harm the Combined Company’s ability to recruit and retain highly skilled employees. If the Combined Company fails to attract new personnel or fails to retain and motivate its current personnel, its business and future growth prospects could be harmed, or customers may lose confidence in the knowledge and capability of its employees.

 

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If the Combined Company is unable to maintain AvePoint’s corporate culture as it grows, it could lose the agility, innovation, teamwork, passion and focus on execution that AvePoint believes has contributed to its success, and its business may be harmed.

AvePoint’s customers have historically relied on its personnel for support related to its products, in particular SaaS products. Following the consummation of the Business Combination, high-quality support will continue to be important for the renewal and expansion of agreements with AvePoint’s existing customers. The importance of high-quality support will increase as the Combined Company expands its business and pursues new customers, particularly MM and large enterprise customers. If the Combined Company does not help its customers quickly resolve issues and provide effective ongoing support, its ability to sell new products and services to existing and potential customers could suffer and its reputation with existing or potential customers could be harmed.

If the Combined Company fails to maintain or grow AvePoint’s brand recognition, its ability to expand its customer base will be impaired and its financial condition may suffer.

AvePoint believes enhancing the “AvePoint” brand and maintaining its reputation in the information technology industry will be critical for the Combined Company to supporting continued acceptance of AvePoint’s existing and future products and services, attracting new customers to its products and services, and retaining existing customers. The importance of brand recognition will increase as competition in its market increases. Successfully maintaining AvePoint’s brand will depend largely on the effectiveness of the Combined Company’s marketing efforts, the ability to provide high-quality, innovative, reliable and useful products and services to meet the needs of its customers at competitive prices, the ability to be responsive to customer concerns and provide high quality customer support, training and professional services, the ability to maintain its customers’ trust, the ability to continue to develop new functionality and products, and the ability to successfully differentiate its products and services.

Additionally, partners’ performance may affect the Combined Company’s brand and reputation if customers do not have a positive experience. Brand promotion activities may not generate customer awareness or yield increased revenue. Even if they do, any increased revenue may not offset the expenses incurred in building its brand. Furthermore, independent industry analysts may provide reviews of the Combined Company’s products and services, as well as other products available in the market, and perception of its products and services in the marketplace may be significantly influenced by these reviews. If these reviews are negative, or less positive than reviews about other products available in the market, the Combined Company’s brand may be harmed. Furthermore, negative publicity relating to events or activities attributed to employees, partners or others associated with any of these parties, may tarnish the Combined Company’s reputation and reduce the value of its brand. Damage to reputation and loss of brand equity may reduce demand for its products and harm its business, results of operations and financial condition. Any attempts to rebuild its reputation and restore the value of its brand may be costly and time consuming, and such efforts may not ultimately be successful. If the Combined Company fails to successfully promote and maintain its brand, it may fail to attract enough new customers or retain its existing customers to realize a sufficient return on its brand-building efforts, and its business could suffer.

If the Combined Company fails to offer high quality support, its business and reputation could suffer.

AvePoint’s customers have historically relied on its personnel for support related to its products, in particular SaaS products. Following the consummation of the Business Combination, high-quality support will continue to be important for the renewal and expansion of agreements with AvePoint’s existing customers. The importance of high-quality support will increase as the Combined Company expands its business and pursues new customers, particularly MM and large enterprise customers. If the Combined Company does not help its customers quickly resolve issues and provide effective ongoing support, its ability to sell new products and services to existing and new customers could suffer and its reputation with existing or potential customers could be harmed.

 

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The Combined Company is expected to store personal and other confidential information of its customers, which may in turn contain third-party personal or other confidential information. If the security of this information is compromised or is otherwise accessed without authorization, the Combined Company’s reputation may be harmed, and it may be exposed to liability and loss of business.

Following the consummation of the Business Combination, the Combined Company may in some cases transmit or store personal and other confidential information of its partners, its customers, and third parties (e.g. if the customer uses its products to create backups of their information) on storage space owned or provided by the Combined Company. While AvePoint has in the past taken, and the Combined Company intends to take, steps to protect personal information and other confidential information that it has access to, including information it may obtain through its customer support services or customer usage of its products, the Combined Company will not proactively monitor (or may not even be able to access) the content that its customers upload or process otherwise or the information provided to it through the use of its products and services. Therefore, the Combined Company will not control the substance of the content on its storage space owned or provided by it, which may include personal or other confidential information.

The Combined Company will also use third-party service providers and sub-processors to help it deliver services to customers. Such service providers and sub-processors may store personal information and/or other confidential information. Such information may be the target of unauthorized access or subject to security breaches as a result of third-party action, employee error, malfeasance or otherwise. Many companies that provide these services have reported a significant increase in cyberattack activity since the beginning of the COVID-19 pandemic. Any of these could result in the loss of information, litigation, indemnity obligations, damage to the Combined Company’s reputation and other liability or harm its business, financial condition, and results of operations. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, the Combined Company may be unable to anticipate these techniques or to implement adequate preventative measures. Even if such a data breach did not arise out of the Combined Company’s action or inaction, or if it were to affect one or more of competitors or customers’ competitors, rather than the Combined Company itself, the resulting concern could negatively affect the Combined Company’s customers and its business. Concerns regarding data privacy and security may cause some customers to stop using its products and services and fail to renew their subscriptions. In addition, failures to meet its customers’ expectations with respect to security and confidentiality of their data and information could damage its reputation and affect its ability to retain customers, attract new customers, and grow its business.

The Combined Company’s failure to comply with legal or contractual requirements around the security of personal information could lead to significant fines and penalties, as well as claims by customers, affected data subjects, or other stakeholders. These proceedings or violations could force the Combined Company to spend money in defense or settlement of these proceedings, result in the imposition of monetary liability or injunctive relief, divert management’s time and attention, increase its costs of doing business, and harm its reputation and the demand for its platform.

If credit card information is stored in the Combined Company’s systems or transmitted, stored or otherwise processed via its products and services and its security measures fail to protect credit card information adequately, it could be liable to its partners, the payment card associations, its customers or affected credit card holders. The Combined Company could be subject to fines and face regulatory or other legal action, and its customers could end their relationships with the Combined Company. The limitations of liability in its contracts may not be enforceable or adequate or would otherwise protect it from any such liabilities or damages with respect to any particular claim.

AvePoint’s historical insurance coverage, including coverage for errors and omissions, may not continue to be available to the Combined Company on acceptable terms or may not be available in sufficient amounts to cover one or more large claims. Insurers could deny coverage as to any future claim. The successful assertion of

 

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one or more large claims against the Combined Company, or changes in insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm its business, financial condition, and results of operations.

The Combined Company will also be subject to federal, state, and foreign laws regarding cybersecurity and the protection of data. Many jurisdictions have enacted laws requiring companies to notify individuals of security breaches involving certain types of personal information. The Combined Company’s agreements with certain customers and partners will require it to notify them of certain security incidents. Some jurisdictions and customers require it to safeguard personal information or confidential information using specific measures. If the Combined Company fails to observe these requirements, its business, operating results, and financial condition could be harmed.

Evolving global internet laws, regulations and standards, privacy regulations, cross-border data transfer restrictions, and data localization requirements may limit the use and adoption of the Combined Company’s services, expose it to liability, or otherwise harm its business.

Federal, state, or foreign governmental bodies or agencies have in the past adopted, and may in the future adopt, laws and regulations affecting the use of the internet as a commercial medium. These laws and regulations could impact taxation, internet neutrality, tariffs, content, copyrights, distribution, electronic contracts and other communications, consumer protection, and the characteristics and quality of services. Legislators and regulators may make legal and regulatory changes, or apply existing laws in ways that require the Combined Company to incur substantial costs, expose it to unanticipated civil or criminal liability, or cause it to change its business practices. These laws and regulations and resulting increased costs could materially harm its business, results of operations, and financial condition.

Further, AvePoint has historically collected and utilized, and the Combined Company will continue to collect and utilize, demographic and other information, including personally identifiable information, from and about users (such as customers, potential customers and others) as they interact with the Combined Company over the internet and otherwise provide it with information whether via its website or blogs or through email or other means. Users may provide personal information to the Combined Company in many contexts, including through its direct telephonic or web-based support service, newsletter or webinar sign-up, product purchase, survey registration, or when accessing online support portals or using other community or social networking features. Because the Combined Company expects to continue to collect and utilize this information, it is subject to laws and regulations regarding the collection, use and disclosure of personal information.

Privacy and data information security have become a significant issue in the United States and in many other countries where the Combined Company will have employees and operations and offer licenses to its products. The regulatory framework for privacy and personal information security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. The U.S. federal and various state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations limiting, or laws and regulations regarding, the collection, distribution, use, disclosure, storage and security of personal information. For example, California recently enacted the California Consumer Privacy Act (the “CCPA”), which went into effect on January 1, 2020, that requires, among other things, covered companies to provide new disclosures to California consumers and afford such consumers new abilities to opt-out of certain sales of personal information.

Internationally, virtually every jurisdiction in which the Combined Company will operate has established its own data security and privacy legal framework with which the Combined Company or its customers must comply. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual, such as names, email addresses and, in some jurisdictions, Internet Protocol addresses. These laws and regulations often are more restrictive than those in the United States and are rapidly evolving. For example, the European Union (the “EU”) data protection

 

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regime, the General Data Protection Regulation (the “GDPR”) became enforceable on May 25, 2018. Additionally, the United Kingdom enacted legislation in May 2018 that substantially implements the GDPR, but the United Kingdom’s exit from the EU (which formally occurred on January 31, 2020), commonly referred to as “Brexit”, has created uncertainty with regard to the regulation of data protection in the United Kingdom. In particular, it is unclear how data transfers to and from the United Kingdom will be regulated following Brexit. Complying with the GDPR or other laws, regulations or other obligations relating to privacy, data protection or information security may cause the Combined Company to incur substantial operational costs or require it to modify its data handling practices. Non-compliance could result in proceedings against the Combined Company by governmental entities or others, could result in substantial fines or other liability and may otherwise adversely impact its business, financial condition and operating results.

Many of these laws and regulations contain detailed requirements regarding collecting and processing personal information, restrict the use and storage of such information, and govern the effectiveness of data subject and consumer consent. They could restrict the Combined Company’s ability to store and process personal data (in particular, the ability to use certain data for purposes such as risk or fraud avoidance, marketing, advertising, lead generation or customer targeting), to control costs by using certain vendors or service providers, and to offer certain services in certain jurisdictions. This could reduce revenue and the general demand for the Combined Company’s products and services.

Such laws and regulations are furthermore often inconsistent and may be subject to amendment or re-interpretation, which may cause the Combined Company to incur significant costs and expend significant effort to ensure compliance. For example, the European Court of Justice recently invalidated the U.S.-EU Privacy Shield as a basis for transfers of personal data from the EU to the U.S. while upholding standard contractual clauses as a mechanism for transfers. The Combined Company’s response to these requirements globally may not meet the expectations of individual customers, affected data subjects, or other stakeholders, which could reduce the demand for its services. Some customers or other service providers may respond to these evolving laws and regulations by asking the Combined Company to make certain privacy or data-related contractual commitments that it is unable or unwilling to make. This could lead to the loss of existing or potential customers or other business relationships.

Certain laws and regulations, like the GDPR, also include restrictions on the transfer of personal information across national borders. Because its services will be accessible worldwide, certain foreign jurisdictions may claim that the Combined Company is required to comply with such laws even in jurisdictions where it has no local entity, employees or infrastructure. Some of these laws include strict localization provisions that require certain data to be stored within a particular region or jurisdiction. The Combined Company will rely on a globally distributed infrastructure in order to be able to provide its services efficiently, and consequently may not be able to meet the expectations of customers who are located in or otherwise subject to such localization requirements, which may reduce the demand for its services.

The Combined Company’s failure to comply with these and additional laws or regulations could expose it to significant fines and penalties imposed by regulators, as well as legal claims by customers or other relevant stakeholders. Similarly, many of these laws require the Combined Company to maintain an online privacy policy and terms of service that disclose its practices regarding the collection, processing, and disclosure of personal information. If these disclosures contain any information that a court or regulator finds to be inaccurate or inadequate, the Combined Company could also be exposed to legal or regulatory liability. Any such proceedings or violations could force it to spend money in defense or settlement, result in the imposition of monetary liability or demanding injunctive relief, divert management’s time and attention, increase the costs of doing business, and harm the Combined Company’s reputation.

In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to the Combined Company. The Combined Company also expects that there will continue to be new proposed laws and regulations concerning privacy, data

 

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protection and information security, but cannot yet determine the impact such future laws, regulations and standards may have on its business. New laws, amendments to or re-interpretations of existing laws and regulations, industry standards, contractual obligations and other obligations may require the Combined Company to incur additional costs and restrict its business operations. Because the interpretation and application of laws and other obligations relating to privacy and data protection are still uncertain, it is possible that these laws and other obligations may be interpreted and applied in a manner that is inconsistent with its existing data management practices or the features of its software. If so, in addition to the possibility of fines, lawsuits and other claims, the Combined Company could be required to fundamentally change its business activities and practices or modify its software, which could harm its business. The Combined Company may be unable to make such changes and modifications in a commercially reasonable manner or at all, and its ability to develop new features could be limited. Any inability to adequately address privacy concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability, damage its reputation, inhibit sales and harm its business.

