RISK FACTORS

You should carefully consider all the following risk factors, together with all of the other information included or incorporated by reference in this joint proxy statement/prospectus, including the financial information, before deciding whether or how to vote or instruct your vote to be cast to approve the proposals described in this joint proxy statement/prospectus.

The value of your investment following consummation of the Business Combination will be subject to significant risks affecting, among other things, the Successor’s business, financial condition or results of operations. If any of the events described below occur, the Successor’s post-Business Combination business and financial results could be adversely affected in material respects. This could result in a decline, which may be significant, in the trading price of the Successor’s common stock and you therefore may lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to the businesses of Stellar and Phunware.

Risk Factors Related to Stellar

Stellar is an early stage company with no operating history and no revenues and you have no basis on which to evaluate Stellar’s ability to achieve its business objective.

Stellar is an early stage company with no operating results. Because Stellar lacks an operating history, you have no basis upon which to evaluate Stellar’s ability to achieve its business objective of completing its initial business combination with Phunware. Stellar may be unable to complete the business combination. If Stellar fails to complete the business combination, it will never generate any operating revenues.

The Initial Shareholders have agreed to vote in favor of the Business Combination, regardless of how Stellar’s Public Shareholders vote.

Unlike other blank check companies in which the Initial Shareholders agree to vote their Founder Shares in accordance with the majority of the votes cast by the Public Shareholders in connection with an initial business combination, after approval of the Stellar Board, the Initial Shareholders have agreed to vote their Founder Shares, as well as any Public Shares purchased during or after Stellar’s IPO, in favor of the initial business combination. The Initial Shareholders own 50.6% of Stellar’s outstanding shares of common stock as of the date hereof. As a result, Stellar would not need any of the 1,851,720 Public Shares to be voted in favor of its initial business combination in order to have such transaction approved. Accordingly, it is more likely that the necessary shareholder approval will be received than would be the case if the Initial Shareholders agreed to vote their Founder Shares in accordance with the majority of the votes cast by the Public Shareholders.

Stellar may not be able to complete its initial business combination within the prescribed time frame, including the extension of such timeframe, in which case Stellar would cease all operations except for the purpose of winding up and Stellar would redeem its Public Shares and liquidate, and Stellar’s warrants would be worthless.

Stellar’s executive officers and directors have agreed that Stellar must complete its the initial business combination by December 26, 2018 (or such later date approved by its shareholders). Stellar may not be able to complete its initial business combination by such date. Stellar previously extended the period of time to consummate a business combination on August 24, 2017, November 24, 2017, February 24, 2018 and May 23, 2018, each by an additional three months and on August 23, 2018, by an additional four months. In order for Stellar to extend the time available for it to consummate its initial business combination, the Sponsors or their affiliates or designees must determine to seek shareholder approval for an extension and Stellar’s shareholders would be required to approve such extension. The seeking of such approval may require Stellar to make certain payments in order to encourage shareholders to approve the extension and shareholders may also have the right to redeem their shares in connection with any solicitation of shareholder approval. Stellar currently has no arrangements in place relating to any payments Stellar may offer its shareholders to encourage shareholders to approve an extension and there is no assurance that any such arrangements can or will be put into place. Should the Sponsors or any other parties determine to loan funds to Stellar for this purpose, we expect that the lenders would waive their right to be repaid for such loans out of the funds held in the Trust Account (except from any interest that Stellar is permitted to withdraw) in the event that Stellar does not consummate a business combination. However, Stellar may repay such loans from funds held outside of the Trust Account from interest permitted to be withdrawn. In the event that interest in the trust is available for withdrawal for working capital purposes and has not been used to pay taxes or other working capital expenses, Stellar may apply the accrued interest in the Trust Account or such withdrawn interest to its obligations with respect to any further extension. the Sponsors and their affiliates or designees are not obligated to fund the Trust Account to extend the time for Stellar to complete Stellar’s initial business combination.

If Stellar has not completed its initial business combination within such time period, it will: (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and working capital released to Stellar and less up to $50,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders of Stellar (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 Stellar’s remaining shareholders and the Stellar Board, dissolve and liquidate, subject in each case to Stellar’s obligations under applicable law to provide for claims of creditors and the requirements of other applicable law.

In connection with Stellar’s solicitation of shareholder approval of its initial business combination, the Sponsors, directors, executive officers, advisors and their affiliates may elect to purchase shares from the Public Shareholders, which may influence a vote on a proposed business combination and reduce the public “float” of Stellar’s common stock.

In connection with Stellar’s solicitation of shareholder approval of its initial business combination, the Sponsors, 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 its initial business combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgement that such shareholder, although still the record holder of Stellar Shares, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsors, directors, executive officers, advisors or their affiliates purchase shares in privately negotiated transactions from Public Shareholders who have already elected to exercise their Redemption Rights, such selling shareholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the Business Combination and the related transactions and thereby increase the likelihood of obtaining shareholder approval of the Business Combination and related transactions or to satisfy the Closing condition in the Merger Agreement, where it appears that such requirement would otherwise not be met. This may result in the consummation of the Business Combination and the related transactions that may not otherwise have been possible.

In addition, if such purchases are made, the public “float” of Stellar’s common stock and the number of beneficial holders of its securities may be reduced, possibly making it difficult to maintain the quotation, listing or trading of the Successor’s securities on a national securities exchange.

If a Public Shareholder fails to receive notice of Stellar’s offer to redeem its Public Shares in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.

Stellar will comply with the applicable SEC rules when conducting redemptions in connection with the consummation of the Business Combination. Despite Stellar’s compliance with these rules, if a Public Shareholder fails to receive this joint proxy statement/prospectus or related materials, such shareholder may not become aware of the opportunity to redeem its shares. In addition, this joint proxy statement/prospectus describes the various procedures that must be complied with in order to validly tender or redeem Public Shares. In the event that a Public Shareholder fails to comply with these procedures, its shares may not be redeemed.

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

Stellar’s Public Shareholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) Stellar’s completion of an initial business combination and then only in connection with those shares of Stellar’s common stock that such shareholder properly elected to redeem, subject to the limitations described herein or (ii) the Redemption of the Public Shares if Stellar is unable to complete an initial business combination by December 26, 2018 (or such later date approved by its shareholders), subject to applicable law and as further described herein. In addition, if Stellar’s plan to redeem the Public Shares if it is unable to complete an initial business combination by December 26, 2018 (or such later date approved by its shareholders) is not completed for any reason, compliance with applicable law and Stellar’s Articles of Incorporation may require that Stellar submit a plan of dissolution to its then-existing shareholders for approval prior to the distribution of the proceeds held in the Trust Account. In that case, Public Shareholders may be forced to wait beyond December 26, 2018 (or such earlier date as determined by the Stellar Board) before they receive funds from the Trust Account. In no other circumstances will a Public Shareholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your Public Shares or warrants of Stellar, potentially at a loss.

You will not be entitled to protections normally afforded to investors of many other blank check companies.

Since the net proceeds of Stellar’s IPO and the sale of the Private Placement Warrants were intended to be used to complete an initial business combination with a target business that had not been identified, Stellar may be deemed to be a “blank check” company under the United States securities laws. However, because Stellar has net tangible assets in excess of $5,000,000, Stellar is exempt from rules promulgated by the SEC to protect investors in blank check companies, such as Rule 419. Accordingly, investors will not be afforded the benefits or protections of those rules. Among other things, this means that Stellar has had a longer period of time to complete its initial business combination than do companies subject to Rule 419. Moreover, if Stellar’s IPO had been subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to Stellar unless and until the funds in the Trust Account were released to Stellar in connection with Stellar’s completion of its initial business combination.

If you or a “group” of shareholders are deemed to hold in excess of 26% of Stellar’s common stock, you will lose the ability to redeem all such shares in excess of 26% of Stellar’s common stock.

Stellar’s amended and restated Articles of Incorporation provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 26% of the shares sold in Stellar’s IPO, which are referred to as the “ Excess Shares .” However, Stellar would not be restricting its shareholders’ ability to vote all of their shares (including the Excess Shares) for or against the Business Combination. Your inability to redeem the Excess Shares will reduce your influence over Stellar’s ability to complete the Business Combination and you could suffer a material loss on your investment in s Stellar if you sell Excess Shares in open market transactions. Additionally, you will not receive Redemption distributions with respect to the Excess Shares if Stellar consummates the Business Combination. And as a result, you will continue to hold that number of shares exceeding 26% and, in order to dispose of such shares, would be required to sell your stock in open market transactions, potentially at a loss.

Stellar’s shareholders may be liable for claims of third-party creditors to the extent you receive distributions in a dissolution.

Under Republic of the Marshall Islands law, Stellar’s shareholders might, in certain circumstances, be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. If Stellar complied with the procedures set forth in Section 106 of the BCA, which are intended to ensure that Stellar makes reasonable provision for all claims against Stellar, including a six month notice period during which any third-party claims can be brought against Stellar before any liquidating distributions are made to shareholders, any liability of a shareholder with respect to a liquidating distribution should be limited to the lesser of such shareholder’s pro rata share of the claim or the amount distributed to the shareholder and any liability of the shareholder should be barred after the period set forth in such notice. However, it is Stellar’s intention to make liquidating distributions to its shareholders as soon as reasonably possible after dissolution if its initial business combination does not occur. As such, Stellar’s shareholders could potentially be liable for any claims to the extent of distributions received by them in a dissolution and any such liability of Stellar’s shareholders will likely extend beyond the third anniversary of such dissolution or the settlement of claims, litigation or proceedings begun prior to or during the three year period. Accordingly, third parties may seek to recover from Stellar’s shareholders amounts owed to them by Stellar.

If third parties bring claims against Stellar, the proceeds held in the Trust Account could be reduced and the per-share Redemption amount received by shareholders may be less than $10.60 per share (or such higher amount then held in trust).

Stellar’s placing of funds in the Trust Account may not protect those funds from third-party claims against Stellar. Although Stellar seeks to have all vendors, service providers, prospective target businesses or other entities with which it does business execute agreements with Stellar 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 Shareholders, 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 Stellar’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, Stellar’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 Stellar than any alternative.

Examples of possible instances where Stellar may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with Stellar and will not seek recourse against the Trust Account for any reason. Upon Redemption of the Public Shares, if Stellar is unable to complete its initial business combination within the prescribed time frame, or upon the exercise of a Redemption Right in connection with the Business Combination, Stellar will be required to provide for payment of claims of creditors that were not waived that may be brought against Stellar within the three years (which may be extended under certain circumstances) following Redemption. Accordingly, the per-share Redemption amount received by Public Shareholders could be less than the $10.60 per share initially held in the Trust Account (or such higher amount then held in trust), due to claims of such creditors. Messrs. Tsirigakis and Syllantavos have agreed that they will be jointly liable to Stellar if and to the extent any claims by a vendor for services rendered or products sold to Stellar, or a prospective target business with which Stellar has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (i) $10.60 per Public Share (or such higher amount then held in trust) or (ii) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes or working capital expenses, 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 Stellar’s indemnity of the underwriters of its 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, Messrs. Tsirigakis and Syllantavos will not be responsible to the extent of any liability for such third party claims. Stellar has not independently verified whether Mr. Tsirigakis or Mr. Syllantavos have sufficient funds to satisfy their indemnity obligations and, therefore, Messrs. Tsirigakis and Syllantavos may not be able to satisfy those obligations. Stellar has not asked Mr. Tsirigakis or Mr. Syllantavos to reserve for such possibility.

Stellar’s directors may decide not to enforce the indemnification obligations of Messrs. Tsirigakis and Syllantavos, resulting in a reduction in the amount of funds in the Trust Account available for distribution to the Public Shareholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.60 per share (or such higher amount then held in trust) or (ii) other than due to the failure to obtain such waiver such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes or working capital expenses and Messrs. Tsirigakis and Syllantavos assert that they are unable to satisfy their obligations or that they have no indemnification obligations related to a particular claim, Stellar’s independent directors would determine whether to take legal action against Messrs. Tsirigakis and Syllantavos to enforce their indemnification obligations. While Stellar currently expects that its independent directors would take legal action on behalf of Stellar against Messrs. Tsirigakis and Syllantavos to enforce their indemnification obligations to Stellar, it is possible that Stellar’s independent directors in exercising their business judgment may choose not to do so in any particular instance. If Stellar’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to Stellar’s Public Shareholders may be reduced below $10.60 per share (or such higher amount then held in trust).

If, after Stellar distributes the proceeds in the Trust Account to the Public Shareholders, Stellar files a bankruptcy petition or an involuntary bankruptcy petition is filed against Stellar that is not dismissed, a bankruptcy court may seek to recover such proceeds and the members of Stellar’s board of directors may be viewed as having breached their fiduciary duties to Stellar’s creditors, thereby exposing the members of the Stellar Board and Stellar to claims of punitive damages.

If, after Stellar distributes the proceeds in the Trust Account to its Public Shareholders, Stellar files a bankruptcy petition or an involuntary bankruptcy petition is filed against Stellar that is not dismissed, any distributions received by shareholders 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 Stellar’s shareholders. In addition, the Stellar Board may be viewed as having breached its fiduciary duty to Stellar’s creditors and/or having acted in bad faith, thereby exposing itself and Stellar to claims of punitive damages, by paying Public Shareholders from the Trust Account prior to addressing the claims of creditors.

If, before distributing the proceeds in the Trust Account to the Public Shareholders, Stellar files a bankruptcy petition or an involuntary bankruptcy petition is filed against Stellar that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of Stellar’s shareholders and the per-share amount that would otherwise be received by Stellar’s shareholders in connection with Stellar’s liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to the Public Shareholders, Stellar files a bankruptcy petition or an involuntary bankruptcy petition is filed against Stellar that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law and may be included in Stellar’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Stellar’s shareholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by Stellar’s shareholders in connection with Stellar’s liquidation may be reduced.

If Stellar is deemed to be an investment company under the Investment Company Act, Stellar may be required to institute burdensome compliance requirements and Stellar’s activities may be restricted, which may make it difficult for Stellar to complete the Business Combination.

If Stellar is deemed to be an investment company under the Investment Company Act, Stellar’s activities may be restricted, including:

In addition, Stellar may have imposed upon it burdensome requirements, including:

If Stellar were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which Stellar has not allotted funds and may hinder Stellar’s ability to complete the Business Combination. If Stellar is unable to complete the initial business combination, Stellar’s Public Shareholders may receive only approximately $10.60 per share (or such higher amount then held in trust) on the liquidation of the Trust Account and Stellar’s warrants will expire worthless.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect the business, investments and results of operations of Stellar and the Successor.

Stellar is subject to laws and regulations enacted by national, regional and local governments. In particular, Stellar is required to comply with certain SEC and other legal requirements. Compliance with and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on the business, investments and results of operations of Stellar and the Successor. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on Stellar and the Successor’s business and results of operations.

Stellar has not registered the shares of common stock issuable upon exercise of its warrants under the Securities Act or any state securities laws at this time and such registration may not be in place when an investor desires to exercise warrants, thus precluding such investor from being able to exercise its warrants and causing such warrants to expire worthless.

Stellar has not registered the shares of common stock issuable upon exercise of the warrants issued in its IPO under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, Stellar has agreed, as soon as practicable, but in no event later than 30 days after the closing of the initial business combination, to use its best efforts to file a registration statement under the Securities Act covering such shares and no later than 90 days after the closing of its initial business combination to have a current prospectus relating to the common stock issuable upon exercise of the warrants, until the expiration of the warrants in accordance with the provisions of the warrant agreement. Stellar cannot assure you that it will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in this joint proxy statement/prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants issued in Stellar’s IPO are not registered under the Securities Act, Stellar will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis and Stellar will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, unless an exemption is available. Notwithstanding the above, if Stellar’s common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, Stellar may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event Stellar so elects, it will not be required to file or maintain in effect a registration statement or register or qualify the shares under blue sky laws and in the event Stellar does not so elect, Stellar will use its best efforts to register or qualify the shares under the blue sky laws of the state of residence in those states in which the warrants were initially offered by us in Stellar’s IPO. In no event will Stellar be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that it is unable to register or qualify the shares underlying the warrants under the Securities Act or applicable state securities laws. If the issuance of the shares upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of units will have paid the full unit purchase price solely for the shares of common stock included in the units. If and when the warrants become redeemable by Stellar, Stellar may exercise its redemption right even if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws and Stellar is unable to effect such registration or qualification, subject to Stellar’s obligation in such case to use it best efforts to register or qualify the shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were initially offered by Stellar in its IPO.

The grant of registration rights to The Initial Shareholders and holders of Stellar’s Private Placement Warrants may make it more difficult to complete the initial business combination and the future exercise of such rights may adversely affect the market price of the Successor’s common stock.

Pursuant to an agreement entered into concurrently with the issuance and sale of the securities in Stellar’s initial public offering, The Initial Shareholders and their permitted transferees can demand that Stellar register the Founder Shares, holders of Stellar’s Private Placement Warrants and their permitted transferees can demand that Stellar register the Private Placement Warrants and the shares of common stock issuable upon exercise of the Private Placement Warrants. Stellar will bear the cost of registering these securities. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of the Successor’s common stock. In addition, the existence of the registration rights may make Stellar’s initial business combination more costly or difficult to conclude. This is because the shareholders of Phunware may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of Stellar’s common stock that is expected when the securities owned by The Initial Shareholders, holders of its Private Placement Warrants or their respective permitted transferees are registered.

If Stellar shareholders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of Stellar Shares and the existence of these rights may make it more difficult to effect a business combination, including the Business Combination.

The Initial Shareholders are entitled to make a demand that Stellar register the resale of their insider shares at any time commencing the consummation of Stellar’s initial business combination. Additionally, the purchasers of the units and the Initial Shareholders, officers and directors are entitled to demand that Stellar register the resale of the units (and the underlying securities) and any securities the Initial Shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to Stellar at any time after Stellar consummates a business combination, including the Business Combination. The presence of these additional securities trading in the public market may have an adverse effect on the market price of Stellar securities. In addition, the existence of these rights may make it more difficult to effectuate a business combination, including the Business Combination, or increase the cost of acquiring the target business, as the shareholders of the target business may be discouraged from entering into a business combination, including the Business Combination, with Stellar or will request a higher price for their securities because of the potential effect the exercise of such rights may have on the trading market for Stellar Shares.

Stellar may issue notes or other debt securities, or otherwise incur substantial debt, to complete a business combination, which may adversely affect Stellar’s leverage and financial condition and thus negatively impact the value of Stellar’s shareholders’ investment in Stellar.

On each of August 24, 2017, November 24, 2017, February 23, 2018, May 23, 2018, June 23, 2018, July 23, 2018, August 23, 2018, September 24, 2018 and October 24, 2018, Stellar issued unsecured promissory notes in the aggregate amount of $303,300, $301,000, $167,100, $62,082, $62,082, $62,082, $37,034, $37,034 and $37,034, respectively, to the Sponsors and on February 22, 2018, May 23, 2018, June 23, 2018, July 23, 2018, August 23, 2018, and September 24, 2018, Stellar issued promissory notes in the aggregate amount of $201,268, $62,082, $62,082, $62,082, $37,034, and $37,034, respectively, to Phunware. The Notes bear no interest and are repayable in full upon consummation of Stellar’s initial business combination. Although Stellar has no other commitments as of the date of this joint proxy statement/prospectus to issue any notes or other debt securities, or to otherwise incur outstanding debt, Stellar may choose to incur additional debt to consummate the Business Combination. Stellar has agreed that it will not incur any indebtedness unless it has obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account. As such, no issuance of debt will affect the per-share amount available for Redemption from the Trust Account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:

The exercise price for Stellar’s public warrants is higher than in many similar blank check company offerings in the past, and, accordingly, the warrants are more likely to expire worthless.