Finally, additional requirements to pass certifications and/or to comply with local laws, especially as they relate to data storage and processing, may drastically increase cost of cloud-based operations and shrink the Combined Company’s margins.

If the Combined Company’s products and services do not effectively interoperate with its customers’ existing or future IT infrastructures or do not operate as effectively when accessed through mobile devices, customers may not be satisfied, which could harm its business.

The Combined Company’s success will depend in part on the interoperability of its products and services with third-party operating systems, applications, data, web browsers and devices that AvePoint has not developed and does not control. Due to the continuing rapid growth of the use of mobile devices in business operations, this also includes third-party mobile devices and mobile operating systems. Any changes in such operating systems, applications, data, web browsers or devices that degrade the functionality of the Combined Company’s products and services or give preferential treatment to competitive services could harm the adoption and usage of its products and services. The Combined Company may not be successful in adapting its products and services to operate effectively with these operating systems, applications, data or devices. Effective mobile functionality is a part of the Combined Company’s long-term development and growth strategy. If customers have difficulty accessing and using the Combined Company’s products and services (including on mobile devices) or if its products and services cannot connect a broadening range of applications, data and devices, then customer growth and retention may be harmed and its business and operating results could be harmed.

Activities of the Combined Company’s customers and partners could damage AvePoint’s brand, subject it to liability and harm the Combined Company’s business and financial results.

AvePoint’s license terms prohibit AvePoint’s customers from using AvePoint’s products in breach of any applicable laws or regulations and, in particular, to use its SaaS products in any way that is unlawful, illegal, fraudulent or harmful or in connection with any unlawful, illegal, fraudulent or harmful purpose or activity and AvePoint’s license terms permit it to terminate an agreement and the granted licenses for AvePoint’s products if AvePoint becomes aware of illegal use. Following the consummation of the Business Combination, the Combined Company’s customers or partners may nonetheless engage in prohibited or illegal activities or use its products in violation of applicable laws, which could subject it to liability. Furthermore, AvePoint’s and the Combined Company’s brand may be negatively impacted by the actions of customers or partners that are deemed to be hostile, offensive, inappropriate, or illegal. The Combined Company does not expect to proactively monitor or review the appropriateness of the content of stored by its customers or its partners’ activities. Safeguards may not be sufficient for the Combined Company to avoid liability or avoid harm to its brand. Hostile, offensive, inappropriate, or illegal use could harm the Combined Company’s business and financial results.

In many jurisdictions, laws relating to the liability of providers of online services for activities of their customers and other third parties are being tested by actions based on defamation, invasion of privacy, unfair

 

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competition, copyright and trademark infringement, and other theories. Any court ruling or other governmental regulation or action that imposes liability on customers of online services in connection with the activities of their own clients or other third parties could harm the Combined Company’s business. The Combined Company could also be subject to liability under applicable law, which may not be fully mitigated by its license terms. Any liability attributed to the Combined Company could harm its brand, reputation, ability to expand its subscriber base, and financial results.

Natural catastrophic events and man-made problems such as power disruptions, global pandemics, computer viruses, data security breaches and terrorism may disrupt the Combined Company’s business.

The Combined Company will rely heavily on its and third parties’, in particular Microsoft’s, network infrastructure and IT systems for its business operations. An online attack, earthquake, fire, terrorist attack, power loss, global pandemics, such as the COVID-19 pandemic, telecommunications failure, or other similar catastrophic event could cause system interruptions, delays in accessing the Combined Company’s service, reputational harm, and loss of critical data or customer data. Such events could prevent the Combined Company from providing its products and services to its customers. A catastrophic event that results in the destruction or disruption of its or third parties’ data centers, or its network infrastructure or IT systems, including any errors, defects, or failures in third-party hardware, could affect the Combined Company’s ability to conduct normal business operations, and harm its operating results. The Combined Company may also incur significant costs for using alternative equipment or facilities or taking other actions in preparation for, or in reaction to, any such events.

Further, if a catastrophic event occurs in a region from which the Combined Company derives a significant portion of its revenue, customers in such region may delay or forego purchases of its products, which may materially and adversely impact its results of operations for a particular period. In addition, acts of terrorism could cause disruptions in its business or the business of partners, customers or the economy as a whole. Given AvePoint’s historical concentration of sales at each quarter end, any disruption in the business of the Combined Company’s partners or customers that impacts sales at the end of each quarter could harm its quarterly results. All of the aforementioned risks may be augmented if disaster recovery plans for the Combined Company or its partners prove to be inadequate. To the extent that any of the above results in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of products, the Combined Company’s business, financial condition and results of operations would be harmed.

In addition, as computer malware, viruses, computer hacking, fraudulent use attempts, and phishing attacks have become more prevalent, the Combined Company will face increased risk from such activities. Such activities threaten the performance, reliability, security, and availability of its products and services. Any computer malware, viruses, computer hacking, fraudulent use attempts, phishing attacks, or other data security breaches to the Combined Company’s systems could, among other things, harm its reputation and its ability to retain existing customers and attract new customers.

The Combined Company could incur substantial costs in protecting or defending its proprietary rights. Failure to adequately protect its rights could impair its competitive position, or cause it to lose valuable assets, experience reduced revenue, or incur costly litigation.

The Combined Company’s success will be dependent, in part, upon protecting its proprietary technology. AvePoint has historically relied on a combination of trade secret laws, contractual provisions, trademarks, service marks, and copyrights in an effort to establish and protect its proprietary rights. However, the steps AvePoint has taken, and the steps the Combined Company intends to take following the Business Combination, to protect its intellectual property may be inadequate.

Any of the Combined Company’s trademarks or other intellectual property rights may be challenged or circumvented by others or invalidated through administrative process or litigation. Others may independently

 

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develop similar products and services or adopt similar or identical brands for competing products and services. Legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite its precautions, it may be possible for unauthorized third parties to copy the Combined Company’s products and services and use information that it regards as proprietary to create products and services that compete with it. Some license provisions restricting unauthorized use, copy, transfer, and disclosure of the Combined Company’s intellectual property may be unenforceable under the laws of jurisdictions outside the United States.

To the extent the Combined Company expands its international activities, its exposure to unauthorized copying and use of its platform and proprietary information may increase. Moreover, effective trademark, copyright, and trade secret protection may not be available or commercially feasible in every country in which it conducts business. Further, intellectual property law, including statutory and case law, particularly in the United States, is constantly developing. Changes in the law could make it harder for the Combined Company to enforce its rights.

The Combined Company will continue to enter into confidentiality and invention assignment agreements with its employees and consultants and into confidentiality agreements with strategic and business partners, advisers and customers. However, AvePoint cannot be certain that it has entered into such agreements with all parties who may have or have had access to its confidential information, that the agreements that it entered into will be effective in controlling access to and distribution of the Combined Company’s proprietary information or that they will provide an adequate remedy in the event of unauthorized disclosure of confidential information. These agreements also will not prevent the Combined Company’s competitors or partners from independently developing technologies that are equivalent or superior to its products and services. In addition, former employees or contractors may start working for competitors and may use the Combined Company’s confidential information there.

The Combined Company may be required to spend significant resources to monitor, protect, and enforce its intellectual property rights. Litigation may be necessary in the future to enforce its intellectual property rights and protect its trade secrets. Litigation brought to protect and enforce its intellectual property rights could be costly, time-consuming, and distracting to management. Such litigation could result in the impairment or loss of portions of its intellectual property. Enforcement of its intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of its intellectual property. An adverse determination of any litigation proceedings could put the Combined Company’s intellectual property at risk of being invalidated or interpreted narrowly. An adverse determination could risk the issuance or cancellation of pending trademark filings. Because of the substantial discovery required in connection with intellectual property litigation, the Combined Company’s confidential or sensitive information could be compromised by disclosure in litigation. Litigation could result in public disclosure of results of hearings, motions, or other interim developments. If securities analysts or investors perceive these results to be negative, it could have a negative impact on the price of the Combined Company Common Stock.

The Combined Company’s inability to protect its proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of management’s attention and resources, could delay further sales or the implementation of its products and services, impair the functionality of its products and services, delay introductions of new functionality to its products and services, result in the substitution of inferior or more costly technologies into its products and services, or injure its reputation. The Combined Company will not be able to protect its intellectual property if it is unable to enforce its rights or if it does not detect unauthorized use of its intellectual property. Policing unauthorized use of the Combined Company’s technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. If the Combined Company fails to meaningfully protect its intellectual property and proprietary rights, its business, operating results, and financial condition could be harmed.

 

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The Combined Company may become subject to legal proceedings and litigation, including intellectual property disputes, which are costly and may subject it to significant liability and increased costs of doing business. The Combined Company’s business may suffer if it is alleged or determined that its technology infringes the intellectual property rights of others.

The software industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights. Companies in the software industry are often required to defend against litigation claims based on allegations of infringement or other violations of intellectual property rights. The Combined Company’s technologies or contractual and legal defenses may not be able to withstand any third-party claims or rights against the use of its technologies. These lawsuits are time-consuming and expensive to resolve and they divert management’s time and attention. The Combined Company’s future success will depend in part on not infringing the intellectual property rights of others.

Many software companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Any claims or litigation could cause the Combined Company to incur significant expenses and, whether or not successfully asserted, could require that it pay substantial damages, ongoing royalty or license payments, re-engineer all or a portion of its products and services, or comply with other unfavorable terms. If a third party is able to obtain an injunction preventing the Combined Company from accessing third-party intellectual property rights, or if it cannot license or develop technology for any infringing aspect of its business, it would be forced to limit or stop sales of its products and services or cease business activities covered by such intellectual property. Any such development could prevent the Combined Company from competing effectively. The Combined Company may be contractually obligated to indemnify its customers for third party claims of different kinds, in particular for infringement of a third party’s intellectual property rights. Responding to such claims regardless of their merit, can be time-consuming and costly to defend in litigation, and can damage the Combined Company’s reputation and brand. The Combined Company also may be required to redesign its products and services, delay product releases, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting it from marketing or selling its products and services. Requiring it to change one or more aspects of the way it delivers its products and services may harm the Combined Company’s business.

Although the Combined Company will carry general liability insurance and other insurance, its insurance may not cover potential claims of this type. Insurance may not be adequate to cover the Combined Company for all liability that may be imposed. The Combined Company may not be able to maintain its insurance coverage. The Combined Company cannot predict the outcome of lawsuits and cannot assure you that the results of any of these actions will not harm its business, operating results or financial condition.

Contractual indemnity provisions could expose the Combined Company to substantial liability for intellectual property infringement, data protection, and other losses.

Some of the agreements with customers and other third parties to be in effect following the consummation of the Business Combination include indemnification provisions under which the Combined Company will be obligated to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, data protection breaches, confidentiality breaches, breaches of IT security obligations, damages to property or persons, or other liabilities relating to or arising from its products, services or other contractual obligations. Some of these indemnity agreements provide for uncapped liability for which the Combined Company would be responsible, and some indemnity provisions survive termination or expiration of the applicable agreement. Large indemnity payments could harm the Combined Company’s business, results of operations and financial condition. Although the Combined Company will attempt to contractually limit its liability with respect to such obligations in negotiations, such negotiations may be fruitless and the Combined Company may, with or without liability limitations in place, still incur substantial liability related to them and may be required to cease use of certain functions of its products and services as a result of any such claims. Any

 

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dispute with a customer with respect to such obligations could harm the Combined Company’s relationship with such customer, other existing customers, and potential customers. Such a dispute could harm its business and results of operations.

The Combined Company will rely on third-party proprietary and open source software for its products and services. The inability to obtain third-party licenses for such software, obtain them on favorable terms, or adhere to the license terms for such software or any errors or failures caused by such software could harm its business, results of operations and financial condition.

Some of the Combined Company’s offerings will include software or other intellectual property licensed from third parties. It may be necessary in the future to renew licenses relating to various aspects of these applications or to seek new licenses for existing or new applications. Necessary licenses may not be available on acceptable terms or under open source licenses permitting redistribution in commercial offerings, if at all. The inability to obtain certain licenses or other rights or to obtain such licenses or rights on favorable terms could result in delays in product releases until equivalent technology can be identified, licensed or developed, if at all, and integrated into the Combined Company’s products and services, which could harm the Combined Company’s business, results of operations and financial condition. Third parties may allege that additional licenses are required for the Combined Company’s use of their software or intellectual property, which it may be unable to obtain on commercially reasonable terms or at all. The inclusion in its offerings of software or other intellectual property licensed from third parties on a non-exclusive basis could limit the Combined Company’s ability to differentiate its offerings from those of its competitors. Failure to properly adhere to the license terms for software or other intellectual property might have negative effects, such as revocation of the license grant, penalties, added license fees or other liabilities. To the extent that its products and services depend upon the successful operation of third-party software, any undetected errors or defects in such third-party software could impair the functionality of the Combined Company’s products and services, delay new feature introductions, result in a failure of products and services, and injure its reputation.

The use of open source software could subject the Combined Company to possible litigation, cause it to subject its products and services to unwanted open source license conditions that could negatively impact its sales, or expose security weaknesses that can be used against it.