The exercise price of Stellar’s public warrants (the “ Public Warrants ”) is higher than is typical in many similar blank check company offerings in the past. Historically, the exercise price of a warrant was generally a fraction of the purchase price of the units in the IPO. The exercise price for the Public Warrants is $11.50 per share. As a result, the warrants are less likely to ever be in the money and more likely to expire worthless.

The provisions of Stellar’s amended and restated Articles of Incorporation that relate to Stellar’s pre-Business Combination activity (and corresponding provisions of the agreement governing the release of funds from Stellar’s Trust Account) may be amended with the approval of holders of 65% of Stellar’s common stock, which is a lower amendment threshold than that of some other blank check companies. It may be easier for Stellar, therefore, to amend its amended and restated Articles of Incorporation to facilitate the completion of the Business Combination that some of Stellar’s shareholders may not support.

Stellar’s amended and restated Articles of Incorporation provide that any of its provisions related to pre-Business Combination activity (including the requirement to deposit proceeds of Stellar’s IPO and the private placement of warrants into the Trust Account and not release such amounts except in specified circumstances and to provide Redemption Rights to Public Shareholders as described herein) may be amended if approved by holders of 65% of Stellar’s common stock and corresponding provisions of the trust agreement governing the release of funds from Stellar’s Trust Account may be amended if approved by holders of 65% of Stellar’s common stock. In all other instances, Stellar’s amended and restated Articles of Incorporation may be amended by holders of a majority of Stellar’s common stock, subject to applicable provisions of the BCA or Nasdaq rules. The Initial Shareholders, who collectively beneficially own 50.6% of Stellar’s common stock, will participate in any vote to amend Stellar’s amended and restated Articles of Incorporation and/or trust agreement and will have the discretion to vote in any manner they choose. As a result, Stellar may be able to amend the provisions of its amended and restated Articles of incorporation which govern Stellar’s pre-Business Combination behavior more easily than some other blank check companies (which require approval by between 90% and 100% of the company’s Public Shareholders) and this may increase Stellar’s ability to consummate the Business Combination, even if you do not agree with the Business Combination. Stellar’s shareholders may pursue remedies against Stellar for any breach of Stellar’s amended and restated Articles of Incorporation.

Stellar’s executive officers and directors have agreed, pursuant to a written agreement with Stellar, that they will not propose any amendment to Stellar’s amended and restated Articles of Incorporation that would affect the substance or timing of Stellar’s obligation to redeem 100% of Stellar’s Public Shares if Stellar does not complete its initial business combination by December 26, 2018 (or such later date approved by its shareholders), unless Stellar provides the Public Shareholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (net of the interest which may be withdrawn to pay taxes or working capital expenses) divided by the number of then outstanding Public Shares. These agreements are contained in letter agreements that Stellar has entered into with the Sponsors, executive officers and directors. Prior to acquiring any securities from the Initial Shareholders, permitted transferees must enter into a written agreement with Stellar agreeing to be bound by the same restriction. Stellar’s shareholders are not parties to, or third-party beneficiaries of, these agreements and, as a result, will not have the ability to pursue remedies against The Sponsors, executive officers, or directors for any breach of these agreements. As a result, in the event of a breach, Stellar’s shareholders would need to pursue a shareholder derivative action, subject to applicable law.

Stellar’s letter agreement with the Sponsors, directors and officers may be amended without shareholder approval.

Stellar’s letter agreement with the Sponsors, directors and officers contains provisions relating to transfer restrictions of the Founder Shares and sponsor warrants, indemnification of the Trust Account, waiver of redemption rights and participation in liquidation distributions from the Trust Account. This letter agreement may be amended without shareholder approval. While Stellar does not expect its board to approve any amendment to this agreement prior to its initial business combination, it may be possible that the Stellar Board, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to such agreement. Any such amendment may have an adverse effect on the value of an investment in Stellar’s securities.

The Initial Shareholders control a substantial interest in Stellar and thus may exert a substantial influence on actions requiring a shareholder vote, potentially in a manner that you do not support.

The Initial Shareholders owns 50.6% of Stellar’s issued and outstanding shares of common stock. Accordingly, they may exert a substantial influence on actions requiring a shareholder vote, including the matters to be considered at the Stellar Special Meeting, potentially in a manner that you do not support. If The Initial Shareholders purchase any additional shares of common stock in the aftermarket or in privately negotiated transactions, this would increase their control. Neither The Initial Shareholders nor, to Stellar’s knowledge, any of Stellar’s officers or directors, have any current intention to purchase additional securities, other than as may be disclosed in this joint proxy statement/prospectus. Factors that would be considered in making such additional purchases would include consideration of the current trading price of Stellar’s common stock. In addition, the Stellar Board, whose members were elected by The Sponsors, is divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. Stellar will not hold an annual meeting of shareholders to elect new directors prior to the consummation of the business combination, in which case all of the current directors will continue in office until at least the completion of the Business Combination. Accordingly, the Initial Shareholders will continue to exert control at least until the consummation of the Business Combination.

Stellar may amend the terms of the warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then outstanding Public Warrants.

Stellar’s warrants are issued in registered form under a warrant agreement between Continental, as warrant agent, and Stellar. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders. Accordingly, Stellar may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then outstanding Public Warrants approve of such amendment. Although Stellar’s ability to amend the terms of the warrants with the consent of at least 65% of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of Stellar’s common stock purchasable upon exercise of a warrant.

Stellar may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.

Stellar has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Stellar’s common stock equals or exceeds $21.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date Stellar sends the notice of redemption to the warrant holders. If and when the warrants become redeemable by Stellar, Stellar may exercise its redemption right even if the issuance of shares of common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws and Stellar is unable to effect such registration or qualification, subject to Stellar’s obligation in such case to use its best efforts to register or qualify the shares of common stock under the blue sky laws of the state of residence in those states in which the warrants were initially offered by Stellar in its IPO. Redemption of the outstanding warrants could force you (i) to exercise your warrants and pay the exercise price at a time when it may be disadvantageous for you to do so, (ii) to sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the Private Placement Warrants will be redeemable by Stellar so long as they are held by their initial purchasers or their permitted transferees.

Stellar’s warrants may have an adverse effect on the market price of Stellar’s common stock and make it more difficult to effectuate the Business Combination.

Stellar issued warrants to purchase 6,900,610 shares of its common stock as part of the units offered in Stellar’s IPO, and, simultaneously with the closing of the IPO, Stellar issued in a private placement an aggregate of 7,970,488 Private Placement Warrants, each exercisable to purchase one share of common stock at $11.50 per share. In addition, Stellar issued a unit purchase option to the underwriters of Stellar’s IPO, pursuant to which the underwriters have the option to purchase 130,000 units consisting of common stock and warrants to purchase an additional 130,000 shares of Stellar’s common stock. To the extent Stellar issues shares of common stock to effectuate the Business Combination, the potential for the issuance of a substantial number of additional shares of common stock upon exercise of these warrants could have made Stellar a less attractive acquisition vehicle to a target business. Such warrants, when exercised, will increase the number of issued and outstanding shares of Stellar’s common stock and reduce the value of the shares of common stock issued to consummate the Business Combination. Therefore, Stellar’s warrants may have made it more difficult to effectuate a business combination or may have increased the cost of acquiring the target business.

The Private Placement Warrants are identical to the warrants sold as part of the units in Stellar’s IPO except that, so long as they are held by the initial purchasers or their permitted transferees, (i) they will not be redeemable by Stellar, (ii) they (including the common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsors until 30 days after the completion of its initial business combination and (iii) they may be exercised by the holders on a cashless basis.

Stellar is an emerging growth company within the meaning of the Securities Act and Stellar has taken advantage of certain exemptions from disclosure requirements available to emerging growth companies; this could make the Successor’s securities less attractive to investors and may make it more difficult to compare the Successor’s performance with other public companies.

Stellar is an “emerging growth company” within the meaning of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2002 (the “ JOBS Act ”) and has taken advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in Stellar’s periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As a result, Stellar’s shareholders may not have access to certain information they may deem important. Stellar and the Successor may be an emerging growth company for up to five years, although circumstances could cause the loss of that status earlier, including if the market value of the common stock held by non-affiliates exceeds $700 million as of any May 31 before that time, in which case the Successor would no longer be an emerging growth company as of the following November 30 (or such other date as may be applicable were the Successor to change its fiscal year). Stellar cannot predict whether investors will find its or the Successor’s securities less attractive because Stellar and the Successor rely on these exemptions. If some investors find the securities less attractive as a result of reliance on these exemptions, the trading prices of the Successor’s securities may be lower than they otherwise would be, there may be a less active trading market for the Successor’s securities and the trading prices of the securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Stellar has elected to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Stellar, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Stellar’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Compliance obligations under the Sarbanes-Oxley Act may make it more difficult for us to effectuate the Business Combination, require substantial financial and management resources and increase the time and costs of completing an acquisition.

Section 404 of the Sarbanes-Oxley Act requires that Stellar evaluate and report on its system of internal controls. Only in the event that Stellar is deemed to be a large accelerated filer or an accelerated filer will Stellar be required to comply with the independent registered public accounting firm attestation requirement on its internal control over financial reporting. Further, for as long as Stellar remains an emerging growth company, it will not be required to comply with the independent registered public accounting firm attestation requirement on its internal control over financial reporting. The fact that Stellar is a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome as compared to other public companies because Phunware may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls. The development of the internal control of Phunware to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to consummate the Business Combination.

Risks Related to the Redomestication and Business Combination

The ability of Stellar’s shareholders to exercise redemption rights with respect to a large number of Stellar’s shares may not allow Stellar to complete the Business Combination or optimize its capital structure.

At the time we entered into the Merger Agreement, Stellar did not know how many shareholders would exercise their redemption rights and therefore Stellar needed to structure the transaction based on its expectations as to the number of shares that will be submitted for redemption. Because the Merger Agreement requires Stellar to have a minimum amount of cash at closing, Stellar will need to reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third party financing. In addition, if a larger number of shares are submitted for redemption than Stellar initially expected, Stellar may need to seek to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third-party financing. Third party financing may not be available to Stellar. Furthermore, raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.

If the Business Combination with Phunware is unsuccessful, you would not receive your pro rata portion of the Trust Account until Stellar liquidates the Trust Account. If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time Stellar’s stock may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with Stellar’s redemption until Stellar liquidates or you are able to sell your stock in the open market.

Because of Stellar’s limited resources and the significant competition for business combination opportunities, it may be more difficult for Stellar to complete its initial business combination. If Stellar is unable to complete its initial business combination, the Public Shareholders may receive only approximately $10.60 per share (or such higher amount then held in trust), on Stellar’s redemption and Stellar’s warrants will expire worthless.

Stellar has encountered intense competition from other entities having a business objective similar to Stellar’s, including private investors (which may be individuals or investment partnerships), other blank check companies and other entities, domestic and international, competing for businesses such as Phunware. Many of these individuals and entities are well-established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries. Many of these competitors possess greater technical, human and other resources or more local industry knowledge than Stellar does and Stellar’s financial resources are relatively limited when contrasted with those of many of these competitors. Stellar’s ability to compete with respect to the acquisition of certain target businesses has been limited by Stellar’s available financial resources. This inherent competitive limitation has given others an advantage in pursuing the acquisition of certain target businesses. Furthermore, if Stellar is obligated to pay cash for the shares of common stock redeemed (including pursuant to this solicitation and the solicitation of shareholder approval for any further extension of time to completed its initial business combination), Stellar may make purchases of its common stock, potentially reducing the resources available to Stellar for its initial business combination. Any of these obligations may have placed Stellar at a competitive disadvantage in negotiating its proposed Business Combination with Phunware. If Stellar is unable to complete its initial business combination, the Public Shareholders may receive only approximately $10.60 per share (or such higher amount then held in trust) on the liquidation of the Trust Account and Stellar’s warrants will expire worthless.

The net proceeds of Stellar’s IPO not being held in the Trust Account may be insufficient to allow Stellar to operate and pay taxes and expenses until the completion of the initial business combination or to complete the initial business combination.

The funds available to Stellar outside of the Trust Account may not be sufficient to allow Stellar to operate until the completion of its initial business combination. Although Stellar believes that, as of August 31, 2018, the funds available outside of the Trust Account ($84,000), are sufficient to allow Stellar to operate until December 26, 2018 (or such later date approved by its shareholders) and to complete its initial business combination, Stellar cannot assure you that its estimate is accurate. Stellar has already incurred considerable expenses in connection with its search for a target business, in connection with its negotiation of a letter of intent and the Merger Agreement with Phunware and in connection with its due diligence and other activities. Stellar anticipates that further diligence on Phunware and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. Notwithstanding the execution of the Merger Agreement, the Business Combination may not occur for any number of reasons including those beyond our control. Any such event will result in a loss to us of the related costs incurred. If Stellar is required to seek additional capital, we may be obligated to borrow funds from the Sponsors, management team or other third parties to operate or Stellar may be forced to liquidate. Neither the Sponsors, members of Stellar’s management team nor any of their respective affiliates is under any obligation to advance funds to us in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from funds released to us upon completion of Stellar’s initial business combination.

If Stellar is unable to complete its initial business combination, Stellar’s Public Shareholders may receive only approximately $10.60 per share (or such higher amount then held in trust) on the liquidation of the Trust Account and Stellar’s warrants will expire worthless.

Stellar may not seek an opinion from an unaffiliated third party as to the fair market value of the target business it acquires, including the Business Combination, or that the price it is paying for the business, including the Business Combination, is fair to its shareholders from a financial point of view.

Stellar is not required to obtain an opinion from an unaffiliated third party that the target business it selects has a fair market value in excess of at least 80% of the balance of the Trust Account unless the Stellar Board cannot make such determination on its own. Stellar is also not required to obtain an opinion from an unaffiliated third party indicating that the price it is paying is fair to its shareholders from a financial point of view unless the target is affiliated with its officers, directors, Initial Shareholders or their affiliates. If no opinions are obtained, Stellar’s shareholders will be relying on the judgment of the Stellar Board, whose collective experience in business evaluations for blank check companies and whose determination as to fair market value has been based on standards generally accepted by the financial community. Furthermore, Stellar’s directors may have a conflict of interest in analyzing the transaction due to their personal and financial interests.

You may be unable to ascertain the merits or risks of Phunware’s operations and the business of Phunware is outside of Stellar management’s area of expertise.

To the extent Stellar completes its initial business combination, Stellar will be affected by numerous risks inherent in Phunware’s business operations. Although Stellar’s management has endeavored to evaluate the risks inherent in the proposed Business Combination with Phunware, Stellar cannot assure you that it can adequately ascertain or assess all of the significant risk factors. Furthermore, some of these risks may be outside of our control. Stellar also cannot assure you that an investment in Stellar’s securities will not ultimately prove to be less favorable to investors in Stellar than a direct investment, if an opportunity were available, in Phunware. Although Stellar has identified general guidelines that it believes are important in evaluating Phunware, it cannot assure you that Phunware’s business meets such guidelines and as a result, Phunware’s business may not have attributes entirely consistent with Stellar’s general guidelines.

In addition, if Stellar’s shareholders do not believe that the prospects for the Business Combination are promising, a greater number of shareholders may exercise their Redemption Rights, which may make it difficult for Stellar to meet any Closing condition with Phunware that requires us to have a minimum net worth or a certain amount of cash. In addition, it may be more difficult for Stellar to obtain shareholder approval of the  Business Combination if Phunware does not meet Stellar’s general guidelines. If Stellar is unable to complete its initial business combination, the Public Shareholders may receive only approximately $10.41 per share (or such higher amount then held in trust) on the liquidation of its Trust Account and its warrants will expire worthless.

Subsequent to the consummation of the Business Combination, the Successor may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition and its share price, which could cause you to lose some or all of your investment.

Stellar cannot assure you that the due diligence Stellar has conducted on Phunware will reveal all material issues that may be present with regard to Phunware, or that it would be possible to uncover all material issues through a customary amount of due diligence or that risks outside of Stellar’s control will not later arise. Phunware is aware that Stellar must complete its initial business combination by December 26, 2018 (or such later date approved by its shareholders), unless Stellar’s shareholders were to approve an extension. Consequently, Phunware may have obtained leverage over us in negotiating the business combination, knowing that if Stellar does not complete its initial business combination with Phunware, Stellar is unlikely to be able to complete an initial business combination with any other target business. In addition, Stellar has had limited time to conduct due diligence. Phunware is a privately held company and Stellar has made its decision to pursue Phunware on the basis of limited information, which may result in a business combination that is not as profitable as expected, if at all. As a result of these factors, the Successor may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in reporting losses. Even if Stellar’s due diligence successfully has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with Stellar’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on the Successor’s liquidity, the fact that the Successor reports charges of this nature could contribute to negative market perceptions about the Successor or its securities. In addition, charges of this nature may cause Stellar to violate leverage or other covenants to which it may be subject as a result of assuming pre-existing debt held by Phunware or by virtue of it obtaining post-combination debt financing. Accordingly, any shareholders who choose to remain shareholders following the Business Combination could suffer a reduction in the value of their shares. Such shareholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by the Successor’s officers or directors of a duty of care or other fiduciary duty owed by them to the Successor, or if they are able to successfully bring a private claim under securities laws that the joint proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Stellar may issue additional common or preferred shares to complete the initial business combination or under an employee incentive plan after completion of the initial business combination, any one of which would dilute the interest of Stellar’s shareholders and likely present other risks.

Stellar’s amended and restated Articles of Incorporation authorize the issuance of up to 200,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. There are currently 175,858,725 authorized but unissued shares of common stock available for issuance, which amount takes into account shares reserved for issuance upon exercise of outstanding warrants. There are currently no shares of preferred stock issued and outstanding. Stellar may issue a substantial number of additional shares of common stock or preferred stock to complete its initial business combination or under an employee incentive plan after completion of the initial business combination. However, Stellar’s amended and restated Articles of Incorporation provide, among other things, that prior to its initial business combination, Stellar may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial business combination. These provisions of Stellar’s amended and restated Articles of Incorporation, like all provisions of Stellar’s amended and restated Articles of Incorporation, may be amended with a shareholder vote and the Successor’s certificate of incorporation following Redomestication, which does not contain similar restrictions, is also subject to amendment. Stellar’s executive officers and directors have agreed, pursuant to a written agreement with Stellar, that they will not propose any amendment to Stellar’s amended and restated Articles of Incorporation that would affect the substance or timing of Stellar’s obligation to redeem 100% of its Public Shares if Stellar does not complete its initial business combination by December 26, 2018 (or such later date approved by its shareholders), unless Stellar provides its Public Shareholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and working capital released to us), divided by the number of then outstanding Public Shares. The issuance of additional shares of common stock or preferred stock:

Stellar is dependent upon its executive officers and directors and their departure could adversely affect Stellar’s ability to consummate its initial business combination; Stellar’s executive officers and directors also allocate their time to other businesses, thereby causing potential conflicts of interest that could have a negative impact on Stellar’s ability to consummate its initial business combination.