A significant portion of the Combined Company’s products will incorporate open source software, and the Combined Company expects to incorporate open source software into other offerings or products in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. Little legal precedent governs the interpretation of these licenses; therefore, the potential impact of these terms on its business is unknown and may result in unanticipated obligations regarding its technologies. If a distributor of open source software were to allege that the Combined Company had not complied with its license, the Combined Company could be required to incur significant legal expenses. In addition, if the license terms for the open source code change, the Combined Company may be forced to re-engineer its software or incur additional costs. If the Combined Company combines its proprietary software with open source software or utilizes open source software in a certain manner, under some open source licenses, it could be in breach of the license if it did not release the source code of its proprietary software. Releasing the source code could substantially help competitors develop products that are similar to or better than the Combined Company’s and could help malevolent actors detect security weaknesses to develop and deploy attacks, including malware, against the Combined Company’s products and systems.

If the Combined Company’s products and services fail to perform properly, or if it fails to develop enhancements to resolve performance issues, it could lose customers, become subject to performance or warranty claims, or incur significant costs.

The Combined Company’s operations will be dependent upon its ability to prevent system interruption. The applications underlying its products and services are inherently complex and may contain material defects or

 

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errors, which may cause disruptions in availability or other performance problems. Also, the Combined Company’s software will be installed and used in a variety of computing environments with different operating system management software, and equipment and networking configurations, which may cause errors or failures of its software or other aspects of the computing environment into which it is deployed. In addition, deployment of its software into computing environments may expose undetected errors, compatibility issues, failures or bugs in its software. While AvePoint has not historically experienced any defects, errors, disruptions in service, cyber-attacks, or other performance problems with its software that materially influenced its sales performance, there is no assurance that such defects, problems or events will not occur in the future for the Combined Company, whether in connection with the day-to-day operation, upgrades or otherwise. Any of these occurrences could result in loss of customers, lost or delayed market acceptance and sales of the Combined Company’s products and services, delays in payment by customers, injury to its reputation and brand, legal claims, including warranty and service claims, diversion of resources, including through increased service and warranty expenses or financial concessions, and increased insurance costs.

The Combined Company may discover defects in its products and services that could result in data unavailability, unauthorized access, loss, corruption, or other harm to its customers’ data. Despite testing, the Combined Company may not be able to detect and correct defects or errors before release. Consequently, the Combined Company or its customers may discover defects or errors after its products and services have been deployed. The Combined Company expects to implement bug fixes and upgrades as part of its regularly scheduled system maintenance. If it does not complete this maintenance according to schedule or if customers are otherwise dissatisfied with the frequency and/or duration of the Combined Company’s maintenance services and related system outages, customers could terminate their contracts, delay or withhold payment, or cause the Combined Company to issue credits, make refunds, or pay penalties. The costs incurred or delays resulting from the correction of defects or errors in the Combined Company’s software or other performance problems may be substantial and could harm its operating results. Moreover, customers could incorrectly implement or inadvertently misuse the Combined Company’s software, which could result in customer dissatisfaction and adversely impact the perceived utility of its products as well as its brand. Any of these real or perceived errors, compatibility issues, failures or bugs in its software could result in negative publicity, reputational harm, loss of or delay in market acceptance, loss of competitive position or claims by customers for losses sustained by them. In such an event, the Combined Company may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem.

The Combined Company will provide its products and services to businesses in highly regulated industries and to customers with elevated confidentiality, privacy or security requirements, including public sector customers, which will subject it to a number of challenges and risks.

AvePoint has historically provided its products and services to customers in highly regulated industries such as pharmaceuticals, finance, insurance, healthcare and life sciences, and following the Business Combination the Combined Company may have customers in other highly regulated industries in the future. The Combined Company expects that it will also provide its products and services to customers that have significantly higher than usual requirements for the confidentiality, protection of data or security of its infrastructure and operations, such as public sector customers in the defense, infrastructure management and other sectors. Providing products and services to such entities will subject the Combined Company to a number of challenges and risks. Selling to such entities can be highly competitive, expensive, and time-consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Customers in highly-regulated industries or in the public sector may demand shorter subscription periods or other contract terms that differ from the Combined Company’s standard arrangements, including terms that can lead those customers to obtain broader rights in its offerings than would be standard. Such entities may have statutory, contractual, or other legal rights to terminate contracts, conduct audits or execute other measures, which affect the Combined Company or its partners due to a default or for other reasons. Any such measure may harm the Combined Company’s reputation, business, results of operations and financial condition. Additionally, due to the heightened regulatory environment in which they operate or their elevated confidentiality, privacy or security requirements, potential

 

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customers in these industries and sectors may encounter additional difficulties when trying to move away from legacy products to products like those the Combined Company provides, in particular to those in an SaaS format, which can negatively affect the Combined Company’s business and results of operations.

Significant changes in the contracting or fiscal policies of the public sector, or the Combined Company’s failure to comply with certain laws or regulations, could harm the business it does with the public sector.

AvePoint has historically derived a portion of its revenue from governments and government-owned or -controlled entities (such as public health care bodies, educational institutions and utilities), which it refers to as the public sector in this prospectus/proxy statement, and following the Business Combination the success and growth of the Combined Company’s business will continue to depend in part on its successful procurement of public sector contracts. Factors that could impede the ability to maintain or increase the amount of revenue derived from public sector contracts include:

 

   

Changes in public sector fiscal or contracting policies;

 

   

Decreases in available public sector funding;

 

   

Changes in public sector programs or applicable requirements;

 

   

Adoption of new laws or regulations or changes to existing laws or regulations;

 

   

Potential delays or changes in the public sector appropriations or other funding authorization processes; and

 

   

Delays in the payment of invoices by public sector payment offices.

Furthermore, the Combined Company must comply with laws and regulations relating to public sector contracting, which will affect how it and its channel partners do business in both the United States and abroad. These laws and regulations may impose added costs on its business, and failure to comply with these or other applicable regulations and requirements, including non-compliance in the past, could lead to claims for damages from channel partners, penalties, termination of contracts, and temporary suspension or permanent debarment from public sector contracting.

The occurrence of any of the foregoing could cause public sector customers to delay or refrain from purchasing licenses of software from the Combined Company in the future or otherwise harm the Combined Company’s business, operations and financial results.

The Combined Company’s sales to government entities will be subject to a number of challenges and risks.

AvePoint sells its products and services to U.S. federal and state and foreign governmental agency customers, often through resellers, and following the Business Combination the Combined Company may increase sales to government entities in the future. Sales to government entities are subject to a number of challenges and risks. Selling to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that these efforts will generate a sale. Contracts and subcontracts with government agency customers are subject to procurement laws and regulations relating to the award, administration, and performance of those contracts. Government demand and payment for the Combined Company’s products and services will be affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays potentially diminishing public sector demand for its products and services. The Combined Company may be subject to audit or investigations relating to its sales to government entities, and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refunds of fees received, forfeiture of profits, suspension of payments, fines, and suspension or debarment from future government business. Government entities may have statutory, contractual or other legal rights to terminate contracts with distributors and resellers for convenience or due to a default. Any of these risks relating to the Combined Company’s sales to governmental entities could adversely impact its future sales and operating results.

 

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Changes in tax laws or regulations that are applied adversely to the Combined Company or its customers could increase the cost of its products and services and adversely impact its business.

New income, sales, use, or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. Any new taxes could harm the Combined Company’s domestic and international business operations and its business and financial performance. Existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified or applied adversely. These events could require the Combined Company or customers using its products and services to pay additional tax amounts on a prospective or retroactive basis. They could require the Combined Company or its customers to pay fines and/or penalties and interest for past amounts deemed to be due. If it raises its prices to offset the costs of these changes, existing and potential customers may elect not to continue to subscribe or elect to subscribe to the Combined Company’s products and services in the future. Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase its and its customers’ compliance, operating and other costs, as well as the costs of its products and services. Any or all of these events could adversely impact the Combined Company’s business and financial performance.

The Combined Company plans further geographic expansion, which will create a variety of operational challenges.

A significant component of the Combined Company’s growth strategy involves the further expansion of its operations and customer base internationally. For the years ended December 31, 2020 and 2019, AvePoint’s revenue generated from customers outside North America was approximately 55% and 58%, respectively, of its total revenue. AvePoint currently has locations in the United States, Australia, China, France, Germany, Japan, the Netherlands, the Philippines, Singapore, South Africa, Sweden, Switzerland, the United Kingdom and Vietnam. The Combined Company intends to continue to adapt and develop strategies to address international markets, but such efforts may not be successful. In addition, the COVID-19 pandemic and related stay-at-home, business closure, and other restrictive orders and travel restrictions may pose additional challenges for international expansion and may impact the Combined Company’s ability to launch in new locations and further expand geographically.

As of December 31, 2020, approximately 82% of AvePoint’s full-time employees were located outside of the United States. Following the Business Combination, the Combined Company expects that its international activities will continue to grow over the foreseeable future as it continues to pursue opportunities in existing and new international markets. This will require significant management attention and financial resources. The Combined Company may face difficulties, including: (1) costs associated with developing software and providing support in many languages, (2) varying seasonality patterns, (3) potential adverse movement of currency exchange rates, (4) longer payment cycles and difficulties in collecting accounts receivable, (5) tariffs and trade barriers, (6) a variety of regulatory or contractual limitations on its ability to operate, (7) adverse tax events, (8) reduced protection of intellectual property rights, (9) a geographically and culturally diverse workforce and customer base, and (10) travel restrictions associated with the COVID-19 pandemic. Failure to overcome any of these difficulties could negatively affect the Combined Company’s results of operations.

The Combined Company’s international operations will involve a variety of risks, including:

 

   

Changes in a country’s or region’s political or economic conditions;

 

   

Economic uncertainty around the world and adverse effects arising from economic interdependencies across countries and regions;

 

   

The need to adapt and localize products and services for specific countries;

 

   

Greater difficulty in receiving payments from different geographies, including difficulties associated with currency fluctuations, transfer of funds, longer payment cycles and collecting accounts receivable, especially in emerging markets;

 

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Potential changes in trade relations arising from policy initiatives implemented by the current administration, which has been critical of existing and proposed trade agreements, or by a successor administration;

 

   

Compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations;

 

   

Unexpected changes in laws, regulatory requirements, taxes, or trade laws;

 

   

More stringent regulations relating to privacy and data security and the unauthorized use of, or access to, commercial and personal information, particularly in Europe;

 

   

Differing labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations in these locations;

 

   

Challenges inherent in efficiently managing an increased number of employees over large geographic distances (including in a work-from-home environment), including the need to implement appropriate systems, policies, benefits, and compliance programs;

 

   

Difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems;

 

   

Increased travel, real estate, infrastructure, and legal compliance costs associated with international operations;

 

   

Currency exchange rate fluctuations and the resulting effect on revenue and expenses, and the cost and risk of entering into hedging transactions if the Combined Company elects to do so in the future;

 

   

Limitations on the ability to reinvest earnings from operations in one country to fund the capital needs of its operations in other countries;

 

   

Laws and business practices favoring local competitors or general preferences for local vendors;

 

   

limited or insufficient intellectual property protection or difficulties enforcing its intellectual property;

 

   

Political instability or terrorist activities;

 

   

Risks related to global health epidemics, such as the COVID-19 pandemic, including restrictions on its and its customers’ ability to travel, disruptions in customers’ ability to distribute products, and temporary closures of customers’ facilities;

 

   

Exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the UK Bribery Act of 2010, the UK Proceeds of Crime Act 2002, and similar laws and regulations in other jurisdictions;

 

   

Compliance with laws and regulations for foreign operations, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on the ability to sell its software in certain foreign markets, and the risks and costs of non-compliance;

 

   

Heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of financial statements and irregularities in financial statements; and

 

   

Adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.

Any of these risks could harm the Combined Company’s international operations, reduce its revenue from outside the United States or increase its operating costs, harming its business, results of operations and financial

 

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condition and growth prospects. There can be no assurance that all of the Combined Company’s employees, independent contractors and partners will comply with the formal policies it will implement, or applicable laws and regulations. Violations of laws or key control policies by employees, independent contractors and partners could result in delays in revenue recognition, financial reporting misstatements, fines, penalties or the prohibition of the importation or exportation of the Combined Company’s software and services and could harm its business and results of operations. If the Combined Company invests substantial time and resources to expand its international operations and is unable to do so successfully, its business and operating results will suffer.

The Combined Company will be subject to governmental export and import controls that could impair its ability to compete in international markets and subject it to liability if it violates the controls.

The Combined Company’s products will be subject to U.S. export controls, including the Export Administration Regulations and economic sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control. Following the Business Combination, the Combined Company will incorporate encryption technology into its products. These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations. AvePoint previously obtained the required licenses to export its products outside of the United States. If the applicable U.S. legal requirements regarding the export of encryption technology were to change or if the Combined Company changes the encryption means in its products, it may need to apply for new licenses. There can be no assurance that the Combined Company will be able to obtain the required licenses under such circumstances. Furthermore, various other countries regulate the import of certain encryption technology, including import permitting and licensing requirements, and have enacted laws that could limit the ability to distribute its products or could limit its customers’ ability to implement its products in such countries.