Stellar’s ability to consummate its initial business combination are dependent upon a relatively small group of individuals and, in particular, its executive officers and directors. Stellar believes that its success depends on the continued service of its executive officers and directors, at least until the completion of the initial business combination. Stellar does not have an employment agreement with, or key-man insurance on the life of, any of its directors or executive officers. The unexpected loss of the services of one or more of Stellar’s directors or executive officers could have a detrimental effect on Stellar and the ability to consummate the business combination. In addition, Stellar’s executive officers and directors are not required to commit any specified amount of time to its affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including monitoring the due diligence and undertaking the other actions required in order to consummate the initial business combination. Each of Stellar’s executive officers is engaged in several other business endeavors for which he may be entitled to substantial compensation and Stellar’s directors also serve as officers and board members for other entities. If Stellar’s executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to Stellar’s affairs which may have a negative impact on Stellar’s ability to consummate its initial business combination.

Stellar does not have an employment agreement with, or key-man insurance on the life of, any of its directors or executive officers. The unexpected loss of the services of one or more of Stellar’s directors or executive officers could have a detrimental effect on Stellar and the ability to consummate its initial business combination.

The Successor’s ability to be successful following the Business Combination will depend upon the efforts of the Successor’s board of directors and Phunware’s key personnel and the loss of such persons could negatively impact the operations and profitability of the Successor’s post-combination business.

The Successor’s ability to be successful following the initial business combination will be dependent upon the efforts of the Successor’s board of directors and key personnel. Stellar cannot assure you that the Successor’s board of directors and key personnel will be effective or successful or remain with the Successor. In addition to the other challenges they will face, such individuals may be unfamiliar with the requirements of operating a public company, which could cause the Successor’s management to have to expend time and resources helping them become familiar with such requirements.

It is estimated that, pursuant to the Merger Agreement, Stellar’s Public Shareholders will own less than 24% of the equity interests or assets of the Successor and Stellar’s management will not be engaged in the management of the Successor’s business. Accordingly, the future performance of the Successor will depend upon the quality of the post-Business Combination board of directors, management and key personnel of the Successor.

Stellar’s key personnel may negotiate employment or consulting agreements with Phunware in connection with the Business Combination. These agreements may provide for them to receive compensation following the Business Combination and as a result, may cause them to have conflicts of interest in determining whether the Business Combination is advantageous.

Stellar’s key personnel may be able to remain with the Successor after the consummation of the Business Combination only if they are able to negotiate employment or consulting agreements in connection with the Business Combination. Such negotiations may take place prior to the consummation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or Stellar’s securities for services they would render to the Successor after the consummation of the Business Combination. The personal and financial interests of such individuals may influence their motivation in connection with the consummation of the Business Combination. However, Stellar believes the ability of such individuals to remain with the Successor after the consummation of the Business Combination will not be the determining factor in Stellar’s decisions regarding the consummation of the Business Combination. There is no certainty, however, that any of Stellar’s key personnel will remain with the Successor after the consummation of the Business Combination. Stellar cannot assure you that any of its key personnel will remain in senior management or advisory positions with the Successor. Except as described in this joint proxy statement/prospectus, the determination as to whether any of Stellar’s key personnel will remain with the Successor may be made at the time of the Business Combination.

Because the Initial Shareholders, executive officers and directors will lose their entire investment in us if the Business Combination is not consummated, and because the Sponsors, executive officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if the Business Combination is not completed, a conflict of interest may have arisen in determining whether Phunware was appropriate for Stellar’s initial business combination.

The Initial Shareholders currently own 2,003,403 shares of common stock (initially purchased by Messrs. Tsirigakis and Syllantavos in January 2016 for an aggregate of $25,000). In addition, Dominium Investments Inc. and Firmus Investments Inc., the Sponsors, purchased an aggregate of 7,970,488 Private Placement Warrants, each exercisable for one share of Stellar’s common stock at $11.50 per share, for a purchase price of $3,985,244, or $0.50 per warrant, that will also be worthless if Stellar does not consummate its initial business combination.

The Founder Shares are identical to the shares of common stock included in the units sold in Stellar’s IPO. However, the holders have agreed (A) to vote any shares owned by them in favor of any proposed business combination and (B) not to redeem any shares in connection with a shareholder vote to approve a proposed initial business combination.

The personal and financial interests of Stellar’s executive officers and directors may have influenced their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. At the closing of Stellar’s initial business combination, the Sponsors, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on Stellar’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. In the event Stellar’s initial business combination is consummated, there is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on Stellar’s behalf. However, the Sponsors, executive officers and directors, or any of their respective affiliates will not be eligible for any such reimbursement if Stellar’s business combination is not completed. Such financial interests of the Sponsors, executive officers and directors may have influenced their motivation in identifying and selecting a target business combination and completing an initial business combination.

Stellar will only be able to complete one business combination with the proceeds of its IPO and the sale of the Private Placement Warrants, which will cause Stellar to be solely dependent on the performance of Phunware. This lack of diversification may negatively impact Stellar’s operations and profitability.

The net proceeds from Stellar’s IPO and the private placement of warrants, along with the extension related funds and interest generated from Trust Account funds, adjusted for the redemptions related to the extensions obtained in May and August of 2018, have provided Stellar with approximately $19.63 million (not including funds held outside the trust as of November 2, 2018) that Stellar may use to complete its initial business combination and pay deferred underwriting commissions being held in the Trust Account.

Stellar will effectuate its business combination with only a single target business rather than with multiple businesses. By completing its initial business combination with only a single entity, the lack of diversification may subject the Successor to numerous economic, competitive and regulatory risks. Further, Stellar will not be able to diversify its operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several business combinations in different industries or different areas of a single industry. Accordingly, the prospects for the Successor’s success will be solely dependent upon the performance of Phunware and upon the market acceptance of Phunware’s products, processes or services.

This lack of diversification may subject the Successor to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the performance of the Successor.

Stellar does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of Stellar’s shareholders do not agree.

The Successor’s certificate of incorporation (which will be in effect at the time of the Closing) does not provide a specified maximum redemption threshold, except that in no event the repurchase in connection with the redemption results in Stellar having net tangible assets of less than $5,000,001 immediately prior to the Closing. As a result, Stellar may be able to consummate the Business Combination even if a substantial majority of the Public Shareholders do not agree with the transaction and have redeemed their shares or if we have entered into privately negotiated agreements for investors to sell their shares to the Sponsors, officers, directors, advisors or their affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for Redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to Stellar, Stellar will not consummate the Business Combination or redeem any shares, all shares of common stock submitted for redemption will be returned to the holders thereof and Stellar will be required to liquidate.

Stellar does not currently have sufficient cash, including funds in the Trust Account, to satisfy the Minimum Cash Asset Level condition in the Merger Agreement required for the Closing of the Business Combination. Unless Stellar is able to obtain sufficient additional financing, or Phunware agrees to modify or waive the Minimum Cash Asset Level condition, Stellar will be unable to satisfy the conditions to the Closing of the Business Combination, and the Business Combination will not occur. There can be no assurance that Stellar will be able to obtain sufficient additional financing to satisfy the Minimum Cash Asset Level condition, that such financing will be available on acceptable terms or that Phunware will agree to modify or waive such condition.

The Merger Agreement provides that, as a condition to the Closing of the Business Combination, Stellar must have a Minimum Cash Asset Level of not less than $19,000,000 (net of its unpaid expenses and liabilities and redemptions by the Public Shareholders, all as determined in accordance with the Merger Agreement), including funds in the Trust Account and proceeds from any backstop financing. As a result of the redemptions in connection with the Extension Meetings, there is currently only approximately $19.63 million held in the Trust Account. This amount is insufficient to enable Stellar to meet the Minimum Cash Asset Level condition set forth in the Merger Agreement. Unless Stellar is able to obtain sufficient additional financing to meet the Minimum Cash Asset Level condition, or Phunware agrees to modify or waive such condition, the Business Combination will not occur. Although Stellar is discussing potential financing with a number of third parties, Stellar cannot assure you that such financing will be available on acceptable terms, if at all. Also, Phunware has not, at the date hereof, advised Stellar that it is willing to modify or waive the Minimum Cash Asset Level condition. If the Business Combination with Phunware does not occur, Stellar most likely will not be able to identify or consummate an alternative initial business combination prior to December 26, 2018 and, unless its shareholders approve further extensions, Stellar would be required by its charter documents to liquidate. If Phunware does agree to modify or waive the Minimum Cash Asset Level condition, the funding available to Phunware would be less than the funding contemplated at the time the Merger Agreement was entered into, and may require the Successor to obtain financing from other sources, to the extent such financing is available. The failure to secure adequate additional financing may have a material adverse effect on the business, operations and prospects of the Successor, including the continued development and growth of Phunware’s business. None of Stellar’s officers, directors or shareholders are required to provide any financing to Stellar in connection with or after the Business Combination. If Stellar is unable to consummate the Business Combination, Stellar’s Public Shareholders may only receive approximately $10.60 per share (or such higher amount then held in trust) on the liquidation of the Trust Account and Stellar’s warrants will expire worthless.

An active market for the Successor’s securities may not develop, which would adversely affect the liquidity and price of the Successor’s securities.

The price of the Successor’s securities may vary significantly due factors specific to the Successor as well as to general market or economic conditions. Furthermore, an active trading market for the Successor’s securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

Nasdaq may delist the Successor’s securities from trading on its exchange, which could limit investors’ ability to make transactions in the Successor’s securities and subject the Successor to additional trading restrictions.

Stellar’s securities are currently listed on Nasdaq and it is anticipated that, following the business combination, the Successor’s securities will be listed on Nasdaq. However, Stellar cannot assure you that the Successor’s securities will continue to be, listed on Nasdaq in the future. In order to continue listing its securities on Nasdaq, the Successor must maintain certain financial, distribution and stock price levels. Generally, the Successor must maintain a minimum amount in shareholders’ equity (generally $2,500,000) and a minimum number of holders of its securities (generally 300 public holders). Additionally, in connection with the initial business combination, the Successor will be required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq. For instance, the Successor’s stock price would generally be required to be at least $4 per share and its shareholders’ equity would generally be required to be at least $5 million and the Successor will be required to have a minimum of 300 public holders. Stellar cannot assure you that the Successor will be able to meet those initial listing requirements at that time.

If Nasdaq delists the Successor’s securities from trading on its exchange and the Successor is not able to list its securities on another national securities exchange, Stellar expects the Successor’s securities could be quoted on an over-the-counter market. If this were to occur, the Successor could face significant material adverse consequences, including:

The unaudited pro forma financial information included in the section entitled “ Unaudited Pro Forma Condensed Combined Financial Statements ” may not be representative of the Combined Company’s results if the Business Combination is consummated and accordingly, you will have limited financial information on which to evaluate the financial performance of the Combined Company and your investment decision.

Stellar and Phunware currently operate as separate companies. Stellar has had no prior history as a combined entity and its operations have not previously been managed on a combined basis. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have actually occurred had the Business Combination been completed at or as of the dates indicated, nor is it indicative of the future operating results or financial position of the Combined Company. The pro forma statement of earnings does not reflect future nonrecurring charges resulting from the Business Combination. The unaudited pro forma financial information does not reflect future events that may occur after the Business Combination and does not consider potential impacts of current market conditions on revenues or expenses. The pro forma financial information included in the section entitled “ Unaudited Pro Forma Condensed Combined Financial Statements ” has been derived from Stellar’s and Phunware’s historical financial statements and certain adjustments and assumptions have been made regarding the combined organization after giving effect to the transaction. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will occur and could have an adverse impact on the pro forma financial information and the Combined Company’s financial position and future results of operations.

In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect the Combined Company’s financial condition or results of operations following the Closing. Any potential decline in the Combined Company’s financial condition or results of operations may cause significant variations in the stock price of the Combined Company.

Some of the Stellar and Phunware officers and directors may be argued to have conflicts of interest that may influence them to support or approve the Business Combination without regard to your interests.

Certain officers and directors of Stellar and Phunware participate in arrangements that may be argued to provide them with interests in the Business Combination that are different from yours, including, among others, the continued service as an officer or director of the Combined Company, severance benefits, continued indemnification and the potential ability to sell an increased number of shares of common stock of the Combined Company. If the Business Combination is not consummated and Stellar is forced to wind up, dissolve and liquidate in accordance with Stellar’s Articles of Incorporation, the 2,003,403 shares of common stock currently held by Stellar’s current management (as transferees from prior management), which were initially acquired prior to Stellar’s IPO by the Initial Shareholders for an aggregate purchase price of $25,000, will be worthless (as the holders have waived liquidation rights with respect to such shares). Such shares had an aggregate market value of approximately $20.2 million based on the last sale price of $10.50 per share on Nasdaq on November 1, 2018. In addition, Stellar’s current management currently owns 7,970,488 warrants, the market value of which is approximately $1.59 million based on the last sale price of $0.20 per warrant on Nasdaq on November 1, 2018. Stellar’s current management has also loaned approximately $1.03 million to Stellar. If the Merger is not consummated and Stellar is forced to wind up, dissolve and liquidate in accordance with Stellar’s Articles of Incorporation, Stellar’s current management may not be able to recover the value of such loans. If the Business Combination is consummated, Stellar’s current management will receive approximately $22.31 million in value from the Business Combination. Accordingly, Stellar’s current executive officers and directors, have interests that may be different from, or in addition to, your interests as a shareholder.

These interests, among others, may influence the officers and directors of Stellar and Phunware to support or approve the Business Combination. For more information concerning the interests of Stellar and Phunware executive officers and directors, see the sections entitled “ The Stellar Business Combination Proposal — Interests of Stellar’s Directors and Officers and Others in the Business Combination ” and “ The Phunware Business Combination Proposal — Interests of Phunware Directors and Executive Officers in the Merger ” in this joint proxy statement/prospectus.

The market price of the Successor’s common stock may decline as a result of the Business Combination.

The market price of the Successor’s common stock may decline as a result of the Business Combination for a number of reasons including if:

Stellar’s shareholders and Phunware’s stockholders may not realize a benefit from the Business Combination commensurate with the ownership dilution they will experience in connection with the Business Combination.

If the Combined Company is unable to realize the full strategic and financial benefits currently anticipated from the Business Combination, Stellar’s shareholders and Phunware’s stockholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the Combined Company is able to realize only part of the strategic and financial benefits currently anticipated from the Business Combination.

During the pendency of the Business Combination, Stellar and Phunware may not be able to enter into a business combination with another party because of restrictions in the Merger Agreement, which could adversely affect their respective businesses. Furthermore, certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

Covenants in the Merger Agreement impede the ability of Stellar and Phunware to make acquisitions or complete other transactions that are not in the ordinary course of business pending consummation of the Business Combination. As a result, if the Business Combination is not consummation, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination outside the ordinary course of business, with any third party. Any such transactions could be favorable to such party’s shareholders.

If the conditions to the Business Combination are not met, the Business Combination may not occur.

Even if the Business Combination is approved by the shareholders of Stellar and Phunware, specified conditions must be satisfied or waived to complete the Business Combination. These conditions are described in detail in the Merger Agreement and in addition to shareholder consent, include among other requirements, (i) receipt of requisite regulatory approvals and no law or order preventing the transactions, (ii) no pending litigation to enjoin or restrict the Closing, (iii) each party’s representations and warranties being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect), (iv) each party complying in all material respects with its covenants and agreements, (v) no Material Adverse Effect with respect to a party since the date of the Merger Agreement which remains continuing and uncured, and (vi) Stellar meeting the minimum cash requirement of $19,000,000 in cash and cash equivalents at the Closing, after the Redemptions and payment of Stellar transaction expenses, indebtedness and liabilities. See the section entitled “ The Merger Agreement and Related Agreements — Merger Agreement — Conditions to Consummation of the Merger ” below for a more complete summary. Stellar and Phunware cannot assure you that all of the conditions will be satisfied. If the conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed and such delay may cause Stellar and Phunware to each lose some or all of the intended benefits of the Business Combination. If the Business Combination does not occur, Stellar may not be able to find another potential candidate for its initial business combination prior to Stellar’s deadline (currently December 26, 2018), and Stellar will be required to liquidate.

Because Stellar is currently incorporated under the laws of the Republic of the Marshall Islands, you may face difficulties in protecting your interests and your ability to protect your rights through the U.S. Federal courts may be limited prior to the Redomestication.

Stellar is currently a corporation incorporated under the laws of the Republic of the Marshall Islands. Until the Redomestication is effected, its corporate affairs are governed by the Articles of Incorporation, its Bylaws, the BCA and the common law of the Republic of the Marshall Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of its directors to Stellar under the laws of the Marshall Islands are to a large extent governed by the common law of the Republic of the Marshall Islands. The common law of the Republic of the Marshall Islands is derived in part from comparatively limited judicial precedent in the Republic of the Marshall Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Republic of the Marshall Islands. The rights of Stellar’s shareholders and the fiduciary responsibilities of its directors under Republic of the Marshall Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Republic of the Marshall Islands has a less developed body of securities laws as compared to the United States and certain states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law. In addition, Republic of the Marshall Islands corporations may not have standing to initiate a shareholders derivative action in a federal court of the United States.

Reeder & Simpson, P.C., Stellar’s counsel with regard to the laws of the Republic of the Marshall Islands, have advised us that there is uncertainty as to whether the courts of the Republic of the Marshall Islands would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in the Republic of the Marshall Islands against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Reeder & Simpson, P.C. has further advised Stellar that it is uncertain that Republic of the Marshall Islands courts would enforce: (1) judgments of U.S. courts obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Reeder & Simpson, P.C. has informed us that there is uncertainty with regard to Republic of the Marshall Islands law relating to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities laws will be determined by the courts of the Republic of the Marshall Islands as penal or punitive in nature. Furthermore, there is currently no statutory enforcement or treaty between the United States and the Republic of the Marshall Islands providing for enforcement of judgments. However, a judgment obtained in the United States may be recognized and enforced in the courts of the Republic of the Marshall Islands under the provisions of the RMI Uniform Money-Judgments Recognition Act at common law, without any re-examination on the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the High Court of the Republic of the Marshall Islands, provided such judgment: (i) is given by a foreign court of competent jurisdiction; (ii) is final; (iii) is not in respect of taxes, a fine or a penalty; and (iv) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or public policy of the Republic of the Marshall Islands. A judgment obtained in a foreign jurisdiction in connection with the documents would be recognized unless (a) the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law; (b) the foreign court did not have personal jurisdiction over the defendant; (c) the foreign court did not have jurisdiction over the subject matter; or (d) the foreign country does not recognize or enforce judgments of any other foreign nation. In addition, a foreign judgment need not be recognized if (a) the defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient time to enable him to defend; (b) the judgment was obtained by fraud; (c) the cause of action on which the judgment is based is repugnant to the public policy of the Republic of the Marshall Islands; (d) the judgment conflicts with another final and conclusive judgment; (e) the proceeding in the foreign court was contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in the court; or (f) in the case of jurisdiction based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action. If none of the above grounds exist then the Republic of the Marshall Islands High Court will enforce a foreign judgment without a retrial on the merits.

As a result of all of the above, Public Shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board or controlling shareholders than they would as public shareholders of a United States company prior to the Redomestication.

There is a risk that a U.S. Holder may recognize taxable gain with respect to its Stellar Shares at the effective time of the Redomestication.

The Redomestication should qualify as a reorganization within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes. However, due to the absence of guidance directly on how the provisions of Section 368(a) apply in the case of a statutory conversion of a corporation with no active business and only investment-type assets such as Stellar, this result is subject to some uncertainty. Accordingly, due to the absence of such guidance, it is not possible to predict whether the Internal Revenue Service (“ IRS ”) or a court considering the issue would take a contrary position. If the Redomestication should fail to qualify as a reorganization under Section 368(a), a U.S. Holder (as that term is defined in the section entitled “ The Redomestication Proposal — Material U.S. Federal Income Tax Consequences of the Redomestication to Stellar Shareholders ”) of Stellar Shares generally would recognize a gain or loss with respect to its Stellar Shares in an amount equal to the difference, if any, between the fair market value of the corresponding common stock of the Delaware corporation received in the Redomestication and the U.S. Holder’s adjusted tax basis in its Stellar Shares surrendered in exchange therefor.