Furthermore, the Combined Company’s activities will subject it to the U.S. economic sanctions laws and regulations that prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. embargoes or sanctions. The current U.S. presidential administration has been critical of existing trade agreements and may impose more stringent export and import controls. Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities even if the export license ultimately may be granted. While the Combined Company will take precautions to prevent its products and services from being exported in violation of these laws, including obtaining authorizations for its products and services, performing geolocation IP blocking and screenings against U.S. and other lists of restricted and prohibited persons, it cannot guarantee that the precautions it intends to take will prevent violations of export control and sanctions laws. Violations of U.S. sanctions or export control laws can result in significant fines or penalties and possible incarceration for responsible employees and managers could be imposed for criminal violations of these laws.

If the Combined Company’s customers or partners fail to obtain appropriate import, export or re-export licenses or permits, the Combined Company may also be harmed, through reputational harm as well as other negative consequences, including government investigations and penalties. AvePoint presently incorporates export control compliance requirements into its license and partner agreements; however, no assurance can be given that the Combined Company’s licensees and partners will comply with such requirements.

Various countries regulate the import and export of certain encryption and other technology, including import and export licensing requirements. Some countries have enacted laws that could limit the ability to distribute the Combined Company’s products and services or could limit its customers’ ability to implement its products and services in those countries. Changes in its products and services or future changes in export and import regulations may create delays in the introduction of the Combined Company’s products and services in international markets, prevent its customers with international operations from deploying its products and services globally or, in some cases, prevent the export or import of its products and services to certain countries, governments, or persons altogether. Various governmental agencies have proposed additional regulation of

 

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encryption technology, including the escrow and government recovery of private encryption keys. Any change in export or import regulations, economic sanctions, or related legislation, or change in the countries, governments, persons, or technologies targeted by such regulations, could limit the Combined Company’s ability to export or sell its products and services to existing or potential customers with international operations. Any decreased use of the Combined Company’s products and services or limitation on its ability to export or sell products and services would harm its business, operating results, and prospects.

The Combined Company will be exposed to fluctuations in currency exchange rates, which could negatively affect its revenue and earnings.

AvePoint conducts a significant number of transactions and holds cash in currencies other than the U.S. Dollar. Following the Business Combination, changes in the values of major foreign currencies, particularly the Euro, Japanese Yen, British Pound, Singapore Dollar and Chinese Yuan, relative to the U.S. Dollar, will significantly affect the Combined Company’s total assets, revenue, operating results and cash flows, which will be reported in U.S. Dollars. In particular, the economic uncertainties relating to Brexit, and European sovereign and other debt obligations may cause the value of the British Pound and Euro to fluctuate relative to the U.S. Dollar. Fluctuations in foreign currency rates, including the strengthening of the U.S. Dollar against the Euro and most other major international currencies, could harm the Combined Company’s revenue growth in terms of the amounts that will be reported in U.S. Dollars after converting its foreign currency results into U.S. Dollars. In addition, reported assets will generally be negatively impacted when the dollar strengthens relative to other currencies as a portion of the Combined Company’s cash and bank deposits, among other assets, will be held in foreign currencies and reported in U.S. Dollars.

The Combined Company will incur expenses for employee compensation and other operating expenses at its non-U.S. locations in local currencies. The weakening of the U.S. dollar against such currencies would cause the U.S. dollar equivalent of such expenses to increase, which could have a negative impact on its reported results of operations. If the Combined Company is not able to successfully hedge against the risks associated with currency fluctuations, its operating results could be harmed.

The Combined Company will be subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject it to criminal and/or civil liability and harm its business.

Following the consummation of the Business Combination, the Combined Company will be subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the UK Bribery Act of 2010, the UK Proceeds of Crime Act 2002, and other anti-bribery and anti-money laundering laws in the countries in which it conducts activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years. These laws are interpreted broadly to prohibit companies and their employees and third-party intermediaries from authorizing, promising, offering, or providing, directly or indirectly, improper payments or anything else of value to recipients in the public or private sector. As the Combined Company seeks to increase its international sales and business and sales to the private and public sector, it may engage with partners and third-party intermediaries to market its services and to obtain necessary permits, licenses, and other regulatory approvals. In addition, the Combined Company or its third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities in other countries, which also include countries known to experience corruption, particularly certain emerging countries in Africa, East Asia, Eastern Europe, South America and the Middle East. Activities in such countries create the risk of unauthorized payments or offers of payments by one of the Combined Company’s employees, consultants, partners or third-party intermediaries that could be in violation of various anti-corruption laws, even though these parties may not be under its control. While the Combined Company will have policies and controls intended to prevent these practices by its employees, consultants, partners and third-party intermediaries, existing safeguards and any future improvements may prove to be less than effective, and the Combined Company could be held liable for corrupt or other illegal activities of such third-party intermediaries, its employees, representatives, contractors, partners, and agents, even if it does not explicitly authorize such activities. While the Combined

 

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Company will have policies and procedures to address compliance with such laws, its employees and agents could violate these policies and applicable law, for which the Combined Company may be ultimately held responsible. As the Combined Company seeks to increase its international sales and business, its risks under these laws may increase. Noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject it to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if the Combined Company does not prevail in any possible civil or criminal litigation, its business, results of operations, and financial condition could be materially harmed. Responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm its business, results of operations, and financial condition.

Changes in subjective assumptions, estimates and judgments by management related to complex accounting matters or changes in accounting principles generally accepted in the United States could significantly affect the Combined Company’s financial condition and results of operations.

GAAP and related pronouncements, implementation guidelines, and interpretations apply to a wide range of matters that will be relevant to the Combined Company’s business, including revenue recognition, stock-based compensation, deferred commissions and business combinations. These matters are complex and will involve subjective assumptions, estimates, and judgments by management. Changes in GAAP, these accounting pronouncements or their interpretation or changes in underlying assumptions, estimates, or judgments by management, the Financial Accounting Standards Board (“FASB”), the SEC and others could significantly change the Combined Company’s reported or expected financial performance, which could impact the market price for the Combined Company Common Stock.

The Combined Company may acquire or invest in companies, which may divert management’s attention and result in additional dilution to stockholders. The Combined Company may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions.

The Combined Company may evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products, and other assets in the future. An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, the Combined Company may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of the acquired companies. Key personnel of the acquired companies may choose not to work for the Combined Company, their software may not be easily adapted, or the Combined Company may have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise. It may also experience difficulties integrating personnel of the acquired company into its business and culture. Acquisitions may also disrupt its business, divert its resources and require significant management attention that would otherwise be available for development of its existing business. The anticipated benefits of any acquisition, investment, or business relationship may not be realized or the Combined Company may be exposed to unknown risks or liabilities.

Negotiating these transactions can be time-consuming, difficult, and expensive, and the ability to close these transactions may often be subject to approvals that are beyond the Combined Company’s control. Consequently, these transactions, even if undertaken and announced, may not close. For one or more of those transactions, the Combined Company may:

 

   

issue additional equity securities that would dilute its stockholders;

 

   

use cash that it may need in the future to operate its business;

 

   

incur debt on terms unfavorable to it or that it is unable to repay;

 

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incur large charges or substantial liabilities;

 

   

encounter difficulties retaining key employees of the acquired company or integrating diverse software codes or business cultures; and

 

   

become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.

The Combined Company intends to invest significantly in research and development, and to the extent such research and development investments do not translate into new products or material enhancements to its products, or if it does not use those investments efficiently, its business and results of operations would be harmed.

A key element of the Combined Company’s strategy will be to invest significantly in its research and development efforts to develop new products and enhance AvePoint’s existing products to address additional applications and markets. If the Combined Company does not spend its research and development budget efficiently or effectively on compelling innovation and technologies, its business may be harmed and it may not realize the expected benefits of its strategy. Moreover, research and development projects can be technically challenging and expensive. The nature of these research and development cycles may cause the Combined Company to experience delays between the time it incurs expenses associated with research and development and the time it is able to offer compelling products and generate revenue, if any, from such investment. Additionally, anticipated customer demand for a product or service being developed could decrease after the development cycle has commenced, and the Combined Company would nonetheless be unable to avoid substantial costs associated with the development of any such product or service. If the Combined Company expends a significant amount of resources on research and development and its efforts do not lead to the successful introduction or improvement of products that are competitive in its current or future markets, it would harm its business and results of operations.

Changes in the Combined Company’s provision for income taxes or adverse outcomes resulting from examination of its income tax returns could harm its results.

The Combined Company will be subject to income taxation in the United States and numerous other jurisdictions. Determining its provision for income taxes will require significant management judgment. In addition, the provision for income taxes could be negatively impacted by many factors, including, among other things, changes to the Combined Company’s operating structure, changes in the amounts of earnings in jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws. AvePoint is subject to ongoing tax examinations in various jurisdictions. Tax authorities may disagree with AvePoint’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. While AvePoint regularly evaluates the likely outcomes of these examinations to determine the adequacy of its provision for income taxes, there can be no assurance that the outcomes of such examinations will not have a material impact on the Combined Company’s results of operations and cash flows. In addition, the Combined Company may be audited in various jurisdictions, and such jurisdictions may assess additional taxes against it. The final determination of any tax audits or litigation could be materially different from historical tax provisions and accruals, which could harm the Combined Company’s results of operations or cash flows in the period or periods for which a determination is made.

Significant judgment is required to determine the recognition and measurement attributes prescribed in Accounting Standards Codification (“ASC”) 740-10-25. In addition, ASC 740-10-25 applies to all income tax positions, which if settled unfavorably could adversely impact the Combined Company’s provision for income taxes.

 

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The Combined Company’s international operations may subject it to potential adverse tax consequences.

AvePoint has been expanding its international operations and personnel to better support its growth into international markets. AvePoint’s corporate structure and associated transfer pricing policies contemplate future growth into the international markets, taking into account the functions, risks, and assets of the various entities involved in the intercompany transactions. After the Mergers, the amount of taxes the Combined Company will pay in different jurisdictions may depend on: (1) the application of the tax laws of the various jurisdictions, including the United States, to its international business activities, (2) changes in tax rates, (3) new or revised tax laws or interpretations of existing tax laws and policies, and (4) the Combined Company’s ability to operate its business in a manner consistent with its corporate structure and intercompany arrangements. Taxing authorities may challenge the transfer pricing methodologies of the Combined Company’s intercompany arrangements or disagree with the Combined Company’s determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and the Combined Company’s position was not sustained, the Combined Company could be required to pay additional taxes, interest, and penalties. This could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of the Combined Company’s operations. The Combined Company’s financial statements could fail to reflect adequate reserves to cover such a contingency.

Risks Related to an Investment in Securities of the Combined Company

There may not be an active trading market for the Combined Company Common Stock, which may make it difficult to sell shares of Combined Company Common Stock.

It is possible that after the Business Combination, an active trading market will not develop or, if developed, that any market will not be sustained. This would make it difficult for you to sell shares of Combined Company Common Stock at an attractive price or at all. The market price per share of Apex Common Stock may not be indicative of the price at which shares of Combined Company Common Stock will trade in the public market after the Business Combination.

The market price of shares of the Combined Company Common Stock may be volatile, which could cause the value of your investment to decline.

Even if an active trading market develops following the Business Combination, the market price of Combined Company Common Stock may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience significant price and volume fluctuations. The securities markets have experienced significant volatility as a result of the COVID-19 pandemic. Market volatility, as well as general economic, market, or political conditions, could reduce the market price of shares of Combined Company Common Stock regardless of its operating performance. The Combined Company’s operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including: (1) variations in quarterly operating results or dividends, if any, to stockholders, (2) additions or departures of key management personnel, (3) publication of research reports about the Combined Company’s industry, (4) litigation and government investigations, (5) changes or proposed changes in laws or regulations or differing interpretations or enforcement of laws or regulations affecting the Combined Company’s business, (6) adverse market reaction to any indebtedness incurred or securities issued in the future, (7) changes in market valuations of similar companies, (8) adverse publicity or speculation in the press or investment community, (9) announcements by competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures, or capital commitments and (10) the impact of the COVID-19 pandemic on the Combined Company’s management, employees, partners, customers, and operating results. In response, the market price of shares of Combined Company Common Stock could decrease significantly. You may be unable to resell your shares of Combined Company Common Stock at or above your purchase price. Following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against such company. Such litigation, if instituted against the Combined Company, could result in substantial costs and a diversion of management’s attention and resources.

 

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The Combined Company’s ability to timely raise capital in the future may be limited, or may be unavailable on acceptable terms, if at all. The failure to raise capital when needed could harm the Combined Company’s business, operating results and financial condition. Debt or equity issued to raise additional capital may reduce the value of the Combined Company Common Stock.

We and AvePoint cannot be certain when or if the operations of the Combined Company will generate sufficient cash to fund its ongoing operations or the growth of its business. The Combined Company intends to make investments to support AvePoint’s current business and may require additional funds to respond to business challenges, including the need to develop new features or enhance its software, improve its operating infrastructure or acquire complementary businesses and technologies. Additional financing may not be available on favorable terms, if at all. If adequate funds are not available on acceptable terms, the Combined Company may be unable to invest in future growth opportunities, which could harm its business, operating results and financial condition. If the Combined Company incurs debt, the debt holders could have rights senior to holders of Combined Company Common Stock to make claims on the Combined Company’s assets. The terms of any debt could restrict the Combined Company’s operations, including its ability to pay dividends on Combined Company Common Stock. If the Combined Company issues additional equity securities following the Closing, stockholders will experience dilution, and the new equity securities could have rights senior to those of Combined Company Common Stock. Because the decision to issue securities in the future offering will depend on numerous considerations, including factors beyond the Combined Company’s control, the Combined Company cannot predict or estimate the amount, timing or nature of any future issuances of debt or equity securities. As a result, stockholders will bear the risk of future issuances of debt or equity securities reducing the value of their Combined Company Common Stock and diluting their interest.

A small number of stockholders will continue to have substantial control over the Combined Company after this offering, which may limit other stockholders’ ability to influence corporate matters and delay or prevent a third party from acquiring control over the Combined Company.

Upon completion of the Business Combination, the directors and executive officers of the Combined Company, and beneficial owners expected to own 5% or more of its voting securities and their respective affiliates, will beneficially own, in the aggregate, approximately 43.66% of outstanding Combined Company Common Stock assuming no Public Stockholders redeem their common stock. This significant concentration of ownership may have a negative impact on the trading price for the Combined Company Common Stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. In addition, these stockholders will be able to exercise influence over all matters requiring stockholder approval, including the election of directors and approval of corporate transactions, such as a merger or other sale of the Combined Company or its assets. This concentration of ownership could limit stockholders’ ability to influence corporate matters and may have the effect of delaying or preventing a change in control, including a merger, consolidation or other business combination, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change in control would benefit the other stockholders.

There can be no assurance that the Combined Company’s securities will be approved for listing on Nasdaq or that the Combined Company will be able to comply with the continued listing standards of Nasdaq.

In connection with the Closing, we intend to list the common stock and warrants of the Combined Company on Nasdaq under the symbols “AVPT” and “AVPTW,” respectively. The Combined Company’s continued eligibility for listing may depend on the number of our shares that are redeemed. If, after the Business Combination, Nasdaq delists the Combined Company’s securities from trading on its exchange for failure to meet the listing standards, the Combined Company and its stockholders could face significant negative consequences including:

 

   

Limited availability of market quotations for the Combined Company’s securities;

 

   

A determination that the Combined Company Common Stock is a “penny stock” which will require brokers trading in the Combined Company Common Stock to adhere to more stringent rules,

 

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Possibly resulting in a reduced level of trading activity in the secondary trading market for shares of the Combined Company Common Stock;

 

   

A limited amount of analyst coverage; and

 

   

A decreased ability to issue additional securities or obtain additional financing in the future.

If the Combined Company’s operating and financial performance in any given period does not meet the guidance provided to the public or the expectations of investment analysts, the market price of its common stock may decline.

The Combined Company may, but is not obligated to, provide public guidance on its expected operating and financial results for future periods. Any such guidance will consist of forward-looking statements, subject to the risks and uncertainties described in this prospectus/proxy statement and in the Combined Company’s other public filings and public statements. The ability to provide this public guidance, and the ability to accurately forecast its results of operations, may be impacted by the COVID-19 pandemic. The Combined Company’s actual results may not always be in line with or exceed any guidance it has provided, especially in times of economic uncertainty, such as the current global economic uncertainty being experienced as a result of the COVID-19 pandemic. If, in the future, the Combined Company’s operating or financial results for a particular period do not meet any guidance provided or the expectations of investment analysts, or if the Combined Company reduces its guidance for future periods, the market price of the Combined Company Common Stock may decline as well. Even if the Combined Company does issue public guidance, there can be no assurance that it will continue to do so in the future.

Following the consummation of the Business Combination, the Combined Company will incur significant increased expenses and administrative burdens as a public company, which could negatively impact its business, financial condition and results of operations.

Following the consummation of the Business Combination, the Combined Company will face increased legal, accounting, administrative and other costs and expenses as a public company that AvePoint does not incur as a private company. The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the PCAOB and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require the Combined Company to carry out activities AvePoint has not done previously. For example, the Combined Company will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the Combined Company identifies a material weakness or significant deficiency in the internal control over financial reporting), the Combined Company could incur additional costs rectifying those issues, and the existence of those issues could harm the Combined Company’s reputation or investor perceptions of it. It may also be more expensive to obtain director and officer liability insurance. Risks associated with the Combined Company’s status as a public company may make it more difficult to attract and retain qualified persons to serve on the Combined Company Board or as executive officers. The additional reporting and other obligations imposed by these rules and regulations will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require the Combined Company to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

 

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If the Combined Company is unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of financial reports, and the market price of its common stock may decline.

The Combined Company will be required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. In addition, following the Business Combination, it will be required to furnish a report by management in its annual report on Form 10-K on the effectiveness of its internal control over financial reporting, pursuant to Section 404 of Sarbanes-Oxley. The process of designing, implementing, and testing the internal control over financial reporting required to comply with this obligation is time-consuming, costly, and complicated. If the Combined Company identifies material weaknesses in its internal control over financial reporting, if it is unable to comply with the requirements of Section 404 of Sarbanes-Oxley in a timely manner, or if it is unable to assert that its internal control over financial reporting are effective, it will be unable to certify that its internal control over financial reporting is effective. The Combined Company cannot assure you that there will not be material weaknesses or significant deficiencies in its internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit the Combined Company’s ability to accurately report its financial condition or results of operations. If it is unable to conclude that its internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of the Combined Company’s financial reports and the market price of the Combined Company Common Stock could decline. The Combined Company could become subject to investigations by Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.

AvePoint’s management has identified material weaknesses in our internal control over financial reporting and we may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet our periodic reporting obligations.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. AvePoint is currently a private company with limited accounting and financial reporting personnel and other resources with which to address its internal controls and procedures. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. AvePoint determined that it had material weaknesses in internal control because AvePoint did not maintain effective controls related to: (i) the completeness and accuracy of financial accounting, reporting and disclosures, (ii) the identification, review and accounting for nonroutine transactions and/or events and (iii) segregation of duties with respect to the processing of financial transactions. With the oversight of senior management and its audit committee, AvePoint implemented actions under a remediation plan which include (i) the hiring of personnel with technical accounting and financial reporting experience to further bolster its ability to assess judgmental areas of accounting and provide an appropriate level of oversight of activities related to internal control over financial reporting and (ii) the engagement of external consultants in the assistance of the evaluation of complex accounting matters. AvePoint is implementing additional actions under a remediation plan which include (i) the implementation of improved accounting and financial reporting procedures and controls to improve the completeness and accuracy of its financial accounting, reporting and disclosures and (ii) the establishment of formalized internal controls to review and maintain segregation of duties between control operators. We have continued the implementation of this plan and believe the measures described above will remediate the material weaknesses identified and strengthen our internal control over financial reporting. We are committed to continuing to improve our internal control processes and will continue to diligently and vigorously review our financial reporting controls and procedures.

While we continue to implement our plan to remediate the material weaknesses described above, we cannot predict the success of such plan or the outcome of our assessment of these plans at this time. If our steps are

 

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insufficient to remediate the material weaknesses successfully and otherwise establish and maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us, and the value of our common stock could be materially and adversely affected. We can give no assurance that the implementation of this plan will remediate these deficiencies in internal control or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, causing us to fail to meet our reporting obligations.

The Combined Company will qualify as an “emerging growth company”. The reduced public company reporting requirements applicable to emerging growth companies may make its common stock less attractive to investors.

Following the consummation of the Business Combination, the Combined Company will qualify as an “emerging growth company” under SEC rules. As an emerging growth company, the Combined Company will be permitted and plans to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These provisions include: (1) presenting only two years of audited financial statements, (2) presenting only two years of related selected financial data and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, (3) an exemption from compliance with the auditor attestation requirement in the assessment of internal control over financial reporting pursuant to Section 404 of Sarbanes-Oxley, (4) not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, (5) reduced disclosure obligations regarding executive compensation arrangements in periodic reports, registration statements, and proxy statements, and (6) 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, the information the Combined Company provides will be different than the information that is available with respect to other public companies that are not emerging growth companies. If some investors find the Combined Company Common Stock less attractive as a result, there may be a less active trading market for the Combined Company Common Stock, and the market price of the Combined Company Common Stock may be more volatile. The Combined Company will remain an emerging growth company until the earliest of: (1) December 31, 2024, (2) the last day of the fiscal year in which it has gross revenue exceeding $1.07 billion, (3) the date on which it has, during the immediately preceding three-year period, issued more than $1.0 billion in non-convertible debt securities, and (4) the end of any fiscal year in which the market value of the Combined Company Common Stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year.

AvePoint’s management has limited experience in operating a public company.

AvePoint’s executive officers have limited experience in the management of a publicly traded company. AvePoint’s management team may not successfully or effectively manage its transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities, which will result in less time being devoted to the management and growth of the Combined Company. AvePoint may not have adequate personnel with the appropriate level of knowledge, experience, and training in the accounting policies, practices or internal controls over financial reporting required of public companies in the United States. The development and implementation of the standards and controls necessary for the Combined Company to achieve the level of accounting standards required of a public company in the United States may require costs greater than expected. It is possible that the Combined Company will be required to expand its employee base and hire additional employees to support its operations as a public company, which will increase its operating costs in future periods.

 

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If securities or industry analysts do not publish research or reports about the Combined Company’s business or publish negative reports, the market price of its common stock could decline.

The trading market for the Combined Company Common Stock will be influenced by the research and reports that industry or securities analysts publish about the Combined Company or its business. If regular publication of research reports ceases, the Combined Company could lose visibility in the financial markets, which in turn could cause the market price or trading volume of the Combined Company Common Stock to decline. Moreover, if one or more of the analysts who cover the Combined Company downgrade the Combined Company Common Stock or if reporting results do not meet their expectations, the market price of the Combined Company Common Stock could decline.

If the Combined Company’s security holders exercise their registration rights, it may negatively impact the market price of the Combined Company Common Stock and the existence of these rights may make it more difficult to effect a business combination.

In connection with the Closing, Apex’s existing registration rights agreement will be amended and restated to: (i) provide that the Combined Company will file a registration statement within 30 days following the Closing to register for resale (A) the shares of Apex Common Stock of the Apex Initial Stockholder and shares of Apex Common Stock issuable upon exercise of the Private Warrants held by the Apex Initial Stockholder and (B) the shares of the Combined Company Common Stock to be issued to the AvePoint stockholders in the Business Combination; (ii) provide the AvePoint stockholders with three demand registration rights; (iii) provide the AvePoint stockholders and the Apex Initial Stockholder customary underwritten takedown rights (subject to customary priorities, minimums, frequency, and quantity limits, cutbacks, deferrals and other terms); and (iv) afford each of the AvePoint stockholders and the Apex Initial Stockholder, on a pari passu basis, “piggy back” registration rights with respect to any underwritten offerings by the other stockholders and by the Combined Company. The sale or possibility of sale of these additional securities trading in the public market may negatively impact the market price of the Combined Company’s securities.

The Combined Company has no current plans to pay cash dividends on its common stock; as a result, stockholders may not receive any return on investment unless they sell their Combined Company Common Stock for a price greater than the purchase price.

The Combined Company has no current plans to pay dividends on the Combined Company Common Stock. Any future determination to pay dividends will be made at the discretion of the Combined Company Board, subject to applicable laws. It will depend on a number of factors, including the Combined Company’s financial condition, results of operations, capital requirements, contractual, legal, tax and regulatory restrictions, general business conditions, and other factors that the board of directors may deem relevant. In addition, the ability to pay cash dividends may be restricted by the terms of debt financing arrangements, as any future debt financing arrangement likely will contain terms restricting or limiting the amount of dividends that may be declared or paid on the Combined Company Common Stock. As a result, stockholders may not receive any return on an investment in Combined Company Common Stock unless they sell their shares for a price greater than that which they paid for them.

The Combined Company may issue additional shares of common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of the Combined Company Common Stock.

Upon consummation of the Business Combination, the Combined Company will have warrants outstanding to purchase an aggregate of 17,905,000 shares of common stock. Pursuant to the 2021 Plan, following the consummation of the Proposed Transactions, the Combined Company may issue an aggregate of up to                  shares of common stock, which amount may be subject to increase from time to time. For additional information about this plan, please read the discussion under the headings “Proposal No. 3 — The Incentive Plan Proposal

 

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and “AvePoint’s Executive Compensation — Employee Benefit Plans.” The Combined Company may also issue additional shares of common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions or repayment of outstanding indebtedness, without stockholder approval, in a number of circumstances.

The issuance of additional shares or other equity securities of equal or senior rank would have the following effects:

 

   

Existing stockholders’ proportionate ownership interest in the Combined Company will decrease;

 

   

The amount of cash available per share, including for payment of dividends in the future, may decrease;

 

   

The relative voting strength of each previously outstanding common stock may be diminished; and

 

   

The market price of the Combined Company Common Stock may decline.

Provisions in the Combined Company’s organizational documents and certain rules imposed by regulatory authorities may delay or prevent an acquisition by a third party that could otherwise be in the interests of stockholders.