As discussed more fully under “ The Redomestication Proposal – Material U.S. Federal Income Tax Consequences of the Redomestication to Stellar Shareholders ” below, it is intended that the Redomestication will constitute a tax-free reorganization within the meaning of Section 368(a)(l)(F) of the Code. Assuming that the Redomestication so qualifies, U.S. Holders of Stellar Shares will be subject to Section 367(b) of the Code and, as a result:

Furthermore, even if the Redomestication qualifies as a reorganization under Section 368(a) of the Code, a U.S. Holder of Stellar Shares may still recognize gain (but not loss) upon the exchange of its Stellar Shares for the common stock of the Delaware corporation pursuant to the Redomestication under the “passive foreign investment company,” or PFIC, rules of the Code equal to the excess, if any, of the fair market value of the common stock of the Delaware corporation received in the Redomestication and the U.S. Holder’s adjusted tax basis in the corresponding Stellar Shares surrendered in exchange therefor. In such event, the U.S. Holder’s aggregate tax basis in the common stock of the Delaware corporation received in connection with the Redomestication should be the same as the aggregate tax basis of Stellar Shares surrendered in the transaction, increased by any amount included in the income of such U.S. Holder under the PFIC rules. See the discussion in the section entitled “ The Redomestication Proposal — Material U.S. Federal Income Tax Consequences of the Redomestication to Stellar Shareholders — PFIC Considerations. ”

U.S. federal income tax reform could adversely affect us and holders of the Successor’s Shares.

On December 22, 2017, President Trump signed into law H.R. 1, originally known as the “ Tax Cuts and Jobs Act ,” which significantly reformed the Internal Revenue Code of 1986, as amended. The new legislation, among other things, changes the U.S. federal tax rates, imposes significant additional limitations on the deductibility of interest, allows the expensing of capital expenditures and puts into effect the migration from a “worldwide” system of taxation to a territorial system. We continue to examine the impact this tax reform legislation may have on us. The impact of this tax reform, or of any future administrative guidance interpreting provisions thereof, on holders of the Successor’s common stock is uncertain and could be adverse. This joint proxy statement/prospectus does not discuss any such tax legislation or the manner in which it might affect holders of the Successor’s common stock. We urge holders of Stellar Shares to consult with their legal and tax advisors with respect to any such legislation and the potential tax consequences of their ownership of Stellar Shares and the Successor’s common stock.

Following the consummation of the Business Combination, if securities or industry analysts do not publish or cease publishing research or reports about the Combined Company, its business, or its market, or if they change their recommendations regarding the Successor’s common stock adversely, the price and trading volume of the Successor’s common stock could decline.

The trading market for the Successor’s common stock will be influenced by the research and reports that industry or securities analysts may publish about the Successor, its business, its market, or its competitors. Securities and industry analysts do not currently, and may never, publish research on the Successor. If no securities or industry analysts commence coverage of the Successor, the Successor’s stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover the Successor change their recommendation regarding the Successor’s stock adversely, or provide more favorable relative recommendations about our competitors, the price of the Successor’s common stock would likely decline. If any analyst who may cover Phunware were to cease coverage of the Successor or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause the Successor’s stock price or trading volume to decline.

Upon consummation of the Business Combination, the rights of holders of the Successor’s common stock arising under the DGCL as well as the Successor’s certificate of incorporation and bylaws will differ from and may be less favorable to the rights of holders of Stellar’s common stock arising under the Republic of the Marshall Islands Association Law, as amended, as well as Stellar’s current Articles of Incorporation.

Upon consummation of the Business Combination, the rights of holders of the Successor’s common stock will arise under the certificate of incorporation and bylaws of the Successor as well as the DGCL. Those new organizational documents and the DGCL contain provisions that differ in some respects from those in Stellar’s current articles of incorporation and the Marshall Islands Association Law, as amended, and, therefore, some rights of holders of the Successor’s common stock could differ from the rights that holders of Stellar common stock currently possess. For instance, while class actions are generally not available to shareholders under Marshall Islands Association Law, as amended, such actions are generally available under Delaware law. This change could increase the likelihood that the Successor becomes involved in costly litigation, which could have a material adverse effect on the Successor.

In addition, there are differences between the new organizational documents of the Successor and the current constitutional documents of Stellar. For a more detailed description of the rights of holders of the Successor’s common stock and how they may differ from the rights of holders of Stellar common stock, please see the section entitled “Comparison of Corporate Governance and Stockholder Rights . ” Forms of the certificate of incorporation and the bylaws of the Successor are attached as Annex A and Annex B , respectively, to this joint proxy statement/prospectus and we urge you to read them.

Delaware law and the Successor’s certificate of incorporation and bylaws will contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Successor’s certificate of incorporation and bylaws that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by the Successor’s board of directors and therefore depress the trading price of the Successor’s common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the Phunware Board or taking other corporate actions, including effecting changes in our management. Among other things, the Successor’s certificate of incorporation and bylaws include provisions regarding:

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Successor’s board of directors or management.

In addition, as a Delaware corporation, the Successor will be subject to provisions of Delaware law, including Section 203 of the DGCL, which may generally prohibit certain stockholders holding 15% or more of the Successor’s outstanding capital stock from engaging in certain business combinations with us for a specified period of time unless certain conditions are met.

Any provision of the Successor’s certificate of incorporation, bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of the Successor’s capital stock and could also affect the price that some investors are willing to pay for the Successor’s common stock.

The Successor’s certificate of incorporation will designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between the Successor and its stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or Exchange Act, each of which could limit the Successor’s stockholders’ ability to choose the judicial forum for disputes with the Successor or its directors, officers, or employees.

The Successor’s certificate of incorporation, which will become effective immediately prior to the consummation of the Business Combination, will provide that, unless the Successor consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Successor, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or agent of the Successor to the Successor or the Successor’s stockholders, (iii) any action asserting a claim against the Successor arising pursuant to any provision of the DGCL or the Successor’s certificate of incorporation or bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the Successor’s certificate of incorporation or bylaws, or (v) any action asserting a claim against the Successor governed by the internal affairs doctrine, in each such case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein.  Unless the Successor consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act or the Securities Exchange Act.

The Successor’s certificate of incorporation will also provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act or the Exchange Act.

Any person or entity purchasing or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to this provision. These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the Successor or its directors, officers, or other employees, which may discourage lawsuits against the Successor and its directors, officers, and other employees. If a court were to find either exclusive-forum provision in the Successor’s bylaws to be inapplicable or unenforceable in an action, the Successor may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its results of operations.

Risk Factors Relating to Phunware

References in this section under the heading “Risk Factors Relating to Phunware” to “our”, “we”, “us” and “Phunware”, refer to Phunware, Inc., except where the context requires otherwise.

Our revenue has declined, we have a history of losses, we expect to continue to incur losses and we may not achieve or sustain profitability in the future.

We have incurred significant losses in each fiscal year since our inception in 2009. We experienced a consolidated net loss of $25.9 million for the year ended December 31, 2017 and a consolidated net loss of $16.3 million for the year ended December 31, 2016. These losses were due to both a reduction in revenue in 2017 and the substantial investments we made to build our products and services, grow and maintain our business and acquire customers. You should not consider our historical revenue levels or operating expenses prior to recent periods as indicative of our future performance. Key elements of our growth strategy include acquiring new customers and continuing to innovate and build our brand. As a result, we expect our operating expenses to increase in the future due to expected increased sales and marketing expenses, operations costs, research and development costs and general and administrative costs and, therefore, our operating losses will continue or even potentially increase for the foreseeable future. In addition, as a public company we incur significant legal, accounting and other expenses that we did not incur as a private company. Furthermore, to the extent that we are successful in increasing our customer base, we will also incur increased expenses because costs associated with generating and supporting customer agreements are generally incurred up front, while revenue is generally recognized ratably over the committed term of the agreement. Our efforts to grow our business may be costlier than we expect and we may not be able to increase our revenue enough to offset our higher operating expenses. We may incur significant losses in the future for many reasons, including the other risks described in this report and unforeseen expenses, difficulties, complications and delays and other unknown events. You should not rely upon our recent bookings or revenue growth as indicative of our future performance. We cannot assure you that we will reach profitability in the future or at any specific time in the future or that, if and when we do become profitable, we will sustain profitability. If we are ultimately unable to generate sufficient revenue to meet our financial targets, become profitable and have sustainable positive cash flows, investors could lose their investment.

Our results of operations and ability to grow could be negatively affected if we cannot adapt and expand our technology offerings and services in response to ongoing market changes.

The collaboration and technology solutions business and markets are characterized by rapid technological change, evolving industry standards, changing customer preferences and new product and service introductions. Our success depends on our ability to continue to develop and implement technology offerings and services that anticipate or timely respond to rapid and continuing changes in technology and industry developments and offerings by new technology providers to serve the evolving needs of our customers. Examples of areas of significant change in the industry include cloud, software defined infrastructure, virtualization, security, mobility, data analytics and IoT, the continued shift from maintenance to managed services and ultimately to cloud based services, as-a-service solutions, security and information technology automation. In addition, enterprises are continuing to shift from on-premise, hardware infrastructure to software centric hosted solutions. Technological developments such as these may materially affect the cost and use of technology and services by our customers and could affect the nature of how our revenue is generated. These technologies and others that may emerge, could reduce and, over time, replace some of our current business. In addition, customers may delay spending under existing contracts and engagements and may delay entering into new contracts while they evaluate new technologies. If we do not sufficiently invest in new technology, industry developments and our personnel, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our technology offerings and services, our results of operations and our ability to develop and maintain a competitive advantage and to continue to grow could be negatively affected.