The Proposed Certificate of Incorporation and amended and restated bylaws to be in effect following the Closing will contain several provisions that may make it more difficult or expensive for a third party to acquire control of the Combined Company without the approval of the board of directors. These provisions, which may delay, prevent or deter a merger, acquisition, tender offer, proxy contest, or other transaction that stockholders may consider favorable, include the following:

 

   

The division of the board of directors into three classes and the election of each class for three-year terms;

 

   

Advance notice requirements for stockholder proposals and director nominations;

 

   

Provisions limiting stockholders’ ability to call special meetings of stockholders, to require special meetings of stockholders to be called, and to take action by written consent;

 

   

Restrictions on business combinations with interested stockholders;

 

   

In certain cases, the approval of holders representing at least 66 2/3% of the total voting power of the shares entitled to vote generally in the election of directors will be required for stockholders to adopt, amend or repeal the bylaws, or amend or repeal certain provisions of the certificate of incorporation;

 

   

No cumulative voting;

 

   

The required approval of holders representing at least 66 2/3% of the total voting power of the shares entitled to vote at an election of the directors to remove directors; and

 

   

The ability of the board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used, among other things, to institute a rights plan that would have the effect of significantly diluting the stock ownership of a potential hostile acquirer, likely preventing acquisitions.

These provisions of the Proposed Certificate of Incorporation and amended and restated bylaws could discourage potential takeover attempts and reduce the price that investors might be willing to pay for shares of Combined Company Common Stock in the future, which could reduce the market price of Combined Company Common Stock. For more information, see the section titled “Description of Apex’s Securities — Certain Anti-Takeover Provisions of Delaware Law.”

 

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The provision of the Proposed Certificate of Incorporation to be in effect following the Business Combination requiring exclusive venue in the Court of Chancery in the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against directors and officers.

The Proposed Certificate of Incorporation will provide that, unless the Combined Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for: (1) any derivative action or proceeding brought on behalf of the Combined Company, (2) any action asserting a claim of breach of fiduciary duty owed by any director, officer, agent or other employee or stockholder to the Combined Company or its stockholders, (3) any action asserting a claim arising pursuant to any provision of the DGCL, the Proposed Certificate of Incorporation or the amended and restated bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, (4) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Proposed Certificate of Incorporation or the amended and restated bylaws or (5) any action asserting a claim governed by the internal affairs doctrine, in each case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. It will further provide that, unless the Combined Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolutions of any complaint asserting a cause of action arising under the Securities Act. The exclusive forum clauses described above shall not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. Although these provisions are expected to benefit the Combined Company by providing increased consistency in the application of applicable law in the types of lawsuits to which they apply, the provisions may have the effect of discouraging lawsuits against directors and officers. The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings and there is uncertainty as to whether a court would enforce such provisions. In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. It is possible that, in connection with any applicable action brought against the Combined Company, a court could find the choice of forum provisions contained in the Proposed Certificate of Incorporation to be inapplicable or unenforceable in such action. If so, the Combined Company may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, financial condition or results of operations.

Risks Related to Apex

Unless the context otherwise requires, all references to “we,” “us,” or “our” in this subsection titled “Risks Related to Apex” refer to Apex.

Apex’s executive officers, directors, the Apex Initial Stockholder and director nominees have agreed to vote in favor of the Business Combination, regardless of how the Public Stockholders vote.

Unlike many other blank check companies in which the executive officers, directors and other initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, Apex’s executive officers, directors and the Apex Initial Stockholder have agreed (and their permitted transferees will agree), pursuant to the terms of a letter agreement entered into with Apex, to vote any shares of Apex Capital Stock held by them in favor of the Business Combination. Apex’s executive officers, directors and the Apex Initial Stockholder (and their permitted transferees) owned     % of the issued and outstanding shares of Apex Capital Stock as of the Record Date. As a result of such agreements, the affirmative vote of holders of an additional              shares of Apex Capital Stock, representing __% of the remaining shares of Apex Capital Stock held by the Public Stockholders as of the Record Date, assuming the minimum number of shares required to constitute a quorum are voted at the special meeting, would be required to approve the Business Combination Proposal. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if such persons agreed to vote their shares of Apex Capital Stock in accordance with the majority of the votes cast by the Public Stockholders.

 

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The exercise of Apex’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes to the terms of the Business Combination or waivers of conditions are appropriate and in Apex’s stockholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Business Combination Agreement, would require Apex to agree to amend the Business Combination Agreement, to consent to certain actions taken by AvePoint or to waive rights that Apex is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of AvePoint’s business, a request by AvePoint to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on AvePoint’s business and would entitle Apex to terminate the Business Combination Agreement. In any of such circumstances, it would be at Apex’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he, she or they may believe is best for Apex and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Apex does not believe there will be any material changes or waivers that Apex’s directors and officers would be likely to make after the mailing of this proxy statement/prospectus. Apex will circulate a new or amended proxy statement/prospectus if changes to the terms of the Business Combination that would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

If Apex is unable to complete the Business Combination or another business combination by September 19, 2021, Apex will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Apex and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by stockholders could be less than $10.00 per share.

Under the terms of the Existing Certificate of Incorporation, Apex must complete an initial business combination by September 19, 2021, or Apex must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding Public Shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Apex. Although Apex has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective business combination partners it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the Trust Account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly, the proceeds held in the Trust Account could be subject to claims that could take priority over those of the Public Stockholders. If Apex is unable to complete a business combination within the required time period, the Sponsor has agreed it will be liable under certain circumstances described herein to ensure that the proceeds in the Trust Account are not reduced by the claims of business combination partners or claims of vendors or other entities that are owed money by Apex for services rendered or contracted for or products sold to Apex. However, it may not be able to meet such obligation. Therefore, the per-share distribution from the Trust Account in such a situation may be less than $10.00 due to such claims.

Additionally, if Apex is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if Apex otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the Trust Account, Apex may not be able to return to its public stockholders at least $10.00 per Public Share.

 

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For illustrative purposes, based on funds in the Trust Account of approximately $351.9 million on December 31, 2020, the estimated per share redemption price would have been approximately $10.05.

Apex’s directors, executive officers, advisors or their affiliates may take actions, which may influence the vote on the Business Combination Proposal and other Stockholder Proposals and reduce the public “float” and have a depressive effect on the market price of Apex Common Stock.

At any time prior to the special meeting of stockholders, during which they are not aware of any non-material public information about Apex or its securities, Apex’s directors, executive officers, advisors or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of the Business Combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of Apex’s securities, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that Apex’s directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public Stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. In addition, they may enter into transactions with investors and others to provide them with incentives to acquire shares of Apex Common Stock. The purpose of such purchases and other transactions could be to vote such shares in favor of the Business Combination and thereby increase the likelihood of obtaining stockholder approval of the Business Combination, where it appears that such requirement would otherwise not be met. This may result in the completion of the Business Combination that may not otherwise have been possible. If such purchases are made, the public “float” of Apex Common Stock and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of Apex’s securities on a national securities exchange.

In addition, pursuant to the Subscription Agreements, certain affiliates of the Apex Initial Stockholder have agreed to purchase an aggregate of 100,000 shares of Apex Common Stock at a purchase price of $10.00 per share in the PIPE upon the Closing. Such purchases may, therefore, be at a price per share that is less than the then-current market price of Apex Common Stock and could have a depressive effect on the market price of Apex Common Stock.

Apex’s ability to successfully effect the Business Combination and the Combined Company’s ability to successfully operate the business thereafter will be largely dependent upon the efforts of certain key personnel of AvePoint, all of whom we expect to stay with the Combined Company following the Business Combination. The loss of such key personnel could negatively impact the operations and financial results of the combined business.

Apex’s ability to successfully effect the Business Combination and the Combined Company’s ability to successfully operate the business following the Closing is dependent upon the efforts of certain key personnel of AvePoint. Although we expect such key personnel to remain with the Combined Company following the Business Combination, there can be no assurance that they will do so. It is possible that AvePoint will lose some key personnel, the loss of which could negatively impact the operations and profitability of the Combined Company. Furthermore, following the Closing, certain of the key personnel of AvePoint may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause the Combined Company to have to expend time and resources helping them become familiar with such requirements.

Apex’s board of directors did not obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination and, as a result, the terms may not be fair from a financial point of view to the Public Stockholders.

Apex’s board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the Business Combination with AvePoint. In analyzing the Business Combination, Apex’s board of directors and management conducted due diligence on AvePoint and researched the industry in

 

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which AvePoint operates and concluded that the Business Combination was in the best interest of Apex’s stockholders. For a complete discussion of the factors utilized by Apex’s board of directors in approving the Business Combination, see the section titled “Proposal No.1 — The Business Combination — Apex’s Board of Directors’ Reasons for the Approval of the Business Combination. Apex’s board of directors believes because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that AvePoint’s fair market value was at least 80% of Apex’s net assets (excluding any taxes payable on interest earned). Accordingly, investors will be relying solely on the judgment of Apex’s board of directors in valuing AvePoint’s business, and the board of directors may not have properly valued such business. Apex’s board of directors may be incorrect in its assessment of the Business Combination. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the proposed Business Combination or demand redemption of their shares for cash, which could potentially impact Apex’s ability to consummate the Business Combination.

Unlike many blank check companies, Apex does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it easier for Apex to consummate the Business Combination even if a substantial majority of Apex’s stockholders do not agree.

Since Apex has no specified percentage threshold for redemption contained in the Existing Certificate of Incorporation, its structure is different in this respect from the structure used by many blank check companies. Historically, blank check companies would not be able to consummate an initial business combination if the holders of such company’s public shares voted against a proposed business combination and elected to redeem more than a specified maximum percentage of the shares sold in such company’s initial public offering, which percentage threshold was typically between 19.99% and 39.99%. As a result, many blank check companies were unable to complete a business combination because the number of shares voted by their public stockholders electing redemption exceeded the maximum redemption threshold pursuant to which such company could proceed with its initial business combination. As a result, Apex may be able to consummate the Business Combination even if a substantial majority of the Public Stockholders do not agree with the Business Combination and have redeemed their shares. However, in no event will Apex redeem Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001 upon the consummation of the Business Combination. If enough Public Stockholders exercise their redemption rights such that Apex cannot satisfy the net tangible asset requirement, Apex would not proceed with the redemption of our Public Shares and the Business Combination, and instead may search for an alternate business combination.

Public Stockholders will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate their investment, therefore, Public Stockholders may be forced to sell their securities, potentially at a loss.

Public Stockholders shall be entitled to receive funds from the Trust Account only (i) in the event of a redemption to Public Stockholders prior to any winding up in the event Apex does not consummate its initial business combination or its liquidation, (ii) if they redeem their shares in connection with an initial business combination that Apex consummates or (iii) if they redeem their shares in connection with a stockholder vote to amend the Existing Certificate of Incorporation (A) to modify the substance or timing of Apex’s obligation to redeem 100% of the Public Shares if Apex does not complete its initial business combination within 24 months from the closing of the IPO or (B) with respect to any other provision relating to Apex’s pre-business combination activity and related stockholders’ rights. In no other circumstances will a stockholder have any right or interest of any kind to the funds in the Trust Account. Accordingly, to liquidate their investment, the Public Stockholders may be forced to sell their securities, potentially at a loss.

 

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If third parties bring claims against Apex, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by stockholders may be less than $10.00 per share.

Apex’s placing of funds in the Trust Account may not protect those funds from third-party claims against Apex. Although Apex has sought to have all vendors, service providers (other than its independent registered public accounting firm), prospective business combination partners or other entities with which it does business execute agreements with Apex waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of the 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 Apex’s 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, Apex’s 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 Apex than any alternative.

Examples of possible instances where Apex 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 Apex 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 Apex is unable to complete its initial business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with its initial business combination, Apex will be required to provide for payment of claims of creditors that were not waived that may be brought against Apex within the 10 years following redemption. Accordingly, the per share redemption amount received by Public Stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors.

Our Sponsor has agreed that it will be liable to Apex if and to the extent any claims by a third party (other than Apex’s independent registered public accounting firm) for services rendered or products sold to us, or a prospective business combination partner with which Apex has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under Apex’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims. Apex has not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and, therefore, our Sponsor may not be able to satisfy those obligations. Apex has not asked our Sponsor to reserve for such obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for Apex’s initial business combination and redemptions could be reduced to less than $10.00 per Public Share. In such event, Apex may not be able to complete its initial business combination, and its stockholders would receive such lesser amount per share in connection with any redemption of their Public Shares. None of Apex’s officers or directors will indemnify Apex for claims by third parties including, without limitation, claims by vendors and prospective business combination partners.

Apex’s directors may decide not to enforce indemnification obligations against our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below $10.00 per Public Share and our Sponsor asserts that it is unable to satisfy obligations or that it has no indemnification obligations related to a particular claim, Apex’s independent directors would determine on Apex’s behalf whether to take legal action

 

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against our Sponsor to enforce its indemnification obligations. While Apex currently expects that its independent directors would take legal action on Apex’s behalf against our Sponsor to enforce its indemnification obligations to Apex, it is possible that Apex’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If Apex’s independent directors choose not to enforce these indemnification obligations on Apex’s behalf, the amount of funds in the Trust Account available for distribution to the Public Stockholders may be reduced below $10.00 per Public Share.

Apex’s stockholders may be held liable for claims by third parties against Apex to the extent of distributions received by them.