In addition, if we are unable to keep up with changes in technology and new hardware, software and services offerings, for example, by providing the appropriate training to out account managers, sales technology specialists, engineers and consultants to enable them to effectively sell and deliver such new offerings to customers, our business, results of operations, or financial condition could be adversely affected.

If we are unable to expand or renew sales to existing customers, or attract new customers, our growth could be slower than expected and our business may be harmed.

Our future growth depends upon expanding sales and renewals of our technology offerings and services with existing customers. Our customers may not purchase our technology offerings and services, or our customers may reduce their purchase rate of services, if we do not demonstrate the value proposition for their investment and we may not be able to replace existing customers with new customers. In addition, our customers may not renew their contracts with us on the same terms, or at all, because of dissatisfaction with our service. If our customers do not renew their contracts, our revenue may grow more slowly than expected, may not grow at all, or may decline.

Additionally, increasing incremental sales to our current customer base may require increasingly sophisticated and costly sales efforts that are targeted at senior management. We plan to continue expanding our sales efforts but we may be unable to hire qualified sales personnel, may be unable to successfully train those sales personnel that we are able to hire and sales personnel may not become fully productive on the timelines that we have projected, or at all. Additionally, although we dedicate significant resources to sales and marketing programs, these sales and marketing programs may not have the desired effect and may not expand sales. We cannot assure you that its efforts will increase sales to existing customers or additional revenue. If our efforts to upsell to our customers are not successful, our future growth may be limited.

Our ability to achieve significant growth in revenue in the future will also depend upon our ability to attract new customers. This may be particularly challenging where an organization has already invested substantial personnel and financial resources to integrate competing technology offerings and services into our business, as such organization may be reluctant or unwilling to invest in new technology offerings and services. If we fail to attract new customers and maintain and expand those customer relationships, our revenue may grow more slowly than expected and our business may be harmed.

Demand for our technology offerings and services could be adversely affected by volatile, negative, or uncertain economic conditions and the effects of these conditions on our customers’ businesses.

Our revenue and profitability depend on the demand for our technology offerings and services, which could be negatively affected by numerous factors, many of which are beyond our control. Volatile, negative, or uncertain economic conditions affect our customers’ businesses and the markets we serve. Such economic conditions in our markets have undermined and could in the future undermine, business confidence in our markets and cause our customers to reduce or defer their spending on new technology offerings and services, or may result in customers reducing, delaying or eliminating spending under existing contracts with us, which would negatively affect our business. Growth in the markets we serve could be at a slow rate, or could stagnate or contract, in each case for an extended period of time. Ongoing economic volatility and uncertainty and changing demand patterns affect our business in a number of other ways, including making it more difficult to accurately forecast customer demand and effectively build our revenue and resource plans.

Economic volatility and uncertainty is particularly challenging because it may take some time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in our business and results of operations. Changing demand patterns from economic volatility and uncertainty could have a significant negative impact on our business, results of operations, or financial condition.

Substantial competition could reduce our market share and significantly harm our financial performance.

We expect the competitive landscape in which we compete to continue to change as new technologies are developed. While innovation can help our business as we create new offerings for us to sell and provide complementary services, it can also disrupt our business model and create new and stronger competitors. For instance, while cloud based solutions present an opportunity for us, cloud based solutions and technologies that deliver technology solutions as a service could increase the amount of sales directly to customers rather than through solutions providers like us, or could reduce the amount of hardware we sell, leading to a reduction in our technology offerings revenue and/or profitability. In addition, some of our hardware and software technology partners sell and could intensify their efforts to sell, their products directly to our customers. Moreover, traditional OEMs have increased their services capabilities through mergers and acquisitions with service providers, which could potentially increase competition in the market to provide comprehensive technology solutions to customers. If any of these trends becomes more prevalent, it could adversely affect our business, results of operations, or financial condition.

Our future results will depend on our ability to continue to focus our resources and manage costs effectively.

We are continually implementing productivity measures and focusing on measures intended to further improve cost efficiency. We may be unable to realize all expected cost savings in connection with these efforts within the expected time frame, or at all and we may incur additional and/or unexpected costs to realize them. Further, we may not be able to sustain any achieved savings in the future. Future results will depend on the success of these efforts.

If we are unable to control costs, we may incur losses, which could decrease our operating margins and significantly reduce or eliminate our profits. Our future profitability will depend on our ability to manage costs or increase productivity. An inability to effectively manage costs could adversely impact our business, results of operations, or financial condition.

Our profitability could suffer if we are not able to manage large and complex projects and complete fixed price, fixed timeframe contracts on budget and on time.

Our profitability and operating results are dependent on the scale of our projects and the prices we are able to charge for our technology offerings and services. We perform a significant portion of our work through fixed price contracts, in which we assume full control of the project team and manage all facets of execution. As a significant portion of our projects are on a fixed price model, we may be unable to accurately estimate the appropriate project price and successfully manage such projects. Although we use specified technical processes and our past experience to reduce the risks associated with estimating, planning and performing fixed price and fixed timeframe projects, we face the risk of cost overruns, completion delays and wage inflation in connection with these projects. If we fail to accurately estimate the resources or time required for a project or future rates of wage inflation, or if we fail to perform contractual obligations within the contractual timeframe, our profitability could suffer.

The challenges of managing larger and more complex projects include:

In addition, large and complex projects may involve multiple engagements or stages and there is a risk that a customer may choose not to retain us for additional stages or may cancel or delay additional planned engagements. Such cancellations or delays may make it difficult to plan our project resource requirements and may result in lower profitability levels than we anticipated upon commencing engagements.

Our investments in new services and technologies may not be successful and our business strategy is evolving and may involve pursuing new lines of business or strategic transactions and investments, or dispositions of assets or businesses that may no longer help us meet our objectives, and such efforts may not be successful.

We continue to invest in new services and technologies, including cloud, virtualization, security, mobility, data analytics and blockchain. The complexity of these solutions, our learning curve in developing and supporting them and significant competition in the markets for these solutions could make it difficult for us to market and implement these solutions successfully. Additionally, there is a risk that our customers may not adopt these solutions widely, which would prevent us from realizing expected returns on these investments. Even if these solutions are successful in the market, they still rely on third-party hardware and software and our ability to meet stringent service levels. If we are unable to deploy these solutions successfully or profitably, it could adversely impact our business, results of operations, or financial condition.

Our industry is undergoing significant change and our business strategy is continuing to evolve to meet these changes. In order to profitably grow our business, we may need to expand into new lines of business beyond our current focus of providing mobile advertising analytics products and services, which may involve pursuing strategic transactions, including potential acquisitions of, or investments in, related or unrelated businesses. In addition, we may seek divestitures of existing businesses or assets. There can be no assurance that we will be successful with our efforts to evolve our business strategy and we could suffer significant losses as a result, which could have a material adverse effect on our business, financial condition and results of operations.

If we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives. We may also dispose of a business at a price or on terms that are less desirable than we had anticipated. In addition, we may experience greater dis-synergies than expected and the impact of the divestiture on our revenue may be larger than projected.

If we lose any of our key personnel, or are unable to attract and retain the talent required for our business, our business could be disrupted and our financial performance could suffer.

Our success is heavily dependent upon our ability to attract, develop, engage and retain key personnel to manage and grow our business, including our key executive, management, sales, services and technical personnel.

Our future success will depend to a significant extent on the efforts of our executive officers, as well as the continued service and support of other key employees. Our future success also will depend on our ability to attract and retain highly skilled technology specialists, engineers and consultants, for whom the market is extremely competitive.

Our inability to attract, develop and retain key personnel could have an adverse effect on our relationships with our technology partners and customers and adversely affect our ability to expand our offerings of technology offerings and services. Moreover, our inability to train our sales, services and technical personnel effectively to meet the rapidly changing technology needs of our customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could adversely affect our business, results of operations, or financial condition.

It may be difficult for us to retain or attract qualified officers and directors, which could adversely affect our business and our ability to maintain the listing of our common stock on the Nasdaq.

We may be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of changes in the rules and regulations which govern publicly-held companies, including, but not limited to, certifications from executive officers and requirements for financial experts on boards of directors. The perceived increased personal risk associated with these changes may deter qualified individuals from accepting these roles. Further, applicable rules and regulations of the SEC and the Nasdaq heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, our business and our ability to maintain the listing of our shares of common stock on Nasdaq could be adversely affected.

Our ability to attract and retain business and personnel may depend on our reputation in the marketplace.

We believe our brand name and our reputation in the marketplace are important corporate assets that help distinguish our technology offerings and services from those of competitors and contribute to our ability to recruit and retain talented personnel, in particular our engineers and consulting professionals. However, our corporate reputation is potentially susceptible to material damage by events such as disputes with customers, cybersecurity breaches, service outages, internal control deficiencies, delivery failures, or compliance violations. Similarly, our reputation could be damaged by actions or statements of current or former customers, directors, employees, competitors, vendors, partners, joint ventures or joint venture partners, adversaries in legal proceedings, legislators, or government regulators, as well as members of the investment community or the media. There is a risk that negative information about us, even if based on rumor or misunderstanding, could adversely affect our business. Damage to our reputation could be difficult, expensive and time-consuming to repair, could make potential or existing customers reluctant to select us for new engagements, resulting in a loss of business and could adversely affect our recruitment and retention efforts. Damage to our reputation could also reduce the value and effectiveness of our brand name and could reduce investor confidence in us, adversely affecting the Successor’s share price.

Future acquisitions could disrupt our business and may divert management’s attention and, if unsuccessful, harm our business.

We may choose to expand by making additional acquisitions that could be material to our business. We have in the past made several acquisitions of complementary businesses, including acquisitions in Odyssey, Simplikate, Digby, Tapit! and GoTV. Acquisitions involve many risks, including the following:

We may not succeed in addressing these or other risks or any other problems encountered in connection with the integration of any acquired business. The inability to integrate successfully the business, technologies, products, personnel, or operations of any acquired business, or any significant delay in achieving integration, could harm our business, results of operations, or financial condition.