The Existing Certificate of Incorporation provides that Apex will continue in existence only until 24 months from the closing of its IPO, or September 19, 2021. If Apex has not completed an initial business combination by such date, it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including any interest not previously released to Apex but net of income taxes or any other taxes payable, divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of Apex’s remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Apex cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, Apex’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Apex cannot assure you that third parties will not seek to recover from Apex’s stockholders amounts owed to such third parties by Apex.

If Apex is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against Apex which 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 Apex’s stockholders. Furthermore, because Apex intends to distribute the proceeds held in the Trust Account to the Public Stockholders promptly after expiration of the time Apex has to complete an initial business combination, this may be viewed or interpreted as giving preference to the Public Stockholders over any potential creditors with respect to access to or distributions from Apex’s assets. Furthermore, Apex’s board of directors may be viewed as having breached their fiduciary duties to Apex’s creditors and/or may have acted in bad faith, and thereby exposing itself and Apex to claims of punitive damages, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors. Apex cannot assure you that claims will not be brought against Apex for these reasons.

Apex’s executive officers and directors have potential conflicts of interest in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other Stockholder Proposals described in this proxy statement/prospectus.

When considering Apex’s board of directors’ recommendation that our stockholders vote in favor of the approval of the Business Combination Proposal and the other Stockholder Proposals, Apex’s stockholders should be aware that Apex’s directors and executive officers have interests in the Business Combination that may be different from, in addition to, or in conflict with the interests of Apex’s stockholders. These interests include:

 

   

The beneficial ownership of Apex’s board of directors and officers of an aggregate of 8,750,000 shares of Apex Capital Stock, 657,500 Initial Stockholder Units, which shares, units and warrants would become worthless if Apex does not complete a business combination within the applicable time period, as Apex’s directors and officers and their affiliates have waived any right to redemption with respect to these shares. Such shares, units, and warrants have an aggregate market value of approximately

 

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$             million, $             million, and $             million, respectively, based on the closing price of Apex Common Stock of $             on Nasdaq on                      , 2021, the Record Date for the special meeting of stockholders. Based on such market values, Apex’s board of directors and officers will have an unrealized gain of $             on their Apex securities;

 

   

Apex’s directors and officers and their affiliates have agreed to purchase an aggregate of 100,000 shares of Apex Common Stock in the PIPE at a purchase price of $10.00 per share, which purchase will not occur if Apex does not complete the Business Combination;

 

   

Apex’s board of directors will not receive reimbursement for any out-of-pocket expenses incurred by them on Apex’s behalf incident to identifying, investigating and consummating the Business Combination to the extent such expenses exceed the amount not required to be retained in the Trust Account, unless the Business Combination is consummated;

 

   

The anticipated continuation of Jeff Epstein as a director of the Combined Company and Brad Koenig’s anticipated role as an observer of the Combined Company Board following the Closing; and

 

   

The continued indemnification of current directors and officers of Apex following the Business Combination and the continuation of directors’ and officers’ liability insurance following the Business Combination.

These financial interests may have influenced the decision of Apex’s directors to approve the Business Combination and to continue to pursue such Business Combination. In considering the recommendations of Apex’s board of directors to vote for the Business Combination Proposal and other Stockholder Proposals, its stockholders should consider these interests.

We may amend the terms of the Apex Warrants in a manner that may be adverse to holders with the approval by the holders of at least a majority of the then-outstanding Public Warrants.

The Apex Warrants were issued in registered form under the Apex Warrant Agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The Apex Warrant Agreement provides that the terms of the Apex Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision but requires the approval by the holders of at least a majority of the then outstanding Public Warrants prior to the Business Combination (or at least a majority of the then outstanding Apex Warrants after the Business Combination) to make any change that adversely affects the interests of the registered holders. Accordingly, we may amend the terms of the Apex Warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding Public Warrants prior to the Business Combination (or at least a majority of the then outstanding Apex Warrants after the Business Combination) approve of such amendment. Although our ability to amend the terms of the Apex Warrants with the consent of at least a majority of the then outstanding Public Warrants prior to the Business Combination (or at least a majority of the then outstanding Apex Warrants after the Business Combination) is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Apex Warrants, convert the Apex Warrants into stock or cash, shorten the exercise period or decrease the number of warrant shares issuable upon exercise of an Apex Warrant.

The Combined Company may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your Public Warrants worthless.

The Combined Company will have the ability to redeem outstanding Public Warrants (excluding the private warrants and any warrants issued to the Apex Initial Stockholder, officers or directors in payment of working capital loans made to us) 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 the Apex Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date we give

 

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notice of redemption and during the entire period thereafter until the time the Combined Company redeems the Public Warrants, the Combined Company has an effective registration statement under the Securities Act covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the Public Warrants become redeemable by the Combined Company, the Combined Company may not exercise its redemption right if it is unable to register or qualify the component securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you (i) to exercise your Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Public Warrants at the then-current market price when you might otherwise wish to hold your Public Warrants or (iii) to accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption, is likely to be substantially less than the market value of your Public Warrants. None of the Private Warrants will be redeemable by us so long as they are held by the initial purchasers or their permitted transferees.

We will require Public Stockholders who wish to redeem their Public Shares in connection with the Business Combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

We will require the 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 up to two business days prior to the vote on the proposal to approve the Business Combination, or to deliver their shares to the transfer agent electronically using DTC’s Deposit/Withdrawal At Custodian System (the “DWAC System”), at the holder’s option. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and our transfer agent will need to act to facilitate this request. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, this may not be the case. Under 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. Accordingly, if it takes longer than we anticipate for stockholders to deliver their shares, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their shares. In the event that a stockholder fails to comply with the various procedures that must be complied with in order to validly tender or redeem Public Shares, its shares may not be redeemed.

Additionally, despite our compliance with the proxy rules, stockholders may not become aware of the opportunity to redeem their shares.

We may issue additional shares of common stock or preferred shares under an employee incentive plan upon or after consummation of the Business Combination, which would dilute the interest of our stockholders.

The Existing Certificate of Incorporation authorizes the issuance of 110,000,000 shares of common stock, consisting of 100,000,000 shares of Apex Class A Common Stock and 10,000,000 shares of Apex Class B Common Stock, and 1,000,000 shares of preferred stock, in each case, par value $0.0001 per share. We may issue a substantial number of additional shares of common stock or shares of preferred stock under an employee incentive plan upon or after consummation of the Business Combination. However, the Existing Certificate of Incorporation provides that we may not issue any additional shares of capital stock that would entitle the holders thereof to receive funds from the Trust Account or vote on an initial business combination. Although no such issuance will affect the per share amount available for redemption from the Trust Account, the issuance of additional common stock or preferred shares:

 

   

May significantly dilute the equity interest of investors from the IPO, who will not have preemption rights in respect of such an issuance;

 

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May subordinate the rights of holders of shares of common stock if one or more classes of preferred stock are created, and such shares of preferred stock are issued, with rights senior to those afforded to Apex Common Stock;

 

   

Could cause a change in control if a substantial number of shares of common stock are issued, which may affect, among other things, our ability to use our NOL carryforwards, if any, and could result in the resignation or removal of our present officers and directors; and

 

   

May adversely affect prevailing market prices for our Apex Units, Apex Common Stock and/or Apex Warrants.

The Existing Certificate of Incorporation provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with Apex or its directors, officers, employees or stockholders.

The Existing Certificate of Incorporation requires, to the fullest extent permitted by law, that derivative actions brought in Apex’s name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel except any action (A) as to which the Court of Chancery in the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, (C) for which the Court of Chancery does not have subject matter jurisdiction, or (D) arising under the Securities Act, as to which the Court of Chancery and the federal district court for the District of Delaware shall have concurrent jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of Apex capital stock shall be deemed to have notice of and consented to the forum provisions in the Existing Certificate of Incorporation.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Apex or any of its directors, officers or employees, which may discourage lawsuits with respect to such claims, although Apex’s stockholders will not be deemed to have waive Apex’s compliance with federal securities laws and the rules and regulations thereunder and may therefore bring a claim in another appropriate forum. Apex cannot be certain that a court will decide that this provision is either applicable or enforceable, and if a court were to find the choice of forum provision contained in the Existing Certificate of Incorporation to be inapplicable or unenforceable in an action, Apex may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

The Existing Certificate of Incorporation provides that the exclusive forum provision will be applicable to the fullest extent permitted by applicable law. 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. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. The proposal to amend and restate the Existing Certificate of Incorporation will also include this provision.

 

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Risks if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, Apex’s board of directors will not have the ability to adjourn the special meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be completed.

Apex’s board of directors is seeking approval to adjourn the special meeting to a later date or dates if, at the special meeting, Apex is unable to consummate the Business Combination. If the Adjournment Proposal is not approved, Apex’s board of directors will not have the ability to adjourn the special meeting to a later date and, therefore, the Business Combination would not be completed.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

Introduction

Apex has entered into the Business Combination Agreement with AvePoint and Merger Subs pursuant to which Merger Sub 1 will merge with and into AvePoint, with AvePoint surviving the First Merger as a wholly-owned subsidiary of Apex and, promptly following the First Merger, AvePoint will merge with and into Merger Sub 2, with Merger Sub 2 surviving the Second Merger as a wholly owned subsidiary of Apex. The Company is providing the following unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of AvePoint becoming a wholly-owned subsidiary of the Company as a result of the mergers. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X. In May 2020, the SEC adopted Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 was effective on January 1, 2021; therefore, the unaudited pro forma condensed combined financial information herein is presented in accordance therewith.

Apex is a blank check company incorporated in Delaware on April 5, 2019. The Company was 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. Apex filed a registration statement with the Securities and Exchange Commission (“SEC”) on Form S-1, which was deemed effective on September 16, 2019. On September 19, 2019, Apex consummated its IPO of 35,000,000 units, which included the partial exercise by the underwriters of the over-allotment option to purchase an additional 4,500,000 units at $10.00 per unit, generating gross proceeds of $350.0 million. The proceeds from the IPO were placed in a trust account Trust Account. Each unit consists of one share of Class A common stock and one-half of one redeemable warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share. Additionally, simultaneously with the closing of the IPO, the Company consummated the sale of 810,000 units (the “Placement Units”) at a price of $10.00 per Placement Unit in a private placement to Apex Technology Sponsor LLC (the “Sponsor”) and Cantor Fitzgerald & Co. (“Cantor”), the representatives of the underwriters, generating gross proceeds of $8.1 million. Each Placement Unit consists of one share of Class A common stock (in reference to shares for Placement Units, “Placement Share”) and one-half of one redeemable warrant (“Placement Warrant”). Each whole Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share.

AvePoint is a leading provider of enterprise collaboration and productivity software solutions. AvePoint develops, markets, and sells its suite of software solutions and services, primarily in North America, Europe, Australia, and Asia. AvePoint provides its customers with high-performance infrastructure management, compliance, data governance, mobility and productivity, online services and software solutions consulting. AvePoint was incorporated as a New Jersey corporation on July 24, 2001 and redomiciled as a Delaware corporation in 2006. AvePoint’s headquarters are located in Jersey City, New Jersey.

The following unaudited pro forma condensed combined balance sheet as of December 31, 2020 assumes that the Business Combination occurred on December 31, 2020. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 present pro forma effect to the Business Combination as if it had been completed on January 1, 2020.

The unaudited pro forma condensed combined financial statements have been presented for illustrative purposes only and do not necessarily reflect what the Combined Company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. Further, the pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

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The historical financial information of the Company was derived from the audited financial statements of the Company as of and for the year ended December 31, 2020, included elsewhere in this proxy statement/prospectus. The historical financial information of AvePoint was derived from audited consolidated financial statements of AvePoint as of and for the year ended December 31, 2020, included elsewhere in this proxy statement/prospectus. This information should be read together with the Company’s and AvePoint’s unaudited and audited financial statements and related notes, the sections titled “Apex Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “AvePoint Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

Description of the Business Combination

Upon the consummation of the Mergers, based on AvePoint’s capitalization table as of February 23, 2021, the aggregate consideration to be paid to AvePoint’s equityholders will be (i) the Aggregate Cash Consideration, which equals an amount in cash of approximately $262 million, assuming AvePoint stockholders elect to receive the maximum cash consideration, minus a deduction for the PIPE Fees and (ii) the Aggregate Stock Consideration and Aggregate Option Consideration, which equals 143,261,093 shares of Apex Common Stock, which includes shares of Apex Common Stock that may be issuable pursuant to the exercise of exchanged AvePoint stock options (calculated using the treasury stock method, subject to an adjustment for an additional number of shares of Apex Common Stock if AvePoint’s stockholders elect to receive less than the maximum cash consideration of approximately $262 million or if there is not sufficient available cash to pay the entire such cash consideration). Each share of AvePoint’s common stock and preferred stock will be converted into approximately 8.6851 shares of common stock of the Company based on the determined exchange ratio. The Aggregate Cash Consideration may be subject to downward adjustment based on the Cash Election and any cutback due to redemptions by stockholders of Apex and any such adjustment shall be offset by an equivalent increase in the Aggregate Stock Consideration based on a value of $10.00 per share of Apex Common Stock.

Following the Closing, in addition to the Aggregate Cash Consideration and Aggregate Stock Consideration, the holders of AvePoint Preferred Stock, AvePoint Common Stock and AvePoint Options shall be issued additional shares of Apex Common Stock, as follows:

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $12.50 over any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $12.50 per share.

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $15.00 over any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $15.00 per share.

 

   

1,000,000 shares of Apex Common Stock, in the aggregate, if at any time from and after the Closing through the seventh anniversary thereof (x) the Closing Price is greater than or equal to $17.50 over any 20 Trading Days within any 30 Trading Day period or (y) Apex consummates a Subsequent Transaction, which results in the stockholders of Apex having the right to exchange their shares for cash, securities or other property having a value equaling or exceeding $17.50 per share. For the avoidance of doubt, the maximum amount of the Contingent Consideration is 3,000,000 shares of Apex Common Stock, in the aggregate.

Each holder of an Unvested Exchange Option that remains unvested when the contingent milestone is achieved will be issued an award of restricted stock units of the Company for a number of shares of Common Stock equal to such portion of the Contingent Consideration issuable with respect to the Unvested Exchange

 

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Option (“Earn-Out RSUs”). Such Earn-Out RSUs will vest in equal amounts over the remaining vesting schedules of the applicable Unvested Exchange Option.

In addition, pursuant to the Sponsor Support Agreement, the Sponsor agreed to deposit 2,916,700 shares of its existing Apex Common Stock (“Sponsor Earn-Out Shares”) into escrow and that such shares will be subject to the vesting provisions set forth below:

 

   

100% of the Sponsor Earn-Out Shares shall vest and be released to the Sponsor if at any time from and after the Closing through the seventh anniversary thereof, the Closing Price is greater than or equal to $15.00 (as adjusted for share splits, share capitalization, reorganizations, recapitalizations and the like) over any 20 trading days within any 30 trading day period; and

 

   

100% of the remaining Sponsor Earn-Out Shares that have not previously vested under the Sponsor Support Agreement shall vest and be released to the Sponsor if at any time from and after the Closing through the seventh anniversary thereof, Apex consummates a Subsequent Transaction.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption into cash of Apex Common Stock:

 

   

Assuming No Redemptions: This presentation assumes that no Public Stockholders of the Company exercise redemption rights with respect to their Public Shares for a pro rata share of the funds in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that stockholders holding 15,569,616 Public Shares will exercise their redemption rights for their pro rata share (approximately $10.05 per share as of December 31, 2020) of the funds in the Trust Account. The Business Combination Agreement provides that consummating the Business Combination is conditioned on the Company having a minimum cash condition of $300,000,000. The minimum cash condition is determined based on the following: (i) the funds remaining in the Trust Account, plus (ii) the proceeds under the Subscription Agreements, plus (iii) the proceeds with respect to any Additional Equity Amount, minus (b) the sum of (i) the amount required to satisfy the Redemption Rights plus (ii) any taxes due on any accrued interest on the Trust Account, plus (iii) any unpaid Apex Transaction Expenses, plus (iv) any unpaid AvePoint Transaction Expenses. This scenario gives effect to Public Share redemptions of approximately 15,569,616 Public Shares (44% of total public shares) for aggregate redemption payments of $156.5 million using a per share redemption price as of December 31, 2020.

The following summarizes the consideration (excluding the earn out shares) based on AvePoint’s capitalization table as of February 23, 2021:

 

     Assuming No
Redemptions and
Maximum Redemptions
 
     (in thousands, except share
and per share amounts)
 

Shares transferred at Closing(1)

     143,261,093  

Cash transferred at Closing(2),(3)

   $ 262,077  

Value per share(4)

   $ 10.00  
  

 

 

 

Total Consideration

   $ 1,694,688  
  

 

 

 

 

(1)

The number of shares in the table above includes the issuance of approximately 32,257,174 shares underlying AvePoint Options. These amounts are presented net of an implied share buyback of approximately 6,884,185 options. AvePoint Options do not represent legally outstanding shares of common stock at Closing.

(2)

The cash consideration amount is subject to a deduction for PIPE fees of approximately $4.3 million, which would result in cash transferred at Closing of $257.8 million.

(3)

The cash consideration assumes a cash election of 12.678% by the electing AvePoint shareholders. However, the impact of the alternative cash election of 0.0% would result in cash consideration being decreased to $245.0 million and an offset by an equivalent increase in stock consideration to 144,965,766.

 

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(4)

Share Consideration is calculated using a $10.00 reference price. Actual total Share Consideration will be dependent on the value of common stock at closing.

The following table summarizes the pro forma common stock shares outstanding under the two redemption scenarios:

 

     Assuming No
Redemptions (Shares)
     %     Assuming Maximum
Redemptions (Shares)
     %  

AvePoint shareholders (1),(2),(3)

     150,145,278        73.0     150,145,278        78.9

Apex public shareholders

     35,000,000        17.0     19,430,384        10.2

PIPE investors

     14,000,000        6.8     14,000,000        7.4

Apex sponsor shares (4)

     5,833,300        2.8     5,833,300        3.1

Apex private placement shares

     657,500        0.3     657,500        0.3

Shares underlying underwriter purchase option

     152,500        0.1     152,500        0.1
  

 

 

      

 

 

    

Pro Forma common stock at December 31, 2020

     205,788,578          190,218,962     
  

 

 

      

 

 

    

AvePoint Options (2)

     (32,257,174        (32,257,174   
  

 

 

      

 

 

    

Pro Forma common stock Outstanding at December 31, 2020

     173,531,404          157,961,788     
  

 

 

      

 

 

    

 

(1)

Excludes 3,000,000 of common stock in earn-out consideration. The earn-out consideration is made-up of three tranches and subject to price triggers of $12.50, $15.00, and $17.50, respectively. These shares are not deemed to be outstanding as the price triggers have not yet been achieved for 20 Trading Days within any 30 Trading Day period subsequent to the Closing.

(2)

The number of shares in the table above includes the issuance of approximately 32,257,174 shares of common stock underlying AvePoint Options. It is expected that the actual number of shares to be issued are 25,372,989, which is net of an implied share buyback of approximately 6,884,185 options. AvePoint Options do not represent legally outstanding shares of common stock at Closing.

(3)

The number of AvePoint shares in the table above assumes a cash election of 12.678% by the electing AvePoint shareholders. However, the impact of the alternative cash election of 0.0% would result in stock consideration of 144,965,766, net of implied share buyback of 6,884,185.

(4)

Excludes 2,916,700 of Sponsor Earn-Out Shares that are owned by the Sponsor and held in escrow. The release of the Sponsor Earn-Out Shares is subject to the Closing Price being greater than or equal to $15.00 over any 20 trading days within any 30 trading day period after the Closing through the seventh anniversary thereof. For illustrative purposes, the Company has elected not to show the Sponsor Earn-Out Shares as part of the capitalization table as the Sponsor will not have possession of these shares until the price trigger is achieved. However, while the Sponsor Earn-Out Shares are held in escrow, the Sponsor shall have full ownership rights to its earn out shares, including the right to vote such shares and to receive dividends and distributions thereon.

The following unaudited pro forma condensed combined balance sheet as of December 31, 2020 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 are based on the historical financial statements of the Company and AvePoint. The unaudited pro forma adjustments are based on information currently available, and assumptions and estimates underlying the unaudited pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions used to present the accompanying unaudited pro forma condensed combined financial information.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2020

(in thousands)

 

                Assuming No Redemptions     Assuming Maximum
Redemptions
 
    As of
December 31, 2020
          As of
December 31, 2020
          As of
December 31, 2020
 
    AvePoint
(Historical)
    Apex
(Historical)
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
 

ASSETS

           

Current assets:

           

Cash and cash equivalents

  $ 69,112     $ 198     $ 351,858  (A)    $ 254,555     $ (156,523 )(K)    $ 111,532  
    —         —         140,000  (B)      —         13,500  (L)      —    
    —         —         (81 )(C)      —         —         —    
    —         —         (48,755 )(D)      —         —         —    
    —         —         (257,777 )(G)      —         —         —    

Short-term investments

    992       —         —         992       —         992  

Accounts receivable

    48,250       —         —         48,250       —         48,250  

Prepaid rent

    754       —         —         754       —         754  

Prepaid expenses and other current assets

    1,589       75       —         1,664       —         1,664  

Prepaid income taxes

    —         477       —         476       —         476  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

    120,697       750       185,245       306,691       (143,023     163,668  

Non-current assets:

           

Cash and marketable securities held in Trust Account

    —         351,858       (351,858 )(A)      —         —         —    

Property and equipment, net

    2,663       —         —         2,663       —         2,663  

Deferred contract costs

    31,943       —         —         31,943       —         31,943  

Long-term unbilled receivables

    5,499       —         —         5,499       —         5,499  

Other assets

    8,252       —         (2,089 )(D)      6,163       —         6,163  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current assets

    48,357       351,858       (353,947     46,268       —         46,268  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

  $ 169,054     $ 352,608     $ (168,702   $ 352,959     $ (143,023   $ 209,936  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

           

Current liabilities:

           

Accounts payable

    774       —         —         774       —         774  

Accrued expenses and other liabilities

    26,245       4,408       (4,397 )(D)      26,256       —         26,256  

Current portion of deferred revenue

    65,203       —         —         65,203       —         65,203  

Franchise tax payable

    —         81       (81 )(C)      —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

    92,222       4,490       (4,478     92,233       —         92,233  

Non-current liabilities:

           

Deferred underwriting compensation

    —         13,150       (13,150 )(D)      —         —         —    

Long-term portion of deferred revenue

    9,485       —         —         9,485       —         9,485  

Share-based awards classified as liabilities

    43,502       —         (43,502 )(G)      —         —         —    

Contingent consideration

    —         —         25,226 (J)      25,226       —         25,226  

Other non-current liabilities

    3,658       —         —         3,658       —         3,658  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-current liabilities

    56,645       13,150       (31,426     38,369       —         38,369  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

    148,867       17,640       (35,904     130,602       —         130,602  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Commitments and Contingencies

           

Mezzanine equity:

           

Class A stock subject to possible redemption

    —         329,968       (329,968 )(E)      —         —         —    

 

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                Assuming No Redemptions     Assuming Maximum
Redemptions
 
    As of
December 31, 2020
          As of
December 31, 2020
          As of
December 31, 2020
 
    AvePoint
(Historical)
    Apex
(Historical)
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
 

Redeemable convertible preferred stock

    183,390       —         (183,390 )(G)      —         —         —    

Redeemable value of common shares

    25,074       —         (25,074 )(G)      —         —         —    

Share-based awards

    1,489       —         (1,489 )(G)      —         —         —    

Redeemable noncontrolling interest

    3,061       —         —         3,061       —         3,061  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total mezzanine equity

    213,014       329,968       (539,921     3,061       —         3,061  

STOCKHOLDERS’ EQUITY (DEFICIT)

           

Preferred stock

    —         —         —         —         —         —    

Class A common stock

    —         —         1  (B)      17       (2 )(K)      15  
    —         —         3  (E)      —         —         —    
    —         —         1  (F)      —         —         —    
    —         —         12  (G)      —         —         —    

Class B common stock

    —         1       (1 )(F)      —         —         —    

Common stock

    12       —         (12 )(G)      —         —         —    

Additional paid-in capital

    105,159       8,349       139,999  (B)      519,903       (156,521 )(K)      376,882  
    —         —         (31,844 )(D)      —         13,500 (L)      —    
    —         —         329,965  (E)      —         —         —    
    —         —         (4,322 )(G)      —         —         —    
    —         —         (3,350 ) (H)      —         —         —    
    —         —         1,173  (I)      —         —         —    
    —         —         (25,226 )(J)      —         —         —    

Accumulated other comprehensive income

    1,791       —         —         1,791       —         1,791  

Accumulated deficit

    (299,789     (3,350     (1,453 )(D)      (302,415     —         (302,415
    —         —         3,350 (H)      —         —         —    
    —         —         (1,173 )(I)      —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL STOCKHOLDERS EQUITY (DEFICIT)

    (192,827     5,000       407,123       219,296       (143,023     76,273  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT)

  $ 169,054     $ 352,608     $ (168,702   $ 352,959     $ (143,023   $ 209,936  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

(in thousands, except share and per share amounts)

 

                 Assuming No Redemptions and
Maximum Redemptions
 
     For the Year Ended
December 31, 2020
   

 

    For the Year Ended
December 31, 2020
 
     AvePoint
(Historical)
    Apex
(Historical)
    Transaction
Accounting
Adjustments
    Pro Forma
Combined
 

Revenue:

        

Subscription

   $ 91,023     $ —       $ —       $ 91,023  

Services

     34,140       —         —         34,140  

License, maintenance and OEM

     26,370       —         —         26,370  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     151,533       —         —         151,533  

Cost of revenue:

        

Subscription

     12,980       —         —         12,980  

Services

     26,089       —         —         26,089  

License, maintenance and OEM

     1,221       —         —         1,221  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenue

     40,290       —         —         40,290  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     111,243       —         —         111,243  

Operating expenses:

        

Sales and marketing

     76,545       —         —         76,545  

General and administrative

     36,872       5,310       1,453 (AA)      40,411  
         (4,397 )(AA)   
         1,173 (BB)   

Research and development

     12,204       —         —         12,204  

Depreciation and amortization

     1,059       —         —         1,059  

Franchise tax expense

     —         201       —         201